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                                 United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q
(Mark One)

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

                 For the quarterly period ended March 31, 2002
                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from        to
                               ------    -------

                        Commission file number 000-29642
                                FILM ROMAN, INC.

               (Exact name of registrant as specified in charter)

             Delaware                              95-4585357
    (State or other jurisdiction                (I.R.S. Employer
  of incorporation or organization)           Identification Number)

                      12020 Chandler Boulevard, Suite 300
                       North Hollywood, California 91607
              (Address of principal executive offices) (Zip Code)

                                 (818) 761-2544
              (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for at least the past 90 days. YES [ X ] NO [ ].


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

As of April 30, 2002, 8,577,690 shares of common stock, par value $.01 per
share, were issued and outstanding.

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                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

<S>                                                                                                <C>
Item 1. Financial Statements .....................................................................    3

        Consolidated Balance Sheets as of December 31, 2001 and March 31, 2002 (unaudited) .......    3

        Consolidated Statements of Operations for the Three Months Ended March 31, 2001 and
        March 31, 2002 (unaudited) ...............................................................    4

        Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2001 and
        March 31, 2002 (unaudited) ...............................................................    5

        Notes to Consolidated Financial Statements ...............................................    6

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk ...............................   15

                           PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K .........................................................   16

Signatures .......................................................................................   17

Index to Exhibits ................................................................................   18
</TABLE>

                                       2

<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


                                FILM ROMAN, INC.

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                               December 31,    March 31,
                                                                                                   2001          2002
                                                                                               ------------  ------------
                                                                                                              (unaudited)
                                        ASSETS
                                        ------
<S>                                                                                           <C>           <C>
         Cash and cash equivalents ........................................................    $  2,776,757  $  1,803,328

         Accounts receivable ..............................................................         259,784       375,297

         Film costs, net of accumulated amortization of
             $50,663,342 (2001) and $52,894,086 (2002) ....................................      22,030,027    15,245,809

         Property and equipment, net of accumulated depreciation and
             amortization of $2,797,025 (2001) and $2,892,025 (2002) ......................         493,552       403,811


         Deposits and other assets ........................................................         612,492       624,966
                                                                                               ------------  ------------
         Total Assets .....................................................................    $ 26,172,612  $ 18,453,211
                                                                                               ============  ============

                                    LIABILITIES AND
                                STOCKHOLDERS' DEFICIENCY

         Accounts payable .................................................................    $  1,678,063  $  1,095,050

         Accrued expenses .................................................................       1,964,982     1,548,002

         Deferred revenue .................................................................      26,312,646    20,409,505
                                                                                               ------------  ------------
         Total liabilities ................................................................      29,955,691    23,052,557

         Stockholders' deficiency:

         Preferred Stock, $.01 par value, 10,000,000 shares authorized, none issued .......              --            --

         Common stock, $.01 par value, 40,000,000 shares authorized,
             8,577,690 shares issued and outstanding in 2001 and 2002 .....................          85,777        85,777

         Additional paid-in capital .......................................................      36,379,615    36,379,615

         Accumulated deficit ..............................................................     (40,248,471)  (41,064,738)
                                                                                               ------------  ------------
         Total stockholders' deficiency ...................................................      (3,783,079)   (4,599,346)
                                                                                               ------------  ------------
         Total liabilities and stockholders' deficiency ...................................    $ 26,172,612  $ 18,453,211
                                                                                               ============  ============
</TABLE>

                             See accompanying notes.

                                       3

<PAGE>

                                FILM ROMAN, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                           Three Months ended
                                                                               March 31,
                                                                     ----------------------------
                                                                         2001            2002
                                                                     ------------    ------------
<S>                                                                  <C>            <C>
Revenue ...........................................................  $ 19,198,579    $ 15,809,791

Cost of revenue ...................................................    18,253,572      15,794,394

Selling, general and administrative expenses ......................       922,842         841,948
                                                                     ------------    ------------

Operating income (loss) ...........................................        22,165        (826,551)

Interest income ...................................................        39,642          10,284

Income (loss) before cumulative effect of a change in
accounting principle and provision for income taxes ...............        61,807        (816,267)

Cumulative effect of a change in accounting principle .............       364,000              --
                                                                     ------------    ------------

Net loss ..........................................................  $   (302,193)   $   (816,267)
                                                                     ------------    ------------

Net income (loss) before cumulative effect of a change in
accounting principle, per common share basic & diluted ............  $       0.01    $      (0.10)
                                                                     ------------    ------------

Net loss, per common share basic & diluted ........................  $      (0.04)   $      (0.10)
                                                                     ------------    ------------

Weighted average number of shares outstanding basic and diluted ...     8,565,190       8,577,690
                                                                     ============    ============
</TABLE>



                             See accompanying notes.

