UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

         For the quarterly period ended MARCH  31, 1997

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

         For the transition period from ________________ to ________________

                        Commission file number: 33-80935

                           NETWORK EVENT THEATER, INC.
         (Exact name of Small Business issuer as specified in its charter)

            Delaware                                       13-3864111
  (State or Other Jurisdiction                            (I.R.S. Employer
of Incorporation or Organization)                        Identification No.)

  149 Fifth Avenue, New York, New York                            10010
(Address of principal executive offices)                      (Zip Code)

  Registrant's telephone number including area code:        (212) 779-2740
 
--------------------------------------------------------------------------------

Check whether the registrant  (1) has filed all reports  required to be filed by
Section  13 or 15 (d) of the  Securities  and  Exchange  Act of 1934  during the
preceding 12 months (or such shorter  period that the registrant was required to
file such reports), and (2) has been subject of such filing requirements for the
past 90 days.

Yes ___X___     No _____

At May 13,  1997 there were  8,845,450  shares of Common  Stock,  $.01 par value
outstanding.

Transitional Small Business Disclosure Format (check one):

Yes _____     No X

<PAGE>

                           Network Event Theater, Inc.
                                   Form 10-QSB

                                      Index

PART I  -  FINANCIAL INFORMATION                                     Page Number

Item 1  Financial Statements
         Condensed consolidated balance sheets - March 31, 1997
                  (unaudited) and June 30, 1996                                1
         Condensed consolidated statements of operations - three and nine
                  months ended March 31, 1997 and 1996 (unaudited)             2
         Condensed consolidated statements of cash flows - nine months
                  ended March 31, 1997 and 1996 (unaudited)                    3
         Condensed consolidated statement of stockholders' equity - nine
                  months ended March 31, 1997 (unaudited)                      4
         Notes to condensed consolidated financial statements                  5

Item 2  Plan of Operation                                                      9

PART II  -  OTHER INFORMATION

Item 6  Exhibits and Reports on Form 8-K                                      14

Signatures                                                                    15

<PAGE>

                                     Part I
                              Financial Statements

Item 1. Financial Statements

                           Network Event Theater, Inc
                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                                 March 31,        June 30,
                                                                                    1997            1996
                                                                               ------------    ------------
                                                                               (Unaudited)
<S>                                                                            <C>             <C> 
ASSETS:  
Current assets:        
   Cash and cash equivalents                                                   $    891,308    $    266,806
   Accounts receivable, net                                                       3,179,883             236
   Investments                                                                    2,490,150       7,882,570
   Prepaid expenses                                                                 654,840            --
   Deposits and other current assets                                                 25,163          26,169
                                                                               ------------    ------------
Total current assets                                                              7,241,344       8,175,781
                                                                               ------------    ------------

Property and equipment, net of accumulated depreciation                           4,827,171       3,081,620
Intangible assets, net of accumulated amortization                                5,243,632          58,634
                                                                               ------------    ------------
Total assets                                                                   $ 17,312,147    $ 11,316,035
                                                                               ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                                       $  3,593,249    $    462,634
   Current portion of long-term debt                                                725,000            --  
                                                                               ------------    ------------ 
Total current liabilities                                                         4,318,249         462,634

Long-term debt                                                                    5,209,037            --

Stockholders' equity:
   Preferred stock, $.01 par value, 1,000,000 shares authorized, no shares
      issued and outstanding                                                           --              --
   Common stock, $.01 par value, 17,000,000 shares authorized,
      8,654,440 shares issued and outstanding at March 31,1997
      and June 30, 1996                                                              86,544          86,544
   Additional paid-in capital                                                    16,177,302      16,177,302
   Accumulated deficit                                                           (8,476,926)     (5,380,355)
   Unrealized depreciation on marketable equity securities                           (2,059)        (30,090)
                                                                               ------------    ------------
Total stockholders' equity                                                        7,784,861      10,853,401
                                                                               ------------    ------------
Total liabilities and stockholders' equity                                     $ 17,312,147    $ 11,316,035
                                                                               ============    ============
</TABLE>

