UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB


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

For the quarterly period ended September 30, 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 000-21659
                       ---------

                                   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 September 30,
1997: 7,858,465

Transitional Small Business Disclosure Format (Check one):  Yes___  No_X_

<PAGE>

<TABLE>
Part I.  FINANCIAL INFORMATION

                                                   EDnet, Inc.
                                        CONSOLIDATED STATEMENTS OF INCOME
                              For the Three Months ended September 30, 1997 & 1996

<CAPTION>
                                                                                     Three Months
                                                                                  Ended September 30
                                                                                     (Unaudited)
                                                                  ----------------------------------------------
                                                                               1997                   1996
                                                                  ----------------------------------------------

<S>                                                                         <C>                    <C>         
Revenues:
         Equipment sales and installation                                   $     290,228          $    295,778
         Site development and services                                            191,817               228,387
         Access, Usage, and Hosting fees                                          396,571               377,275
         Other fees                                                                24,755                25,160
                                                                  ----------------------------------------------
                                                                                  903,371               926,600

Cost of sales                                                                     553,101               606,881
                                                                  ----------------------------------------------

         Gross Profit                                                             350,270               319,719

Research & Development                                                                  -               158,564
Sales and Marketing expenses                                                      172,638               192,508
General and Administrative expenses                                               722,356               497,062
                                                                  ----------------------------------------------
                                                                                  894,994               848,134

         Loss from operations                                                    (544,724)             (528,415)
                                                                  ----------------------------------------------

Other income (expense):
         Interest income (expense)                                                 (4,524)              (56,631)
                                                                  ----------------------------------------------

         Total other income (expense), net                                         (4,523)              (56,631)
                                                                  ----------------------------------------------

         Loss before provision for income taxes                                  (549,248)             (585,046)

Income taxes                                                                          --                    --
                                                                  ----------------------------------------------

         Net Loss                                                           $    (549,248)         $   (585,046)
                                                                  ==============================================

Net Loss Per Common Share                                                   $       (0.08)         $      (0.18)
                                                                  ==============================================

Weighted Average Number
         of Shares Outstanding                                                  6,670,226             3,206,675
                                                                  ==============================================

<FN>
            The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
                                                       2
<PAGE>

<TABLE>
                                                             EDnet, Inc.
                                                     CONSOLIDATED BALANCE SHEETS
                                             As of September 30, 1997 and June 30, 1997


<CAPTION>
                                                              ASSETS
                                                                                                     9/30/97            6/30/97
                                                                                                   (Unaudited)        (Unaudited)
                                                                                            ----------------------------------------
<S>                                                                                                  <C>                 <C>       
CURRENT ASSETS
            Cash                                                                                     $     1,176         $   31,067
            Accounts Receivable, net                                                                     474,449            445,121
            Inventories                                                                                  212,520            202,913
            Other Current Assets                                                                         202,960            193,949
                                                                                            ----------------------------------------
                            TOTAL CURRENT ASSETS                                                         891,105            873,050

            PROPERTY AND EQUIPMENT, NET                                                                  500,792            556,533
            OTHER ASSETS                                                                                   5,478              5,478
                                                                                            ----------------------------------------
            TOTAL ASSETS                                                                             $ 1,397,375         $1,435,061
                                                                                            ========================================

                                 LIABILTIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
            Accounts payable                                                                         $ 1,615,347         $1,648,167
            Accrued expenses                                                                             493,606            466,455
            Deferred revenue                                                                              96,445             69,193
            Line of credit                                                                                34,510             34,628
            Notes payable                                                                                185,681            592,286
            Current portion of capital lease obligations                                                  20,826             27,817
                                                                                            ----------------------------------------
                            TOTAL CURRENT LIABILITIES                                                  2,446,416          2,838,546

LONG TERM LIABILITIES                                                                                    767,846            770,904
                                                                                            ----------------------------------------
            TOTAL LIABILITIES                                                                          3,214,261          3,609,450


STOCKHOLDERS' EQUITY (DEFICIT)
            Common  stock;  par  value  $.001 per  share
            Authorized  50,000,000 shares, 7,858,465 and
            5,720,465 shares issued and outstanding as of
            September 30, 1997 and June 30,1997 respectively                                               7,858              5,720

            Preferred Stock; par value $1,000 per share
            Authorized 1,750 shares, 150 shares issued and
            outstanding as of June 30, 1997                                                              116,776            117,541

            Capital paid in excess of par value of common stock                                        5,316,190          4,411,577

            Accumulated Deficit                                                                       (7,257,711)        (6,709,227)
                                                                                            ----------------------------------------
            TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                                      (1,816,887)        (2,174,389)

