U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For Quarterly period ended September 30, 1999 or

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the Transition period from _________ to _________

Commission File No. 0-21534

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

                      Children's Broadcasting Corporation
                      -----------------------------------
                                 (former name)

           Minnesota                                      41-1663712
-------------------------------                ---------------------------------
(State or other jurisdiction of                          (IRS Employer
incorporation or organization)                       Identification Number)

                   5501 Excelsior Blvd., Minneapolis, MN 55416
                   -------------------------------------------
           (Address of principal executive office, including zip code)

                                 (612) 925-8840
                                 --------------
                (Issuer's telephone number, including area code)

     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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_____

     As of November 2, 1999, there were outstanding 6,131,842 shares of common
stock, $.02 par value, of the registrant.

<PAGE>


INDEX

iNTELEFILM CORPORATION

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

            Consolidated Balance Sheets  -- September 30, 1999 and December 31,
            1998.

            Consolidated Statements of Operations -- Three and nine months ended
            September 30, 1999 and 1998.

            Consolidated Statements of Cash Flows -- Nine months ended
            September 30, 1999 and 1998.

            Notes to Consolidated Financial Statements  -- September 30, 1999.


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



PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings
Item 2.     Changes in Securities and Use of Proceeds
Item 3.     Defaults upon Senior Securities
Item 4.     Submission of Matters to a Vote of Security Holders
Item 5.     Other Information
Item 6.     Exhibits and Reports on Form 8-K


SIGNATURES

EXHIBIT INDEX

<PAGE>

iNTELEFILM Corporation
Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                  September 30,      December 31,
                                                                      1999              1998
                                                                   (unaudited)        (audited)
                                                                  -------------     -------------
<S>                                                               <C>               <C>
              ASSETS

Current assets:
      Cash and cash equivalents                                   $   2,524,259     $     253,905
      Accounts receivable                                             6,547,960            39,000
          Allowance for doubtful accounts                              (179,664)          (39,000)
      Accounts receivable - affiliates                                  587,078           280,438
      Radio station assets available for sale                                --        11,391,402
      Other accounts receivable                                       1,583,780           331,527
      Prepaid expenses                                                  193,424           279,816
      Note receivable                                                15,000,000                --
                                                                  -------------     -------------
              Total current assets                                   26,256,837        12,537,088

Note receivable                                                              --        15,000,000
Investment in & notes receivable from Harmony                                --         5,421,322
Property and equipment, net                                           3,072,519           120,385
Goodwill, net                                                         6,811,595                --
Deferred debt issue costs                                                    --           742,737
Other Assets                                                            663,544                --
                                                                  -------------     -------------
              Total assets                                        $  36,804,495     $  33,821,532
                                                                  =============     =============

              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable                                            $   2,930,204     $   2,205,212
      Accounts payable - affiliates                                          --           363,727
      Accrued interest                                                    1,298           143,505
      Accrued income taxes                                            3,017,351           328,000
      Deferred revenue                                                1,090,707         2,675,556
      Other accrued expenses                                          5,115,995         1,227,637
      Line of credit                                                  2,124,773           434,974
      Long-term debt - current portion                                1,921,764        10,665,792
                                                                  -------------     -------------
              Total current liabilities                              16,202,092        18,044,403

Long-term debt, less current maturities                                 731,347           848,111
                                                                  -------------     -------------
              Total liabilities                                      16,933,439        18,892,514
                                                                  -------------     -------------

Commitments and Contingencies                                                --                --

Redeemable convertible preferred stock                                       --         2,448,486
Minority interest                                                        81,387                --

Shareholders' equity
      Common stock                                                      117,929           129,015
          Authorized shares - 50,000,000
          Issued & outstanding shares - voting: 5,955,001
          September 30, 1999 and 6,261,701 - December 31, 1998
          Issued and outstanding shares - nonvoting:
          189,041 - September 30, 1999 and December 31, 1998
      Additional paid-in capital                                     45,258,431        45,773,584
      Accumulated deficit                                           (25,481,691)      (33,292,504)
      Stock subscriptions receivable                                   (105,000)         (129,563)
                                                                  -------------     -------------
              Total Shareholders' Equity                             19,789,669        12,480,532
                                                                  -------------     -------------

      Total Liabilities & Shareholders' Equity                    $  36,804,495     $  33,821,532
                                                                  =============     =============
</TABLE>

<PAGE>


iNTELEFILM Corporation
Consolidated Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                          SEPTEMBER 30,                     SEPTEMBER 30,
                                                                      1999            1998              1999            1998
                                                                 -------------    ------------     -------------    ------------
<S>                                                              <C>              <C>              <C>              <C>
Revenues:
    Production contract revenues                                 $ 21,492,732     $         --     $ 45,732,020     $         --
    Broadcast related revenues                                   $         --          531,842     $     99,912        1,971,248
                                                                 -------------    ------------     -------------    ------------
       Total revenues                                              21,492,732          531,842       45,831,932        1,971,248
    Cost of Production                                             18,024,181               --       38,317,499               --
                                                                 -------------    ------------     -------------    ------------
       Gross profit                                              $  3,468,551     $    531,842     $  7,514,433     $  1,971,248

Operating expenses:
    Production divisions
       Selling                                                        598,009               --        1,561,025               --
       General and administrative                                   2,238,867               --        4,425,274               --
    Broadcast related expenses                                             --        1,102,111          193,319        3,443,814
                                                                 -------------    ------------     -------------    ------------
Production service income (loss)                                      631,675         (570,269)       1,334,815       (1,472,566)