                                       4

<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                              Three Months ended
                                                                                   March 31,
                                                                         -----------------------------
                                                                             2001             2002
                                                                         ------------    -------------
<S>                                                                                 <C>         <C>
Operating activities:

    Net loss ..........................................................  $   (302,193)   $    (816,267)

    Adjustments to reconcile net loss to net cash (used in)
     provided by operating activities:

        Depreciation and amortization .................................       100,000           95,000

        Amortization of film costs ....................................    18,253,572       15,794,394

        Cumulative effect of a change in accounting principles ........       364,000               --

    Changes in operating assets and liabilities:

        Accounts receivable ...........................................      (141,443)        (115,513)

        Film costs ....................................................   (10,724,306)      (9,010,176)

        Deposits and other assets .....................................      (217,424)         (12,474)

        Accounts payable ..............................................      (635,485)        (583,013)

        Accrued expenses ..............................................      (408,220)        (416,980)

        Deferred revenue ..............................................    (8,873,003)      (5,903,141)
                                                                         ------------    -------------
        Net cash (used in) operating activities .......................    (2,584,502)        (968,170)

Investing activities:

    Additions to property and equipment ...............................       (32,474)          (5,259)
                                                                         ------------    -------------
        Net cash used in investing activities .........................       (32,474)          (5,259)

Financing activities:

        Net cash provided by financing activities .....................            --               --

    Net decrease in cash ..............................................    (2,616,976)        (973,429)
                                                                         ------------    -------------
    Cash and cash equivalents at beginning of period ..................     4,203,221        2,776,757
                                                                         ------------    -------------
    Cash and cash equivalents at end of period ........................  $  1,586,245    $   1,803,328
                                                                         ------------    -------------
Supplemental disclosure of cash flow information:
    Cash paid during the period for:

        Income taxes ..................................................  $      6,000    $          --
                                                                         ------------    -------------
</TABLE>

                             See accompanying notes.

                                       5

<PAGE>

                                FILM ROMAN, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) - Basis of Presentation

        Film Roman, Inc., a Delaware corporation (the "Company"), currently
conducts all of its operations through its wholly owned subsidiaries, Film
Roman, Inc., a California corporation; Namor Productions, Inc., a California
corporation; Chalk Line Productions, Inc., a California corporation; Film Roman
Records, Inc., a Delaware Corporation; Diversion Entertainment, Inc., a Delaware
corporation; Level 13 Entertainment, Inc., a Delaware corporation and Special
Project Films, Inc., a Delaware corporation. The accompanying consolidated
unaudited financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments consisting only of normal recurring accruals necessary to present
fairly the financial position of the Company as of March 31, 2002 and the
results of its operations for the three months ended March 31, 2001 and 2002 and
the cash flows for the three months ended March 31, 2001 and 2002 have been
included. The results of operations for interim periods are not necessarily
indicative of the results which may be realized for the full year. For further
information, refer to the financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 2001
(the "Form 10-K") filed with the Securities and Exchange Commission.

(2) - Net Loss per Common Share

        For the three months ended March 31, 2001 and 2002, the per share data
is based on the weighted average number of common shares outstanding during the
period. Common equivalent shares, consisting of outstanding stock options, are
not included in the calculation because they are antidilutive.

(3) - Film Costs

<TABLE>
<CAPTION>

        The components of unamortized film costs consist of the following:

                                                                  December 31,            March 31,
                                                                      2001                  2002
                                                                      ----                  ----
                                                                                         (unaudited)
                                                                                         -----------
<S>                                                              <C>                     <C>
        Film productions released, net of                         $        --             $     4,850
        amortization

        Film productions in process                                21,844,184              14,822,857

        Film productions in development                               185,843                 418,102
                                                                  -----------             -----------

                                                                  $22,030,027             $15,245,809
                                                                  ===========             ===========
</TABLE>

