<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

(Mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2000

Commission file No.  0-18866

                                       OR

[   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934


                       FIRST NATIONAL ENTERTAINMENT CORP.
                       ----------------------------------
        (Exact name of small business issuer as specified in its charter)

          COLORADO                                        93-1004651
          --------                                        ----------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)


              6516 WEST NORTH AVENUE, SUITE 200, CHICAGO, IL 60707
              ----------------------------------------------------
                    (Address of principal executive offices)

                                 (773) 237-7460
                  --------------------------------------------
              (Registrant's telephone number, including area code)




Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK $0.005 PAR VALUE
                          -----------------------------
                                (Title of Class)

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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ X ]         NO  [   ]

As of March 31, 2000 the registrant had outstanding 19,437,458 shares of its
$.005 par value Common Stock.


<PAGE>   2


                                      INDEX



                         Part I - Financial Information


                                                                            Page

Item 1   Consolidated Balance Sheet ......................................... 3

         Consolidated Statements of Income .................................. 5

         Consolidated Statements of Cash Flow ............................... 6

         Notes to Consolidated Financial Statements ......................... 7

Item 2   Management's Discussion and Analysis of Financial Conditions
         and Results of Operations ..........................................12



          Part II - Other Information and Signatures


Item 1   Legal Proceedings ..................................................13

Item 5   Other Information ..................................................14

Item 6   Exhibits and Reports on Form 8-K ...................................14




                                       2

<PAGE>   3




PART 1 - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)


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

March 31,                                                            2000

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

ASSETS

Current Assets
  Cash                                                         $   18,228
  Loans Receivable, net of allowance                              724,422
 Other Real Estate owned, net of allowance                      1,004,151
 Notes Receivable, net of allowance                               174,000
  Interest Receivable                                             104,181
  Other                                                             1,800

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

Total Current Assets                                            2,026,782

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

Real Estate held for development                                    9,000

Property and equipment, net                                        10.613

Other Assets
  Film inventory                                                   10,000

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

Total Other Assets                                                 10,000

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

TOTAL ASSETS                                                   $2,056,395

================================================================================

See accompanying notes to consolidated financial statements.





                                       3
<PAGE>   4



FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(UNAUDITED)


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

March 31,                                                            2000

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

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
  Short term debt                                            $  2,099,582
  Accounts payable                                                 49,285
  Accrued expenses                                                107,066
  Accrued compensation                                            141,146
  Net Liabilities of discontinued operations                      422,543

================================================================================

Total Current Liabilities                                       2,819,622

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

Minority interest in consolidated subsidiary                    2,788,968

Shareholders' Equity
Preferred stock, $.001 par value,
  authorized 10,000,000 shares, no shares
  issued and outstanding                                               --
Common stock, $.005 par value,
  authorized 100,000,000 shares,
  issued and outstanding:
    2000,  19,437,458 shares
    1999,  18,637,458 shares                                       95,190
  Paid in capital                                              27,260,741
  Accumulated deficit                                         (30,908,126)

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

Total Shareholders' Equity                                    (3,552,195)

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

================================================================================

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY                                         $  2,056,395

================================================================================

See accompanying notes to consolidated financial statements.




                                       4
<PAGE>   5



FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------

For the three months ended March 31,                            2000             1999

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

<S>                                                     <C>              <C>
OPERATING REVENUES  Interest and fees on loans          $     50,269     $    208,609
 OPERATING EXPENSES
  Marketing, selling  & royalties                                266            9,397
  General and administrative                                 224,990          260,027
                                                        ------------     ------------
                                                             225,256          269,424
                                                        ------------     ------------

LOSS FROM OPERATIONS                                        (174,987)         (60,815)

OTHER INCOME (EXPENSE)
   Other                                                       8,697               --
   Interest Expense                                          (88,716)         (54,691)
                                                        ------------     ------------
                                                             (80,019)         (54,691)
                                                        ------------     ------------

LOSS FROM CONTINUING OPERATIONS                             (255,006)        (115,506)

Discontinued operations
      Gain (Loss) from operation of Prairie Business
       Credit, Inc.                                               --           10,553
      Gain (Loss) from operations of First
        National Video Corp.                                                    2,123
                                                        ------------     ------------
                                                                  --           12,676
                                                        ------------     ------------

Net Loss                                                    (255,006)        (102,830)

Dividends on preferred stock of subsidiary                   (76,562)         (76,562)
                                                        ------------     ------------

Net loss allocated to common shareholders               $   (331,568)    $   (179,392)
                                                        ============     ============

Net loss allocated to common shareholders per share
   Loss from continuing operations                      $       (.02)    $       (.01)
  Discontinued operations                                         --               --
                                                        ------------     ------------

         Net loss allocated to common shareholder
              per share                                 $       (.02)    $       (.01)
                                                        ============     ============

==========================================================================================

Weighted average shares outstanding                       19,037,458       18,672,458
                                                        ============     ============
</TABLE>


See accompanying notes to consolidated financial statements.






