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 June 30, 2000 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)

          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 August 4, 2000, there were outstanding 6,511,366 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 -- June 30, 2000 and December 31, 1999.

         Consolidated Statements of Operations -- Three and six months ended
         June 30, 2000 and 1999.

         Consolidated Statements of Cash Flows -- Six months ended June 30,
         2000 and 1999.

         Condensed Notes to Consolidated Financial Statements -- June 30,
         2000.


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>
                                                                JUNE 30,           DECEMBER 31,
                                                                  2000                1999
                                                               (UNAUDITED)          (AUDITED)
                                                              --------------      --------------
<S>                                                           <C>                 <C>
              ASSETS

Current assets:
      Cash and cash equivalents                               $    7,996,289      $   15,986,385
      Accounts receivable                                          6,044,119           8,965,467
          Allowance for doubtful accounts                           (129,664)           (199,164)
      Unbilled accounts receivable                                        --                  --
      Accounts receivable - affiliates                               373,301             373,239
      Other accounts receivable                                      642,644             502,024
      Prepaid expenses                                             1,787,784           1,563,122
                                                              --------------      --------------
              Total current assets                                16,714,473          27,191,073

Property and equipment, net                                        3,123,962           2,957,455
Goodwill, net                                                      6,195,408           6,730,446
Other Assets                                                       1,005,306             738,878
                                                              --------------      --------------
              Total assets                                    $   27,039,149      $   37,617,852
                                                              ==============      ==============

              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable                                        $    2,803,057      $    4,010,891
      Accrued income taxes                                           366,946           1,032,520
      Deferred revenue                                             2,949,545           2,392,785
      Other accrued expenses                                       3,168,503           4,650,835
      Line of credit                                                      --           3,548,911
      Short-term debt                                                     --           1,500,000
      Long-term debt - current portion                               255,865             191,933
                                                              --------------      --------------
              Total current liabilities                            9,543,916          17,327,875

Long-term debt, less current maturities                              628,233             679,885
                                                              --------------      --------------
              Total liabilities                                   10,172,149          18,007,760
                                                              --------------      --------------

Commitments and Contingencies                                             --                  --

Minority interest                                                    333,477             139,447

Shareholders' equity
      Common stock                                                   128,127             125,772
          Authorized shares - 50,000,000
          Issued & outstanding shares - voting: 6,217,325
          June 30, 2000 and 6,099,577 - December 31, 1999
          Issued and outstanding shares - nonvoting:
          189,041 - March 31, 2000 and December 31, 1999
      Additional paid-in capital                                  45,916,683          45,625,300
      Accumulated deficit                                        (29,195,741)        (25,952,927)
      Stock subscriptions receivable                                (315,546)           (327,500)
                                                              --------------      --------------
              Total Shareholders' Equity                          16,533,523          19,470,645
                                                              --------------      --------------

      Total Liabilities & Shareholders' Equity                $   27,039,149      $   37,617,852
                                                              ==============      ==============
</TABLE>

    See accompanying condensed notes to the consolidated financial statements

<PAGE>


iNTELEFILM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED                     SIX MONTHS ENDED
                                                              JUNE 30,                               JUNE 30,
                                                       2000              1999                2000              1999
                                                  --------------------------------      --------------------------------
<S>                                               <C>                <C>                <C>                <C>
Revenues:
    Production contract revenues                  $  15,437,142      $  23,457,601      $  37,176,733      $  24,619,824
    Broadcast related revenues                               --             10,418                 --             97,320
                                                  --------------------------------      --------------------------------
      Total revenues                                 15,437,142         23,468,019         37,176,733         24,717,144
Costs and expenses:
    Cost of production                               12,368,178         19,557,110         30,865,415         20,836,738
    Selling                                             780,278            908,017          1,593,992          1,081,787
    General and administrative
      (exclusive of items shown below)                2,261,755          2,115,366          4,500,087          2,611,130
    Broadcast related expenses                               --             13,004                 --            193,319
    Stock option compensation                           135,393          1,958,250            225,745          1,958,250
    Corporate                                         1,195,622            880,560          2,356,935          1,520,655
    Depreciation and amortization                       524,048            408,197          1,040,299            557,428
                                                  --------------------------------      --------------------------------
Loss from operations                                 (1,828,132)        (2,372,485)        (3,405,740)        (4,042,163)

Gain/(loss) on sale of radio stations                        --             (7,551)                --         16,537,956
Equity loss in Harmony                                       --                 --                 --         (1,118,785)
Interest income net of interest (expense)               111,829            388,715            174,770           (114,091)
                                                  --------------------------------      --------------------------------

Net income (loss) before income taxes                (1,716,303)        (1,991,321)        (3,230,970)        11,262,917