(4) - Change in Accounting Principle

        In June 2000, Statement of Position 00-2 "Accounting by Producers or
Distributors of Films" ("SOP 00-2") was issued. SOP 00-2 establishes new
financial accounting and reporting standards for producers and distributors of
films, including changes in accounting for advertising, development and overhead
costs. The Company adopted the provisions of SOP 00-2 as of January 1, 2001. SOP
00-2 requires that certain indirect overhead costs and development costs for
abandoned projects be charged

                                       6

<PAGE>

directly to expense, instead of those costs being capitalized to film costs as
was required under the previous accounting model. In connection with the
adoption of SOP 00-2, the Company recorded a non-cash charge of $364,000 to
reduce the carrying value of its film inventory. Such amount is primarily due to
the expensing of certain indirect overhead costs and development costs for
abandoned projects, which were previously capitalized. The non-cash charge is
reflected as a cumulative effect of a change in accounting principle in the
accompanying consolidated statement of operations for the three months ended
March 31, 2001.

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

         This Form 10-Q contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The words "expect,"
"estimate," "anticipate," "predict," "believe," "plan," "should," "may" and
"projects" and similar expressions and variations thereof are intended to
identify forward-looking statements. Such forward-looking statements relate to,
among other things, trends affecting the financial condition or results of
operations of the Company; the Company's future production and delivery schedule
(including the number of episodes of programming to be produced and delivered
during the 2002-2003 television season); plans to enter into new business areas
beyond the Company's core business of animation television production; the
Company's objectives, planned or expected activities and anticipated financial
performance and liquidity. These forward-looking statements are based largely on
the Company's current expectations and are subject to a number of risks and
uncertainties, including without limitation, those described under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors" in the Company's Form 10-K for the year ended
December 31, 2001. Actual results could differ from these forward-looking
statements. The Company does not make projections of its future operating
results and undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

General

         Film Roman, Inc. ("Film Roman" or the "Company") develops, produces and
distributes a broad range of television programming for the television network,
cable television, first-run domestic syndication and international markets. The
Company was founded in 1984 and has grown into one of the leading independent
animation studios in the world. Film Roman has produced and is producing some of
the world's best known animated series, including The Simpsons, King of the
Hill, X-Men, The Mask, Bobby's World, The Twisted Tales of Felix the Cat and
Garfield & Friends. Over the years, the Company has primarily produced animation
for television, both on a fee-for-services and a proprietary basis. While the
Company is currently aggressively pursuing both of theses areas, the Company is
also continuing expansion of its production capabilities into live action, and
expansion of its animation beyond television, including motion pictures, cable,
direct-to-video, commercials, and the Internet. As the Company moves into these
other areas, it is also responding to the changes that are taking place in the
media and entertainment areas.

         Production work on a fee-for-services basis has historically accounted
for the largest and most reliable portion of the Company's revenues. Fees paid
to the Company for these production services generally range from $300,000 to
$800,000 per episode and typically cover all direct production costs plus a
profit margin. The Company also produces programming for which it controls some
of the proprietary rights (including, for example, international distribution
and licensing and merchandising rights). Fees paid to the Company for these
production services typically do not cover all direct production costs.
Generally, the Company seeks to cover a portion of its production costs prior to
production of its proprietary programs and seeks to cover the remaining
production costs through the

                                       7

<PAGE>

exploitation of the proprietary rights associated with these programs. As a
result, the Company may recognize revenue associated with its proprietary
programming over a period of years. Revenues from proprietary programming have
not been material over the last several years.

         The Company produces a limited number of animated television series in
any year and is substantially dependent on revenues from licensing these
programs to broadcasters and from fees from producing programs for third
parties. The Company's future performance will be affected by issues facing all
producers of animated programming, including risks related to the limited number
of time slots allocated to children's and/or animated television programming,
the intense competition for those time slots, the limited access to distribution
channels (particularly for programs produced by independent studios), the
declining license fees paid to producers of programming by broadcasters and the
regulations implemented by the Federal Communications Commission ("FCC")
governing program content. While the Company seeks to limit its financial risk
associated with its proprietary programming by obtaining commitments from third
parties prior to production to cover a portion of its direct production costs,
there can be no assurance that the Company will be able to cover the balance of
its production costs and overhead costs relating to production, licensing and
distribution through the exploitation of its proprietary rights. As a result of
the foregoing risks, there can be no assurance that the Company will be able to
generate revenues that exceed its costs.