                                       5
<PAGE>   6



FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------

For the three months ended March 31,                         2000          1999

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

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                     <C>           <C>
    Net income (loss)                                   $(255,006)    $(102,830)

    Adjustments to reconcile net loss to net cash
     provided by operating activities:

    Other amortization, depreciation, write-offs            1,422         1,711
    Provision for loan losses                               8,041        37,000
    Changes in operating assets and liabilities, net      342,930       777,447
    Discontinued operations                               117,704      (747,904)

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

NET CASH PROVIDED BY (USED IN)                            215,091       (34,576)
      OPERATING ACTIVITIES


CASH FLOWS FROM FINANCING ACTIVITIES:

    Loans (repayment) from/to shareholder                (234,926)      (27,500)
    Proceeds from borrowings from shareholder             105,544            --
    Proceeds from borrowings on notes                          --       102,900
    Dividends paid on preferred stock of subsidiary      (127,604)      (76,562)

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

NET CASH (USED IN) FINANCING ACTIVITIES                  (256,986)       (1,162)

NET DECREASE IN CASH                                      (41,895)      (35,738)

CASH - BEGINNING OF PERIOD                                 60,123       117,465

CASH - END OF PERIOD                                    $  18,228     $  81,727

==========================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

Supplemental schedule of non cash finance activities:
    Note Receivable exchanged in satisfaction of shareholder debt      $889,987




                                       6
<PAGE>   7




FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)\
March 31, 2000 and 1999


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

NOTE 1  GENERAL

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

In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of March 31,
2000 (unaudited) and the unaudited results of operations and cash flows for the
periods ended March 31, 2000 and 1999. The financial statements have been
prepared in accordance with the requirements of Form 10-QSB and consequently do
not include all the disclosures normally made in an Annual Report on Form
10-KSB. Accordingly, the consolidated financial statements included herein
should be reviewed in conjunction with the financial statements and the
footnotes thereto included in the Company's December 31, 1999 Annual Report on
Form 10-KSB.

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.

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

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Principles of Consolidation: The consolidated financial statements include the
accounts of First National Entertainment Corp. (a Colorado corporation) and its
subsidiaries, Equator Entertainment, First National Finance Corp., and First
National Video Corp. (collectively referred to as the "Company"). Effective
January 1, 1999, First National Finance Corp. has a wholly owned subsidiary,
Prairie Business Credit, Inc., which is also included within the consolidated
financial statements. The transaction was accounted for as a purchase. On
December 17, 1999 management decided to sell or otherwise dispose of this
segment of the business. All significant intercompany accounts and transactions
have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Cash and Cash Equivalents: For purposes of the statement of cash flows, the
Company considers all investments with maturities of three months or less, when
purchased, to be cash equivalents.

Loans Receivable: Loans are stated net of the allowance for loan losses and
unearned discount. Interest on loans is included in operating revenues over the
term of the loan based upon the principal balance outstanding. Where serious
doubt exists as to the collectibility of a loan, the accrual of interest in
discontinued. Loan fees and direct loan origination costs are deferred and
amortized over the term of the loan as a yield adjustment.

The Company has a reserve for unfunded restoration costs which it holds in
escrow. Payments are made from time to time as work is completed and
documentation is presented to a title company for approval. Funds are disbursed
upon a directive from the title company.




                                       7
<PAGE>   8



Allowance for Loan Losses: An allowance for loan losses has been established to
provide for those loans which may not be repaid in their entirety. The allowance
is increased by provisions for loan losses charged to expense and decreased by
charge-offs, net of recoveries. Although a loan is charged off by management
when deemed uncollectible, collection efforts may continue and future recoveries
may occur.

The allowance is maintained by management at a level considered adequate to
cover losses that are currently anticipated based on past loss experience,
general economic conditions, information about specific borrower situations
(including their financial position and collateral values) and other factors and
estimates which are subject to change over time. Estimating the risk of loss and
the amount of loss on any loan is necessarily subjective and ultimate losses may
vary from current estimates. These estimates are reviewed periodically, and as
adjustments become necessary, they are reported in earnings in the periods in
which they become known.