Income tax provision                                     (7,295)                --            (11,844)        (3,100,000)
                                                  --------------------------------      --------------------------------

Net income (loss)                                 $  (1,723,598)     $  (1,991,321)     $  (3,242,814)     $   8,162,917
                                                  ================================      ================================

Basic and diluted net income (loss) per share     $       (0.27)     $       (0.31)     $       (0.51)     $        1.26
                                                  ================================      ================================

Weighted average number of shares outstanding         6,423,000          6,490,000          6,379,000          6,491,000
                                                  ================================      ================================
</TABLE>

    See accompanying condensed notes to the consolidated financial statements

<PAGE>


iNTELEFILM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                               SIX MONTHS ENDED
                                                                                   JUNE 30,
                                                                            2000              1999
                                                                        ------------------------------
<S>                                                                     <C>               <C>
Operating activities:
Net income (loss)                                                       $ (3,242,814)     $  8,162,917
Adjustments to reconcile net income (loss) to net
      cash used in operating activities:
          Provision for doubtful accounts & director advances                571,639           109,039
          Depreciation & amortization                                      1,040,299           557,428
          Gain on sale of radio stations                                          --       (16,537,956)
          Stock option compensation                                          225,745         1,958,250
          Amortization and write-off of deferred debt issue costs                 --           742,737
          Equity loss in Harmony                                                  --         1,118,785
          Non-cash interest payment related to sale of stations                   --            92,008
          Decrease (increase) in:
                Accounts receivable                                        2,921,348        (1,242,197)
                Other receivables                                           (781,821)         (311,612)
                Prepaid expenses                                            (224,662)         (246,169)
          Increase (decrease) in:
                Accounts payable                                          (1,207,834)       (3,319,958)
                Deferred income                                              556,760         3,370,393
                Other accrued expenses                                    (2,147,906)        2,809,825
                                                                        ------------      ------------
                Net cash (used in) operating activities                   (2,289,246)       (2,736,510)
                                                                        ------------      ------------

Investing activities:
      Sale/purchase of property & equipment                                 (608,639)         (860,795)
      Net investment in & notes receivable from Harmony                           --          (215,657)
      Other capital expendiures                                             (329,557)       (1,471,861)
      Proceeds from sale of radio stations                                        --        14,034,415
                                                                        ------------      ------------
                Net cash provided by (used in) investing activities         (938,196)       11,486,102
                                                                        ------------      ------------

Financing activities:
      Payment of line of credit                                           (3,548,911)               --
      Payment of debt                                                     (1,679,173)         (538,291)
      Proceeds from debt financings                                          191,453           645,303
      Redemption of convertible preferred stock                                   --        (2,450,002)
      Repurchase of common stock                                                  --          (260,145)
      Proceeds from issuance of common stock                                 273,977                --
      Proceeds from stock subscriptions receivable                                --            21,500
                                                                        ------------      ------------
                Net cash used in  financing activities                    (4,762,654)       (2,581,635)
                                                                        ------------      ------------

Increase (decrease) in cash and cash equivalents                          (7,990,096)        6,167,957
Cash and cash equivalents at beginning of period                          15,986,385           253,905
                                                                        ------------      ------------

Cash and cash equivalents at end of period                              $  7,996,289      $  6,421,862
                                                                        ============      ============
</TABLE>

    See accompanying condensed notes to the consolidated financial statements

<PAGE>


iNTELEFILM Corporation
Condensed Notes to Consolidated Financial Statements (unaudited)
June 30, 2000

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 six-month period ended June 30, 2000, are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. 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, 1999.

         Through the additional purchase of Harmony Holdings, Inc. ("Harmony")
common stock in April 1999, iNTELEFILM ("the Company") acquired a majority
interest in Harmony, thereby allowing the Company to consolidate Harmony, for
financial statement purposes, beginning April 1, 1999, rather than accounting
for the investment under the equity method as it had for all previous periods.


Note 2        Significant Transactions and Subsequent Events

         The following significant transactions occurred during 2000 and are
considered non-recurring:

      A. In January 2000, the Company formed webADTV.com, Inc. ("webADTV") under
         the laws of the state of Minnesota. The Company is the principal
         shareholder in webADTV. webADTV intends to offer an online digital
         suite of tools designed to web-enable all aspects of the global
         advertising process from conception of the media campaign, through
         production, placement and fulfillment. By providing a series of
         productivity features and through a wide array of e-commerce solutions
         within webADTV's tools, specifically designed for transactions by the
         advertising community, webADTV will enhance and streamline the business
         processes for advertising agencies and their clients. Initially,
         iNTELESOURCE will be the core of webADTV. iNTELESOURCE provides
         agencies and production companies the opportunity to digitize, archive
         and retrieve all television commercials produced by their firms.