            See notes to condensed consolidated financial statements


                                       1
<PAGE>

                           Network Event Theater, Inc.
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                    Three months ended              Nine months ended
                                                          March 31,                      March 31,
                                                  ----------------------        --------------------------
                                                     1997           1996           1997           1996
                                                     ----           ----           ----           ----
<S>                                               <C>            <C>            <C>            <C>      
Net revenues                                      $ 2,265,011    $      --      $ 4,937,969    $      --
Operating expenses
    Payroll and related taxes                         955,765        166,552      2,234,592        489,747
    Professional fees                                 464,642        354,663      1,237,015        997,292
    Other expenses                                  1,882,985        193,599      3,645,813        397,666
    Depreciation and amortization                     312,226        155,266        794,285        318,293
                                                  -----------    -----------    -----------    ----------- 
Total operating expenses                            3,615,618        870,080      7,911,705      2,202,998
                                                  -----------    -----------    -----------    ----------- 
Operating loss                                     (1,350,607)      (870,080)    (2,973,736)    (2,202,998)
Interest and other income (expense), net              (39,219)           508         42,156         47,782
                                                  -----------    -----------    -----------    ----------- 
Loss before provision for income taxes             (1,389,826)      (869,572)    (2,931,580)    (2,155,216)
Provision for income taxes                             60,910           --          164,991           -- 
                                                  -----------    -----------    -----------    -----------   

Net loss                                          $(1,450,736)   $  (869,572)   $(3,096,571)   $(2,155,216)
                                                  ===========    ===========    ===========    ===========
Net loss per common share                         $     (0.17)   $     (0.10)   $     (0.36)   $     (0.25)
                                                  ===========    ===========    ===========    ===========

Weighted average common shares outstanding          8,654,440      8,654,440      8,654,440      8,654,440
                                                  ===========    ===========    ===========    ===========
</TABLE>

            See notes to condensed consolidated financial statements


                                       2
<PAGE> 

                           Network Event Theater, Inc.
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              Nine months ended
                                                                  March 31,
                                                         --------------------------
                                                             1997           1996
                                                             ----           ----
<S>                                                      <C>            <C>         
Net cash used in operating activities                    $(2,949,426)   $(1,753,958)

Cash flows from investing activities
   Purchase of property and equipment                     (2,369,656)    (2,670,491)
   Expenditures for acquisition of business               (5,382,873)          --
   Sale of investments                                     5,392,420           --   
                                                         -----------    -----------
Net cash used in by investing activities                  (2,360,109)    (2,670,491)

Cash flows from financing activities
   Net proceeds from sale of common stock                       --          906,578
   Net proceeds from note payable                               --          500,000
   Net proceeds from issuance of long-term debt            5,934,037           --
                                                         -----------    -----------   
Net cash provided by financing activities                  5,934,037      1,406,578
                                                         -----------    -----------

Net increase (decrease) in cash and cash equivalents         624,502     (3,017,871)
Cash and cash equivalents at beginning of period             266,806      3,232,035
                                                         -----------    -----------

Cash and cash equivalents at end of period               $   891,308    $   214,164
                                                         ===========    ===========

Supplementary cash flow information:
   Cash paid for interest                                $   199,102    $      --
   Cash paid for taxes                                   $   142,352    $      --

</TABLE>

            See notes to condensed consolidated financial statements


                                       3
<PAGE>

                           Network Event Theater, Inc.
            Condensed Consolidated Statement of Stockholders' Equity
                        Nine Months ended March 31, 1997
                                   (Unaudited)

                                                        Common Stock
                                               ---------------------------
                                               Shares               Amount
                                               ------               ------
Balances at June 30, 1996                      8,654,440          $     86,544
Net loss                                            --                    --
Unrealized appreciation on 
  marketable equity securities                      --                    --   
                                            ------------          ------------
Balances at March 31, 1997                     8,654,440          $     86,544
                                            ============          ============
                                                                
                                             Additional         
                                               paid-in             Accumulated
                                               Capital               Deficit
                                               -------               -------
Balances at June 30, 1996                   $ 16,177,302          $ (5,380,355)
Net Loss                                            --              (3,096,571)
Unrealized appreciation on 
  marketable securities                             --                    --   
                                            ------------          ------------
Balances at March 31, 1997                  $ 16,177,302          $ (8,476,926)
                                            ============          ============
                                                                