Loans are considered impaired if full principal or interest payments are not
anticipated. Each impaired loan is carried at the present value of expected cash
flows discounted at the loan's effective interest rate or at the fair value of
the collateral if the loan is collateral dependent. A portion of the allowance
for loan losses is allocated to an impaired loan if the present value of cash
flows or collateral value indicate the need for an allowance.

For impaired loans and other loans, accrual of interest is discontinued on a
loan when management believes, after considering collection efforts and other
factors, that the borrower's financial condition is such that collection of
interest is doubtful. Cash collections on impaired loans are credited to the
loan receivable balance, and no interest income is recognized on those loans
until the principal balance has been collected.

Other Real Estate Owned: Real estate acquired in settlement of a loan is carried
at the lower of the recorded investment in the property or its fair value. Prior
to foreclosure, the value of the underlying loan is written down to the fair
value of the real estate to be acquired by a charge to the allowance for loan
losses, if necessary. At the time of foreclosure, an allowance is established
for estimated selling costs. Any subsequent write-downs required by changes in
estimated fair value or disposal expenses are provided through this allowance
and the provision is charged to operating expense. Carrying costs of such
properties, net of related income, and gains and losses on their disposition are
charged or credited to operating expense as incurred.

Property, Plant, and Equipment: Property, plant, and equipment are recorded at
cost. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets, generally 3 to 7 years.

Financial Instruments: The Company's financial instruments consist principally
of loans receivable and notes payable and are carried at amounts which
approximate fair value.

Stock-Based Compensation: On October 23, 1995, the Financial Accounting
Standards Board (the "FASB") issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 encourages, but does not require, the recognition of
compensation expense for grants of stock, stock options, and other equity
instruments to employees based on a fair value method of accounting. Companies
are permitted to continue to apply the existing accounting rules contained in
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APBO No. 25"); however, companies that choose to retain this method
of accounting are required to provide expanded disclosures of pro forma net
income and earnings per share in the notes to financial statements as if the new
fair value method of accounting had been adopted. The Company has elected to
continue to apply the accounting principles contained in APBO No. 25.

Income Taxes: The Company accounts for income taxes using the deferred asset and
liability method as required by SFAS No. 109, "Accounting for Income Taxes."
Deferred income taxes are provided as temporary differences arise between the
basis of asset and liabilities for financial reporting and income tax reporting.

Loss Per Share: Earnings per common share (EPS) is computed under the provisions
of Statement of Financial Accounting Standards No. 128, "Earnings Per Share."
Basic loss per common share is computed by dividing net loss




                                       8
<PAGE>   9




available to common shareholders by the weighted average number of common shares
outstanding during the period. Net loss available to common shareholders is
calculated by deducting dividends on preferred stock of subsidiary from net
loss. Since the Company has experienced net operating losses, the outstanding
options and warrants to purchase common stock have an anti-dilutive effect.
Therefore, options and warrants were not included in computing dilutive loss per
share.


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

NOTE 3  NOTES RECEIVABLE

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

                                                                 March 31,
                                                                 ---------
                                                                   2000
                                                                   ----
      10% note due August 15, 2000.  Note is secured by
      second mortgages and other property                       $  48,000

      10% note due May 1, 2000.  Note is secured by real
      estate.                                                     126,000
                                                                ---------

                                                                $ 174,000

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

NOTE 4  AMORTIZATION OF FILM INVENTORY

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

Amortization of capitalized film property costs is computed using the
individual-film-forecast computation method as promulgated under SFAS No. 53,
"Financial Reporting by Producers and Distributors of Motion Picture Films". At
June 30, 1996, the Company intended to amortize the remaining unamortized film
costs for its Happily Ever After property over the next five years, subject to
future market conditions altering this accounting estimate.

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

NOTE 5  LEASEHOLD IMPROVEMENTS AND EQUIPMENT

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

Leasehold improvements and equipment consisted of the following at March 31,
2000



                                                                  2000
                                                                  ----

           Office equipment                                        17,395
           Furniture and fixtures                                  11,070
                                                                 --------
                                                                   28,465
           Less accumulated depreciation                         (17,852)
                                                                ---------

             Net property and equipment                         $  10,613
                                                                =========




                                       9
<PAGE>   10


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

NOTE 6  SHAREHOLDERS' EQUITY

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

Preferred Stock: The Company has authorized the issuance of 10,000,000 shares of
$.0001 par value preferred stock. At March 31, 2000, the Company had not issued
any preferred shares.

Common Stock: During the periods ended March 31, 2000 and 1999, respectively,
the Company issued 500,000 and 600,000 shares for employee compensation and
professional fees valued at $4,000 and $6,000.