      B. In February 2000, webADTV adopted the 2000 Incentive Stock Option Plan
         and the 2000 Non-Qualified Stock Option Plan whereby 5,000,000 shares
         of the subsidiary's common stock have been reserved under each plan.
         The options can be either incentive stock options or non-statutory
         options as indicated by the plan name and are generally valued at the
         fair market value of the stock on the date of grant. The plans allow
         various vesting options and the ability for the employee to immediately
         exercise the options for consideration of cash or a subscription
         receivable. The subsidiary is able to repurchase stock issued on

<PAGE>


         immediate exercises at the exercise price if the employee does not meet
         certain service periods. As of August 4, 2000, approximately 3.9
         million options had been granted under the plans of which approximately
         2.8 million options had been exercised. Stock subscription receivable
         related to these exercises aggregated $54,900. If all options were
         exercised, the Company's ownership in webADTV would be diluted to 84%.

      C. In March 2000, the Company proposed to commence an exchange tender
         offer to the shareholders of Harmony to acquire all of the outstanding
         shares of Harmony's common stock in exchange for shares of the
         Company's common stock. The Company proposes to offer one share of its
         common stock for every 13.75 shares of Harmony common stock. If the
         Company is successful in its tender offer, Harmony will become a wholly
         owned subsidiary of the Company.

      D. On March 23, 2000, the Company called its notes payable due from
         Harmony. As a result of Harmony's inability to repay the notes within
         the 30-day demand period, on May 1, 2000, the Company granted Harmony a
         forbearance for an indeterminate amount of time to allow the
         independent directors of Harmony to further consider and propose cure
         alternatives.

      E. During the six months ended June 30, 2000, the Company recorded a
         valuation allowance associated with commercial director advances in
         excess of earnings totaling $641,000, of which $461,000 relates to
         advances paid in 1999. Such advances are regularly paid to established
         commercial directors on a monthly basis and are offset against the
         actual earnings from commercial directorial services. The Company
         capitalizes these monthly payments and recognizes them as an expense in
         the period that they are offset against a commercial director's actual
         earnings. Capitalized amounts were evaluated for impairment based on
         anticipated future commercial project awards for individual commercial
         directors and an allowance was established for capitalized amounts
         believed to be impaired. The valuation allowance was primarily
         necessitated by changes in the workflow and contractual relationships
         of the majority of commercial directors at The End, Inc. ("The End"), a
         wholly-owned subsidiary of Harmony, after the resignation of two
         principal officers of The End.

      F. On May 1, 2000, members of the Screen Actors Guild ("SAG") began a
         strike against the advertising agencies that represent the Company's
         customer base. This on-going strike has limited the Company's ability
         to produce television commercials domestically. The Company has made an
         effort to limit the effect that the strike may have on its operations
         by utilizing non-union talent and continuing to produce its commercials
         outside of the United States wherever possible. To date, the Company
         has experienced some loss of business as a result of the strike. The
         Company can give no assurance that an extended strike will not have a
         significant adverse affect on its operations.

      G. In June 2000, webADTV signed a letter of intent to acquire Cosmic
         Inventions, LLC ("Cosmic Inventions"). Cosmic Inventions' leading
         product, Spot Rocket, facilitates the transmittal of

<PAGE>


         approval-quality video, CD-quality audio tracks, animatics,
         photographs, storyboards, animations and various multimedia components.
         Additionally, Cosmic Inventions has developed a product that enables
         simplified delivery and receiving of large files via standard e-mail
         addressing. These products provide high quality transmittal,
         eliminating costly production errors, travel expenses and last minute
         revisions.

      H. In July 2000, the Company discontinued the operations of Populuxe
         Pictures, Inc. ("Populuxe"). There are no significant continuing
         obligations related to this subsidiary.

      I. In July 2000, webADTV entered into a software license agreement with
         Excalibur Technologies Corporation ("Excalibur"). Under the agreement,
         Excalibur will receive 200,000 shares of webADTV's common stock, valued
         at $2.50 per share, and $500,000 in cash. In return, webADTV will
         receive a three-year, pre-paid license for, and the right to
         exclusively market to advertising agencies through iNTELESOURCE, the
         Excalibur Screening Room(R) and RetrievalWare(R) product lines. These
         products will provide webADTV tools needed to provide its web-based
         advertising services.

      J. In August 2000, the Company signed an accounts receivable-based loan
         and security agreement with General Electric Capital Corporation ("GE
         Capital"). This loan and security agreement provides for borrowings for
         working capital under a revolving line of credit with maximum
         availability of $7 million based on acceptable accounts receivable. The
         line of credit bears interest at a variable rate (10.29% at July 26,
         2000). The agreement requires the Company to comply with certain
         restrictive covenants and will provide financing for Curious Pictures
         Corporation ("Curious Pictures"), Chelsea Pictures, Inc. ("Chelsea")
         and The End.

