UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                      For the quarter ended March 31, 2000


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

               For the transition period from _________to_________


                           Commission File No. 0-12374


                                  EQUITEX, INC.

             (Exact Name of Registrant as Specified in its Charter)


Delaware                                                              84-0905189
-------------------------------                              -------------------
(State or other jurisdiction of                                    (IRS Employer
 incorporation or organization)                              Identification No.)


                           7315 East Peakview Avenue
                           Englewood, Colorado 80111
               ---------------------------------------------------
               (Address of principal executive offices) (Zip code)


                                 (303) 796-8940
               ---------------------------------------------------
               (Registrant's telephone number including area code)



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days. Yes [X] No [ ]

Number of shares of common stock outstanding at May 15, 2000: 7,106,943

<PAGE>

                                  EQUITEX, INC.

PART I  FINANCIAL INFORMATION                                               Page
                                                                            ----

        Item 1.  Financial statements:

                 Independent Accountants Report on condensed
                 consolidated financial statements                             3

                 Condensed consolidated balance sheets - March
                 31, 2000 and December 31, 1999                                4

                 Condensed consolidated statements of operations-
                 three months ended March 31, 2000 and 1999                    5

                 Condensed consolidated statement of changes in
                 stockholders' equity - three months ended March
                 31, 2000                                                    6-7

                 Condensed consolidated statements of cash
                 flows - three months ended March 31, 2000, and 1999         8-9

                 Notes to condensed consolidated financial statements      10-14

        Item 2.  Management's discussion and analysis of financial         15-17
                 condition and results of operations

        Item 3.  Quantitative and qualitative disclosures of market risk      17

PART II OTHER INFORMATION

        Item 1.  Legal proceedings                                            18

        Item 2.  Changes in securities and use of proceeds                    18

        Item 3.  Defaults upon senior securities                              18

        Item 4.  Submission of matters to a vote of security holders          18

        Item 5.  Other information                                            18

        Item 6.  Exhibits and reports on Form 8-k                             18



                                        2


<PAGE>

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

                         INDEPENDENT ACCOUNTANTS' REPORT

Board of Directors
Equitex, Inc.

We have  reviewed  the  accompanying  condensed  consolidated  balance  sheet of
Equitex,  Inc. and subsidiaries as of March 31, 2000, and the related  condensed
consolidated statements of operations,  stockholders' equity, and cash flows for
the  three-month  period  then  ended.   These  financial   statements  are  the
responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with  generally  accepted  auditing  standards,  the  objective  of which is the
expression of an opinion  regarding the financial  statements  taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.

We have  previously  audited,  in accordance  with generally  accepted  auditing
standards, the balance sheet as of December 31, 1999, and the related statements
of operations, stockholders' equity, and cash flows for the year then ended (not
presented  herein);  and in our report  dated April 10,  2000,  we  expressed an
unqualified  opinion  on  those  financial  statements.   In  our  opinion,  the
information set forth in the accompanying  condensed  consolidated balance sheet
as of December 31, 1999, is fairly stated, in all material respects, in relation
to the balance sheet from which it has been derived.

GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
May 18, 2000

                                        3
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                       March 31,    December 31,
                                                         2000           1999
                                                     -----------    -----------
                                                     (Unaudited)

Cash and cash equivalents ......................     $   721,832    $   783,606
Mortgage loans held for sale, net ..............       6,688,344     14,787,080
Receivables, net:
     Related parties ...........................       1,012,017        958,810
     Other .....................................       1,055,964        504,571
Inventories ....................................         109,622        167,346
Investments:
     Equity investments ........................       1,774,404      1,707,898
     Other investments .........................       1,801,570      1,767,537
Furniture, fixtures and equipment, net .........         952,382      1,058,032
Intangible and other assets, net ...............      19,627,902     20,010,057
                                                     -----------    -----------

                                                     $33,744,037    $41,744,937
                                                     ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
     Warehouse loans ...........................     $10,596,137    $18,582,351
     Accounts payable ..........................       1,763,405      1,584,926
     Accrued liabilities:
       Related parties .........................         561,311        454,235
       Others ..................................       2,196,408      2,773,989
     Notes and advances payable:
       Related parties .........................       1,209,550        832,000
       Others ..................................       1,883,055      1,941,954
                                                     -----------    -----------
Total liabilities ..............................      18,209,866     26,169,455
                                                     -----------    -----------

Minority interest ..............................       7,995,070      6,473,070
                                                     -----------    -----------