Stock option compensation                                              60,000               --        2,018,250               --
Corporate                                                             893,382        1,413,877        2,278,010        3,941,445
Depreciation and amortization                                         446,680          528,005        1,018,176        1,621,626
                                                                 -------------    ------------     -------------    ------------
Income (loss) from operations                                        (768,387)      (2,512,151)      (3,979,621)      (7,035,637)

Gain/(loss) on sale of radio stations and production division         141,517          542,297       16,679,473          542,297
Equity loss in Harmony                                                     --         (877,074)      (1,930,942)      (1,803,871)
Interest income net of interest (expense)                             296,150       (1,267,549)         165,182       (3,414,533)
                                                                 -------------    ------------     -------------    ------------

Net income (loss) before income taxes                                (330,720)      (4,114,477)      10,934,092      (11,711,744)

Income tax provision                                                       --               --        3,101,892               --
                                                                 -------------    ------------     -------------    ------------

Net income (loss)                                                $   (330,720)    $ (4,114,477)    $  7,832,200     $(11,711,744)
Accretion of preferred stock and minority interest                    (21,387)        (544,189)         (21,387)        (544,189)
                                                                 -------------    ------------     -------------    ------------
Net income (loss) to common shareholders                         $   (352,107)    $ (4,658,666)    $  7,810,813     $(12,255,933)
                                                                 =============    ============     =============    ============

Basic and diluted net income (loss) per share                    $      (0.05)    $      (0.69)    $       1.21     $      (1.83)
                                                                 =============    ============     =============    ============

Weighted average number of shares outstanding                       6,410,305        6,728,000        6,463,852        6,692,000
                                                                 =============    ============     =============    ============
</TABLE>

<PAGE>


iNTELEFILM Corporation
Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
                                                                                   NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                                                                 1999             1998
                                                                             -----------------------------
<S>                                                                          <C>              <C>
Operating activities:
Net income (loss)                                                            $  7,832,200     $(11,711,744)
Adjustments to reconcile net income (loss) to net
      cash used in operating activities:
           Provision for doubtful accounts                                         96,947         (285,995)
           Depreciation & amortization                                          1,018,176        1,621,626
           Gain on sale of radio stations & production division               (16,679,473)        (542,297)
           Net barter activity                                                         --           (8,840)
           Stock option compensation                                            2,018,250               --
           Amortization and write-off of deferred debt issue costs                742,737          615,640
           Equity loss in Harmony                                               1,930,942        1,803,871
           Non-cash interest payment related to sale of stations                   92,008               --
           Issuance of common stock for payment of interest                            --           79,788
           Decrease (increase) in:
                 Accounts receivable                                             (648,865)       1,387,276
                 Other receivables                                                223,365          (68,751)
                 Prepaid expenses                                                  99,322          (29,655)
           Increase (decrease) in:
                 Accounts payable                                              (3,328,793)         615,272
                 Accrued interest                                                 (12,493)         132,043
                 Deferred income                                                 (352,078)              --
                 Other accrued expenses                                         4,106,589        3,242,624
                                                                             ------------     ------------
                      Net cash used in operating activities                    (2,861,166)      (3,149,142)
                                                                             ------------     ------------

Investing activities:
      Sale/purchase of property & equipment                                      (494,577)         151,783
      Net investment in & notes receivable from Harmony                        (1,663,102)      (1,557,500)
      Cash acquired related to Harmony consolidation                              723,872               --
      Investment in Curious Pictures                                           (1,500,000)              --
      Other capital expendiures                                                  (844,938)       1,452,327
      Proceeds from sale station and production division assets                13,720,358               --
                                                                             ------------     ------------
                      Net cash provided by (used in) investing activities       9,941,613           46,610
                                                                             ------------     ------------

Financing activities:
      Payment of debt                                                          (1,556,468)      (2,869,784)
      Proceeds from debt financings                                                    --        3,724,449
      Redemption of convertible preferred stock                                (2,450,002)              --
      Repurchase of common stock                                                 (825,123)              --
      Proceeds from issuance of common stock                                           --            5,000
      Proceeds from issuance of convertible preferred stock                        21,500        1,864,250
                                                                             ------------     ------------
                      Net cash provided by (used in) financing activities      (4,810,093)       2,723,915
                                                                             ------------     ------------

Increase (decrease) in cash and cash equivalents                                2,270,354         (378,617)
Cash and cash equivalents at beginning of period                                  253,905          545,258
                                                                             ------------     ------------

Cash and cash equivalents at end of period                                   $  2,524,259     $    166,641
                                                                             ============     ============
</TABLE>

<PAGE>


iNTELEFILM Corporation
Notes to Consolidated Financial Statements (unaudited)
September 30, 1999

Note 1       Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310 of
Regulation S-B. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals with the exception of the adjustments discussed in
Note 2) considered necessary for a fair presentation have been included.
Operating results for the three and nine-month periods ended September 30, 1999,
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Form 10-KSB
for the year ended December 31, 1998.

Additionally, in April 1999, the Company acquired additional shares of Harmony
Holdings, Inc. ("Harmony") (see Note 3). This additional ownership allows the
Company to consolidate Harmony, for financial statement purposes, as of April 1,
1999, rather than accounting for the investment under the equity method as it
has for all previous periods presented.