         The Company is also continuing expansion of its production capabilities
into live action, and expansion of its intended markets beyond television,
including cable, direct-to-video, commercials and the Internet. The Company's
future performance will be affected by unpredictable and changing factors that
influence the success of an individual television program or direct-to-video
release such as personal taste of the public and critics as well as public
awareness of a production and the successful distribution of a production.
Although the Company intends to attempt to limit the risks involved with
television, film and direct-to-video production, the Company will likely be
unable to limit all financial risk, and the level of marketing, promotional and
distribution activities and expenses necessary for such production cannot be
predicted with certainty. The Company has a limited history of developing,
producing or distributing live action television, computer generated animation
and there can be no assurance that the Company can compete successfully with
more established persons or entities. Live action production involves many of
the risks associated with animation production as well as additional risks
inherent to live action that are outside of the Company's control. These risks
include, but are not limited to, the risk of strike by actors and film crew,
increased union activity, delay in production, weather and other local
conditions, inability to obtain proper permitting at a desired site, at desired
times and/or under desired terms, and accidents or injury to actors and film
crew. No assurance can be given that the Company will produce any live action
television, film or direct-to-video productions or that, if produced, such
productions will be profitable.

The Company's 2002 Production Schedule

         The Company has historically been a major producer of animated prime
time, first run syndicated, and Saturday morning programming. The market for
these programs is composed of television networks (ABC, CBS, NBC, FOX, UPN and
Warner Brothers); syndicators of first run programming that license programming
on local stations nationwide (Columbia-Tristar, Universal, Paramount, King, Fox,
MGM and Viacom); and cable networks and services (USA, Disney Channel, Fox
Family, HBO, Showtime and TNT).

         The Company is currently scheduled to produce the following programming
for the 2002-2003 broadcast season:

               The Simpsons. The Company is scheduled to produce 22 new episodes
          of The Simpsons for exhibition over the Fox Broadcasting Network.
          Entering its fourteenth season and still the

                                       8

<PAGE>

          longest-running prime time animated series in television history, The
          Simpsons has been honored with a number of awards, including a Peabody
          Award, Emmy Awards, Annie Awards, Genesis Awards, International
          Monitor Awards and Environmental Media Awards, among numerous other
          honors. The Simpsons has transformed the way the television industry
          and audiences perceive animation and comedy series in general.

               King of the Hill. The Company is currently scheduled to produce
          22 new episodes of King of the Hill to be exhibited on the Fox
          Broadcasting Network. King of the Hill is the hit half-hour, animated
          comedy, voted the Best Television Show of 1997 by TV Guide and
          Entertainment Weekly, that tells the hilarious stories about Hank
          Hill, his family and their neighbors in the fictional suburb of Arlen,
          Texas, the heartland of America.

               X-Men. The Company is currently scheduled to produce 13 episodes
          of X-Men, which airs Saturday mornings on the WB Network.

               Tripping the Rift. The Company has a firm order from the Sci-Fi
          Channel for 13 episodes of Tripping the Rift, which will be produced
          through a Canadian Company, CineGroupe.

               John Waters' Patent Leather Dream House. The Company is
          developing this late-night half-hour series to be produced through
          CineGroupe.

               Save Your Ass. The Company is currently developing this project
          for MTV.

               Capbusters. The Company is currently offering this Level 13
          original hit series to conventional media.

               Hairballs. The Company is currently developing this late-night
          half-hour series.

               Projects in Development. The Company is currently developing
          Twistin' Trash and Rex Riders for evening viewers and is developing
          Jumbies for the kids' market.

Results of Operations

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

     Total revenue decreased by 18%, or $3.4 million, to $15.8 million for the
quarter ended March 31, 2002, from $19.2 million for the quarter ended March 31,
2001. Total revenue decreased because in 2001, the Company delivered a
movie-of-the-week special but did not do so in 2002.

     The Company delivered 24 fee-for-services episodes during the quarter ended
March 31, 2002 compared to 38 episodes in the comparable period in 2001.
Fee-for-services revenue increased 3%, or $0.4 million, to $15.7 million for the
quarter ended March 31, 2002, from $15.3 million in the comparable period in
2001. Although there was a decrease in episodes delivered, the per episode fee
was higher for the episodes delivered.