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                     $ 1,397,375         $1,435,061
                                                                                            ========================================

<FN>
                       The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
                                                                 3
<PAGE>

<TABLE>
                                                           EDnet, Inc.
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     for the Three Months ended September 30, 1997 and 1996

<CAPTION>
                                                                                        9/30/97                    9/30/96
                                                                                      (Unaudited)                (Unaudited)
                                                                                -----------------------------------------------
<S>                                                                                  <C>                        <C>           
Cash flows from operating activities:

      Net loss                                                                        $   (549,258)              $    (585,045)

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

            Depreciation and amortization                                                   52,672                     110,182
            Increase (decrease) in Provision
                        for doubtful accounts                                                3,389                       4,800
            Noncash compensation expenses                                                  400,000                     195,312
            Decrease (increase) in other current assets                                     (9,011)                    (33,136)
            Decrease (increase) in accounts receivable                                     (32,717)                    (89,477)
            Increase in inventory                                                           (9,607)                   (167,893)
            Increase in accounts payable
                        and accrued expenses                                                 2,467                     144,682
            Increase (decrease) in deferred revenue                                         27,252                     (50,487)
                                                                                -----------------------------------------------

                        Net cash used in operating activities                             (114,813)                   (471,062)
                                                                                -----------------------------------------------

Cash flows from investing activities:

      Purchase of property and Equipment                                                    (5,065)                   (171,010)
                                                                                -----------------------------------------------

                        Net cash used in investing activities                               (5,065)                   (171,010)
                                                                                -----------------------------------------------

Cash flows from financing activities:

      Repayment on borrowings                                                              (31,719)                    (35,000)
      Proceeds from borrowings                                                             131,755                   1,000,000
      Repayments on capital leases                                                         (10,049)                     (2,367)
                                                                                -----------------------------------------------


                        Net cash provided by financing activities                           89,987                     962,633
                                                                                -----------------------------------------------

                                     Net increase (decrease) in cash                       (29,891)                    320,561
                                                                                ===============================================


Cash at beginning of period                                                                 31,067                     221,875
                                                                                -----------------------------------------------

Cash at end of period                                                                 $      1,176               $     542,436
                                                                                ===============================================

<FN>
                     The accompanying notes are an integral part of these consolidated financial statements.
</FN>
</TABLE>
                                                               4
<PAGE>


                                   EDNET, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   Basis of Presentation

     In  the  opinion  of  management,   the  unaudited  consolidated  condensed
     financial  statements  included  herein have been  prepared on a consistent
     basis  with  the  June  30,  1996  audited  and  June  30,  1997  unaudited
     consolidated  financial  statements  and include all material  adjustments,
     consisting of normal recurring adjustments, necessary to fairly present the
     information  set  forth  therein.  As  reported  in the  audited  financial
     statements of June 30, 1996 and unaudited June 30, 1997,  EDnet, Inc. ("the
     Company")  has not  been  able  to  generate  any  operating  profit  since
     inception, and is attempting to raise additional funds as described in Note
     8.  However,  if the  Company  is  unable  to  raise  additional  funds  or
     consummate  a merger or other  transaction,  it may not have the  financial
     resources  to  continue  as a  going  concern  and  may be  forced  to seek
     protection from its creditors under Chapter 11 of the bankruptcy  code. The
     financial  statements do not contain any adjustments  that may be needed if
     the Company is unable to continue as a going concern.

2.   Consolidation

     The consolidated  financial  statements include the accounts of the Company
     and its wholly owned subsidiaries Entertainment Digital Network, Inc. (EDN)
     and  Internet   Worldwide   Business   Solutions,   Inc.  (IBS).   Material
     inter-company transactions and balances have been eliminated.

3.   Loss per Share

     Loss per  share has been  computed  using the  weighted  average  number of
     common shares  outstanding  totaling  7,858,465 shares for the three months
     ended  September 30, 1997.  There were  6,670,226  weighted  average shares
     outstanding  for the three ended  September 30, 1997.  Due to the Company's
     loss position, common equivalent shares have been excluded because they are
     anti-dilutive.

4.   Research and Development

     The Company  incurred no research and development  expense during the three
     months ended September 30, 1997.

5.   Consulting Agreements

     On June 30, 1997,  the Company  entered into a  consulting  agreement  with
     Charles  Clark,  pursuant to which Mr. Clark agreed to serve the Company in
     advising and  assisting in the  structure  of debt and  liabilities,  joint
     ventures,   acquisitions  or  merger  partners,  business  development  and
     developing long term financial  plans.  The Company agreed to pay Mr. Clark
     for  re-structuring  and re-organizing the Company's senior notes and debts
     on the Company's balance sheet,  four hundred thousand  (400,000) shares of
     Common Stock. These shares were issued to Mr. Clark and registered with the
     Securities and Exchange  Commission under Form S-8  registration  under the
     Securities  Act of 1934 on July 25, 1997.  The term of the Agreement is for
     five (5) years and can be terminated by either party with a thirty (30) day
     written notice under certain conditions.

