UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB/A
                                  Amendment No. 1
                                        to

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

For the quarterly period ended December 31, 1998  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 000-21659


                                   EDnet, INC.

        (Exact name of small business issuer as specified in its charter)


            Colorado                                       84-1273795
---------------------------------                      -------------------
State or other jurisdiction                            (I.R.S. Employer
of incorporation or organization)                      Identification No.)


One Union Street, San Francisco, California                   94111
-------------------------------------------                -----------
Address of principal executive offices                      (Zip Code)


Issuer's telephone number, including area code            (415) 274-8800
                                                          --------------


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes (X) No ( ).

Number of shares outstanding of the issuer's common stock as of December 31,
1998:   16,761,836

Transitional Small Business Disclosure Format (Check one):     Yes ( ) No (X)

<PAGE>



         The Registrant hereby amends the items of its Quarterly Report on  Form
10-QSB for the quarter ended December 31, 1998 as set forth below:

Part I

Consolidated Statements of Cash Flows.
Management's  Discussion  and  Analysis  of  Financial Condition  and Results of
Operations.














































<PAGE>
                                   EDnet, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             For the Three Months ended December 31, 1998 and 1997

                                                     12/31/98        12/31/97
                                                    (Unaudited)    (Unaudited)
                                                    -----------    -----------
Cash flows from operating activities:

   Net income (loss)                                   $565,135      $(202,992)

   Adjustments to reconcile net loss
   to cash used in operating activities:

      Depreciation and amortization                      53,195         97,808
      Provision for doubtful accounts                     1,848            275
      Noncash compensation expenses                           -        400,000
      Gain from sale of assets - IBS                   (663,530)             -
      Decrease (increase) in other current assets       (67,479)       (14,425)
      Decrease (increase) in accounts receivable         47,570       (147,655)
      Decrease (increase) in inventory                  (26,763)        50,879
      Increase (decrease) in accounts payable
       and accrued expenses                            (196,593)      (646,483)
      Increase (decrease) in deferred revenue           (25,965)        (3,919)
                                                    -----------    -----------

         Net cash used in operating activities         (312,582)      (466,512)
                                                    -----------    -----------
Cash flows from investing activities:

   Purchase of property and equipment                    (4,220)             -
   Sale of property and equipment                             -         10,354
   Proceeds from sale of assets - IBS &
    Breakthrough Software investment                  1,000,000        307,495
                                                    -----------    -----------

         Net cash provided by investing activities      995,780        317,849
                                                    -----------    -----------
Cash flows from financing activities:

   Repayment on borrowings                             (308,214)       (73,392)
   Proceeds from borrowings                             150,000        222,600
   Payment on Settlement of Claim in Equity             (50,000)             -
   Repayments on capital leases                          (3,981)       (20,343)
                                                    -----------    -----------
         Net cash (used in) provided by
                 financing activities                  (212,195)       128,865
                                                    -----------    -----------

             Net increase (decrease) in cash            471,003        (19,798)

Cash at beginning of period                              88,470         31,067
                                                    -----------    -----------
Cash at end of period                                  $559,473        $11,269
                                                    ===========    ===========
              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>


                                   EDNET, INC.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Results of Operations

For the three  months  ended  December 31, 1998,  the  Company's  revenues  were
$1,027,558,  a  slight  increase  compared  to  revenues  of  $1,008,657  in the
comparable  period last year.  This quarter is affected by the  holidays,  where
production and  post-production of  media for  the entertainment and advertising
sector is usually completed prior to December or postponed to the new year.

Gross Profit  decreased  to $322,676 or 31% of sales,  in the three months ended
December 31, 1998 compared to $330,553 or 33% of sales, in the equivalent period
last year. This slight change was due to the profit margins sales mix difference
between the two quarters.

Operating expenses  (including Sales & Marketing,  and General & Administrative)
increased to $415,941 in the three months ended  December 31, 1998 from $301,414
in the equivalent period last year.

Interest  expense  decreased  dramatically  from $17,269 in the prior equivalent
quarter to $498 in the quarter ending December 31, 1998.  This was attributed to
the  re-organization  of the Senior Notes  Payable in June,  1998.  In the three
months  ended  December 31, 1997  other income  included the gain on the sale of
Preferred Shares of Breakthrough Software, Inc., of $248,334.

For the three months ended December 31, 1998, the Company  incurred a net profit
of $565,135 or $0.02 per share based on a weighted average of 28,648,714  shares
outstanding,  compared with a net profit of 346,255, or $0.05 per share based on
a weighted average of 7,264,345 shares outstanding in the prior year.

Following the investment in the company by Visual Data Corporation it had become
apparent  that  the  web  development   resources  at  IBS  duplicated  existing
facilities at Visual Data. The Company  completed the sale of all the assets and
certain liabilities of its wholly owned subsidiary,  Internet Business Solutions
("IBS") for $1,000,000 in cash on December 11, 1998.