     The Company delivered no proprietary episodes and earned minimal
proprietary revenue during the three months ended March 31, 2002 and 2001.
Proprietary revenue consists of revenue derived from the U.S. license fees paid
upon the initial delivery of a new episode of proprietary programming to a U.S.
broadcaster and from the exploitation of the proprietary rights (e.g.,
merchandising, licensing and/or

                                       9

<PAGE>

international distribution rights) associated with the proprietary episodes in
the Company's library that were initially delivered in prior periods.

     Other revenue decreased to $0.1 million for the quarter ended March 31,
2002 compared to $3.8 million for the quarter ended March 31, 2001. The decrease
is primarily due to the delivery of a movie-of-the-week special in 2001 that did
not occur in 2002.

     Total cost of revenue decreased by 14%, or $2.5 million, to $15.8 million
for the quarter ended March 31, 2002, from $18.3 million for the quarter ended
March 31, 2001. Total cost of revenue as a percentage of sales increased 5% to
100% for the quarter ended March 31, 2002, from 95% in the comparable period in
2001 due to lower fee-for-services margins.

     Total selling, general and administrative expenses for the quarter ended
March 31, 2002 decreased by $0.1 million to $0.8 million from $0.9 million for
the comparable period in 2001, due primarily to lower general and administrative
costs.

     Operating loss was $0.8 million for the quarter ended March 31, 2002, as
compared to income of $0.02 million for the quarter ended March 31, 2001.

Subsequent Events

     Film Roman, Inc. acquired the assets and key employees of VanHook Studios,
a visual effects studio, on April 26, 2002. Kevin VanHook, sole proprietor of
VanHook Studios, and two key employees are now employees of the Company and will
receive as compensation for the transaction a total of 120,000 stock options
issued pursuant to the Company's stock option plan. Kevin VanHook also received
the right to participate in profits from future visual effects. VanHook Studios
changed its name to Forum Visual Effects at the closing of the acquisition.

Industry Accounting Policies

     Revenue and Cost Recognition. Effective January 1, 2001, the Company
recognizes revenue based on Statement of Position 00-2 "Accounting by Producers
and Distributors of Films" ("SOP 00-2").

     Revenue earned from fee-for-services productions is the principal source of
revenue earned by the Company. During 2000 and 2001, such revenues accounted for
more than 90% of the Company's total revenues. License fees received by the
Company for its work on fee-for-hire productions are recognized on an
episode-by-episode basis as each episode is completed and delivered to the
customer in accordance with the terms of the existing arrangement.

     Revenue earned from proprietary programs is recognized as such programs are
exploited in the markets in which the Company has retained ownership rights,
typically upon the receipt of statements from the Company's licensees. In the
event that a licensee pays the Company a nonrefundable minimum guarantee at the
beginning of a license term, the Company will record this amount as revenue if
all of the criteria for recognition pursuant to SOP 00-2 is met.

     Costs incurred in connection with the acquisition of story rights, the
development of stories, production and allocable overhead are capitalized as
film costs. Film costs are stated at the lower of unamortized cost or fair
value. The costs of fee-for-service produced episodes are capitalized and
subsequently amortized to cost of revenues at the time revenue is recognized. If
the costs of an episode are expected to exceed the corresponding license fee,
all costs incurred in excess of this license fee will be expensed to cost of
revenues as incurred. The cost of each proprietary program is capitalized and is

                                       10

<PAGE>

amortized in the proportion that revenue realized relates to management's
estimate of the total revenue expected to be realized from such programs.

     The Company's cash flow is not necessarily related to revenue recognition
and amortization of production costs. Cash is received and costs are incurred
(and paid) throughout the year. Historically, in the fourth quarter, and to a
lesser extent the third quarter, cash used in operations typically exceeded cash
generated by operations as completed shows were delivered to broadcasters. The
Company expects that cash used in or provided by operations will fluctuate
greatly from quarter to quarter.

     Overhead Allocation. Overhead is allocated to particular productions on the
basis of the total allocable overhead times the ratio of direct production costs
incurred on a program to total production costs incurred during the period.
Total allocable overhead is determined on the basis of management's estimates of
the percentage of overhead costs that can be attributed to the productions in
progress during the period.

Liquidity and Capital Resources

     At March 31, 2002, the Company had cash and short-term investments of
approximately $1.8 million compared to $2.8 million at December 31, 2001. The
Company's cash and short-term investment balances have continued to decline
since December 31, 2001 and the Company expects cash to decline further during
the next two quarters of 2002.