      K. Currently, $750,000 of the Company's cash balance secures a line to be
         used to issue import letters of credit. At the date of this filing, the
         Company is not exposed to a significant credit risk as a result of
         these letters of credit.

Note 3        Investment in Harmony

         The Company holds a majority interest in Harmony through the ownership
of 4,139,562 shares of Harmony's common stock. Harmony's most recent reported
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:

                                           Three Months
                                           Ended 3/31/99
                                          (in thousands)
                                          --------------

                Contract revenues           $   16,275
                Cost of production              13,889
                                            ----------

                Gross profit                     2,386
                Production expenses              2,851
                                            ----------

<PAGE>


                Loss from productions             (465)
                Corporate, depreciation
                   & amortization                  836
                Restructuring cost &
                   impairment of assets           (175)
                                            ----------

                Loss from
                   Operations                   (1,126)
                Interest expense                   (79)
                                            ----------

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

         Harmony's results from operations are consolidated for the period
beginning April 1, 1999 and all periods thereafter. 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
June 30, 2000, the Company had recognized losses in excess of its prorata share
totaling $2.8 million.

Note 4        Reclassifications

         Certain amounts in the 1999 financial statements have been reclassified
to conform to the 2000 presentation. These reclassifications have no effect on
the accumulated deficit or net income or loss previously reported.

Note 5        Business Segments

         The Company classifies its operations into two major business segments:
television commercial production and webADTV. The television and commercial
production segment consists of the Company's production companies: Curious
Pictures, Chelsea, and The End and its subsidiaries through Harmony. The webADTV
segment is comprised of the INTELESOURCE and other online digital tools designed
to web-enable all aspects of the advertising campaign process.

         The Company evaluates performance based on several factors, of which
the primary financial measure is production service income, excluding non-cash
charges and non-recurring charges, since this measure approximates the cash flow
generated by each segment. Production service income is defined as earnings
before interest, taxes, stock-based compensation, corporate overhead, and
depreciation and amortization. The accounting policies of the segments are the
same as those described in the summary of significant accounting policies
contained in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999.

                     Six months ended June 30, 2000 (in thousands)

                     Television
                     Commercial                                     Total
                     Production       webADTV       Corporate     iNTELEFILM
                     ----------       -------       ---------     ----------
Revenues
 from external
 sources              $ 37,161       $     16       $     --       $ 37,177
Inter-segment
 Revenues                   --             --            600            600

<PAGE>


Production
 service income/
 (loss)               $    441       $   (823)      $    600       $    218
Stock option
 compensation              170             --             56            226
Depreciation and
 amortization              527              2            511          1,040
                      --------       --------       --------       --------
Income (loss) from
 operations           $   (349)      $   (826)        (2,231)        (3,406)
                      --------       --------       --------       --------

Additions to long-
 lived assets         $    501       $     75       $     33       $    609
                      --------       --------       --------       --------


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.

         Results of Operations for the Three and Six Months Ended June 30, 2000
Compared to the Three and Six Months Ended June 30, 1999:

General Overview

         The Company has changed its focus within the media and entertainment
industry from children's entertainment to commercial production services. The
transition was finalized with the completion of the sale of the Company's radio
stations in January 1999. As such, broadcasting revenues and expenses in 1999,
exclusive of the gain on the sale of the radio stations, were insignificant. The
complete transition to commercial production service within the media and
entertainment industry occurred in 1999 with increases in the Company's
ownership in Harmony to 55%, in Curious Pictures to 51%, and in Chelsea to 100%.

         The Company believes it is one of the leading sources of services for
the television commercial production within the entertainment industry, offering
extensive production capability and the exclusive services of established
industry talent. The Company intends to seek additional acquisitions to further
broaden its offering of services with the objective of enhancing overall profit
margins and leveraging its pool of talent and technical expertise to capitalize
on the convergence of short-form video content and technologies of broadband
Internet delivery systems.

         The Company is also expanding services offered through its subsidiary,
webADTV. webADTV intends to offer an online digital suite of tools that will
web-enable all aspects of the global advertising process. webADTV will enhance
and streamline the business process for advertising agencies and their clients
by providing a series of tools and a wide array of e-commerce solutions designed
for transactions within the advertising community. webADTV's first tool,
iNTELESOURCE, is an Internet based, video asset management system that provides
agencies and production companies with the

<PAGE>


ability to digitize, encode, archive and stream television commercials that they
produce.