Commitments and contingencies

Stockholders' equity:
     Convertible preferred stock; par value $1,000;
     4,500 shares authorized:
         Series D, 6%, 1,200 shares issued and
         outstanding; liquidation preference
         $1,602,700                                    1,200,000      1,200,000
         Series E, 250 shares issued and outstanding     250,000        250,000
     Common stock, par value $.02; 7,500,000
       shares authorized; 7,140,293 shares issued;
        7,106,943 shares outstanding ...........         142,806        142,806
     Additional paid-in capital ................      19,166,127     18,820,223
     Accumulated deficit .......................     (13,105,795)   (11,196,580)
     Less treasury stock at cost (33,350 shares)        (114,037)      (114,037)
                                                     -----------    -----------
Total stockholders' equity .....................       7,539,101      9,102,412
                                                     -----------    -----------

                                                     $33,744,037    $41,744,937
                                                     ===========    ===========

            See notes to condensed consolidated financial statements.
                                        4
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

                                   (UNAUDITED)

                                                        2000            1999
                                                     -----------    -----------
Revenues:
     Product sales .............................     $   115,564    $   222,348
     Loan production and processing revenues ...         196,475
     Secondary marketing revenues, net .........         860,575
     Interest and dividend income ..............         229,315         12,050
     Other .....................................          55,364         32,647
                                                     -----------    -----------

                                                       1,457,293        267,045
                                                     -----------    -----------
Expenses:
     Cost of product sales .....................          72,633        131,086
     Loan production and processing ............         593,374
     Selling,  general and administrative ......       2,641,878        901,957
                                                     -----------    -----------

                                                       3,307,885      1,033,043
                                                     -----------    -----------

Loss from operations ...........................      (1,850,592)      (765,998)
                                                     -----------    -----------

Other income (expenses):
     Investment gains, net .....................         154,125        299,653
     Equity in earnings of affiliates ..........          66,506
     Interest expense:
       Related parties .........................         (40,058)
       Other ...................................        (315,796)       (20,786)
     Other income ..............................          76,600
                                                     -----------    -----------

                                                         (58,623)       278,867
                                                     -----------    -----------

Loss before minority interest ..................      (1,909,215)      (487,131)
Minority interest ..............................                         11,787
                                                     -----------    -----------

Net loss .......................................      (1,909,215)      (475,344)
Other comprehensive income,
     unrealized holding gains on investments ...                         35,851
                                                     -----------    -----------

Comprehensive loss .............................     $(1,909,215)   $  (439,493)
                                                     ===========    ===========


Net loss .......................................     $(1,909,215)   $  (475,344)
Amortization of discount on preferred stock ....                     (1,333,098)
Deemed preferred stock dividends ...............         (17,700)       (23,600)
                                                     -----------    -----------

Net loss applicable to common shareholders .....     $(1,926,915)   $(1,832,042)
                                                     ===========    ===========

Basic and diluted net loss per common share ....     $      (.27)   $      (.33)
                                                     ===========    ===========

Weighted average number of common
  shares outstanding ...........................       7,140,293      5,612,291
                                                     ===========    ===========

            See notes to condensed consolidated financial statements.
                                        5
<PAGE>

                         EQUITEX, INC., AND SUBSIDIARIES

       CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                        THREE MONTHS ENDED MARCH 31, 2000

                                   (UNAUDITED)


<TABLE>
<CAPTION>

                              Convertible preferred stock      Common stock
                                -----------------------    ----------------------
                                  Shares       Amount        Shares      Amount
                                ----------   ----------    ---------   ----------
<S>                                  <C>     <C>           <C>         <C>
Balances, January 1, 2000 ...        1,450   $1,450,000    7,140,293   $  142,806
Subsidiary equity transaction
Net loss
                                ----------   ----------   ----------   ----------
Balances, March 31, 2000 ....        1,450   $1,450,000    7,140,293   $  142,806
                                ==========   ==========   ==========   ==========
</TABLE>


                                   (Continued)
                                        6
<PAGE>

                         EQUITEX, INC., AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

                        THREE MONTHS ENDED MARCH 31, 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                 Additional
                                  Treasury        paid-in       Accumulated
                                   stock          capital          Deficit         Total
                                ------------    ------------    ------------    ------------
<S>                             <C>             <C>             <C>             <C>
Balances, January 1, 2000 ...   $   (114,037)   $ 18,820,223    $(11,196,580)   $  9,102,412
Subsidiary equity transaction                        345,904                         345,904
Net loss ....................                                     (1,909,215)     (1,909,215)
                                ------------    ------------    ------------    ------------
Balances, March 31, 2000 ....   $   (114,037)   $ 19,166,127    $(13,105,795)   $  7,539,101
                                ============    ============    ============    ============
</TABLE>