In the second quarter of 1996, the Company initiated an equity restructuring
program in which the Company issued 1,260,000 shares of its common stock (par
value $.005) along with warrants to purchase an additional 1,260,000 shares of
its common stock (par value $.005) at $1 share. Total proceeds from the offering
amounted to $830,000. On October 6, 1996, the Company's Board of Directors
approved and issued an Extension and Optional New Pricing Offer to the holders
of these warrants. These 1,260,000 warrants originally entitled the holders to
purchase an additional share each of the Company's common stock at a price of $1
through an expiration date of December 15, 1997. The Extension and Optional New
Pricing Offer allows an extension until December 31, 1999, at a share price of
$.15 for additional consideration of $.05 per warrant or an extension until
December 31, 2000, at a share price of $.05 for additional consideration of $.10
per warrant. During the year ended June 30, 1997, warrants for 800,000 shares
were extended to December 31, 1999 and warrants for 200,000 shares were extended
to December 31, 2000. Additional paid-in capital of $60,000 was received from
these transactions for the period ended June 30, 1997. During 1998, certain
warrants previously issued in the six-month period ended December 31, 1998 were
canceled and cash of $20,000 was returned. During the quarters ended March 31,
2000 and 1999 no warrants were issued as part of an executive compensation
agreement The warrants are convertible to common stock at twenty-five cents a
share. There were 29,325,000 warrants outstanding at March 31, 2000.

Stock Options: On May 21, 1993, shareholders approved an incentive stock plan
which reserved 3,500,000 shares of the Company's common stock for issuance under
the 1993 Incentive Stock Option Plan ("ISO") and the 1993 Non-Qualified Stock
Option Plan ("NQSO") (collectively referred to as the "1993 Plan"). The 1993
Plan provides incentives to officers, directors, employees, consultants, and
advisors in the form of stock options, subject to certain restrictions. The
Company's Board of Directors determines the granting of options under the 1993
Plan, including the exercise period, contingencies, vesting periods, and
employee qualifications. Options to be issued under the ISO are intended to
qualify as "incentive stock options" under Section 422 of the 1986 Internal
Revenue Code (the "Code"), as amended. Options granted under the NQSO are
subject to fewer restrictions than the ISO and are considered "Non-Statutory
Stock Options" as defined in the Code. As of December 31, 1997, 25,000 options
had been issued under the 1993 Plan. These options were issued in August 1993 at
the exercise price of $1.53 per share. All of the outstanding options were
exercisable at March 31, 2000. No options were exercised during the quarters
ended March 31, 2000 and 1999.



Employee Stock Purchase Plan: The Company implemented an Employee Stock Purchase
Plan in 1994 which permits substantially all employees to acquire Company common
stock. Participating employees may acquire stock at the end of each six-month
period (June 30 and December 31 of each year) at a purchase price of 85% of the
lower of fair market value at the beginning or end of the period. Employees may
designate up to 10% of their base compensation for the purchase of stock under
this plan. There are no charges to income in connection with this plan.




                                       10
<PAGE>   11




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

NOTE 7  LEASES

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

The Company occupies certain office facilities and video stores under operating
lease arrangements. Under terms of the leases, the Company is responsible for
real estate taxes, insurance, and maintenance costs on the facilities. Total
rent expense under such arrangements was approximately $42,460, and $89,866 for
the three month period ended March 31, 2000 and 1999, respectively. The leases
expire from 2000 through 2003.

Future minimum payments under noncancelable leases as of March 31, 2000 are as
follows:

                                Continuing         Discontinued
                                Operations          Operations
                                ----------          ----------

             2000              $         --          $185,091
             2001                        --           212,742
             2002                        --           214,440
             2003                        --           180,870
                               ------------          --------

                               $         --          $793,143
                               ============          ========


                                     ITEM 2.
               FIRST NATIONAL ENTERTAINMENT CORP. AND SUBSIDIARIES
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
                       OPERATIONS AND FINANCIAL CONDITION

OVERVIEW

The Corporation continues to maintain three major wholly owned subsidiaries from
which it derives current and anticipated revenues.

FIRST NATIONAL FINANCE CORP. ("FNFC") which maintains a portfolio of short term
loans for purchase and rehab of real estate, primarily in the Chicagoland area.

During the quarter, FNFC has sold a number of seized non performing property
loans from the prior year. The Company in almost all cases completed the rehab
work. The cash from these sales have been used to maintain operations and
invested in new performing loans, including a major condominium project. FNFC
has a remaining inventory of approximately $1,000,000 of seized properties (See
Current Assets: Real Estate Owned for Sale) at March 31, 2000. The Company
anticipates selling these properties, without additional substantial loss of
principal carrying value, within the following two quarters. The Company has
initiated major policy and procedure changes to insure the core value of the
portfolio has a value capable of sustaining operation costs.