                                             Unrealized         
                                            Appreciation        
                                           On Marketable  
                                         Equity Securities             Total
                                         -----------------             -----
Balances at June 30, 1996                   $    (30,090)         $ 10,853,401
Net loss                                            --              (3,096,571)
Unrealized appreciation on 
  marketable equity securities                    28,031                28,031
Balances at March 31, 1997                  $     (2,059)         $  7,784,861
                                            ============          ============

            See notes to condensed consolidated financial statements


                                       4
<PAGE>

                           Network Event Theater, Inc.
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 1997
                                   (Unaudited)

1. Basis of Presentation

The accompanying  condensed 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 of 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)  considered necessary for a fair presentation have
been included.  Operating results for the nine month period ended March 31, 1997
are not necessarily  indicative of the results that may be expected for the year
ended June 30, 1997. For further information,  refer to the financial statements
and footnotes thereto included in Network Event Theater,  Inc.'s (the "Company")
Form  10-KSB  for the  transition  period  ended  June 30,  1996  filed with the
Securities and Exchange Commission on November 20, 1996.

The  accompanying   condensed  consolidated  financial  statements  include  the
accounts  and  transactions  of the  Company and its  wholly-owned  subsidiaries
American Passage Media, Inc. ("American Passage") and Campus Voice, LLC ("Campus
Voice"). All significant intercompany transactions have been eliminated.

2. Acquisitions

On September  13,  1996,  the Company,  through its newly  created  wholly owned
subsidiary,  American Passage,  acquired from American Passage Media Corporation
("APMC")  substantially  all of APMC's  assets  relating to its college and high
school media, marketing, and service businesses. The businesses acquired include
APMC's  college  newspaper  placement   operations,   college  campus  postering
operations,  high school  focused  GymBoards(TM)  operations  and various  other
advertiser and sponsorship activities. APMC has been involved in the young adult
marketing business since 1976.

As  consideration  for the assets (i) American  Passage paid APMC  approximately
$3.5  million  in  cash,  (ii)  American  Passage  issued  to  APMC  a  two-year
subordinated  promissory  note for $750,000,  (iii) the Company issued to APMC a
contingent option to purchase up to 100,000 shares of the Company's common stock
pursuant to an option  agreement,  (iv) American Passage entered into a two-year
consulting  agreement  with APMC for $273,600 and (v) American  Passage  assumed
certain of APMC's contractual liabilities.

On February  21,  1997,  the  Company,  through its newly  created  wholly owned
subsidiary,  Campus  Voice,  acquired  from a wholly owned  subsidiary of Sirrom
Capital  Corporation  ("Sirrom")  substantially  all of the assets relating to a
business  of a  national  network of  proprietary  giant  wallboards  on college


                                       5
<PAGE>

                           Network Event Theater, Inc.
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 1997
                                   (Unaudited)

campuses.  The network  consists of over 3,500 giant  wallboards  located on 388
college campuses across the United States.

As  consideration  for the assets,  Campus Voice  delivered to Sirrom its junior
secured  promissory notes in the aggregate amount of approximately $1.6 million.
Campus Voice also paid Sirrom certain lending and legal fees of $14,000.  Sirrom
also agreed to advance up to $660,000  of working  capital to Campus  Voice from
the date of  acquisition  until  January 1, 1998 on a senior  basis;  Sirrom had
advanced  $210,000 of that amount as of March 31, 1997.  All of the Campus Voice
debt is secured solely by the assets and cash flow of Campus Voice and is not an
obligation of the Company.

These  acquisitions  have  been  accounted  for  using  the  purchase  method of
accounting. Accordingly, the purchase price of each of the acquisitions has been
allocated  to the assets  based on their fair values at the  respective  date of
acquisition.  Intangible assets  representing the excess of cost over the assets
acquired and  liabilities  assumed are being  amortized over a period of fifteen
years. The results of operations of the properties  acquired are included in the
Company's condensed  consolidated results of operations from the respective date
of acquisition.

The total purchase price of the  transactions  described above of  approximately
$7.2 million has been  preliminarily  allocated as follows:  approximately  $1.8
million to property and equipment and approximately $5.4 to intangible assets.

The following  unaudited  supplemental pro forma information for the nine months
ended March 31, 1997 and 1996 is presented as if the Company had  completed  the
acquisitions of American Passage and Campus Voice on July 1, 1995.