            See notes to condensed consolidated financial statements.
                                        7
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                   2000            1999
                                                                -----------    -----------
<S>                                                             <C>            <C>
Cash flows used in operating activities:
Net loss ....................................................   $(1,909,215)   $  (475,344)
                                                                -----------    -----------
Adjustments to reconcile net loss to net cash provided by
  (used in) operating activities:
     Depreciation and amortization ..........................       544,458         17,644
     Gain on sale of subsidiary assets ......................       (76,620)
     Warrants issued for services ...........................                      150,000
     Provision for bad debts ................................        12,867
     Investment gain, net ...................................      (154,125)
     Equity in earnings of affiliates .......................       (66,506)
     Minority interest ......................................                      (11,787)
Changes in assets and liabilities:
     Decrease in investments in trading securities ..........       193,198         87,839
     Increase in investments in available-for-sale securities                      (35,851)
     Increase in equity investments .........................                     (250,000)
     Increase in receivables ................................       (39,496)      (520,129)
     Decrease in mortgage loans held for sale ...............     8,085,869
     Increase in inventories ................................       (10,338)       (22,974)
     Increase in other assets ...............................      (164,138)       (13,694)
     Increase in bank overdrafts ............................                      (12,666)
     Decrease in accounts payable and accrued liabilities ...      (292,026)      (282,256)
                                                                -----------    -----------

     Total adjustments ......................................     8,033,143       (893,874)
                                                                -----------    -----------

Net cash provided by (used in) operating activities .........     6,123,928     (1,369,218)
                                                                -----------    -----------

Cash flows from investing activities:

     Purchase of other investments ..........................       (12,471)      (175,000)
     Sales of other investments .............................         7,431
     Purchases of furniture, fixtures and equipment .........        (8,658)        (1,662)
     Repayment of loans and notes receivable ................         3,484
     Issuance of loans and notes receivable .................      (300,526)
     Increase in intangible and other assets ................                     (115,119)
                                                                -----------    -----------

Net cash used in investing activities .......................      (310,740)      (291,781)
                                                                -----------    -----------

Cash flows from financing activities:

     Common stock issued for cash ...........................                    1,214,650
     Preferred stock issued for cash ........................                    1,950,000
     Issuance of notes payable ..............................       447,721         18,199
     Repayment of notes payable .............................      (129,070)        (1,431)
     Warehouse loans ........................................    (7,986,214)
     Proceeds from subsidiary stock transactions ............     1,792,601
                                                                -----------    -----------

Net cash (used in) provided by financing activities .........    (5,874,962)     3,181,418
                                                                -----------    -----------
</TABLE>
            See notes to condensed consolidated financial statements.
                                        8
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   2000            1999
                                                                -----------    -----------
<S>                                                             <C>            <C>
Change in cash and cash equivalents .........................       (61,774)     1,520,419

Cash and cash equivalents, beginning ........................       783,606           --
                                                                -----------    -----------

Cash and cash equivalents, ending ...........................   $   721,832    $ 1,520,419
                                                                ===========    ===========


Supplemental disclosure of cash flow information:

     Cash paid for interest: ................................   $   335,879    $    21,829
                                                                ===========    ===========


Supplemental disclosure of non-cash
 investing and financing activities:

     Sale of subsidiary assets:
       Equipment ............................................   $    38,500
       Intangible assets ....................................        84,880
       Inventory ............................................        68,062
       Note receivable issued in exchange ...................      (268,062)
                                                                -----------

       Gain on sale of subsidiary assets ....................   $   (76,620)
                                                                ===========

     Common stock issued in satisfaction of
       note payable .........................................                  $   150,000
                                                                               ===========

     Amortization of discount on preferred stock ............                  $ 1,333,098
                                                                               ===========
</TABLE>
            See notes to condensed consolidated financial statements.
                                        9
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

1.   Basis of presentation:

     The condensed  consolidated  financial  statements  of Equitex,  Inc.  (the
       "Company")  for the  three-month  periods  ended March 31, 2000 and 1999,
       have  been  prepared  by the  Company  without  audit  by  the  Company's
       independent  auditors.  In the opinion of the Company's  management,  all
       adjustments  necessary to present fairly the financial position,  results
       of  operations,  and cash flows of the Company as of March 31, 2000,  and
       for the periods then ended have been made. Those adjustments consist only
       of normal and recurring  adjustments.  The condensed consolidated balance
       sheet as of  December  31,  1999,  has  been  derived  from  the  audited
       consolidated balance sheet of the Company as of that date.

