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


                                   FORM 10-QSB


[    ]    QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
          ACT OF 1934


          For the quarterly period ended NOVEMBER 30, 1997

                                       OR

[    ]    TRANSITION  REPORT  UNDER  SECTION 13 OR 15 (D) OF THE EXCHANGE ACT OF
          1934 

          FOR THE PERIOD FROM July 1, 1997 thru November 30, 1997

                         Commission File No. 33-37968-A

                           IMAGICA ENTERTAINMENT, INC.
             (Exact name of Registrant as specified in its charter )

            Florida                                         59-2762999
(State or other jurisdiction or                  (I.R.S. Employer Identification
 incorporation or organization)                            Number)

                    1518 SW 12th Avenue, Ocala, Florida 34474
                    (Address of principal executive offices)


                                 (352) 867-7861
                            Issuer's telephone number

Check wether 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  (    )          No  (  X  )

Number of common shares  outstanding as November 30, 1997 (including the 100,000
shares of redeemable common stock) - 589,683

Transitional Small Business Disclosure Format:

                          Yes  (    )          No  (  X  )

<PAGE>





                                      INDEX




PART I - FINANCIAL INFORMATION                           Page Number
                                                         -----------

Item 1. Financial Statements (Unaudited):

        Balance  Sheets                                        3

        Statement  of  Operations                              5

        Statement  of  Cash  Flows                             6

        Notes  to  Financial  Statements                       7



        Managements  Discussion  and  Analysis                 8
           of  Financial  Condition  and  Results
           of  Operations


        SIGNATURE                                              9




                                       2

<PAGE>


                           IMAGICA ENTERTAINMENT, INC.

                                 BALANCE SHEETS




                                              November 30,           May 31,
ASSETS                                           1997                 1997
------                                        (Unaudited)          (Unaudited)
                                              -----------          -----------
CURRENT ASSETS:

Cash and equivalents                        $    31,098.63      $      55,849.79
Accounts receivable, less allowance for
      possible losses of $13,189 and
      $13,189                                   320,414.24            317,081.91
Inventories (less obsolete of $39,000)          187,698.26            188,210.24
Prepaid expenses                                 45,793.13          1,264,665.82
                                            --------------      ----------------


      Total Current Assets                      585,004.26          1,825,807.76
                                            --------------      ----------------



Property and equipment, net                     262,593.38            328,658.55



Other Assets:
      Land held for future development                --                    --
      Equipment not yet placed in service             --               37,500.00
      Deposits on equipment                           --              206,632.00
      Other                                      11,777.90              6,277.90
                                            --------------      ----------------
        Total Other Assets                       11,777.90            250,409.90



TOTAL ASSETS                                $   859,375.54      $   2,404,876.21
                                            --------------      ----------------



                                       3

<PAGE>
<TABLE>
<CAPTION>



                                IMAGICA ENTERTAINMENT, INC.

                                      BALANCE SHEETS

                                                         November 30,            May 31,
                                                            1997                  1997
                                                         (Unaudited)           (Unaudited)
                                                         -----------           -----------

LIABILITIES and STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                        <C>                   <C>       
      Notes Payable                                        249,140.29            324,196.22
      Accounts Payable - Trade                             380,804.35            365,465.96
      Accrued Liabilities                                  184,338.24            295,968.54
      Current Portion of Stockholder Note Payable                                     --
      Current Maturities of Long-Term Debt                 229,652.81            293,820.33
      Current Portion of Obligations Under Capital          22,765.24             24,859.25
          Leases

                                                      -------------------------------------
             Total Current Liabilities                   1,066,700.93          1,304,310.30


Stockholder Note Payable, less current portion                                   304,654.96
Long-Term Debt, Less Current Maturities                     29,969.76             31,648.84
Obligations Under Capital Leases, Less                      11,681.18             14,910.91
         Current Maturities
                                                      -------------------------------------

             Total Liabilities                           1,108,351.87          1,655,525.01

Redeemable Common Stock                                    100,000.00            100,000.00

Stockholder's Equity
      Common Stock, $.001 Par Value,                         3,021.67              7,021.67
          shares authorized 50,000,000;
           issued 8,441,944
      Additional Paid-in-Capital                         4,581,230.51          4,504,730.51
      Accumulated Deficit                               (4,836,948.64)        (3,766,121.20)
                                                     --------------------------------------
                                                          (252,696.46)           745,630.98

Less: Treasury Stock, at cost, 680,000 shares              (96,279.77)           (96,279.77)
          Notes Receivable arising from the
             Exercise of Stock Options
           Total Stockholders' Equity                     (348,976.23)           649,351.21
                                                     ----------------      ----------------


TOTAL LIABILITIES
           and STOCKHOLDERS' EQUITY                  $     859,375.64      $   2,404,876.22


                                            4

</TABLE>
<PAGE>
<TABLE>


                                           IMAGICA ENTERTAINMENT, INC.