     Management believes that its existing cash balances and short-term
investments, combined with anticipated cash flow from operations, will
nevertheless be sufficient to meet its cash requirements through the next 12
months. In the event that cash flows are not as anticipated, the Company may
implement cost reductions. Accordingly, the consolidated financial statements
have been prepared on the basis that the Company will continue as a going
concern.

     The Company may need to secure additional equity or debt financing during
fiscal 2003 in order to fulfill its growth strategies. Recent operating losses,
the Company's declining cash balances, trends in the entertainment industry
adversely affecting independent production companies similar to the Company, and
the Company's historical stock performance may make it difficult for the Company
to attract equity investments on terms that are deemed to be favorable to the
Company. In addition, the Company's losses may make it more difficult for the
Company to attract significant debt financing. As a consequence, there can be no
assurance that the Company will be successful in arranging for additional equity
or debt financing at levels sufficient to meet its planned needs. The failure to
obtain such financing could have an adverse effect on the implementation of the
Company's growth strategies and its ability to successfully run its operation.

     For the three months ended March 31, 2002, net cash used for operating
activities was approximately $1.0 million, principally due to cash used in
connection with film production activities and a decrease in deferred revenue.
For the three months ended March 31, 2002, net cash used for investing
activities was $5,259 due to additions to property and equipment. No cash was
generated by financing activities for the first three months of 2002.

     Cash collected in advance of revenue recognition is recorded as deferred
revenue. As of March 31, 2002, the Company had a balance in its deferred revenue
account of $20.4 million. There will be a net cost of approximately $0.9 million
to the Company (future receipts less future expenditures) to finish the programs
for which cash has been collected in advance and included in deferred revenue.

                                       11

<PAGE>

     The following table summarizes the contractual obligations and commitments
the Company has over the next 5 years:

<TABLE>
<CAPTION>
                                                 2002              2003            2004           2005         2006
                                                 ----              ----            ----           ----         ----
<S>                                     <C>               <C>              <C>             <C>            <C>
        Operating Lease Agreements       $    1,320,156    $     898,544    $     24,372    $    19,428    $   1,532
        Employment Agreements            $      729,058    $     450,975    $    187,979             --           --
</TABLE>


Risk Factors

     The Company's business is subject to numerous risk factors, not all of
which can be known or anticipated and any one of which could adversely impact
the Company or its financial condition. Some of those risk factors are as
follows:

     Failure to Renew Licenses or Production Agreements. There can be no
assurance that any of the programs being produced by the Company will be
relicensed for additional broadcast seasons or renewed for production or, if so
relicensed or renewed, that the terms of the license agreements or production
agreements will be as favorable to the Company as those of existing licenses or
production agreements.

     Dependence on a Limited Number of Television Programs. The Company's
revenue has historically come from the production of a relatively small number
of animated television programs. King of the Hill, The Simpsons and X-Men
accounted for approximately 33%, 30% and 16% respectively, of the Company's
total revenue for the year ended December 31, 2001. King of the Hill, The
Simpsons and X-Men accounted for approximately 38%, 45% and 17% respectively, of
the Company's total revenue for the quarter ended March 31, 2002. Film Roman
cannot assure that broadcasters will continue to broadcast the Company's
proprietary or fee-for-services programs or that Film Roman will continue to be
engaged to produce such programs.

     Company Has a History of Losses and Declining Cash Balances and There Can
Be No Assurance that It Will Be Able to Execute on Its Business Strategy. The
Company has accumulated losses of approximately $41.0 million through March 31,
2002. Because substantial portions of the Company's expense are fixed and its
gross margin is relatively low, achieving profitability and positive cash flows
depends upon Company's ability to generate and sustain substantially higher
revenues. Although the Company's revenues are relatively predicable and its
strategy is to increase revenues and gross margin, it cannot be assured that the
Company will be able to do so and consequently the Company may experience
additional losses and a further decline in its cash balances in 2002.

     Risks of Vertical Integration. Over the last decade, broadcasters,
distributors and producers of television and motion picture programming have
become increasingly integrated vertically through mergers, acquisitions,
partnerships, joint ventures or other affiliations. Film Roman has not entered
into any of these relationships. As a result, the number of time slots available
for children's and/or animated programming and, specifically, for animated
programming supplied by independent animation studios, may decrease, making it
more difficult to compete successfully for available time slots.