                                                 Nine Months       Nine Months
                                                     Ended            Ended
                                                March 31, 1997    March 31, 1996
                                                --------------    --------------

Net revenue ...................................  $ 5,032,239        $ 4,560,706
Net loss ......................................   (3,734,252)        (2,092,777)
Net loss per common share .....................        (0.43)             (0.24)
Common shares outstanding .....................    8,654,440          8,654,440
                                                               

The pro forma information is not necessarily indicative either of the results of
operations  that would have  occurred  had these  transactions  been made at the
beginning of the period or of future results of operations.


                                       6
<PAGE>

                           Network Event Theater, Inc.
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 1997
                                   (Unaudited)

3. Debt

On September 13, 1996, in conjunction  with the acquisition of certain assets of
APMC (see Note 2),  American  Passage entered into a five year $3.5 million loan
with Signet Bank (the "Loan").  The Loan is secured by all of American Passage's
assets and is  guaranteed  by the Company.  The Loan is payable in  installments
with the final  installment  due on  September  30,  2001.  Interest  is payable
monthly at a variable  rate of interest set each ninety days based either on 300
basis points above LIBOR for U.S.  Dollar deposits of ninety day maturity or 100
basis points  above the prime rate of Signet Bank.  The current rate of interest
is 8.5313% per annum.

Additionally,  on September  13,  1996,  American  Passage  delivered a two-year
subordinated  promissory note to APMC in the principal  amount of $750,000 which
provides for payment in eight equal  quarterly  installments  of principal which
commenced on December 13, 1996 together with interest  thereon at the rate of 8%
per year.

On February 21, 1997, in conjunction with the acquisition of certain assets from
Sirrom  (see Note 2),  Campus  Voice  delivered  to Sirrom  its  junior  secured
promissory notes in the aggregate  amount of  approximately  $1.6 million with a
maturity  date of December  31, 2006.  The debt accrues  interest at the rate of
12.0% per year from the date of purchase,  but no interest or principal payments
are due to be paid in cash until June 30,  1999.  After that time,  interest  is
payable  monthly  and  principal  payments  must be  made  annually  until  full
repayment,  including all accrued  interest.  In addition,  Sirrom has agreed to
advance up to  $660,000  of senior  indebtedness  which is to be used as working
capital  for  Campus  Voice.  As of March  31,  1997,  $210,000  of such  senior
indebtedness  had been  advanced  to Campus  Voice.  This  senior  debt  accrues
interest  at the rate of 8.0% per  annum  and  requires  that  interest  be paid
monthly.  The senior debt is due December 31, 1999. Campus Voice is obligated to
apply its Free Cash Flow (as defined) to prepayment  of its notes to Sirrom;  in
addition, the subordinated notes provide for certain annual minimum prepayments.
All of the Campus  Voice  debt is secured  solely by the assets and cash flow of
Campus Voice and is not an obligation of the Company.

4. Net Loss Per Share

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 128,  "Earnings Per Share" ("FAS 128"). FAS
128  establishes  standards  for  computing  and  presenting  earnings per share
("EPS") and supersedes APB Opinion No. 15,  "Earnings Per Share" ("Opinion 15").
FAS 128 replaces the  presentation  of primary EPS with a presentation  of basic
EPS which  excludes  dilution  and is computed by dividing  income  available to
common  stockholders by the weighted average number of common shares outstanding
during the period.  This statement also requires dual  presentation of basic EPS
and diluted EPS on the face of the income  statement for all periods  presented.
Diluted EPS is computed  similarly to fully  diluted EPS pursuant to Opinion 15,
with some  modifications.  FAS 128 is effective for financial  statements issued


                                       7
<PAGE>

                           Network Event Theater, Inc.
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 1997
                                   (Unaudited)

for periods ending after December 15, 1997,  including  interim  periods.  Early
adoption is not permitted and the statement  requires  restatement  of all prior
period  EPS data  presented  after the  effective  date.  The  Company  does not
anticipate that the implementation of FAS 128 will have a material impact on the
Company's condensed consolidated financial position or results of operations.