Note 2       Significant Transactions during 1999

The following significant transactions occurred during 1999 and are considered
non-recurring:

A.       In January and February 1999, the Company advanced Harmony $2.38
         million in cash pursuant to unsecured note receivable agreements due on
         demand, which bore interest at 10%. Additionally, in February 1999, all
         notes with Harmony were amended to provide for interest at 14%. It is
         management's belief that 14% reflects the interest rate that would be
         charged to Harmony by other junior and unsecured lenders. In June and
         August 1999, Harmony paid the Company an aggregate of $1.0 million
         representing approximately $771,000 of principal and $229,000 of
         related interest. Notes outstanding with Harmony aggregated
         approximately $2.3 million as of November 3, 1999. These notes and
         related interest are eliminated for all consolidated periods presented.

B.       In January 1999, the Company closed on the sale of the radio broadcast
         licenses and certain other assets of its radio stations KAHZ(AM),
         Dallas, KIDR(AM), Phoenix, and WJDM(AM), New York, to Radio Unica Corp.
         ("Radio Unica"). The Company received gross proceeds of $29.25 million
         for the stations' assets which had a net book value of approximately
         $11.4 million at the time of the sale. The Company incurred
         approximately $1.5 million of transaction costs including bonuses paid
         to management, employees and Media Management, LLC.

C.       In January 1999, the Company redeemed all of its 606,061 shares of
         Series B Convertible Preferred Stock which were issued in June 1998.

<PAGE>


         The preferred stock was redeemed at $4.04 per share, or $2.45 million,
         utilizing a portion of the proceeds from the Radio Unica transaction
         (Note 2B).

D.       In January 1999, the Company entered into an agreement regarding the
         production of a picture titled "True Rights" based on a screenplay
         written by Meg Thayer. In exchange for providing certain financing of
         the production, the Company received a 33.33% equity interest in the
         screenplay, production of "True Rights" and any other material relating
         thereto. Also, the Company shall receive 30.0% of the net proceeds from
         the distribution and exploitation of "True Rights" in all media and all
         sources worldwide after the Company receives, on a parri passu basis
         with other investors, the sum equal to 125% of its respective
         contribution to the production of "True Rights". The Company's
         financing obligation totaled $126,000 and was paid in full during the
         filming of the project.

E.       In February 1999, the Company incorporated a new subsidiary, Buffalo
         Rome Films, Inc. ("Buffalo Rome"). Buffalo Rome seeks out independent
         film opportunities.

F.       On March 4, 1999, the Company acquired all of the issued and
         outstanding common stock of Chelsea Pictures, Inc. ("Chelsea") for
         consideration totaling approximately $1.14 million, representing
         125,000 shares of common stock with a value of $250,000 and the
         assumption of approximately $885,000 of liabilities net of assets.
         Chelsea is a television commercial production company with principal
         operations in New York. The acquisition has been accounted for as a
         purchase, whereby, all assets purchased and liabilities assumed were
         recorded at their fair market value. Additional consideration for the
         transaction may consist of issuance of up to an aggregate of 75,000
         additional shares of the Company's common stock. Any future issuance is
         dependent on Chelsea meeting certain performance goals during the year
         ended December 31, 1999. The value of shares issued will be treated as
         an adjustment to the purchase price at the time of issuance.

         The unaudited pro forma results of operations which follow, assume that
         the acquisition of Chelsea had occurred at January 1, 1998. In addition
         to combining the historical results operations of the Company and the
         acquired business, the pro forma calculations include adjustments for
         the estimated effect on the historical results of operations for
         depreciation, interest and issuances of common stock related to the
         business acquisition.

                            Three Months Ended            Nine Months Ended
                            ------------------            -----------------
                          9/30/99       9/30/98        9/30/99        9/30/98
                          -------       -------        -------        -------

Revenues               $ 21,492,732   $ 3,783,415   $ 47,439,932   $ 11,725,966

Gross profit              3,468,551       885,041      7,680,707      3,030,846

Loss from operations       (768,387)   (2,510,852)    (4,202,683)    (7,031,741)

Net income/(loss)          (330,720)   (4,106,776)     7,695,885    (11,688,640)

Net income per share          (0.05)        (0.60)          1.19          (1.71)

Weighted average number   6,410,000     6,853,000      6,464,000      6,817,000
  of shares outstanding

<PAGE>


         The unaudited pro forma results do not purport to be indicative of the
         results of operations which actually would have resulted had the
         acquisition occurred on January 1, 1998, or of future results of
         operations of the consolidated entities.

G.       In April 1999, the Company's Board of Directors authorized the
         repurchase of up to 500,000 shares of its common stock, representing
         approximately 7.6% of the then outstanding common stock, over a period
         of 12 months. Repurchases have been and will be made in accordance with
         Exchange Act Rule 10b-18, and will be subject to the availability of
         stock, trading price, market conditions and the Company's financial
         performance. The repurchased shares will be canceled and returned to
         the Company's authorized capital stock. As of November 2, 1999, the
         Company had repurchased an aggregate of 443,900 shares at prices
         ranging from $1.63 to $2.06 per share.

H.       In April, May and June 1999, the Company purchased an aggregate of
         456,600 shares of Harmony's common stock at prices ranging from $.94 to
         $1.03 per share. These purchases increased the Company's ownership in
         Harmony to approximately 55.2%. For reporting purposes, the Company has
         prepared consolidated financial statements under the purchase method of
         accounting for the acquisition of a majority interest in a subsidiary.