         As a result of acquiring a majority interest in Harmony and Curious
Pictures, the Company began consolidating these companies under the purchase
method of accounting for the acquisition of majority-owned subsidiaries. Harmony
and Curious Pictures' results from operations are consolidated for the period
beginning April 1, 1999. Previous periods are accounted for under the equity
method. Chelsea's operations are consolidated for the period beginning March 1,
1999. Because of this transition, a comparison of the changes in the revenue and
expense categories from the first half of 1999 to the first half of 2000 would
not be meaningful without including additional information related to Harmony's
results of operations for the first quarter of 1999. Accordingly, information
related to Harmony's first quarter 1999 performance has been provided.

         The Company's total revenues decreased $8,031,000 from $23,468,000 in
the second quarter of 1999 to $15,437,000 in the second quarter of 2000, while
in the first half of 2000 revenues increased $12,460,000 or 50% from $24,717,000
in 1999 to $37,177,000 in 2000. During the second quarter of 2000, revenues at
Curious Pictures and Chelsea increased $2.9 million while revenues at The End
and Populuxe decreased $8.8 million. A decrease in revenues of $2.0 million
during the second quarter is attributable to The End (London), which Harmony
sold July 1, 1999. The End and Curious Pictures produced revenues of $13.5
million in the first quarter of 1999, although those revenues were not
consolidated in the Company's financial statements at that time. The Company
believes that the decrease in revenues at The End resulted from the effects of
the SAG strike, which began in May 2000. In reaction to the initial strike
announcement, many agencies withheld production as they assessed the situation
in an attempt to determine when a settlement might be reached. Although the
agencies are gradually sending more jobs into production, there continued to be
fewer jobs on which to bid through August 4, 2000. The strike has had a lesser
effect on Curious Pictures as Curious Pictures' productions primarily use
animation and digigraphics. Chelsea has been able to avoid some of the strike's
impact by producing commercials outside of the United States. Additionally, a
portion of the decrease in revenues at The End may be attributed to the
commercial director contracts that were not renewed. Revenues of $97,000 were
produced by the broadcasting entities in the first half of 1999. These entities
were sold in mid-January 1999.

         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, production insurance and
commercial directors' fees. Cost of production as a percentage of production
contract revenues decreased to 80% and 83% during the second quarter and first
half of 2000, respectively, from 84% and 85% during the second quarter and first
half of 1999, respectively. Included in the cost of production for the first
half of 2000 is $641,000 in charges related to the Company's change in estimated
valuation for the advances paid to its commercial production directors (see Note
2E to the financial statements). Of this amount, $461,000 is related to advances
paid in 1999. The Company believes the cost of production, as a percentage of
revenues, will decrease as its production companies retain more directors and
are able to charge greater premiums for these directors as the demand for their
work increases. Additionally, the Company believes it will continue to realize
greater cost benefits on a

<PAGE>


consolidated basis, such as vendor discounts, which may lower the overall cost
of production.

         Selling expenses at the production companies consist of sales
commissions, advertising and promotional expenses, travel and other expenses
incurred in the securing of television commercial contracts. Selling costs
decreased $128,000 from $908,000 during the second quarter of 1999 to $780,000
during the second quarter of 2000, and increased $512,000 during the first half
of 2000 compared to the same period in 1999. Expenses recorded related to The
End (London) during the second quarter of 1999 amounted to $275,000, while The
End and Curious Pictures incurred selling costs of $526,000 in the first quarter
of 1999, which were not consolidated in the Company's financial statements at
that time. Additionally, during the first half of 2000, the Company's newest
subsidiary, webADTV, incurred $65,000 in selling costs associated with
iNTELESOURCE, its subscription based video asset management system.

         General and administrative expenses at the divisions consist of
overhead costs such as office rent and expenses, executive, general and
administrative payroll, and related items. During the second quarter of 2000,
general and administrative expenses increased $147,000 from $2,115,000 during
the second quarter of 1999 to $2,262,000 during the second quarter of 2000, and
increased $1,889,000 during the first half of 2000 compared to the same period
in 1999. Expenses recorded related to The End (London) during the second quarter
of 1999 amounted to $205,000, while The End and Curious Pictures incurred
general and administrative costs of $1,453,000 during the first quarter of 1999,
although those expenses were not consolidated in the Company's financial
statements at that time. webADTV's general and administrative costs during the
first half of 2000 were $728,000. These costs include a management fee of
$600,000. This fee is eliminated in the consolidated financial statements.

         Expenses related to the Company's broadcasting entities held until
mid-January 1999 were $193,000 during the first half of 1999.

         Stock option compensation decreased $1,823,000 during the second
quarter of 2000 and $1,733,000 during the first half of 2000 compared to the
respective periods of 1999. Stock option compensation expense in the first half
of 2000 and 1999 includes expense related to options granted to members of the
Company's Board of Directors in the amount of $56,000 and $50,000, respectively,
and expense related to options granted to Curious Management of $170,000 and
$1,908,000, respectively.