                                       8
<PAGE>

Item 2.  Plan of Operation

The following discussion of the financial condition and results of operations of
the  Company  should  be read in  conjunction  with the  condensed  consolidated
financial  statements  and  related  notes  thereto.  The  following  discussion
contains   certain   forward   looking   statements   that  involve   risks  and
uncertainties.  The Company's actual results could differ  materially from those
discussed  herein.  Factors that could cause or contribute  to such  differences
include,  but are not limited to, risks and uncertainties  relating to leverage,
the  ability  to  obtain  financing,   integration  of  the  recently  completed
acquisitions,  the  ability of the  Company to  continue  the  expansion  of its
Network (as hereinafter defined),  the management of growth and the introduction
of new technology.  The Company undertakes no obligation to publicly release the
results of any revisions to these forward looking statements that may be made to
reflect any future events or circumstance.

Network  Event  Theater,  Inc.  (the  "Company")  is  engaged in  developing  or
acquiring media and marketing services  businesses that focus on the young adult
and college market  segments and in operating its college campus theater network
(the "Network").

The  Company  intends to  continue  to expand its  college  media and  marketing
businesses  either through  internal  growth or  acquisitions.  On September 13,
1996,  American  Passage Media,  Inc.  ("American  Passage"),  a newly organized
wholly owned  subsidiary of the Company,  acquired  from American  Passage Media
Corporation ("APMC")  substantially all of APMC's assets relating to its college
and high school  media and  marketing  business.  APMC has been  involved in the
young adult  marketing  business  since 1976. The acquired  businesses  included
APMC's  college  newspaper  placement   operations,   college  campus  postering
operations,  high school  focused  GymBoard(TM)  operations  and  various  other
advertiser and event sponsorship related activities.

On February  21,  1997,  the  Company,  through its newly  created  wholly owned
subsidiary, Campus Voice, LLC, acquired from a wholly owned subsidiary of Sirrom
Capital  Corporation,  ("Sirrom")  substantially all of the assets relating to a
business of operating a national  network of  proprietary  giant  wallboards  on
college campuses. The network, which was started in 1981, today consists of over
3,500 giant wallboards  located on 388 college campuses across the United States
reaching 3.6 million college  students.  The posters are replaced each month and
primarily  contain  editorial  content of interest to college  students and paid
advertisements. The Company believes that the network is a complementary part of
the Company's  offering to advertisers and entertainment  companies which desire
to reach the  college  market and that it can  operate  the  network  profitably
because  it will be  part of the  Company's  overall  sales  strategy  and  that
advertisements for this network can be sold by the Company's other sales staffs.

On April 11, 1997,  the Company  acquired the assets and certain  liabilities of
Posters Preferred, Inc. and is operating its business of distributing posters to
college  students  through  twice  yearly  catalogs as a division of the Company



                                       9
<PAGE>

using the name  "Beyond  the  Wall".  "Beyond  the  Wall" is one of the  largest
circulation print medium that  specifically  targets the college student market,
with  4.1  million   catalogs   distributed   to  700  campuses  each  year.  As
consideration for this purchase,  the Company issued to the seller 70,000 shares
of  its  common  stock;   assumed  certain  trade  accounts  payable  and  other
obligations of the seller;  is obligated to issue up to 6,666 additional  shares
of the  Company's  common stock in each of 1998,  1999 and 2000,  subject to the
satisfaction of certain conditions; and agreed to pay to the seller cash amounts
to the extent that the market price of shares of the  Company's  common stock is
less than $5.00 per share on the first  anniversary  of any date on which shares
are to be issued pursuant to the purchase agreement.

On April 30, 1997, Pik:Nik Media, LLC ("Pik:Nik"),  a newly created wholly owned
subsidiary  of the  Company,  acquired  from  Pik:Nik LLC the assets and certain
liabilities of its free post card distribution  business. The Company expects to
expand the operations of that business to locations that appeal to young adults,
such as movie  theaters,  malls and certain retail  locations as well as college
campuses.  As consideration for the purchase,  Pik:Nik paid to the principals of
the seller cash in the aggregate amount of $68,750; paid to certain creditors of
the seller cash in the amount of $20,000 and agreed to pay to those creditors an
additional  $240,000,  plus  interest,  in  installments  over the succeeding 36
months; the Company issued to the principals of the seller and certain creditors
an aggregate of 29,118 shares of the Company's common stock; and Pik:Nik and the
Company agreed to pay additional  amounts of cash and to issue additional shares
to the  principals  of the seller  based on the  amount of  Pik:Nik's  EBIT,  as
defined,  during each of the four  successive  fiscal years  commencing  July 1,
1997.  The Company has also agreed to contribute to Pik:Nik at least $300,000 of
working capital, of which $116,000 had been contributed as of May 1, 1997.