With the sale of the assets of IBS, the Company  anticipates  the loss of 20% of
its annual projected  sales  for  fiscal  1999 and a  corresponding reduction of
expenses.  The company intends to offset this loss with the continued  growth of
its core audio networking business and the aggressive introduction of  its video
networking  services  in Spring, 1999.  In addition the Company's  revenues will
benefit from the  support of  Visual Data's  Internet  business through expanded
hosting and broadcasting capabilities over the Internet.

 The Company has executed a OEM  Agreement  with a new supplier of a video codec
and will be one of their  major beta users during the months of March and April.
Over 50% of the Company's  current  audio network  clients will have the need to
send or receive video  material for their work. In addition, Visual Data and its
partnership with PRNewswire will provide expanded short form video  transmission
opportunities during the approval process.


                                        
<PAGE>

Financial Condition, Liquidity, and Capital Resources

At December 31, 1998, the Company's  accumulated  deficit was $5,569,271 and the
Company  had  a  positive  net  working  capital  of  $721,022.   The  Company's
accumulated  deficit was reduced due to the net profit  achieved  primarily from
the sale of the assets of its subsidiary Internet Business Solution (IBS) during
the three months ended December 31, 1998. The Company's working capital improved
from a negative $17,695 on September 30, 1998 to a positive net working  capital
of $721,022 at the end of the current  period.  This  increase was due primarily
to sale of the assets of its subsidiary, IBS.

The Company believes that it has sufficient  working capital to fund its current
plan  of  operation.  In the  event  that  the  introduction  of our  new  video
networking   and  webcasting   services   accelerate  at  a  greater  pace  than
anticipated,  the  Company has  available  its Line of Credit with Union Bank of
California and several leasing lines that are presently in place.

Readiness for Year 2000

The Company  continues  to assess the nature and extent of the Year 2000 ("Y2K")
issues that it must address,  and is confident that it has already taken or will
be able to  complete  the  work  required  to make  its  systems,  products  and
infrastructure Y2K ready. The Company has determined that the primary impact, if
any,  of Y2K  problems  would be  relegated  to certain  management  information
systems,  not to any operating  revenue  generating  systems or services that it
provides.  The Company has ordered the  upgrades to be  installed  by the end of
March 31, 1999, that are necessary for the accounting  system to handle year end
issues.  There may be certain computer  hardware and software  replacements that
are  necessary  to handle Y2K issues as well.  These have also been  ordered and
will also be in place by March 31, 1999..  There are no technological  issues in
the  hardware or software  that the Company  sells or rents to its clients  that
will be affected by Y2K issues.

The Company plans is evaluating  the Y2K readiness of its  consultants,  vendors
and suppliers.  Where the Company determines that critical suppliers are not Y2K
ready, the Company will monitor their progress and take appropriate  actions. In
particular,  the telephone companies that supply the Company with services, must
be Y2K ready in order to avoid  major  billing  errors.  Though the  Company may
experience  some  temporary  delay  in its  ability  to  accurately  rebill  its
customers, it does not foresee any permanent liability,  should some error occur
on the part of these  suppliers.  The Company  believes that the Y2K date change
will not  significantly  affect the  Company's  ability to deliver  products and
services  to its  customers  on a timely  basis;  however,  given the  uncertain
consequences  of failure  to resolve  significant  Y2K  issues,  there can be no
assurance that any one or more such failures  would not have a material  adverse
effect on the Company.

Disclosure Pursuant to the Private Securities Litigation Reform Act of 1995

When used in this Management's  Discussion and Analysis, the words "anticipate,"
"estimate,"   "expect,"  and  similar   expressions  are  intended  to  identify
forward-looking  statements.  These  statements are subject to certain risks and
uncertainties,  including,  but not limited to, the following:  risks associated
with  fundraising  and the company's  ability to secure  resources  necessary to
fully develop business products; risks associated with mergers and acquisitions,
the nature of any  transaction  consummated,  and the  ability  to  successfully

<PAGE>


operate  a  merged  entity;   business  conditions  in  the  telecommunications,
entertainment,  advertising  and  Internet-related  industries,  and the general
economy;  competitive  factors such as rival  networking  technology,  competing
products,   and  competitive   pricing;   risks  associated  with   development,
introduction,  and acceptance of new products;  the company's  ability to manage
its rapid growth and attract and retain key  employees;  and other risk factors.
Actual results may differ  materially from management  expectations as discussed
here.




                                       
<PAGE>





                                   SIGNATURE

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.




                                                    EDNET, INC.




February 25, 1999                                   By:  /s/Tom Kobayashi
                                                         -----------------------
                                                         Tom Kobayashi
                                                         Chief Executive Officer






                                                    By:  /s/David Gustafson
                                                         -----------------------
                                                         David Gustafson
                                                         Secretary




                                       14