         Corporate charges incurred in the second quarter of 2000 were
$1,196,000 and $881,000 in the second quarter of 1999. During the first half of
2000, corporate charges increased from $1,521,000 in 1999 to $2,357,000 in 2000.
Corporate charges related to the Harmony divisions were $530,000 in the first
quarter of 1999 and were not consolidated in the Company's financial statements
for that period. Overall, the increase in corporate charges on a comparable
basis was $306,000 from the first half of 1999 to the first half of 2000. This
increase was due primarily to the start-up activities related to webADTV.

         Depreciation and amortization increased to $524,000 in the second
quarter of 2000 from $408,000 in the second quarter of 1999, and increased
$483,000 during the first half of 2000 compared to the same period in 1999.
Depreciation and amortization related to the Harmony divisions was $197,000 in
the first quarter of 1999 and was not consolidated in the Company's financial
statements for that period. Overall, the increase in depreciation and
amortization on a comparable basis was $286,000. This increase was related to
the excess of the investment cost over the value of the underlying net assets

<PAGE>


(goodwill) of Harmony. Prior to the Company obtaining a majority interest in
Harmony, this expense was reported as a portion of the equity loss in Harmony.

         Net interest income was $112,000 in the second quarter of 2000 compared
to $389,000 in the second quarter of 1999. Interest income of $175,000 was
reported in the first half of 2000 compared to interest expense of $114,000 in
the same period of 1999. The interest income in 2000 was due primarily to
interest earned on the Company's cash, while the interest expense in the first
half of 1999 was related to the debt and debt-issue costs remaining prior to the
sale of the last three radio stations the Company held until mid-January 1999.

         A tax provision of $3,100,000 consisting of alternative minimum tax and
state income taxes was recorded in the first quarter of 1999. This represented
taxes estimated to be due as a result of the sale of the radio stations at the
time. This estimate was subsequently reduced to approximately $1,102,000 in the
fourth quarter of 1999 by employing certain income tax strategies not in place
in the first three quarters of 1999.

         A net loss of $1,724,000 was recognized in the second quarter of 2000
compared to a net loss of $1,991,000 in the second quarter of 1999. A net loss
of $3,243,000 was recognized in the first half of 2000, while net income of
$8,163,000 was recognized in the first half of 1999. The net income realized in
1999 was due to the sale of the radio stations.

Liquidity and Capital Resources

         The Company's liquidity, as measured by its working capital, was
$7,171,000 at June 30, 2000, compared to $9,863,000 at December 31, 1999.

         In January 2000, the Company organized webADTV as a subsidiary. webADTV
intends to offer an online digital suite of tools designed to web-enable all
aspects of the global advertising process from conception of the media campaign,
through production, placement, and fulfillment. Initially, iNTELESOURCE will be
the core of webADTV. iNTELESOURCE provides agencies and production companies the
opportunity to digitize, archive, and retrieve all television commercials that
they produce. webADTV will focus on the workflow needs critical to advertising
agencies in the $250 billion advertising arena. webADTV believes the development
of its tools for the advertising agency will generate revenues through a tiered
subscription model, service income and commissions. webADTV will continue to
differentiate itself from competitors by applying the depth of its industry
expertise, incorporating its various proprietary tools, and by increasing the
range of its strategic relationships. In June 2000, webADTV signed a letter of
intent to acquire Cosmic Inventions. Cosmic Inventions' leading product, Spot
Rocket, facilitates the transmittal of approval-quality video, CD-quality audio
tracks, animatics, photographs, storyboards, animations and various multimedia
components. Additionally, Cosmic Inventions has developed a product that enables
simplified delivery and receiving of large files via standard e-mail addressing.
These products provide high quality transmittal, eliminating costly production
errors, travel expenses and last minute revisions. Currently, approximately 88%
of the outstanding shares of common stock of webADTV are held by iNTELEFILM and
approximately 12% of the outstanding shares of webADTV common stock have been
issued to employees and consultants pursuant to stock option plans. The Company
is seeking separate financing for webADTV. However, no assurance can be given
that webADTV will be able to obtain financing or that the terms of such
financing will be favorable to webADTV. In that event, webADTV may have to seek
alternative methods of financing, including the continued use of iNTELEFILM
funds. Additionally, outside financing may result in the issuance

<PAGE>


of additional shares, thereby diluting the Company's investment. There can be no
assurance that webADTV's business plan will be completed, or if completed, that
the business plan will be successful.

         In April 2000, all advances made through the credit facility
established between Finova Capital Corporation ("Finova") and Harmony were paid
in full as Finova terminated its relationship with Harmony. As a result, all of
the Company's obligations as a guarantor of this facility have been fulfilled.