The Company has signed a letter of intent to acquire  another company engaged in
the free post card  distribution  business;  that  transaction is subject to the
completion of due diligence and to the  preparation  and execution of definitive
agreements.  The Company is also currently  engaged in discussions  with several
other entities that may lead to future  acquisitions.  There can be no assurance
that the Company will consummate these or any other transactions.

The Company is now generating  significant  operating revenues on a consolidated
basis and is no longer in the development stage. These revenues result primarily
from the acquisition of American Passage and, to a lesser extent,  from payments
from product  providers  utilizing the Network.  Because of expenses required to
make  and  assimilate   acquisitions   and  to  evaluate   additional   business
opportunities  for the Company,  as well as to install Network theater equipment
at colleges and to obtain  programming for these theaters,  the Company is still
generating  operating losses on a consolidated  basis. These losses may continue
and may remain  significant until the newly acquired  businesses and the Network
are  integrated  and begin to generate  revenues.  The success of the  Company's


                                       10
<PAGE>

proposed plan of operations will be largely dependent upon the Company's ability
to operate both its acquired  companies and the theater  Network on a profitable
basis which involves,  with regard to theater  operations,  attracting  revenues
from sponsors,  advertisers and  entertainment  companies.  The Company believes
that the campus theater Network can be profitable without significant additional
expansion  in either the number of  theaters  or in the number of  relationships
with advertisers and entertainment companies. While the Company is continuing to
seek to expand the number of theaters it  operates,  the pace of such  expansion
has slowed.  As of March 31, 1997,  the Company had  installed  Network  theater
equipment at 32 campus  theaters and had entered into  contracts with four other
schools.  During  the next  twelve  months,  the  Company  intends to enter into
agreements with additional  colleges and  universities and intends to install at
least one new theater each  quarter.  The Company  currently  has two  full-time
employees   engaged  in  marketing  the   Company's   Network  to  colleges  and
universities across the United States.

Since  January  1996,  the  Company  has  entered  into a  number  of  licensing
agreements with content providers such as Miramax, Don King Productions, Mercury
Records, Warner Brothers and ABC Network for individual  productions.  In August
1996, the Company entered into an agreement with Home Box Office ("HBO") to show
one program a month during the 1996-1997  academic  year on its Network.  In the
Fall of 1996, among other events,  the Company  presented three HBO programs and
premiered  two movies for Miramax,  including  Swingers and Scream.  The Network
also  premiered the R.E.M.  Road Movie for Warner  Brothers and presented a live
concert  featuring Rusted Root for Polygram.  In the Spring of 1997, the Company
presented  three HBO programs,  a program for Fox  Television  and premiered two
original Company productions  including an exclusive interview with world famous
film  director  Milos  Forman  and a program  of comedy  recorded  live from Los
Angeles's  comedy club,  the Laugh Factory.  During the next twelve months,  the
Company will seek to develop further  relationships with these and other content
providers  to  acquire  rights  to  special  events.  However,  there  can be no
assurance  that the Company  will obtain the  programming  necessary  to attract
sponsors and advertisers  and thereby  generate  meaningful  revenues or achieve
profitable operations from its Network.

Over the next  twelve  months the  Company  will  continue  to make  significant
capital  investments  as it continues  to  assimilate  and expand its  purchased
businesses,  evaluate future acquisitions and business opportunities and install
equipment in theaters on college  campuses.  The Company has no current plans to
increase  staff  significantly  with  regard to either the Network or any of its
other operations except incremental  increases in sales and administrative staff
to generate and accommodate increased business needs.

Results of Operations

During the three and nine months  ended March 31,  1997,  the Company  generated
approximately  $2.3 million and $4.9  million,  respectively,  of net  revenues,
principally from its subsidiary, American Passage. For the comparable periods in


                                       11
<PAGE>

the prior year, the Company had not acquired  American  Passage and was still in
the development stage, and did not earn any material revenues.