     Certain information and note disclosures normally included in the Company's
       annual  financial   statements  prepared  in  accordance  with  generally
       accepted  accounting  principles  have been  condensed or omitted.  These
       condensed consolidated financial statements should be read in conjunction
       with a reading of the financial  statements and notes thereto included in
       the Company's Form 10-K annual report for 1999, filed with the Securities
       and Exchange  Commission.  The results of operations for the three months
       ended  March 31, 2000 and 1999,  are not  necessarily  indicative  of the
       results to be expected for the full year.

     The  consolidated  financial  statements  as of March 31, 2000  include the
       accounts of Equitex,  Inc., and the following  significant  subsidiaries:
       nMortgage,  Inc.  ("nMortgage")  and its wholly- owned  subsidiary  First
       Bankers Mortgage Services, Inc. ("FBMS"),  First Teleservices Corporation
       ("FTC"),  and Triumph Sports Group,  Inc.  ("Triumph").  All  significant
       intercompany   accounts  and   transactions   have  been   eliminated  in
       consolidation.

     Minority interest at March 31, 2000, represents preferred stock of FBMS and
       nMortgage. During the three months ended March 31, 2000, nMortgage issued
       1,522,000 shares of Series A preferred stock for $1,522,000. As a result,
       minority  interest  increased  from  $6,473,070  at December  31, 1999 to
       $7,995,070  at March 31,  2000.  During the three  months ended March 31,
       2000, net losses  incurred by the Company's  majority owned  subsidiaries
       exceeded the minority  interest in the common equity  (deficiency) of the
       subsidiaries.  As a  result,  the  excess  of  losses  applicable  to the
       minority  interest have been charged  against the Company and no minority
       interest is reflected in the Company's 2000 statement of operations.

2.   Commitments and contingencies:

     Litigation:

     The Company is involved in various claims and legal actions  arising in the
       ordinary course of business.  In the opinion of management,  the ultimate
       disposition  of these  matters  will not have a material  adverse  impact
       either  individually  or in the  aggregate  on  consolidated  results  of
       operations, financial position or cash flows of the Company.

                                       10
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

2.   Commitments and contingencies (continued):

     Minimum regulatory capital requirements:

     FBMS is subject to various regulatory capital requirements  administered by
       the various state banking agencies in certain states in which the Company
       is licensed to do business.  Failure to meet minimum capital requirements
       can initiate  certain  mandatory  and possibly  additional  discretionary
       actions by regulators  that, if undertaken,  could have a direct material
       effect on the Company's  consolidated  results of  operations,  financial
       position  and/or cash flows. At March 31, 2000, FBMS is not in compliance
       with all regulatory requirements in certain states.

3.   Stockholders' equity:

     Series A, B, and C convertible preferred stock:

     In January and February 1999, the Company issued a total of 2,100 shares of
       6%,  Series A, B, and C convertible  preferred  stock for $1,000 cash per
       share,  which is the  stated  value per share.  Each  series of stock was
       convertible  into common stock at any time by the holders at a conversion
       price  equal to 65% of the  average  closing  bid price of the  Company's
       common stock as specified in the agreement.

     Because this preferred stock contained an immediate  beneficial  conversion
       feature, both additional paid-in capital and the accumulated deficit were
       increased by $1,333,098  during the first quarter of 1999,  the amount of
       the discount due to this beneficial  conversion feature. The holders were
       entitled  to  receive a  cumulative  annual  dividend  of $60 per  share,
       payable quarterly,  and had preference to any other dividends which might
       have been paid by the Company. The dividend was payable either in cash or
       in shares of the Company's  common stock,  at the Company's  option.  The
       preferred  stockholders  also  received  warrants  to purchase a total of
       250,000 shares of the Company's  common stock at 120% of the market price
       as of the grant date. In addition,  the placement agent was issued 20,000
       shares of the Company's common stock,  valued at $200,000 in exchange for
       services in connection with the preferred stock sales.

     In April 1999, all 2,100 shares of Series A, B and C convertible  preferred
       stock,  plus accumulated  dividends on those shares,  were converted into
       320,528 shares of common stock, at an average  conversion  price of $6.63
       per share.

     Series D convertible preferred stock:

     In May 1999, the Company reached an agreement  with an accredited  investor
       to sell 3,500  shares of Series D, 6%  convertible  preferred  stock (the
       "Series D  Preferred  Stock")  for $1,000  cash per  share,  which is the
       stated  value per share.  In August 1999,  the Company  issued a total of
       1,200  shares  of the  Series  D  Preferred  Stock in  consideration  for
       $1,200,000.  The balance of $2,300,000 for the remaining  2,300 shares of
       Series D Preferred Stock is being held in escrow pending authorization by
       the  Company's  stockholders  of a  sufficient  number  of  shares of the
       Company's  common  stock to cover those  shares  underlying  the Series D
       Preferred Stock.