6.  Notes Receivable

     In connection  with the  licensing by IBS of IBS' software to  Breakthrough
     Software, Inc. ("BSI"), completed in the prior fiscal year, the Company has
     an unsecured note receivable from BSI of $250,000 as of September 30, 1997.
     No further advances will be made to BSI under the note. The

                                       5
<PAGE>

     Company has extended the due date of the note receivable from  Breakthrough
     to March 31, 1998, and has established a 100% reserve against the note.

     Subsequent  to  September  30, 1997,  $93,891.65  of  liabilities  on IBS's
     balance sheet were transferred to BSI reducing the note due from BSI to IBS
     from $250,000 to $156,108.35. For other related subsequent events see (Note
     9).

7.   Notes Payable

     On  September  30, an  agreement  was reached  whereby the  Company's  note
     payable to Mr.  Onggara in the amount of $340,000 plus accrued  interest of
     $35,000 was converted to shares of the Company's  Common Stock at $.375 per
     share,  resulting in an issuance of 1,000,000 shares. The Company addressed
     an  unresolved  commitment of options to Mr.  Onggara by issuing  1,000,000
     warrants  priced at $1.25 each. The warrants are  convertible  over 3 years
     and are transferable and divisible.

     The Company has senior  promissory  notes payable to Morgan Fuller  Capital
     Group  L.L.C.,  with  original  amounts of $500,000,  $200,000 and $300,000
     collateralized  by the Company's assets with interest payable  quarterly at
     14% beginning  September  30, 1996.  The original due date of the Notes was
     extended  from  November  15, 1996 to  February  15,  1997,  when the Notes
     converted  into a term loan with  principal  in the amount of $100,000  and
     interest at 18% payable  monthly.  The Company repaid principal of $100,000
     and accrued interest on February 15, 1997, but failed to make the March 15,
     1997 payment.  Effective June 30, 1997, accrued penalties and interest were
     forgiven,  and the  Notes  were  converted  to a term  loan  payable  in 60
     installments  with  accrued  interest at 6%  commencing  September 1, 1997.
     Additionally, the Company agreed to re-price all warrants previously issued
     to Morgan Fuller to an exercise price of $1.50.

8.   Investment by T Bar W Ranch Investments

     Under a subscription agreement signed July 10, 1997, the Company received a
     commitment to purchase 3,750,000 shares of Common Stock at a price of $0.20
     per  share.  Each  share  would be issued  with a warrant  to  purchase  an
     additional  share of Common  Stock at an  exercise  price of $1.00  with an
     expiration date five years from the date of issuance.

     As of  November  10,  1997,  the  total  amount  invested  by T Bar W Ranch
     Investments was $147,596.  The Company has experienced  delays in obtaining
     the full amount of the funding  commitment  described above, and is working
     with T Bar W Ranch Investments to determine the likelihood of full funding.
     The Company is considering alternative courses of action presuming that the
     full  amount  of  T  Bar  W  Ranch  Investment's  commitment  will  not  be
     forthcoming. See (Note 9) regarding merger and funding discussions.

9.   Subsequent Events

     Resignations:

     On October 15, 1997, Alan K. Geddes, Vice President of Finance resigned his
     position as Chief  Financial  Officer.  The Company  has not  replaced  his
     position  as of  November  15,  1997 and his  duties  are  presently  being
     performed by Tom Kobayashi, CEO and Simon Wu, Controller.

                                       6

<PAGE>


     Merger Discussions

     On October 28 ,1997, the Company initiated  preliminary  discussions with a
     potential merger partner.  To date, those  discussions have covered merger,
     acquisition,  asset sales, and other potential transactions. As of the date
     of this filing, no definitive agreement has been reached.

     Funding

     On  November 7, 1997,  the Company  entered a  Pre-Closing  Agreement  (the
     "Agreement") with BSI and a private investor ("Investor"). BSI contemplates
     a sale of its Series B Preferred  Stock to  Investor on or before  November
     30,  1997  (the  "Financing").  It is a  condition  to the  closing  of the
     Financing  that  Investor  purchase  all  outstanding  shares  of  Series A
     Preferred Stock (the "Series A") from EDnet (the "Purchase") and contribute
     a portion of such shares to the capital of BSI.  Investor has  accommodated
     EDnet and BSI by making a portion of the funds to be paid in the  Financing
     and the Purchase available prior to the closing of such transactions.