I.       Effective July 1, 1999, Harmony sold 90% of the issued and outstanding
         shares of capital stock of one of its consolidated subsidiaries, The
         End (London), LTD ("The End (London)"), to a principal executive (the
         "Purchaser") of The End (London) for nominal consideration. The End
         (London) is a commercial production company based in London, England,
         and, prior to this sale, was a wholly owned subsidiary of Harmony. In
         connection with the sale, the Company and the Purchaser entered into an
         agreement granting the Purchaser the right, under certain
         circumstances, to purchase the remaining 10% equity interest in The End
         (London) from Harmony for approximately $803,000.

J.       Effective as of August 1, 1999, the Company purchased the Option and
         Share Transfer Agreement ("Option Agreement") entered into by Harmony
         and the four principal executives (collectively, "Curious Management")
         of Curious Pictures Corporation ("Curious Pictures") dated December 15,
         1996. Under the Option Agreement, Curious Management could earn the
         right to purchase 50% of the outstanding stock of Curious Pictures from
         Harmony upon the achievement of certain specified financial goals.
         Pursuant to the Company's purchase agreement and based on the results
         of operations of Curious Pictures, it was agreed by all parties that
         Curious Management's rights to purchase the 50% equity interest in
         Curious Pictures had fully vested and were exercisable for
         consideration totaling $50. Following its purchase of the Option
         Agreement, the Company acquired 50% of Curious Pictures through the
         exercise of stock options granted under the Option Agreement. The
         Company also acquired a 1% equity interest in Curious Pictures owned by
         Curious Management that was initially conveyed to Curious Management
         upon signing the Option Agreement. The consideration paid to Curious
         Management by the Company for the aforementioned acquisitions
         aggregated $3.0 million consisting of $1.5 million in cash and a $1.5

<PAGE>


         million note receivable bearing an interest rate of 8%, due May 31,
         2000. As a result of the aforementioned transaction, the Company owns
         51% of the outstanding stock of Curious Pictures and Harmony owns 49%
         of the outstanding stock of Curious Pictures.

         In addition, as of January 1, 1999, Curious Pictures entered into new
         five-year employment agreements with each of the four members of
         Curious Management. As part of the compensation to be paid to Curious
         Management, at the end of each employment year, each member of Curious
         Management was granted the right to purchase from Harmony, one share of
         Curious Pictures, representing 1% of the capital stock of Curious
         Pictures. As a result, if all of the members of Curious Management
         exercise all of their new options over the five-year term of their
         employment agreements, the Company will own 51% of the Curious Pictures
         stock, Curious Management will collectively own 20%, and Harmony will
         own the remaining 29%. Additionally, the Company granted Curious
         Management warrants to purchase 300,000 shares of the Company's common
         stock for approximately $1.92 per share.

         The Company, Harmony, and Curious Management also entered into a Stock
         Agreement effective as of August 1, 1999. Under this agreement, the
         members of Curious Management were granted the right to sell to the
         Company, the shares of Curious Pictures that they earn from Harmony
         (the put right), and the Company obtained the right to purchase such
         shares from Curious Management (the call right). The price to be paid
         by the Company to Curious Management under the put or call is $96,774
         per share. These options have been valued at their intrinsic value as
         of August 1, 1999 ($54,000 per option). The related compensation
         expense will be recognized ratably over the employment agreement
         service period and reflected as a minority interest on the Company's
         balance sheet. Further, the minority interest will be ratably accreted
         to the value of management's put right ($96,774 per share) over the
         time period from the option vesting date to the date that the put right
         may be exercised. During the three month period ended September 30,
         1999, the Company recognized compensation expense and accretion of the
         minority interest of $60,000 and $21,000, respectively, resulting in a
         minority interest valuation aggregating $81,000 at September 30, 1999.

K.       In October 1999, the Company received payment in full on its $15.0
         million note receivable with Catholic Radio Network ("CRN"). The
         related interest and negotiated radio station sale prorations paid at
         that time were approximately $226,000. The note was originally
         scheduled to mature April 2000.

Note 3       Investment in Harmony

         With the purchase of 456,600 shares of Harmony's common stock (see Note
         2H), the Company holds a majority interest in Harmony through the
         ownership of 4,139,562 shares of Harmony's common stock. As of November
         3, 1999, the Company's investment represented 55.2% of Harmony's
         outstanding common stock. Harmony's most recent fiscal year end was
         June 30, 1999. Harmony's operations prior to the Company consolidating
         Harmony's financial statements, are summarized as follows for the
         quarter ended March 31, 1999:

<PAGE>


                                        Three Months
                                       Ended 3/31/99
                                       -------------

         Contract revenues              $16,274,699
         Cost of production              13,889,304
                                        -----------

         Gross profit                     2,385,395
         Production expenses              2,850,724
                                        -----------

         Income from productions           (465,329)
         Corporate, depreciation
            & amortization                  835,624
         Restructuring cost &
            impairment of assets           (175,000)

         Loss from
            operations                   (1,125,953)
         Interest expense                   (79,089)
                                        -----------

         Net loss                       $(1,205,042)
                                        -----------


         Harmony's results from operations are consolidated in the quarters
ended June 30, 1999 and September 30, 1999 (see Note 2H). Previous periods are
accounted for under the equity method.

         No minority interest is currently shown related to Harmony, as the
minority shareholders no longer have any equity basis in their investment. As of
September 30, 1999, the Company has recognized losses in excess of its prorata
share totaling $1.9 million.

Note 4       Reclassifications

Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation. These reclassifications have no effect on the
accumulated deficit or net income or loss previously reported.