         In March 2000, the Company proposed to commence an exchange tender
offer to the shareholders of Harmony to acquire all of the remaining outstanding
shares of Harmony's common stock in exchange for shares of the Company's common
stock. The Company proposes to offer one share of its common stock for every
13.75 shares of Harmony common stock. If the tender offer were fully completed
according to these terms, the Company would exchange approximately 244,880
shares of its common stock for 3,367,098 shares of Harmony's common stock,
thereby owning 100% of Harmony. Based on the stock prices of Harmony and the
Company at August 4, 2000, and assuming approximately $200,000 of transaction
costs, the Company would recognize approximately $690,000 of goodwill. No
assurance can be given that the Harmony shareholders will accept the offer once
it is made.

         On March 23, 2000, the Company demanded payment on the notes payable
from Harmony, aggregating approximately $3.2 million at March 31, 2000. On May
1, 2000, the Company granted Harmony a forbearance for an indeterminate amount
of time to allow the independent directors of Harmony to consider and propose
cure alternatives.

         On May 1, 2000, members of SAG began a strike against the advertising
agencies that represent the Company's customer base. This on-going strike has
limited the Company's ability to produce television commercials domestically.
The Company has made an effort to limit the effect that the strike may have on
its operations by utilizing non-union talent and continuing to produce its
commercials outsie of the United States wherever possible. To date, the Company
has experienced some loss of business as a result of the strike. The Company can
give no assurance that an extended strike will not have a significant adverse
affect on its operations.

         In November 1999, two of the principal officers of The End resigned.
Under their agreements with The End, certain of the commercial directors of The
End now have the right to terminate their agreement with The End. To date, one
of the End's commercial directors has exercised his right to terminate his
agreement and has ended his exclusive representation by The End. Subsequent to
the departures of the aforementioned officers, the Company appointed a long-time
executive with The End as executive producer of The End, and appointed a new
chief operating officer who is a known talent as an executive in the financial,
administrative, production and marketing arena of the entertainment industry.
During the quarters ended June 30, 2000 and March 31, 2000, The End produced
revenues of $4.5 million and $9.7 million, respectively, and operating losses of
$394,000 and $453,000, respectively, compared to revenues of $7.9 million and an
operating loss of $814,000 for the quarter ended December 31, 1999. No assurance
can be given that these departures will not cause material adverse impact on
operations or financial performance of The End. The impact of the departures of
the foregoing individuals of The End on the Company's liquidity and
profits/losses is not currently ascertainable; however, it has reduced The End's
overhead and

<PAGE>


necessitated the valuation allowance for director advances in excess of earnings
discussed fully in Note 2E to the financial statements.

         The Company intends to further expand its television commercial
production business and holdings through acquisitions and opportunities within
its present divisions. The Company seeks to explore the consolidation of
commercial production companies in an effort to increase its commercial
production director pool. In addition, the Company intends to acquire production
service companies, such as rental, editing, design/marketing, post-production
and music companies. The Company believes that gross revenues and profits can be
increased through the acquisition of private production companies and related
service companies. There can be no assurance that the Company will consummate
any additional acquisition or that any acquisition, if consummated, will
ultimately be advantageous or profitable for the Company.

         Management believes that with $7,171,000 of working capital as the
foundation of its acquisition capital, the Company should have adequate capital
to meet its ongoing working capital needs and continue its business plan and
acquisition strategy in the near term. Anticipated uses of cash in the near term
include funding operating losses and funding costs incurred by webADTV, which is
currently in its initial start-up phase. Additionally, the Company further
replenished its acquisition capital in August 2000 by entering into an accounts
receivable-based loan and security agreement with GE Capital. This loan and
security agreement provides for borrowings for working capital under a revolving
line of credit (see note 2J to the financial statements), thereby enabling the
divisions to operate their business through a line of credit instead of
depending on the Company to fund their operations. The line will provide working
capital for all of the Company's existing divisions, excluding webADTV, which
the Company currently finances internally. However, should a potential
acquisition require greater capital than the Company's 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 full implementation of its business plan.

         Consolidated cash was $7,996,000 at June 30, 1999 and $15,986,000 at
December 31, 1999, a decrease of $7,990,000.

         Cash provided by operating activities during the first half of 2000 was
$2,289,000. Accounts receivable at June 30, 2000 decreased $2,921,000 from
December 31, 1999, other receivables at June 30, 2000 increased $782,000 from
December 31, 1999 and prepaid expenses at June 30, 2000 increased $225,000
during the same period. Accounts payable at June 30, 2000 decreased $1,208,000
from December 31, 1999, accrued expenses at June 30, 2000 decreased $2,148,000
from December 31, 1999, and deferred income increased $557,000 during the same
period.

         During the first half of 2000, net cash used in investing activities
was $938,000 and was used for capital expenditures.

         Cash used in financing activities amounted to $4,763,000 during the
first half of 2000. This represents primarily the payoff of the line of credit
and the short-term note payable to the four principals of Curious Pictures, net
of the proceeds from the exercise of options to purchase common stock.