                                             STATEMENT OF OPERATIONS


                                                                                           
                                             Three Months ended November 30,       Nine Months ended November 30,   
                                             -------------------------------       ------------------------------   

                                                 1997               1996               1997               1996
                                                 ----               ----               ----               ----
                                             (Unaudited)        (Unaudited)        (Unaudited)        (Unaudited)


<S>                                          <C>                <C>                <C>                <C>        
SALES                                        $   624,946        $   869,099        $ 1,361,797        $ 1,832,935

COST OF SALES                                $   405,589        $   721,105        $   885,523        $ 1,414,506


       GROSS PROFIT                          $   219,357        $   147,994        $   476,274        $   418,429



OPERATING EXPENSES                           $   249,477        $ 1,330,761        $   498,986        $ 1,939,735


   INCOME (LOSS) FROM OPERATIONS             $   (30,120)       $(1,182,767)       $   (22,712)       $(1,521,306)


OTHER INCOME (EXPENSES):

   INTEREST                                  $    (7,763)       $   (46,046)       $    (8,380)       $   (65,856)



NET INCOME (LOSS)
                                             $   (37,883)       $(1,228,813)       $   (31,092)       $(1,587,162)





Earnings (loss) per Share                    $     (0.06)       $     (0.39)             (0.05)             (0.50)



Weighted average common shares outstanding       589,683          3,165,593            589,683          3,165,593



                                                     5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                            IMAGICA ENTERTAINMENT, INC.

                                             STATEMENTS OF CASH FLOW


                                                      Three Months ended November 30,      Six Months ended November 30,
                                                      -------------------------------      -----------------------------

                                                          1997               1996              1997              1996
                                                          ----               ----              ----              ----
                                                       (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)

Cash Flows from operating activities:
<S>                                                    <C>               <C>                   <C>           <C>         
   Net  Income (loss)                                  $   (37,883)      $(1,085,228)          (31,092)      $(1,443,576)
   Adjustments to reconcile net income (loss)
     to net cash provided by operating activities:
       Depreciations and Amortization                  $    47,053       $    61,083            66,065       $   122,668
   Cash provided by (used for):
       Accounts Receivable                             $    20,265       $   189,487            (3,332)      $   202,799
       Inventories                                     $    (9,564)      $   110,298               512       $   114,654
       Prepaid Expenses                                $    17,558       $  (976,700)           17,558       $(1,915,898)
       Stockholders' Advance                           $      --         $      (372)             --         $      (742)
       Accounts Payable - Trade                        $       760       $  (380,716)          (15,338)      $  (302,858)
       Notes Payable                                   $  (304,655)      $   189,554          (181,695)      $   189,554
       Customer Deposits                               $      --         $      --                --         $      --
       Accrued Liabilities                             $   192,347       $   (61,609)          111,630       $    58,168

Net Cash Provided by Operating Activities              $   (74,120)      $(1,954,203)      $   (35,692)      $(2,975,231)

Cash Flows from investing activities:
   Purchase of Property and Equipment                  $      --         $      --         $      --         $      --
   Decrease in other Assets                                              $    55,797       $      --         $    56,021
Net Cash Provided by (used for)                        $      --         $    55,797       $    (5,000)      $    56,021
       investing activities:

Cash Flows from financing activities:
   Decrease in Note Payable                            $      --         $      --                           $      --
   Proceeds from issuance of Convertible N-Pyble       $      --         $   281,867                         $   281,867
   Proceeds from issuance of  Stock                    $      --         $       620                         $     1,095
   Additional Paid-in-Capital                          $      --         $ 1,742,747                         $ 2,868,022
   Net Decrease in Stockholder Note Payable            $      --         $      --                           $    41,100
   Principal Payments of Long-Term Debt and            $    37,006       $  (109,171)           71,790       $  (196,766)
       Capital Lease Obligations
   Debt Issuance Costs                                 $      --         $      --  
Net Cash used for financing activities                 $    37,006       $ 1,916,063       $    71,790       $ 2,995,318

Net Increase (decrease) in cash and                    $   (37,114)      $    17,657       $    31,098       $    76,108
         cash equivalents

Cash and Cash Equivalents, beginning                   $    68,212       $    58,451                 0       $         0
         of Period

Cash and Cash Equivalents,                             $    31,098       $    76,108       $    31,098       $    76,108
         end of Period


                                                          6
</TABLE>

<PAGE>


                           IMAGICA ENTERTAINMENT, INC.