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

         This discussion and analysis contains certain non-historical
forward-looking terminology such as "believes," "expects," "anticipates," and
"intends," or comparable terminology. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. Potential purchasers of the Company's securities are
cautioned not to place undue reliance on such forward-looking statements which
are qualified in their entirety by the cautions and risks described herein.

General

         The Company has officially changed its name to iNTELEFILM Corporation
and changed its Nasdaq symbol to "FILM". The Company

<PAGE>


implemented these changes as part of its repositioning into the commercial
production industry. Further, management believes that the Company has become
the largest producer of television commercials in the world. The Company has
made several investments in, and acquisitions of, television commercial
production and related media companies. These transactions are briefly described
in the following paragraph. More details on these transactions can be found in
Note 2 to the financial statements elsewhere in this document.

         The Company has become a 55.2% owner of Harmony, a company that
produces television commercials, music videos, and related media. Additionally,
the Company has incorporated two new subsidiaries, Populuxe Pictures, Inc.
("Populuxe"), and Buffalo Rome. Populuxe is based in New York and currently is
comprised of three directors along with an executive staff. Populuxe produces
television commercials and related media. Buffalo Rome seeks independent film
opportunities. The Company also acquired a 33.3% equity interest in the
screenplay, production of, and any other material relating to the film "True
Rights". In the first quarter of 1999, the Company acquired the stock of
Chelsea, which is based in New York and engages in the production of television
commercials, independent films and related media. Effective August 1, 1999, the
Company purchased 51% of the stock of Curious Pictures, a commercial production
company and a producer of broadcast television programming. Curious Pictures has
studios in New York and San Francisco.

         In the past year, the Company has transformed itself into a leading
source of services for the television commercial production industry, offering
the most extensive production capability available in the United States and the
exclusive services of established industry talent. The Company plans additional
acquisitions to further broaden its offering of services with the objective of
enhancing overall profit margins and leveraging its unique pool of talent and
technical expertise to capitalize on the convergence of short-form video content
and technologies of broadband Internet delivery systems.

         It is the Company's intention to acquire small to medium sized
commercial production companies, as well as ancillary support and information
businesses. By undertaking this strategy, the Company believes it can increase
revenues and profits four ways: (i) Increase its talent base of in-demand
creative personnel; (ii) eliminate duplication of efforts through a centralized
accounting, sales and marketing effort; (iii) increase leverage with suppliers
and support services to receive more competitive rates and (iv) raise overall
profits through the strategic addition of high margin ancillary support and
information business.

         Management believes that such a consolidation will place the Company in
a position to better serve and interact with the recent consolidation of global
advertising agencies, as well as position itself for the transition to digital
based business and Internet/new media applications.



<PAGE>


         During 1998, the Company focused on the sale of the radio stations it
had acquired pursuant to its former business strategy. The last of such were
sold on January 14, 1999. In exchange for its radio stations, the Company
obtained approximately $55.0 million in cash and a note receivable for $15
million which was paid in full in October 1999.

         Results of Operations:

         Three and Nine Months ended September 30, 1999 compared to Three and
Nine Months ended September 30, 1998.

         During the quarter ended June 30, 1999, the Company's ownership in
Harmony increased to 55.2%. As a result of this majority interest in Harmony,
the Company is required to prepare consolidated financial statements under the
purchase method of accounting for the acquisition of a majority interest in a
subsidiary. Harmony's results from operations are consolidated in the quarters
ended June 30, 1999 and September 30, 1999 (see Note 2H to the financial
statements). Previous periods are accounted for under the equity method.

         The Company's total revenues increased $20,961,000 from $532,000 in the
third quarter of 1998 to $21,493,000 in the third quarter of 1999. During the
first nine months of 1999, revenues increased $43,861,000 over the same period
in 1998. Of these increases, $16,378,000 was produced by Harmony during the
third quarter of 1999, and $35,060,000 was produced by Harmony during the second
and third quarters of 1999 ("the Consolidated Reporting Period"). Chelsea and
Populuxe, two of the Company's new production companies, provided $5,114,000 of
revenue during the third quarter of 1999 and a total of $10,672,000 of revenues
during the first nine months of 1999, while the remaining revenues were related
to the broadcasting entities the Company held until mid-January 1999. Populuxe
is a start-up company which is building a new base of talent and directors with
which to produce revenues. Management believes that revenues will increase over
time as this base becomes fully developed. The Company began operating Chelsea
in March 1999. Chelsea currently has a base of talent and directors from which
to draw, but intends to continue to build that base to increase revenues.

         Cost of production is directly related to revenues and includes all
direct costs incurred in connection with the production of television
commercials including film, crews, location fees and commercial directors' fees.
Cost of production as a percentage of production contract revenues was 84%
during the third quarter and first nine months of 1999. Management believes the
cost of production as a percentage of revenues will decrease as the production
companies retain more directors and these directors become more established.

<PAGE>


         Selling expenses consist of sales commissions, advertising and
promotional expenses, travel and other expenses incurred in the securing of
television commercial contracts. Harmony's selling expenses were $551,000 and
$1,391,000 during the third quarter of 1999 and the Consolidated Reporting
Period, respectively, while selling expenses at Chelsea and Populuxe were
$47,000 and $170,000 for the three and nine months ended June 30, 1999,
respectively.

         General and administrative expenses at the production companies consist
of overhead costs such as office rent and expenses, executive, general and
administrative payroll, and related items. Harmony's general and administrative
expenses were $1,636,000 and $3,102,000 for the third quarter of 1999 and the
Consolidated Reporting Period, respectively, while these expenses at Chelsea and
Populuxe were $603,000 and $1,323,000 during the three and nine months ended
September 30, 1999, respectively.