<PAGE>


Seasonality and Inflation

         The Company does not believe that seasonality or 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

On September 30, 1998, a jury in the United States District Court for the
District of Minnesota (the "Court") ruled in favor of the Company in connection
with litigation for breach of contract and misappropriation of trade secrets
that the Company had commenced against ABC/Disney and awarded the Company $20
million for breach of contract against ABC Radio, $10 million for
misappropriation of trade secret by ABC Radio and $10 million for
misappropriation of trade secret against Disney. On January 15, 1999, the Court
upheld the jury's findings that ABC Radio had breached its contract with the
Company and that ABC/Disney both misappropriated the Company's trade secret
information, the Court disagreed with the jury's conclusion that the evidence
showed that those actions caused the Company's damages or that the amount of
damages awarded by the jury was supported by the evidence, and set aside the
jury's verdict. The Court further ruled that in the event that the decision is
reversed or remanded on appeal, that the defendants be granted a new trial on
the issues of causation and damages. The Company filed a Notice of Appeal in
February 1999. On February 16, 2000, the Company presented its oral argument to
the 8th Circuit Court of Appeals in St. Paul, Minnesota. To date, the 8th
Circuit Court of Appeals had not yet ruled on the appeal. The Company intends to
pursue its appeal of the judgment and, to this end, certain personnel and
financial resources will be used.

Item 2.       Changes in Securities.

         Not applicable

Item 3.       Defaults Upon Senior Securities

         Not applicable

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

         (a)  The Company held its Annual Meeting of Shareholders on June 22,
              2000.

         (b)  The following directors were elected and continued their terms of
              office at the Annual Meeting:

              Christopher T. Dahl
              Richard W. Perkins
              Michael R. Wigley
              William E. Cameron

         (c)  The following matters were voted upon at the Annual Meeting of
              Shareholders:

              (1)  To elect four directors for the ensuing year and until their
                   successors shall be elected and duly qualified:

                                                FOR           AGAINST
                   Christopher T. Dahl       4,882,563        941,009
                   Richard W. Perkins        4,919,133        904,439
                   Michael R. Wigley         4,924,988        898,584
                   William E. Cameron        4,921,988        901,584

<PAGE>


              (2)  To consider and vote upon adoption of the Company's 2000
                   Stock Option Plan; and

                   FOR              2,606,035
                   AGAINST            604,693
                   ABSTAIN             20,375
                   BROKER NON-VOTE  2,592,469

              (3)  To ratify the appointment of BDO Seidman, LLP as the
                   Company's independent public accountants for the fiscal year
                   ending December 31, 2000.

                   FOR              5,696,959
                   AGAINST            120,378
                   ABSTAIN              5,875

         (d)  Not applicable

Item 5.       Other Information.

          a.   On August 9, 2000, webADTV.com, Inc. ("webADTV"), a subsidiary of
               the Registrant, issued a press release announcing that it signed
               an exclusive licensing agreement with CDCX Corporation, a leading
               digital asset management company, to provide print and audio
               digital archiving as part of webADTV's inteleSource product.
               Under the agreement, webADTV has the exclusive right to market
               the CDXC Solution to the top 100 U.S. advertising agencies.

          b.   On August 10, 2000, webADTV issued a press release announcing the
               appointment of James Bergeson to its Board of Advisors. Mr.
               Bergeson is currently the Chief Executive Officer of Colle and
               McVoy, one of the top 100 advertising agencies in the world.

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

          a.   Exhibits

               27.1  Financial Data Schedule

               99.1  Online System Software License Agreement Between Excalibur
                     Technologies Corporation and webADTV.com, Inc. dated July
                     31, 2000

          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 April 26,
                    2000 regarding the online availability of inteleSOURCE.ORG
                    through webADTV.com, Inc.

               2.   The Company's Current Report on Form 8-K filed on April 27,
                    2000 regarding the execution of a joint operating agreement
                    by webADTV.com, Inc. and Post Production Services, Inc. to
                    provide encoding service expertise to webADTV.com, Inc.

               3.   The Company's Current Report on Form 8-K filed on June 22,
                    2000 regarding a letter of intent executed by webADTV.com,
                    Inc. to acquire Cosmic Inventions, LLC, a subsidiary of Post
                    Production Services, Inc.

<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 August 14, 2000.

                                             iNTELEFILM CORPORATION


                                       BY:   /s/ Steven C. Smith
                                             -----------------------------------
                                             Steven C. Smith
                                       ITS:  Chief Financial Officer


<PAGE>


EXHIBIT INDEX

27.1  Financial Data Schedule

99.1  Online System Software License Agreement Between Excalibur Technologies
      Corporation and webADTV.com, Inc. dated July 31, 2000