     Declining Value of License Fee Agreements and Increasing Control of
Proprietary Rights by Broadcasters. Competition created by the emergence of new
broadcasters (such as UPN, WB, Nickelodeon and the USA Network) has provided
television audiences with more choices, thereby generally reducing the number of
viewers watching any one program. As a result, the market share of, and license
fees paid by, FOX, CBS, NBC and ABC may continue to decrease and make it
difficult for Film Roman to finance certain proprietary programs.

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         Current Programs May Not Sustain Their Popularity and New Programs May
Not Become Popular. Film Roman derives substantially all of its revenue from the
production and distribution of animated television programs. Each program is an
individual artistic work, and consumer reaction will determine its commercial
success. Film Roman cannot assure that the Company will be able to continue to
create entertaining episodes for its existing programs or that the Company will
be able to create new programs that are appealing to broadcasters.

         Risks Related to Expansion of Production of Proprietary Programming.
Film Roman intends to expand its production of programming for which the Company
owns or controls certain licensing and/or distribution rights ("proprietary
programming"). These rights may include domestic and international broadcast
distribution, home video distribution, licensing and merchandising and
interactive/game development ("proprietary rights"). While Film Roman seeks to
limit the financial risk associated with the development of proprietary
programming by obtaining commitments prior to production to cover a portion of
its direct production costs, the Company cannot be sure that it will be able to
recover the balance of the production and overhead costs through the
exploitation of its remaining rights.

         Risk of Budget and Cost Overruns. Although Film Roman reviews cost
reports and updates the Company's cost projections regularly and has generally
completed each of the Company's productions within its budget, the Company
cannot assure that the actual production costs for its programming will remain
within budget. Significant cost or budget overruns could negatively impact the
Company's gross margin since the majority of the Company's revenues result from
fixed fee arrangements.

         Revenues and Costs Recognized in Certain Periods May Be Overstated or
Understated Due to the Application of Entertainment Accounting Policies. In
2001, Film Roman adopted SOP 00-2 regarding revenue recognition and amortization
of production costs. All costs incurred in connection with an individual program
or film, including acquisition, development, production and allocable production
overhead costs and interest, are capitalized as television and film costs. These
costs are stated at the lower of unamortized cost or fair value. Film Roman
amortizes its estimated total production costs for an individual program or film
in the proportion that revenue realized relates to management's estimate of the
total revenue expected to be received from such program or film. As a result, if
revenue or cost estimates change with respect to a program or film, the Company
may be required to write-down all or a portion of its unamortized costs for the
program or film. The Company cannot make assurances that these write-downs will
not have a significant impact on its results of operations and financial
condition.

         Competition. The creation, development, production and distribution of
television programming, together with the exploitation of the proprietary rights
related to such programming, is a highly competitive business. Film Roman
competes with producers, distributors, licensors and merchandisers, many of whom
are larger and have greater financial resources than does the Company. Although
the number of outlets available to producers of animated programming has
increased with the emergence of new broadcasters, the number of time slots
available to independent producers of children's and animated programming
remains limited. Moreover, because license fees in the United States have
dropped substantially recently, companies that do not rely on U.S. broadcast
license fees to finance the production of animation programming, particularly
international animation companies that receive governmental subsidies, have
achieved a competitive advantage. These companies now serve as an additional
source of competition for the limited slots available to independent animation
companies. As a result of these factors, the Company cannot make assurances that
it will be able to remain competitive.

                                       13

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         Risks Related to International Operations. There are many risks
inherent in Film Roman's international business activities. The Company's
projects could be adversely affected by: reversals or delays in the opening of
foreign markets to new competitors; unexpected changes in regulatory
requirements; export controls, tariffs and other barriers; currency
fluctuations; investment policies; nationalization, expropriation and
limitations on repatriation of cash; and social and political risks.

         Overseas Subcontractors. Like other producers of animated programming,
Film Roman subcontracts some of the less creative and more labor-intensive
components of its production process to animation studios located in low-cost
labor countries, primarily in the Far East. As the number of animated feature
films and animated television programs increases, the demand for the services of
overseas studios has increased substantially. This increased demand may lead
overseas studios to raise their fees, which may result in increased production
costs, or an inability to contract with the Company's preferred overseas
studios.