         Expenses related to the Company's broadcasting entities held until
mid-January 1999 were $190,000 for the nine months ended September 30, 1999, a
decrease of $3,254,000 compared to the first nine months of 1998. These expenses
decreased as the radio stations were sold and the network discontinued producing
programming.

         Stock option compensation was $2,018,000 for the nine months ended
September 30, 1999 and includes the following: (i) $50,000 of expense related to
options granted to members of the Company's Board of Directors, (ii) $1,908,000
of expense related to previously existing options granted to Curious Management,
and (iii) $60,000 of expense related to current options granted to Curious
Management.

         Corporate charges decreased $521,000 during the third quarter of 1999
from $1,414,000 in the third quarter of 1998 to $893,000. During the first nine
months of 1999, these expenses decreased $1,663,000 as compared to the same
period in 1998. This decrease is attributable in part to a decrease in legal,
accounting, and outside service fees which were elevated in 1998 due to the
activity related to the sale of the radio stations. Additionally, during the
first nine months of 1999, there was a decrease in litigation expenses of
$2,103,000 as the trial against ABC/Disney was concluded in the last quarter of
1998. A less costly appeals process continues at this time. Corporate charges of
$642,000 during the Consolidated Reporting Period are attributable to Harmony.

         Depreciation and amortization decreased $81,000 in the third quarter of
1999 compared to the third quarter of 1998, and decreased $603,000 in the first
nine months of 1999 compared to the first nine months of 1998. Depreciation and
amortization related to Harmony was $183,000 and $394,000 for the third quarter
of 1999 and the Consolidated Reporting Period, respectively. The decrease in
depreciation and amortization is a result of the Company's sale of its radio
stations. The Company reported $225,000 of amortization expense in each of the
second and third quarters of 1999 related to the excess of the investment cost
over the value of the underlying net assets (goodwill) of Harmony. Prior to the
Company obtaining a majority

<PAGE>


interest in Harmony, this expense was reported as a portion of the equity loss
in Harmony.

         A net gain of $16,530,000 was realized in the first quarter months of
1999 from the sale of three of the Company's radio stations to Radio Unica. In
the third quarter of 1999, a gain of $150,000 was realized related to the sale
of 90% of the common stock of The End (London), a previously consolidated
subsidiary of Harmony (see Note 2I to the financial statements).

         Net interest income for the third quarter of 1999 was $296,000 compared
to net interest expense of $1,268,000 during the same period of 1998. Net
interest income for the first nine months of 1999 was $165,000 compared to net
interest expense of $3,415,000. This decrease in interest expense was a result
of the payoff of the majority of the Company's debt in existence at the time of
the radio station sale, January 1999. Since that time, the Company has been
reporting the interest earned from the $15.0 million note receivable due from
CRN which was paid in full in October 1999, and, prior to the Consolidated
Reporting Period, the interest earned from the advances made to Harmony.

         A tax provision of $3,100,000 was recorded in the first quarter of
1999. This represents approximately $700,000 of federal income tax and
$2,400,000 of state taxes estimated to be due as a result of the sale of the
radio stations. Income tax expense of $2,000 related to Harmony was recorded
during the Consolidated Reporting Period.

         Net loss of $331,000 was realized in the third quarter of 1999 compared
to a net loss of $4,114,000 in the third quarter of 1998. Net income of
$7,832,000 was realized during the first nine months 1999 compared to a net loss
of $11,712,000 in the first nine months of 1998. This increase was due primarily
to the sale of the radio stations and the reduction of those stations' operating
losses.

Liquidity and Capital Resources

         The Company's liquidity, as measured by its working capital, was
$10,055,000 at September 30, 1999, compared to a deficit of $5,507,000 at
December 31, 1998. This increase in working capital was due to the sale of three
radio stations to Radio Unica, the payoff of related debt, and the
reclassification of the note receivable from CRN of $15.0 million to a current
asset.

         In January 1999, the Company closed on the sale of the radio broadcast
licenses and certain other assets of its radio stations KAHZ(AM), Dallas,
KIDR(AM), Phoenix, and WJDM(AM), New York, to Radio Unica. The Company received
gross proceeds of $29.25 million for the stations' assets which had a net book
value of approximately $11.4 million at the time of the sale. The Company
recognized approximately $1.5 million in transaction costs including bonuses
paid to management, employees and Media Management, LLC, recorded a tax
provision of $3.1 million, and paid off all but $981,000 of its debt outstanding
at the time of closing. The following is a description of the use of the
proceeds from the Radio Unica transaction:

<PAGE>


         *     The Company redeemed 606,061 shares of Series B Convertible
               Preferred Stock which were issued in June 1998 for an aggregate
               of $2.45 million (see Note 2C to the financial statements).

         *     The Company advanced Harmony approximately $2.4 million in cash
               pursuant to unsecured note receivable agreements which are due on
               demand and bear an interest rate of 14%. Total advances from the
               Company at that time were approximately $3.1 million.
               Subsequently, Harmony repaid the Company a total of $1.0 million
               in principal and related interest which leaves approximately $2.3
               million remaining due and payable to the Company as of November
               3, 1999 (see Note 2A to the financial statements). These notes
               and the related interest are eliminated in the Company's
               consolidation of Harmony for periods after April 1, 1999.

         *     The Company acquired all of the issued and outstanding common
               stock of Chelsea for consideration totaling approximately
               $1,135,000, representing 125,000 shares of common stock with a
               value of $250,000 and the assumption of approximately $885,000 of
               liabilities net of assets (see Note 2F to the financial
               statements).