     EDnet has agreed to sell its  2,000,000  shares of Series A to  Investor in
     exchange for $250,000 and the  obligation to pay an additional  $165,000 at
     the closing of the Financing.  The 2,000,000  shares of Series A from EDnet
     is being held in escrow and will be transferred to Investor upon closing of
     the  Financing.  In the event the  Financing has not closed by November 30,
     1997,  500,000  shares  of  Series A shall  be  returned  to EDnet  and the
     obligation to pay an additional $165,000 to EDnet shall be rescinded.

                                       7

<PAGE>


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

Results of Operations

For the three months ended  September  30, 1997,  the  Company's  revenues  were
$903,371,  a decrease  of 3% compared to revenues of $926,600 in the same period
last year.  This  decrease was due  primarily to a 19% decrease in revenues from
web site  development  and a slight  decline in network  equipment  sales due to
certain  vendor credit  limitations.  However,  there were  increases in network
access,  usage fees, and recurring  hosting  revenues  associated  with a larger
installed network base.

Gross Profit  increased  to $350,270 or 39% of sales,  in the three months ended
September  30, 1997  compared to $319,719,  or 35% of sales,  in the  equivalent
period  last  year.  Increases  in gross  profit  as a  percentage  of sales are
attributed  to the growth in network  usage and web  hosting  revenues,  each of
which carry higher profit margins.

Operating expenses  (including  Research & Development,  Sales & Marketing,  and
General &  Administrative)  increased  to  $894,994  in the three  months  ended
September 30, 1997 compared to $848,134 in the equivalent  period last year. The
Company  did not incur any  Research  and  Development  expense  during the 1997
period due primarily to the  elimination of investment in software  development.
Operating  expenses for the three month period  ending  September  30, 1997 also
include  amortization of the full cost of $400,000 for the consulting  agreement
with  Charles  Clark.  (See Note 5) By  removing  this  nonrecurring  expense of
$400,000  in  the  current  period  and  $383,721  of  Research  &  Development,
amortization  of goodwill,  and consulting  costs in the comparable  period last
year,  the operating  expense  would have been  $494,994 for the current  period
versus $464,413 for the year earlier period, representing a 6% increase.

Other expenses  decreased to $4,524 in the three months ended September 30, 1997
compared to $56,631 in the  equivalent  period last year.  The decrease in other
expenses  was due to  decreases  in interest  expense and  amortization  of debt
issuance costs and note discounts associated with the Notes (Note 7).

For the three months ended  September 30, 1997, the Company  incurred a net loss
of $549,248 or ($0.08) per share based on a weighted average of 6,670,226 shares
outstanding, compared with a net loss of $585,046, or ($0.18) per share based on
a weighted average of 3,206,675 shares outstanding in the prior year.


Financial Condition, Liquidity, and Capital Resources

At September 30, 1997, the Company's  accumulated deficit was $7,257,711 and its
working capital  deficit was  $1,555,311.  The rate of increase in the Company's
accumulated  deficit  declined  in the  quarter  ended  September  30,  1997 due
primarily to the elimination of Research and Development expense associated with
the licensing of the IBS Internet  software  product to BSI, and  elimination of
other non-recurring operating expenses, such as goodwill and amortization of the
cost of Liviakis Financial  Communications  consulting  agreement in fiscal year
ended June 30, 1997.  However,  this was offset by the full  amortization of the
cost of  $400,000  for  Charles  Clark's  consulting  agreement  (Note  5).  The
Company's  working capital  deficit  improved by 410,185 since June 30, 1997 due
primarily to the  conversion  of Irawan  Onggara note (note 7),  principal  plus
interest of $375,000,  to common stock,

                                       8
<PAGE>

and the private placement investment of $147,596 by T Bar W Investment (note 8).
The Company has made several  adjustments  to its  operations to further  reduce
costs,  and,  partially as a result of funding needs, has initiated  preliminary
discussions with one potential  partner  regarding  merger,  acquisition,  asset
sales and other potential transactions (Note 9).


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
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.

                                       9

<PAGE>


PART II  OTHER INFORMATION


Item 1. Legal Proceedings

None

Item 2. Changes in Securities since June 30, 1997

None


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

None


Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

        (a) (27) Financial Data Schedule, filed electronically.
        (b)      Form 8-K filed July 25, 1997 to report the issuance of S-8
                 shares to Charles W Clark per consulting agreement. (Note 5).

                                       10
<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.


November 15, 1997                         By:      /s/Tom Kobayashi
                                                   -------------------
                                                   Tom Kobayashi
                                                   Chairman and CEO


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

                                       11