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 December 31, 1997 or


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

For the transition period from ______________ to ______________

Commission file number 000-21659


                                   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,
1997: 7,858,465

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

<PAGE>

Part I.  FINANCIAL INFORMATION
<TABLE>

                                  EDnet, Inc.
                       CONSOLIDATED STATEMENTS OF INCOME
          For the Three and Six Months ended December 31, 1997 & 1997
<CAPTION>

                                                    Three Months                   Six Months      
                                                 Ended December 31              Ended December 31       
                                                    ( Unaudited )                 ( Unaudited )   
                                            ---------------------------------------------------------
                                                1997           1996           1997          1996
                                            ---------------------------------------------------------
<S>                                         <C>            <C>            <C>            <C>        
Revenues:
        Equipment sales and installation    $   292,792    $   345,927    $   440,560    $   641,706
        Site development and services           168,062        347,488        359,879        575,875
        Access, Usage, and Hosting fees         508,478        424,590      1,047,509        801,864
        Other fees                               39,325         33,479         64,080         58,639
                                            ---------------------------------------------------------
                                              1,008,657      1,151,484      1,912,028      2,078,084

Cost of sales                                   678,104        596,935      1,231,205      1,203,816
                                            ---------------------------------------------------------

        Gross Profit                            330,553        554,549        680,823        874,268

Research & Development                             --          764,532           --          923,096
Sales and Marketing expenses                    150,722        245,364        323,360        437,872
General and Administrative expenses             150,692        614,257        873,049      1,111,318
                                            ---------------------------------------------------------
                                                301,414      1,624,154      1,196,409      2,472,286

        Income (loss) from operations            29,139     (1,069,604)      (515,586)    (1,598,018)
                                            ---------------------------------------------------------

Other income (expense):
        Interest income (expense)               (17,269)      (100,412)       (21,792)      (157,042)
        Other income (expense)                  336,785           --          336,785           --   
                                            ---------------------------------------------------------

        Total other income (expense), net       319,516       (100,412)       314,993       (157,042)
                                            ---------------------------------------------------------

        Income (loss) before provision
                for income taxes                348,655     (1,170,016)      (200,593)    (1,755,060)

Income taxes                                      2,400           --            2,400           --   
                                            ---------------------------------------------------------

        Net income (loss)                   $   346,255    $(1,170,016)   $  (202,993)   $(1,755,060)
                                            =========================================================

Net Income (Loss) Per Common Share          $      0.05    $     (0.26)   $     (0.03)   $     (0.39)
                                            =========================================================

Weighted Average Number
        of Shares Outstanding                 7,264,345      4,536,020      7,264,345      4,536,020
                                            =========================================================
<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 December 31, 1997 and June 30, 1997

<CAPTION>
                                     ASSETS
                                                                12/31/97        6/30/97
                                                             ( Unaudited )  ( Unaudited )
                                                             ----------------------------
<S>                                                           <C>            <C>        
CURRENT ASSETS
        Cash                                                  $    11,269    $    31,067
        Accounts Receivable, net                                  592,501        445,121
        Inventories                                               152,034        202,913
        Other Current Assets                                       36,237        193,949
                                                             ----------------------------
                TOTAL CURRENT ASSETS                              792,041        873,050


PROPERTY AND EQUIPMENT, NET                                       440,238        556,533
OTHER ASSETS                                                       10,948          5,478
                                                             ----------------------------
        TOTAL ASSETS                                          $ 1,243,227    $ 1,435,061
                                                             ============================

                          LIABILTIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
        Accounts payable                                      $ 1,192,942    $ 1,648,167
        Accrued expenses                                          411,669        466,455
        Deferred revenue                                           65,274         69,193
        Line of credit                                             34,282         34,628
        Notes payable                                             310,939        592,286
        Current portion of capital lease obligations               13,705         27,817
                                                             ----------------------------
                TOTAL CURRENT LIABILITIES                       2,028,811      2,838,546

LONG TERM LIABILITIES                                             689,674        770,904
                                                             ----------------------------
        TOTAL LIABILITIES                                       2,718,485      3,609,450


STOCKHOLDERS' EQUITY
        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
        December 31, 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 December 31, 1997                       170,133        165,596