Interest revenues are recognized as properties are sold according to generally
accepted accounting principles.

Also, during the quarter, the Company did divest itself of Prairie Business
Credit, Inc., a factoring company, which experienced a significant loss in 1999.






                                       11
<PAGE>   12



EQUATOR ENTERTAINMENT, INC. ("EEI") continues to develop significant project
possibilities with North American Broadcasters, publishers and Internet
providers in a variety of projects. Through EEI's alliance with Egmont
Imagination - a leading European entertainment conglomerate. Mr. Peter Keefe,
President, remains confident certain projects will reach fruition within the
next six to twelve months. These projects along with EEI's own opportunities is
situating the Company in a favorable position for future revenues.

EEI did not generate any revenue during the quarter.


FIRST NATIONAL VIDEO CORP. ("FNVC") d/b/a Windy City Video. On October 18, 1999,
the Company entered into a plan to dispose of all the video stores.


LIQUIDITY AND CAPITAL RESOURCES

During the first quarter the Corporation reduced loans to shareholders by
$1,013,468 with cash and transfer of certain receivables. The reduction should
save approximately $180,000 in interest annually. No additional outside
financing was obtained during the quarter.


FINANCING ACTIVITIES

The Corporation is in the process of negotiating an extension of the $1,100,000
term loan. In addition, the Corporation has discussed expanding the loan amount
with its current lender while exploring the option of working with additional
lending institutions. (See Note 2 - Management's Future Plans of the 12/31/99
10K).

OTHER IMPORTANT FINANCIAL INFORMATION

The Corporation has completed its move to new headquarters at a substantial
monthly rental savings in its continuing effort to reduce costs.

The Chairman & President, Mr. Charles E. Nootens has initiated a substantial
reduction in his annual salary in a further effort to make the Corporation
profitable.

The Business Plan established when current management assumed leadership of the
company called for acquisitions which had synergy and profits. Management
continues to pursue such acquisitions and has in its opinion a legal, and IRS
plan to use as a platform.


RESULTS OF OPERATIONS - Three months Ended March 31, 2000 compared to Three
Months Ended March 31, 1999.

Consolidated Balance Sheet The significant decrease in Loans Receivable is
attributable to an erosion of the portfolio due to performance, additional
reserves and a reclassification of a portion of the portfolio to Real Estate
Owned for Sale. Also, no factored receivables are outstanding as Prairie
Business Credit, Inc. was sold in January, 2000. This amount is offset by a
equal reduction in liabilities.



Consolidated Statement of Operations

Revenues fell to $50,269 from $208,609 due to closing or sale of Video store,
sale of PBCI and reduction in interest income on short term loans.






                                       12
<PAGE>   13




Total operating costs were reduced by $44,168 from the same period last year.

Net loss of ($281,605) compared to $(102,830) is due to reduced revenue in FNFC,
certain video store shut down costs and continued support of the Equator
Entertainment start-up.

TAXES ON INCOME

Taxes on income are zero due to the cumulative net operating loss carryforwards
of approximately $30.6 million at March 31, 2000, for federal tax purposes. The
net operating loss carryforwards expire in varying amounts beginning in 2000.

"Forward looking statements" as defined in the Private Securities Litigation
Reform Act of 1995 may be included in this report. A variety of factors could
cause the Corporation's actual results to differ from the reported results
expressed in such forward looking statements. Investors are referred to the
Corporations' most recent 10K.


                           PART II - OTHER INFORMATION

                           ITEM 1 - LEGAL PROCEEDINGS

Currently, in the normal course of business the company is involved in legal
action taken against it by former employee Chinna Boddipalli regarding severance
pay. The Company has had a successful arbitration ruling and expects to prevail
in the courts.

The second and final action is by S. Pratap for severance and damages. The
Corporation expects to prevail in the trial.

Each of these proceedings are scheduled for May, 2000. In both actions the
claims are $50,000 or less. As in any legal proceeding the Corporation although
confident of its position cannot predetermine the courts ruling.



               ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

                                      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




                                       13
<PAGE>   14




                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         (27)     Financial Data Schedule

(b)      Reports on Form 8-K

            None











                                       14
<PAGE>   15


                                    SIGNATURE


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.


                                              First National Entertainment Corp.




Dated:  June 5, 2000                          /s/ Charles E. Nootens
        ------------                          ----------------------------------
                                              Charles E. Nootens
                                              President






<PAGE>   16






                                 EXHIBIT INDEX
                                 -------------


                   Exhibit 27          Financial Data Schedule