                                       11
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999



3.   Stockholders' equity (continued):

     Series D convertible preferred stock (continued):

     The holder of each share of Series D  Preferred  Stock is  entitled to a 6%
       cumulative annual dividend,  payable  quarterly.  The dividend is payable
       either  in  cash or in  shares  of the  Company's  common  stock,  at the
       discretion  of the  Company.  The  Series D  Preferred  Stock  contains a
       liquidation preference equal to the sum of the stated value of each share
       plus an amount  equal to 100% of the stated  value plus the  aggregate of
       all  accrued  and unpaid  dividends  on each share of Series D  Preferred
       Stock until the most recent dividend payment date or date of liquidation,
       dissolution or winding up of the Company.

     The Series D Preferred Stock is convertible  into common stock at any time,
       at a  conversion  price  per share of  common  stock  equal to 65% of the
       average  closing bid price of the Company's  common stock as specified in
       the  agreement.  Because  this  preferred  stock  contained  an immediate
       beneficial  conversion  feature,  both additional paid-in capital and the
       accumulated deficit were increased by $1,884,615 during the third quarter
       of 1999,  the amount of the  discount due to this  beneficial  conversion
       feature.

     Series E convertible preferred stock:

     The holders of the Series E Preferred  Stock are not entitled to dividends,
       do not have a liquidation  preference and do not have voting rights.  The
       Series E Preferred  stock,  if fully  issued,  automatically  converts to
       1,000,000  shares of common stock upon the approval of an increase in the
       authorized  shares of common stock from  7,500,000  shares to  50,000,000
       shares,  or the  subsequent  merger of the Company  with or into  another
       company, or the sale of substantially all the Company's assets.

4.   Subsidiary transactions:

     Effective  January  1,  2000,  Triumph  sold the  assets of one of its four
       retail stores in exchange for a $268,000 note  receivable.  In connection
       with  this   transaction,   Triumph  recorded  a  gain  on  the  sale  of
       approximately  $76,600,  which  is  presented  as  other  income  in  the
       accompanying statement of operations.

     During the three months ended March 31, 2000, an officer/shareholder of the
       Company  sold  marketable  securities  to Triumph at his cost of $10,000.
       Triumph  subsequently  sold a portion of these marketable  securities for
       approximately  $278,000.  The market value of the remaining securies held
       by  the  Company  at  March  31,  2000  was  approximately  $77,000.  The
       difference  between  the cost and  market  value of these  securities  of
       $345,904 was recorded as an increase in additional paid-in capital during
       the quarter ended March 31, 2000.

                                       12
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

5.   Proposed business transactions:

     Proposed sale of nMortgage, Inc.:

     On December 31,  1999, the Company  entered  into an Agreement  and Plan of
       Merger, whereby all of the outstanding common stock of nMortgage is to be
       acquired by Innovative  Gaming  Corporation of America  ("IGCA"),  an SEC
       reporting  company  whose  common  stock  trades on the  Nasdaq  SmallCap
       Market. Under the terms of this proposed transaction, in exchange for all
       outstanding  shares  of  nMortgage,  Inc.,  the  Company  and  the  other
       nMortgage shareholders are to receive, approximately 46,000,000 shares of
       IGCA common stock,  assuming that there will be approximately  16,000,000
       shares of IGCA common stock outstanding on a fully-diluted  basis, before
       the transaction.

     IGCA was formed in 1991 to  develop,  manufacture,  market  and  distribute
       specialty  video  gaming  machines.   As  a  condition  of  the  proposed
       transaction,  IGCA is to  dispose  of its  gaming  assets,  resulting  in
       nMortgage as the sole business operation of IGCA.

     There are a number of material  conditions  that must be satisfied prior to
       the completion of this  transaction,  including any required  approval by
       the Company's  shareholders,  the disposal of IGCA's gaming  assets,  and
       approval  from  all  governmental   bodies  or  agencies  and  regulatory
       authorities.  There is no assurance that the conditions  summarized above
       will be satisfied, or that the transaction will occur consistent with the
       terms outlined above.

     Proposed transactions with First TeleBanc Corp.:

     On May 4, 1999, the Company  entered  into a definitive  agreement  whereby
       First TeleBanc Corp.  ("First  TeleBanc"),  a single bank holding company
       based in Boca  Raton,  Florida,  is to merge with the  Company,  with the
       Company being the surviving  corporation (the "TeleBanc  Merger").  First
       TeleBanc  owns all of the issued and  outstanding  stock of 1st  National
       Bank, a national banking association. Consummation of the TeleBanc Merger
       is subject to a number of conditions,  including  approval by the Federal
       Reserve  Bank of Atlanta,  Georgia,  the  distribution  of certain of the
       Company's assets to a new  wholly-owned  subsidiary and the "spin-off" of
       that subsidiary, and the approval of the TeleBanc Merger by the Company's
       shareholders.