                          NOTES TO FINANCIAL STATEMENTS




NOTE  1 -  BASIS OF PRESENTATION


The  unaudited  financial  statements  presented  herein  have been  prepared in
accordance with the  instructions to Form 10-QSB,  and do not include all of the
information  and   disclosures   required  by  generally   accepted   accounting
principles.  These  statements  should be read in conjunction with the financial
statements and notes thereto  included in the Company's Form 10-KSB for the year
ended May 31, 1996 ( year ended May 31, 1997 Form 10-KSB not completed to date).
The accompanying  financial  statements have not been examined by an independent
accountant in accordance with generally accepted auditing standards,  but in the
opinion of  management,  such  financial  statements  include  all  adjustments,
consisting only of normal recurring  adjustments and accruals,  to fairly report
the  Company's  financial  position  and results of  operations.  The results or
operations  for the interim  periods  shown in this  report are not  necessarily
indicative of results to be expected for the fiscal year.


The results for fiscal 1997 have been restated from previous  10-QSB  reports to
reflect the elimination of transactions  subsequently  determined to be improper
and for the removal of Imagica,  Inc. (a Subsidiary) from the results of Imagica
Entertainment,  Inc.  This  was  done  due to  determination  that  the  minutes
authorizing  the  transaction  only  authorized  the  acquisition of stock not a
pooling of interests.





                                       7
<PAGE>



                           IMAGICA ENTERTAINMENT, INC.


ITEM  2.             MANAGEMENTS DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS




Results of Operations

Sales for the six months ended November 1997 were $ 624,946 reflecting a decline
of $ 244,153  or 29% from the  comparable  period in fiscal  1997.  the  Company
believes this was due to working  capital  constraints and a reduction in worker
moral and  efficiency  due to the Companies  having filed for  protection  under
Chapter 11 of the Federal Bankruptcy Code.

Gross  profit for the six months  ended  November  30, 1997  increased by 14% to
$476,274 from $418,429 for the comparable period in fiscal 1997. This was due to
the Company being able to close unprofitable production facilities and eliminate
certain contractual obligations due to the Chapter Eleven filing.

Selling and general administrative  expenses (reflected as operating expenses in
the  accompanying  statements  of  operations).   These  expenses  were  largely
unchanged from the same period in fiscal 1997 except for non-recurring items.

Interest  Expense  decreased  from  $65,856  in  fiscal  1997 to  $8,380  in the
comparable quarter ended November 1997 due to the Chapter 11 filing.

Gross profit in the quarter ended November 1997 was a loss of ($37,883) compared
to a loss of ($1,228,813) in the fiscal 1997 period. This was due to a reduction
in the interest expense and non-recurring items in the prior period.


Liquidity and Capital Resources

The Company has experienced  serious cash flow  difficulties over several years.
In April 1997 a group of dissident  stockholders called a special meeting of the
shareholders  with the intent of taking control and thru  management and capital
input returning the Company to profitability.  The existing  management  blocked
that move by placing the Company in Chapter 11 bankruptcy.  Petition was made by
the dissident  stockholders  to the bankruptcy  court to dismiss the dismiss the
bankruptcy  filing as unauthorized  and turn over control to the dissident group
which had  received  the  majority  vote at the  special  stockholders  meeting.
Instead the bankruptcy  court remanded the matter to the Marion Count,  State of
Florida for determination.  Until such time as this matter is resolved and until
significant sources of outside capital have been obtained the future of survival
of the Company is in extreme doubt.

On September 18, 1997 in Marion County  Circuit Court,  State of Florida,  Judge
Swiggart ruled that the  Stockholder  Meeting held on September 3, 1997 electing
Braxton P. Jones and Mark Tishman  directors was valid. The Board having elected
Braxton Jones as Chairman and President directed him to take physical control of
the Company on September 19, 1997.


                                       8
<PAGE>


                                    SIGNATURE
                                    ---------




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



                                              IMAGICA ENTERTAINMENT, INC.
                                              (registrant)





Date:     May 1, 1998                         By: /s/  Braxton P. Jones
                                                 -------------------------------
                                                 Braxton P. Jones, President






                                       9


<PAGE>


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549

                  ---------------------------------------------


                                   EXHIBITS TO

                                  10-QSB REPORT

                                       FOR

                                  QUARTER ENDED

                                NOVEMBER 30, 1997

                  ---------------------------------------------


                           IMAGICA ENTERTAINMENT, INC.



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