        Capital paid in excess of par value of common stock     5,311,562      4,411,577

        Accumulated Deficit                                    (6,964,811)    (6,757,282)
                                                             ----------------------------
        TOTAL STOCKHOLDERS' EQUITY                             (1,475,258)    (2,174,389)

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            $ 1,243,227    $ 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 Four Months ended Dec 31, 1997 and 1996
                                                                        
<CAPTION>
                                                                     12/31/97        12/31/96
                                                                   ( Unaudited )   ( Unaudited )
                                                                   -----------------------------
<S>                                                                 <C>            <C>         
Cash flows from operating activities:                                                                   
                                                                        
        Net income (loss)                                           $  (202,992)   $(1,755,060)

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

                Depreciation and amortization                            97,808        272,866
                Provision for doubtful accounts                             275           --   
                Noncash compensation expenses                           400,000           --   
                Decrease (increase) in other current assets             (14,425)       (19,075)
                Increase in accounts receivable                        (147,655)      (259,918)
                Increase in inventory                                    50,879       (149,434)
                Increase (decrease) in accounts payable
                        and accrued expenses                           (571,483)     1,044,883
                Increase (decrease) in deferred revenue                  (3,919)       (55,637)
                                                                   -----------------------------
                        Net cash used in operating activities          (391,513)      (921,375)
                                                                   -----------------------------

Cash flows from investing activities:

        Purchase of property and Equipment                               10,354       (263,336)
        Vest of BSI Investment                                          307,495
                                                                   -----------------------------
                        Net cash used in investing activities           317,849       (263,336)
                                                                   -----------------------------

Cash flows from financing activities:

        Repayment on borrowings                                         (73,392)      (372,256)
        Proceeds from borrowings                                        147,600      1,000,000
        Repayments on capital leases                                    (20,343)       (11,820)
        Issuance of shares under Reg D                                                 528,108
                                                                   -----------------------------

                        Net cash provided by financing activities        53,866      1,144,032
                                                                   -----------------------------

                                Net increase (decrease) in cash         (19,798)       (40,679)
                                                                   =============================

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

Cash at end of period                                               $    11,269    $   181,196
                                                                   =============================
<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 the unaudited financial  statements of June
     30, 1997, EDnet Inc. (the Company) has not been able to generate any profit
     since  inception  until this quarter.  The Company had executed a Letter of
     Agreement (LOI) to be acquired by Curtis Mathes Holding Corporation (Curtis
     Mathes) as described in Note 10, which was subsequently rescinded by Curtis
     Mathes on  January  29,  1998 as per Note 12. 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.  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
     Net income for the quarter  ended  December 31, 1997 and the loss per share
     for the six months  ended  December  31, 1997 has been  computed  using the
     weighted  average number of common shares  outstanding  totaling  7,858,465
     shares for the three and six months ended  December  31,  1997.  There were
     7,264,345  weighted average shares outstanding for the three and six months
     ended  December  31,  1997.  Due to the  Company's  loss  position,  common
     equivalent shares have been excluded because they are anti-dilutive.

4.   Notes Receivable
     In connection  with the  licensing by IBS to  Breakthrough  Software,  Inc.
     (Breakthrough)  of IBS'  software,  completed  in the  prior  quarter,  the
     Company had an unsecured note  receivable  from  Breakthrough  of $250,000,
     which was amended  effective  December  19, 1997 (See Note 7). The Note was
     reduced by a debt  transfer by IBS and  assumption by  Breakthrough  of the
     Global  Automation,  Inc.,  debt of $91,891.65 and San Jose Mercury News of
     $2,000.  The  balance  of the  Note  of  $156,108  has  been  canceled  and
     substituted  by a Convertible  Subordinated  Promissory  Note. The new Note
     will be at simple  interest at the rate of eight percent (8.0%) per annum..
     All principal  under this Note shall be  automatically  converted  upon the
     closing of Breakthrough's  next financing involving the receipt of at least
     $2,000,000.  If a Next  Financing  does not occur within 12 months from the
     issuance of the Note or Breakthrough is acquired prior to a Next Financing,
     then the Note shall be automatically converted at the lower per share price
     (i) in Breakthrough's Common Stock at the price of $1.00 per share, or (ii)
     into  most  senior  capital  stock  or  convertible  securities  issued  by
     Breakthrough in financings  which do not qualify as a Next Financing at the
     per share price equal to the weighted  average per share price paid in cash
     by other  investors in such  financings.  In the event of  conversion,  the
     accrued interest shall be paid at the time of conversion in securities into
     which the Note is  converted.  The Company has  established  a 100% reserve
     against the note.