                                       13
<PAGE>

                         EQUITEX, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                   THREE MONTHS ENDED MARCH 31, 2000 AND 1999

6.   Operating segments:

     Asof and during the three month  periods  ended March 31,  2000,  and 1999,
       the segment results were as follows:
<TABLE>
<CAPTION>

     2000:
     ----
                                         Sporting goods/    Corporate activities
                             Financial       product     ---------------------------
                             services        related     Investments        Other         Total
                           ------------   ------------   ------------   ------------   ------------
     <S>                   <C>            <C>            <C>            <C>            <C>
     Revenues              $  1,305,945   $    115,564   $     35,420   $        364   $  1,457,293
     Segment gain (loss)     (1,708,014)       (16,089)       256,051       (441,163)    (1,909,215)
     Total assets            27,759,189      1,588,167      2,938,102      1,458,579     33,744,037


     1999:
     ----
                                         Sporting goods/    Corporate activities
                             Financial       product     ---------------------------
                             services        related     Investments        Other         Total
                           ------------   ------------   ------------   ------------   ------------
     Revenues              $              $    222,348   $     44,697   $              $    267,045
     Segment gain (loss)        (89,126)       (46,486)                     (339,732)      (475,344)

</TABLE>


                                       14
<PAGE>

                                    ITEM TWO
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                               FINANCIAL CONDITION

FORWARD LOOKING STATEMENTS

THIS REPORT MAY CONTAIN  CERTAIN  "FORWARD-LOOKING"  STATEMENTS  AS SUCH TERM IS
DEFINED  IN THE  PRIVATE  SECURITIES  LITIGATION  REFORM  ACT OF  1995 OR BY THE
SECURITIES AND EXCHANGE COMMISSION IN ITS RULES, REGULATIONS AND RELEASES, WHICH
REPRESENT THE COMPANY'S  EXPECTATIONS OR BELIEFS,  INCLUDING BUT NOT LIMITED TO,
STATEMENTS CONCERNING THE COMPANY'S OPERATIONS, ECONOMIC PERFORMANCE,  FINANCIAL
CONDITION,   GROWTH  AND  ACQUISITION   STRATEGIES,   INVESTMENTS,   AND  FUTURE
OPERATIONAL  PLANS. FOR THIS PURPOSE,  ANY STATEMENTS  CONTAINED HEREIN THAT ARE
NOT  STATEMENTS  OF  HISTORICAL  FACT  MAY  BE  DEEMED  TO  BE   FORWARD-LOOKING
STATEMENTS.  WITHOUT  LIMITING THE  GENERALITY OF THE  FOREGOING,  WORDS SUCH AS
"MAY", "WILL", "EXPECT", "BELIEVE", "ANTICIPATE", "INTENT", "COULD", "ESTIMATE",
"MIGHT", OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR COMPARABLE
TERMINOLOGY  ARE  INTENDED  TO  IDENTIFY   FORWARD-LOOKING   STATEMENTS.   THESE
STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES,  CERTAIN
OF WHICH ARE  BEYOND  THE  COMPANY'S  CONTROL,  AND  ACTUAL  RESULTS  MAY DIFFER
MATERIALLY  DEPENDING ON A VARIETY OF IMPORTANT FACTORS,  INCLUDING  UNCERTAINTY
RELATED  TO THE  COMPANY'S  OPERATIONS,  MERGERS OR  ACQUISITIONS,  GOVERNMENTAL
REGULATION, THE VALUE OF THE COMPANY'S ASSETS AND ANY OTHER FACTORS DISCUSSED IN
THIS AND OTHER COMPANY FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

(a) Liquidity.
(b) Capital Resources.

During 1999,  as the  Registrant  restructured  its business  from an investment
company to an operating  company,  the  Registrant  relied  primarily on private
placements of equity  securities to fund its operations and  acquisitions  as it
sought to become a fully  operating  entity.  Also during 1999,  the  Registrant
divested certain of its portfolio  securities providing additional liquidity and
may continue to do so in 2000. Presently,  all of the Registrant's  subsidiaries
operate on a stand-alone basis and each is individually  responsible for its own
liquidity.  However,  the  Registrant may need to assist its  subsidiaries  from
time-to-time  should  unforeseen   liquidity  issues  arise.  Should  additional
liquidity be necessary to fund the operations of its subsidiaries or to complete
any merger or  acquisition,  the Registrant  believes it has sources  available,
including the sales of certain  investments  or the private  placement of equity
securities, to cover any such needs.