         *     The Company's Board of Directors authorized the repurchase of up
               to 500,000 additional shares of its common stock. As of November
               2, 1999, the Company has paid a total of approximately $839,000
               to repurchase an aggregate of 443,900 shares of common stock
               under this plan (see Note 2G to the financial statements).

         *     The Company purchased 51% of Curious Pictures, a commercial
               production company, from Curious Management for $1.5 million in
               cash and $1.5 million pursuant to a promissory note bearing 8%
               interest, due May 31, 2000. Curious Pictures was a subsidiary of
               Harmony, which now owns 49% of Curious Pictures (see Note 2J to
               the financial statements).

         In October 1999, the Company received payment in full on its $15.0
million note receivable due from CRN. Management believes that with this money
as the foundation of its acquisition capital, the Company will have adequate
capital to continue its new business plan and acquisition strategy. However,
should a potential acquisition require greater capital than the Company's
current cash sources, the Company may need to obtain additional financing. If
the Company is not able to obtain adequate financing, or financing on acceptable
terms, it could possibly cause a delay in the implementation of its full
business plan. The Company has begun to execute the initial phase of its
business plan to acquire production companies through the acquisition of Chelsea
in March 1999, and the acquisition of 51% of Curious Pictures in August 1999.
The Company believes that a number of potential acquisitions similar in nature
to its acquisition of Chelsea exist. There can be no assurance that the Company
will consummate any

<PAGE>


additional acquisition or that any acquisition, if consummated, will ultimately
be advantageous or profitable for the Company.

         Consolidated cash was $2,524,000 at September 30, 1999 and $254,000 at
December 31, 1998, an increase of $2,270,000.

         Cash used in operating activities during the nine months ended
September 30, 1999 was $2,861,000 and the operating cash flows reflected are net
of account increases occurring as a result of acquisitions. Accounts receivable
at September 30, 1999 increased $649,000 from December 31, 1998, other
receivables at September 30, 1999 decreased $223,000, and prepaid expenses at
September 30, 1999 decreased $99,000 from December 31, 1998. Accounts payable at
September 30, 1999 decreased $3,329,000 from December 31, 1998, accrued interest
at September 30, 1999 decreased $12,000, other accrued expenses at September 30,
1999 increased $4,107,000 from December 31, 1998, and deferred income decreased
$352,000 during the same period.

         During the nine months ended September 30, 1999, net cash obtained
through investing activities was $9,942,000 and was provided primarily by the
sale of the radio stations to Radio Unica net of proceeds utilized for the
direct payment of outstanding debt. As of September 30, 1999, advances made to
Harmony under note receivable agreements were $2,279,000 net of Harmony's
repayments. Of the $3,250,000 principal advance to Harmony, Harmony has repaid
the Company $971,000 of principal as well as the related interest. Proceeds from
the sale of radio stations totaled $14,034,000, net of advance payments received
prior to December 31, 1998.

         Cash used in financing activities amounted to $4,810,000 during the
nine months ended September 30, 1999. This represents the redemption of the
convertible preferred stock for $2,450,000, the repurchase of the Company's
common stock of $825,000, and the cash used to repay debt.

Subsequent Events

         In October 1999, the Company received payment in full on its $15.0
million note receivable due from CRN (see "Liquidity and Capital Resource").

Year 2000 Readiness Disclosure

         The term "Year 2000" is used to describe general problems that may
result from improper processing of dates and date-sensitive calculations by
computers or other machinery as the year 2000 is approached and reached. This
problem stems from the fact that many of the world's computer hardware and
software applications have historically used only the last two digits to refer
to a year. As a result, many of these computer programs do not or will not
properly recognize a year that begins with "20" instead of the familiar "19". If
not corrected, this could result in a system failure or miscalculations which
may cause disruptions in operations, including

<PAGE>


among other things, a temporary inability to process transactions, send
invoices, or engage in similar business activities.

State of Readiness

         To operate its business, the Company relies on certain information
technology ("IT") and non-technology systems, including its payroll, accounts
payable, banking and general ledger systems. The Company does not maintain any
proprietary IT systems and has not made any modifications to any of the IT
systems provided to it by outside vendors. The Company has used an outside IT
consultant to assess the readiness of its hardware and software. This assessment
has been completed and the remediation needed to bring the Company's systems
into compliance is scheduled to be completed by November 25, 1999. As part of
this remediation process, the Company replaced its voice-mail system during the
second quarter of 1999 at a cost of approximately $8,000.

         The Company also relies upon certain suppliers and service providers,
over which it can assert little control. The Company has contacted critical
suppliers and service providers to assess the readiness of such parties and to
determine the extent to which the Company may be vulnerable to such parties'
failure to resolve their own Year 2000 issues. To date, ongoing communications
with these parties have not brought to our attention any material non-compliant
issues.

Costs to Address Year 2000 Issues

         The Company anticipates that it may incur up to approximately $32,000
in additional costs to bring its remaining systems into Year 2000 compliance.
Based on the results of the Company's assessment, the Company believes that any
future expenses that may be incurred will not have a material adverse effect on
the Company's business, operating results or financial condition.