         Risks Associated with Possible New Businesses. Film Roman has begun
live action television production, feature film development with the expectation
of production (both live action and animation) and direct-to-video production
(both live action and animation). The television and direct-to-video industries
are highly speculative and involve a substantial degree of risk. The success of
an individual television program, feature film or direct-to-video release
depends upon unpredictable and changing factors, such as personal tastes of the
public and critics. Therefore, there is a substantial risk that the Company's
projects will not be successful, resulting in costs not being recouped and
anticipated profits not being realized.

         Technological Changes; Possible Changes in Production of Products. The
proliferation of new production technologies may change the manner in which the
animation industry creates and distributes programming. Recently, certain
animators have begun to use computer-generated animation, including
three-dimensional digital animation, instead of two-dimensional cell animation,
to create their animated programming. Film Roman cannot be sure that the
introduction and proliferation of three-dimensional digital animation or other
technological changes will not cause the Company's historical methods of
producing animation to become less cost competitive or less appealing to its
audiences. In addition, the Company cannot be sure that it will be able to adapt
to such changes in a cost-effective manner.

         Dependence upon Key Personnel. Film Roman's success depends to a
significant extent upon the expertise and services of John Hyde, President and
Chief Executive Officer. Although the Company has employment agreements with Mr.
Hyde and certain other key management personnel, the loss of services of Mr.
Hyde and/or other key management personnel could have an adverse effect on the
Company's business, results of operations and financial condition. Film Roman
does not currently carry "key man" life insurance policies on any of the
Company's executives.

         Casualty Risks. Substantially all of the Company's operations and
personnel are located in its North Hollywood headquarters, resulting in
vulnerability to fire, flood, power loss, telecommunications failure or other
local conditions, including the risk of seismic activity. In addition, the
Company, its clients, domestic subcontractors and overseas subcontractors are
all subject to the possibility of acts of terror, acts of war, or threat of such
acts. If a disaster were to occur, the Company's disaster recovery plans may not
be adequate to protect the Company and its business interruption insurance may
not fully compensate the Company for its losses.

         Volatility of Stock Price. The Market price of the Company's Common
Stock, which trades on the NASD OTCBB, could fluctuate significantly in response
to operating results and other factors.

                                       14

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     Impact of FCC Regulations. The policies of the current FCC indicate a
potential lessening of government restrictions that may facilitate more vertical
integration of companies than in the past. This could have an adverse effect on
the availability of buyers for the Company's product.

     Film Roman Does Not Intend to Pay Dividends. Film Roman has never paid
dividends and currently does not intend to declare or pay dividends. The Company
plans to follow a policy of retaining earnings to finance the growth of its
business. Whether or not the Company declares or pays dividends is up to the
Board of Directors and will depend on results of operations, financial
condition, contractual and legal restrictions and other factors the Board of
Directors deems relevant at that time.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

     The Company does not utilize market risk sensitive instruments (such as
derivative financial instruments) for trading or other purposes.

     The Company has low exposure to interest rate risk. The Company currently
does not have any debt (fixed or floating rate) other than trade liabilities and
invests its cash assets in debt instruments with maturities of less than 90
days. Thus, a decrease (or increase) in future interest rates will directly and
proportionately decrease (or increase, respectively) the Company's future
interest income. For the three months ended March 31, 2002, the Company earned
interest income of $10,284.

     The Company is not exposed to significant foreign exchange rate risk. All
of the Company's contracts with foreign subcontractors are dollar-denominated.
The Company makes limited international sales in foreign currencies, the
aggregate of which the Company estimates to be less than one percent of the
Company's yearly revenue.

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PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits

         The Exhibit, and the Index thereto, required to be filed by Item 601 of
         Regulation S-K are attached hereto. Certain management contracts and
         other compensation plans or arrangements required to be filed are
         identified on the attached Index with an asterisk.

     (b) Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended March 31,
2002.

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                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: May 14, 2002

                      FILM ROMAN, INC.


                      By:     /s/ John Hyde
                          ------------------------------------
                              John Hyde
                              President and Chief Executive Officer and Director



                      By:     /s/ Joan Thompson
                          ------------------------------------
                              Joan Thompson
                              Chief Accounting Officer


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<PAGE>

                                INDEX TO EXHIBITS

Exhibit
Number                              Description
-------                           ---------------

* Exhibit 10.5 Agreement with Phil Roman regarding office space and employment.

Footnotes

* Management contract or other compensation plan or arrangement.

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