Following  the  acquisition  of FBMS  through  nMortgage  in  August  1999,  the
Registrant  began  incorporating  major  opeartional  changes at nMortgage.  The
purpose  of these  changes  is to  significantly  reduce  nMortgage's  operating
overhead as it transitions  from a traditional  brick and mortar mortgage banker
to a technology driven mortgage banker, broker and Internet solution provider to
the mortgage industry. nMortgage is also seeking to mitigate the risk associated
with the warehouse  funding and  subsequent  sale of its mortgage  portfolios by
employing  the "table  funding"  method  described  below for closing its retail
mortgage loans. This  restructuring  continued during the first quarter of 2000.
Additional capital expenditures have been incurred as nMortgage further develops
its  information  technology  in  connection  with its  Internet-  based product
offerings.

Beginning in the second quarter of 2000, as nMortgage  completes the first phase
of the planned  changes,  it will initially  rely  primarily on origination  and
other loan  related  fees from  lenders to whom it brokers  mortgage  loans.  As
nMortgage  rolls out its  business to  business  Internet  solutions  during the
second and third  quarters  of 2000,  additional  fees will be  recognized  from
fee-based  programs for private  labeling  third party website  solutions.  This
should generate additional loan-related as well as service-related fees.

Triumph  and VP Sports both rely  primarily  on cash flows from  operations  for
their working  capital.  In addition,  during 1999 and 2000,  Triumph received a
cash  infusion  from the sale of an  investment  purchased  from an  officer  of
Triumph   considerably  below  market  value.  This  capital  infusion  provided
additional  cash of  approximately  $270,000  to operate  its  business  and was
considered a  contribution  of capital.  The  Registrant  anticipates  Triumph's
liquidity and capital resources will be sufficient to fund its operations during
the year 2000.

                                       15
<PAGE>

                                    ITEM TWO
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                         FINANCIAL CONDITION (CONTINUED)


(c) Results of operations.

The Registrant  fundamentally  changed its  operations  during 1999 most notably
with the  acquisition  of FBMS in August 1999.  As a result,  comparison  of the
results of  operations  for 1999 as  compared  to 2000 would not  provide  for a
meaningful analysis.  The discussion and analysis of the Registrant's results of
operations  have been analyzed with a view toward the  Registrant's  current and
future business operations.

REVENUES: The Registrant's consolidated revenues for the quarter ended March 31,
2000 increased  significantly when compared to March 31, 1999 as a result of the
addition of nMortgage.  Of the total consolidated  revenues,  approximately $1.2
million is attributable to nMortgage.

As  discussed  above,  nMortgage  is  continuing  to  implement  changes  in its
operations.  During the quarter ended March 31, 2000, nMortgage was a company in
transition.  While continuing to offer retail mortgages through both traditional
as well as Internet  oriented  channels,  nMortgage began to transition from its
practice of warehouse funding to table funding a majority of its mortgage loans.
During the second  quarter of 2000,  nMortgage  is  expected  to  complete  this
transition and be table funding nearly 100% of its loans. This change results in
the  need  for  significantly  fewer  employees  as  the   responsibilities  for
underwriting,   post  closing,   closing,  auditing  and  disbursing  loans  are
transferred  from  nMortgage  to the  investors  underwriting  and  funding  the
originations.  Therefore,  nMortgage is  consolidating  its  operations and as a
result  continues to decrease its operating  overhead.  Two significant  offices
were closed resulting in certain write-offs and severance costs during the first
quarter and continuing into the second quarter. As a result of these operational
changes,  nMortgage  experienced an overall decrease in loan originations during
the period as it trimmed its work force in anticipation of its Internet  product
roll-out. In addition,  nMortgage saw a decrease in mortgage originations due to
increasing  interest rates.  Financing of new home purchases  decreased slightly
while refinancings  decreased  significantly as interest rates reached levels at
which most consumers chose not to refinance.

As nMortgage  completes its  "restructuring"  program and fully  integrates  the
table funding concept for its mortgage  originations,  a majority of nMortgage's
revenues for the remainder of the year should be derived from origination  fees.
Once a mortgage  originated  by  nMortgage  is closed and funded by the  lender,
nMortgage  will  be  paid  its fee  directly  from  that  lender.  nMortgage  is
continuing  its  restructuring  program  and  anticipates  it will  not be fully
completed  until  the  third  quarter  of 2000.  nMortgage  debuted  its  second
generation  business  to  consumer  website  as well as its  first  business  to
business  site  during the  beginning  of the  second  quarter.  As  nMortgage's
Internet  business  to  consumer  and  business  to  business  technologies  are
introduced,  nMortgage  anticipates an increase in loan originations  during the
latter portion of 2000, compared to the first half of 2000.