Risks of Year 2000 Issues

         The Company recognizes that Year 2000 issues constitute a material
known uncertainty. The Company also recognizes the importance of ensuring that
Year 2000 issues will not adversely affect its operations. The Company believes
that the processes described above will be effective to manage the risks
associated with the problem. However, there can be no assurance that the
processes can be completed on the timetable described above or that remediation
will be fully effective. The failure to identify and remediate Year 2000 issues,
or the failure of key vendors, suppliers and service providers or other critical
third parties who do business with the Company to timely remediate their Year
2000 issues could cause an interruption in the business operations of the
Company. At this time, however, the Company does not possess information
necessary to estimate the overall potential financial impact of Year 2000
compliance issues.

         Specific risks the Company may face with regard to Year 2000 issues may
include the inability of the Company's suppliers and service providers to be
Year 2000 ready which could result in television

<PAGE>


commercial production delay and may affect the Company's business. The most
likely worst case scenario for the Company is that it would be temporarily
unable to produce television commercials due to disruptions in the functioning
of its production equipment. The failure to produce television commercials would
result in reduced revenues and cash flows for the Company during the period of
disruption.

Contingency Plans

         The Company recognizes the need for Year 2000 contingency plans in the
event that remediation is not fully successful or that remediation efforts of
its suppliers are not timely completed. Contingency plans for Year 2000 related
interruptions are being finalized.

Seasonality and Inflation

         In the past, the Company's revenues generally followed retail sales
trends, with the fall season, September through December, reflecting the highest
revenues for the year, due primarily to back-to-school and holiday season retail
advertising, and the first quarter reflecting the lowest revenues for the year.
Presently, the Company has not determined the impact of seasonality on its
future revenues. The Company does not believe inflation has affected the results
of its operations, and does not anticipate that inflation will have an impact on
its future operations.


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

         The Company filed a lawsuit in the fall of 1996 against ABC Radio
         Networks, Inc. ("ABC Radio") and The Walt Disney Company ("Disney")
         (collectively, "ABC/Disney"). On September 30, 1998, the jury entered a
         verdict in favor of the Company and awarded the Company $20 million in
         damages for breach of contract by ABC Radio, $10 million for
         misappropriation of trade secret by ABC Radio and $10 million for
         misappropriation of trade secret by Disney. On January 15, 1999,
         although the United States District Court for the District of Minnesota
         upheld the jury's findings as to liability, it set aside the jury's
         verdict on causation and damages. The Company filed a Notice of Appeal
         on February 12, 1999, and the Company intends to pursue its appeal of
         the judgment. Certain personnel and financial resources will be used to
         this end.

Item 2.  Changes in Securities.

         a.       Not applicable.

         b.       Not applicable.

         c.       On July 27, 1999, the Company issued warrants to purchase
                  300,000 shares of its Common Stock, exercisable at $1.92

<PAGE>


                  per share, to the four principal officers of Curious Pictures
                  Corporation. Each warrant becomes exercisable to the extent of
                  50% of the shares purchasable thereunder on January 1, 2001,
                  provided that the warrant holder is then employed by Curious
                  Pictures. If the holder of the warrant agrees to extend his or
                  her employment agreement with Curious Pictures through
                  December 31, 2004, such warrant will become exercisable as to
                  the remaining 50% of the shares purchasable thereunder on
                  January 1, 2004. Each warrant expires on December 31, 2004.
                  This issuance was in connection with the Company's purchase of
                  1% of the equity of Curious Pictures and the Company's right
                  to acquire an additional 50% of the equity of Curious Pictures
                  from the four principal officers of Curious Pictures.

                  The above issuance was made in reliance upon the exemption
                  provided in Section 4(2) of the Securities Act of 1933, as
                  amended (the "Act"), which provides an exemption for
                  transactions not involving a public offering. The purchasers
                  of the securities described above acquired the warrants for
                  their own account and not with a view to any distribution
                  thereof to the public. At its issuance, the foregoing
                  securities were restricted as to sale or transfer, unless
                  registered under the Act, and the documents representing such
                  securities contained a restrictive legend, stating that the
                  securities were not to be offered, sold, or transferred other
                  than pursuant to an effective registration statement under the
                  Act, or an exemption from such registration. In addition, the
                  recipients of such securities received or had access to
                  material information concerning the Company, including but not
                  limited to the Company's reports on Form 10-KSB, Form 10-QSB
                  and Form 8-K, as filed with the Securities and Exchange
                  Commission. No underwriting commissions or discounts were paid
                  with respect to the issuances of the securities described
                  above.

         d.       Not applicable.


Item 3.  Defaults upon Senior Securities.

         Not applicable.

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

         Not applicable.

Item 5.  Other Information.

         Not applicable.

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

<PAGE>


         a.       Exhibits

                  3        Articles of Incorporation, as amended.

                  27       Financial Data Schedule

         b.       Current Reports on Form 8-K

                  The Company filed the following Current Reports on Form 8-K
(File No. 0-21534) with the Commission during the quarter for which this report
is filed:

                  1.       The Company's Current Report on Form 8-K filed on
                           July 2, 1999, relating to the Company doing business
                           as iNTELEFILM and changing its ticker symbol to
                           "FILM."

                  2.       The Company's Current Report on Form 8-K filed on
                           August 4, 1999, relating to the Company's purchase of
                           51% of the equity in Curious Pictures Corporation.

<PAGE>


                                   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 hereunto duly authorized on November 8, 1999.

                                             iNTELEFILM Corporation


                                       BY:   /s/ James G. Gilbertson
                                             -----------------------------------
                                             James G. Gilbertson
                                       ITS:  Chief Operating Officer and Chief
                                             Financial Officer


EXHIBIT INDEX

3        Articles of Incorporation, as amended.

27       Financial Data Schedule