5.   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.

                                       5
<PAGE>

     On June 30, 1997 the Company  reached an  agreement  with Morgan  Fuller to
     convert the Notes to a term loan  payable in 60  installments  with accrued
     interest  at 6%  commencing  September  1, 1997.  In  conjunction  with the
     restructuring,  Morgan  Fuller  agreed to  forgive  accrued  penalties  and
     interest and the Company agreed to re-price all warrants  previously issued
     to Morgan Fuller to an exercise price of $1.50.


6.   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  and an
     expiration  date five years from the date of  issuance.  As of February 10,
     1998, 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 no longer considers this a source
     of investment.

7.   Resignations
     On October 15, 1997, Alan K. Geddes, Vice President of Finance resigned his
     position as Chief  Financial  Officer.  The Company has not  replaced  this
     position as of February 10, 1998 and his duties are presently  performed by
     Tom Kobayashi, CEO and Simon Wu, Controller.

8.   Sale of Breakthrough Preferred Stock
     On November 3, 1997,  the Company  entered  into an  agreement  to sell the
     Company's 2,000,000 shares of Breakthrough  Series A Convertible  Preferred
     Stock for  $415,000 and to exchange  the balance of the  unsecured  note of
     $156,108 due March 31, 1998 into a Convertible  Promissory Note with Common
     Stock  Purchase  Warrants  as  described  in Note 4. The first  payment  of
     $250,000 for the sale was received on November 7, 1997, a second payment of
     $67,995.04  on December 19, 1997 and the balance of  $97,004.96  on January
     21, 1998.

9.   Changes in Registrant's Certifying Accountants.
     On  November  24,  1997  Coopers & Lybrand  L.L.P.  (C&L)  resigned  as the
     Company's  principal  accountant,  due to  non-payments  of fees for  prior
     audits.  There were no recommendation or approval to change  accountants by
     the Company's Board of Directors.  During the period subsequent to the last
     fiscal year audit for year ended June 30, 1996 until their  resignation  as
     Company's   principal   auditor  on  November  24,  1997,   there  were  no
     disagreements with C&L on any matter of accounting principles or practices,
     financial statement  disclosures or auditing scope or procedure.  Note that
     C&L did not  perform an audit for the year  ended June 30,  1997 or for any
     period  subsequent to June 30, 1997. Form 8KA was filed with the Securities
     & exchange Commission on December 18, 1997.

10.  Letter of Intent.
     On December 23, 1997,  Curtis Mathes and the Company  entered into a Letter
     of Intent wherein Curtis Mathes would acquire all of the outstanding shares
     of the Company.  In the acquisition,  the outstanding  Company common stock
     would be  exchanged  for newly  issued  shares  of  common  stock of Curtis
     Mathes.  As a  result  of the  acquisition,  the  Company  would  become  a
     wholly-owned  subsidiary of Curtis Mathes.  The maximum aggregate number of
     shares of common stock of Curtis Mathes to be issued in the  acquisition in
     exchange  for all of the  outstanding  fully-diluted  shares of the Company
     shall be 11,278,000 shares of Curtis Mathes common stock (plus or minus the
     amount any closing  adjustments.)  Curtis  Mathes will  exchange its common
     stock for  outstanding  common  stock of the Company on a one to one ratio.
     Curtis  Mathes will  exchange its  warrants and options to purchase  Curtis
     Mathes  common  stock for  outstanding  warrants  and  options to  purchase
     Company  common  stock on a one for one  ratio,  at a  comparable  exercise
     price. Curtis Mathes will undertake to file a registration  statement under
     the  1933  Act as soon as  practicable  after  final  consummation  of this
     Agreement,  covering the Curtis  Mathes  common stock and the Curtis Mathes
     common stock  underlying the options and warrants issued to Shareholders of
     the Company under the Agreement.