Triumph,  the second largest contributor to the Registrant's  revenues,  derived
those  revenues  from product sales at its three retail  locations.  Total sales
were down as compared to the prior year as a result of the divestiture of one of
its retail locations.  This sale did result in a gain of approximately  $76,600,
which is presented as other income.

The  Registrant's  revenues  for the quarter on a  stand-alone  basis  consisted
solely of interest income related to certain  long-term and short-term  loans to
non-affiliated entities. As a holding company, the Registrant has no significant
sources  of  revenue  other  than  those  of  its  operating  subsidiaries.  The
Registrant partially offset its operating overhead during 1999 from the sales of
certain  investments which is considered other income not revenue.  For the year
2000, the Registrant may continue to divest certain of its  investments to cover
its operating  overhead as it continues to work toward  completion of its merger
with First TeleBanc Corp.

                                       16
<PAGE>

                                    ITEM TWO
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
                         FINANCIAL CONDITION (CONTINUED)

EXPENSES:  Of the  Registrant's  total expenses on a consolidated  basis for the
quarter  ended March 31, 2000,  approximately  $2,600,000  are  attributable  to
nMortgage,  $450,000 to Equitex,  $62,000 to First  Teleservices and $182,000 to
Triumph. This is an increase of approximately 220% when compared to the previous
year as a result of the addition of nMortgage.

A  majority  of the total  expenses  are  selling,  general  and  administrative
expenses with  nMortgage  accounting for  approximately  $2,000,000 of the total
$2,641,878.  As stated  above,  nMortgage  continues to decrease  its  operating
overhead  mainly through  employee  layoffs and office  closures the benefits of
which  may not be fully  realized  until  the  third  quarter  of  2000.  Of the
approximately  $2,000,000 of expenses for nMortgage,  approximately  $463,000 is
the amortization of goodwill.  The remaining portion of expenses attributable to
Equitex,  Triumph  and First  TeleServices  did not  change  significantly  when
compared to the previous year's quarter.

OTHER INCOME (EXPENSES):  Other income (expense) includes net investment gain of
$154,125  a  majority  of  which  is  the  unrealized  gain  on  certain  of the
Registrant's  investments,  equity in gains of affiliates  of $66,506,  interest
expense of $352,732 and other income of $73,478 from Triumph's sale of assets.

Of the  total  interest  expense,  approximately  $317,000  is  attributable  to
nMortgage.  This  expense is related to  nMortgage's  warehouse  lines of credit
which   totaled   approximately   $10,600,000   at  March  31,  2000  down  from
approximately  $18,600,000  at December  31,  1999.  As a result of  nMortgage's
transition from warehouse  funding to table funding its loans, it is anticipated
the  warehouse  lines of credit will be paid down  during the second  quarter of
2000 to below  $1,000,000.  This will  significantly  decrease interest costs to
nMortgage for the second quarter and beyond.

Equity in gains of affiliates  corresponds to the  Registrant's  35.7% ownership
interest in VP Sports  which is  accounted  for on an equity  basis.  VP Sports'
business is seasonal and  traditionally,  the first and second calendar quarters
are the peak sales periods for VP with the latter  portion of the year being the
slowest.

NET LOSS:  Of the net loss for the quarter  ended March 31, 2000,  approximately
$1,702,000  is  attributable  to nMortgage,  approximately  $185,000 to Equitex,
approximately $6,000 to First TeleServices and approximately $16,000 to Triumph.
This  compares  to a net loss of $439,493  for the quarter  ended March 31, 1999
which did not include the operations of nMortgage.

NET LOSS  APPLICABLE  TO  COMMON  STOCKHOLDERS:  Net loss  applicable  to common
stockholders  was  $1,926,915  for the quarter  ended March 31, 2000 This amount
includes deemed preferred stock dividends on the outstanding  Series D preferred
stock of the Registrant of $17,700 for the quarter.


                                   ITEM THREE
             QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK

Not applicable
                                       17
<PAGE>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

         None

Item 2. Changes in Securities

         None

Item 3. Defaults Upon Senior Securities

         None

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

         None

Item 5. Other Information

         None

Item 6. Exhibits and Reports of Form 8-K

     (a) Financial data schedule for SEC registrants

     (b) None

                                       18
<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 thereunto duly authorized.

                                       EQUITEX, INC.
                                       (Registrant)



Dated: May 22, 2000                    By: /s/ Henry Fong
                                           ---------------------
                                           Henry Fong
                                           President, Treasurer and Chief
                                           Financial Officer


                                       19