Operating expenses for the three months ended March 31, 1997 are proportionately
greater  than those for the nine month  period  ended March 31, 1997 because the
first quarter's  results for American Passage  reflected  expenses only from the
date of its acquisition. Amounts for interest and other income (expense) for the
three and nine month periods  primarily  reflect interest charges related to the
acquisition  of  American  Passage and to a lesser  degree,  for the three month
period, the acquisition of Campus Voice. For the comparable periods of the prior
year interest and other income  (expense)  reflect the interest income earned on
the proceeds of the Company's initial public offering (see below).

Liquidity and Capital Resources

The Company  consummated  an initial  public  offering  of its common  stock and
warrants  on April 9, 1996 (the  "Offering"),  pursuant  to which it raised  net
proceeds of approximately $9.7 million,  of which $0.5 million was used to repay
previously existing Company indebtedness.  As of March 31, 1997, the Company had
cash and  cash  equivalents  and  investments  in the  amount  of  approximately
$891,000 and $2.5 million,  respectively,  on a  consolidated  basis.  Since the
Offering,  the  Company  has  purchased  approximately  $1.1  million of Network
theater equipment and invested approximately $1.2 million of the proceeds of the
public offering in the  acquisitions  of American  Passage and Campus Voice (the
remainder of the cash portion of the purchase prices having been borrowed).  The
balance  of the  proceeds  have  otherwise  been  used  to  fund  the  Company's
operations.

The Company's  primary capital  requirement  with respect to its operations have
been for acquisitions and for the purchase and installation of theater equipment
on college campuses for its Network of campus theaters. Based on current results
of operations and the Company's plans (including  installing  approximately  one
additional theater each calendar quarter),  the Company  anticipates that it has
sufficient   resources  to  satisfy  its  contemplated   cash  requirements  for
approximately the next four months (see below).

Implementation  of the Company's  business plan beyond the next four months will
require financial  resources  substantially  greater than currently available to
the Company.  In the event that the Company's plans and assumptions with respect
to its Network change or prove to be inaccurate, if its assumptions with respect
to American  Passage and Campus  Voice being able to fund their  operations  and
make  required  debt  service  payments  out of their own cash flow  prove to be
inaccurate, or if the working capital or capital expenditure requirements of its
Beyond the Wall  division or of the  Company's  Pik:Nik  subsidiary  prove to be
greater than anticipated,  then the Company could be required to seek additional


                                       12
<PAGE>

financing  sooner.  The  inability to obtain  additional  financing  will have a
material adverse effect on the Company, including possibly requiring the Company
to significantly curtail or cease its operations.

The Company may also determine,  depending upon the  opportunities  available to
it, to seek additional  debt or equity  financing to fund the cost of additional
expansion of its Network and the cost to develop or acquire  additional  college
marketing business  complementary to the Network. To the extent that the Company
finances its requirements  through the issuance of additional equity securities,
any such  issuance  would result in dilution to the  interests of the  Company's
stockholders.

Additionally,  to the extent that the Company incurs indebtedness or issues debt
securities in connection with financing activities,  the Company will be subject
to  all  of  the  risks  associated  with  incurring  substantial  indebtedness,
including  the risk  that  interest  rates  may  fluctuate  and cash flow may be
insufficient to pay principal and interest on any such indebtedness. The Company
has  no  current  arrangements  with  respect  to,  or  sources  of,  additional
financing.  There can be no  assurance  that any  additional  financing  will be
available to the Company on acceptable terms, if at all.


                                       13
<PAGE>

                                     PART II

                                OTHER INFORMATION

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

(a)   Exhibits.

         27.1   Financial Data Schedule.

(b)   Reports on Form 8-K.

         None.

<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

May 15, 1997

                                   By: /s/ Harlan D. Peltz
                                       ---------------------------------------
                                       Harlan D. Peltz
                                       Chairman of the Board
                                       and Chief Executive Officer


                          
                                   By: /s/ Bruce L. Resnik
                                       ---------------------------------------
                                       Bruce L. Resnik
                                       Executive Vice President
                                       Chief Financial Officer and
                                       Chief Accounting Officer