                                       6
<PAGE>

11.  Revolving Credit and Security Agreement
     Under a revolving  credit and security  agreement  executed on December 30,
     1997, Curtis Mathes (Lender) established a Revolving Credit in favor of the
     Company in an aggregrate  pricncipal amount at any one time outstanding not
     exceeding $1,000,000. The amount of any borrowing may be repaid in whole or
     in part within one (1) year from date of funding  and such  repaid  amounts
     may be thereafter  reborrowed.  All  principal and accrued  interest due on
     such borrowing must be repaid within one (1) year from date of funding. The
     annual  rate of  interest  shall  be at the  rate  equivalent  to the  rate
     described by the Wall Street  Journal as the prime rate in effect from time
     to time, plus one and one-half  (1.5%).The Company has has granted security
     interest  as  collateral   all  accounts,   contract   rights  and  general
     intangibles  relating to accounts,  receivables  and claims  whether now or
     hereafter  arising;  all  inventory,  wherever  located  and whether now or
     hereafter exisiting; and all equipment, wherever located and whether now or
     hereafter  arising.  The Company  borrowed  $75,000 under this agreement on
     December 30, 1997.

12.  Subsequent Events
     On January 29,  1998,  Curtis  Mathes  informed  the Company  that they had
     decided not to proceed with the  acquisition  of the Company based on their
     opinion  that certain  contingencies  in the Letter of Intent did not occur
     (Note 10).  The  Company  had  borrowed an  additional  $275,000  under the
     Revolving  Credit and Security  Agreement (Note 11) from January 1, 1998 to
     January 22, 1998. The Company had repaid  through  January 27, 1998 against
     the loans a total of $221,4393.58 leaving a balance due on the principal of
     $129,987.74 and accrued interest as of January 31, 1998 of 248.22.


                                       7

<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, 1997,  the  Company's  revenues  were
$1,008,657,  a  decrease  of 14%  compared  to  revenues  of  $1,151,484  in the
comparable period last year. Revenues for the six months ended December 31, 1997
decreased 8% to $1,912,028  compared to revenues of $2,078,084 in the comparable
period last year. Decreases in revenue are primarily due to decreases in revenue
for web site development, and for sales of audio codec equipment. The decline of
equipment  revenues in the three and six months ended  December 31, 1997 was due
to unavailability of inventory because of vendor credit  restrictions.  However,
there  are  increases  in  network  access,  usage  fees  and  hosting  revenues
associated with a growing installed base.

Gross Profit  decreased  to $330,553 or 33% of sales,  in the three months ended
December  31, 1997  compared to  $554,549,  or 48% of sales,  in the  equivalent
period  last year.  For the six months  ended  December  31,  1997 gross  profit
decreased to $680,823,  or 36% of sales,  from $874,268,  or 42% of sales in the
equivalent period last year.  Decreases in gross profit as a percentage of sales
are  primarily due to a decrease in web  development  revenue and an increase in
web  programmers  costs of $242,773 for the three months ended December 31, 1997
and six month  costs of  $588,012.  In prior  periods  these costs were shown as
operating overhead costs. With these items excluded, gross profit would increase
in the three months ended December 31, 1997 to $574,326 or 57% of sales compared
to $554,549 or 48% of sales in the equivalent  period.  For the six months ended
December 31, 1997, the gross profit would increase to $1,188,835 or 62% of sales
from $874,268 or 42% of sales.

Operating expenses  (including  Research & Development,  Sales & Marketing,  and
General &  Administrative)  decreased  to  $301,414  in the three  months  ended
December 31, 1997 compared to $1,196,409 in the equivalent period last year. For
the nine  months  ended  December  31,  1997  operating  expenses  decreased  to
$1,196,409  from  $2,472,286  in the  equivalent  period last year.  Significant
non-recurring  expenditures in the three months ended December 31, 1996 included
$764,532 of Research and Development  expense.  Total six months expenditures on
Research & Development were $923,096.  Operating  expenses for the three and six
months  periods  ending  December  31, 1996 also  include  $36,000 and  $204,000
respectively,   which  represents   non-recurring  legal  and  accounting  costs
associated with the IBS acquisition,  the Company's three year audit, the filing
of Form 10-SB registration  statement with the SEC, and fees associated with the
Senior Notes (Note 5). The Company did not incur any  research  and  development
expense during the three and six months ended December 31, 1997.  This reduction
from prior  equivalent  periods is due  primarily to the action taken to license
the  Company's  IBS Internet  software  product to  Breakthrough  Software  Inc.
(Breakthrough), rather than continue development efforts.

Operating  expenses for the three and six month period ending  December 31, 1997
include a reduction of $91,892 for  transfer of debt  against the reserved  note
receivable from Breakthrough (Note 4). There is also a reduction of $242,773 for
the three months and $588,012  for six months  ended  December 31, 1997,  of web
development cost that are now included in the cost of sales for web development.
There is also a non-recurring  expense of $400,000 which  represents the cost of
the 400,000  shares of S-8 common stock of the Company  issued under the Charles
Clark consulting agreement.  With these items excluded,  operating expenses were
$452,295  for the three  months  ended  December  31, 1997  compared to adjusted
operating  expenses of $821,621 for the  comparable  period  representing  a 45%
decrease  from the prior year.  For the six months  ended  December 31, 1997 the
adjusted  operating  expenses  were  $1,292,529  compared to adjusted  operating
expenses of $1,345,190  representing  a 4% decrease from the prior period.  This
decrease is attributed to the reduction of research and development expense.

Net income and  expenses  increased  to a positive  $319,516 in the three months
ended  December 31, 1997 compared to a negative  $100,412  during the equivalent
period  last year.  For the six months  ended  December  31, 1997 net income and
other expenses  increased to a positive $314,993 compared to a negative $157,402
in the equivalent  prior period.  The increase in other income was attributed to
sale of

                                       8
<PAGE>

assets for the investment of Breakthrough of $248,334 (Note 7) and restructuring
of certain accounts  payable debts of $88,451.  The decrease in interest expense
was due to the  restructuring  of senior  notes  (Note  5),  which  resulted  in
interest  expense  decreasing  from  $100,412 to $17,269 for three  months ended
December 31, 1997 and  decreasing  from $157,042 to $21,742 for six months ended
December 31, 1997 compared to their respective comparable periods.

For the three months ended December 31, 1997, the Company  produced a net income
of $346,255 or $0.05 per share based on a weighted  average of 7,264,345  shares
outstanding,  compared with a net loss of $1,170,016, or ($0.26) per share based
on a weighted  average of 4,536,020  shares  outstanding  in the prior year. The
Company  incurred  a net loss for the six  months  ended  December  31,  1997 of
$202,993 , or ($0.03) per share based on a weighted  average of 7,264,345 shares
outstanding,  compared with a net loss of $1,755,060 or ($0.39) per share, based
on a weighted average of 4,536,020 shares in the prior period.

Financial Condition, Liquidity, and Capital Resources

At December 31, 1997, the Company's  accumulated  deficit was $6,964,811 and its
working capital  deficit was  $1,236,770.  The rate of decrease in the Company's
accumulated  deficit  declined  in the  quarter  ended  December  31,  1997  due
primarily  to the sale of  assets  for  investment  of  Breakthrough  (Note  8),
assumption  of debt by  Breakthrough  against  note  receivable  which was fully
reserved  (Note 4), and  restructuring  of the debt with  certain  vendors.  The
Company's  working capital deficit  improved by $728,726 since June 30, 1997 due
primarily  to  restructuring  of Morgan  Fuller's  Senior  Notes  (Note 5),  the
Conversion  of  Irawan  Onggara's  Note  Payable  to equity  (Note  5),  and the
improvement in net income. The Company has also made several  adjustments to its
operations to further reduce costs during the six months period.


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

None


Item 3.  Defaults Upon Senior Securities

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  December 8, 1997 and amended  Form 8-KA filed
                  December 19, 1997 to report  resignation of Coopers & Lybrand
                  L.L.P. as Company's principal accountant.
                  (Note 9).

                                       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.




January 27, 1998                                  By:      /s/Tom Kobayashi
                                                           ---------------------
                                                           Tom Kobayashi
                                                           Chairman of the Board





                                                  By:      /s/David Gustafson
                                                           ---------------------
                                                           David Gustafson
                                                           President




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