U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

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


                 For the quarterly period ended August 31, 1996


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

         For the transition period from          to

         Commission file number:            1-13360



                                ENTERACTIVE, INC.
        (Exact name of small business issuer as specified in its charter)


         DELAWARE                                          22-3272662
(State or other jurisdiction of                          (I.R.S.  Employer
incorporation or organization)                           Identification No.)


              110 West 40th Street, Suite 2100, New York, NY 10018
                    (Address of Principal Executive Offices)

                                 (212) 221-6559
                (Issuer's Telephone Number, Including Area Code)


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

YES    /X/          NO

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

                                                          Number Outstanding
    Title of Class                                      as of October 11, 1995
    --------------                                      ----------------------

Common Stock, $.01 Par Value                                7,679,441


Transitional Small Business Disclosure Format:       Yes         No   /X/
<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

PART I  - Financial Information

Item 1  - Financial Statements

          Consolidated Balance Sheets at August 31,1996                        3
          and May 31, 1996

          Consolidated  Statements of  Operations  for the three               4
          month periods ended August 31, 1996 and August 31, 1995

          Consolidated  Statements  of Cash  Flow for the three                5
          months ended August 31, 1996 and August 31, 1995

          Notes to Financial Statements                                      6-9

Item 2  - Management's Discussion and Analysis of                          10-14
          Financial Condition and Results of Operations

PART ll - OTHER INFORMATION

Item 1  - Legal Proceedings                                                   15

Item 2  - Change in Securities                                                15

Item 3  - Defaults upon Senior Securities                                     15

Item 4  - Submission of Matters to a Vote of Security Holders                 15

Item 5  - Other Information                                                   15

Item 6  - Exhibits and Reports on Form 8-K                                    15

SIGNATURES                                                                    16
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS                                                    Enteractive, Inc.

                                                                August 31                            May 31
                                                         -------------------------------------------------------------
                                                                   1996                               1996
                                                         -------------------------------------------------------------
<S>                                                               <C>                               <C>
ASSETS                                                                            (unaudited)
Current Assets
      Cash and cash equivalents                                   $     3,046,500                   $       6,005,400
      Accounts receivable                                                 492,100                             147,400
      Income taxes receivable                                              16,400                              16,400
      Inventories                                                         552,800                             439,500
      Prepaid expenses and other                                           45,300                              10,200
                                                         -------------------------------------------------------------
         Total current assets                                           4,153,100                           6,618,900

Capitalized Software                                                      963,600                           1,070,600
Property and equipment, net                                               204,200                             231,300
Other                                                                      24,200                              24,200
                                                         -------------------------------------------------------------

                                                                  $     5,345,100                   $       7,945,000
                                                         =============================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
      Accounts payable                                            $     1,001,800                   $       1,404,300
      Accrued expenses                                                    253,400                             895,300
      Current maturities of long-term debt                                443,700                             498,900
                                                         -------------------------------------------------------------
         Total current liabilities                                      1,698,900                           2,798,500

Long-term debt, excluding current maturities                              112,600                             167,800
                                                         -------------------------------------------------------------
          Total liabilities                                             1,811,500                           2,966,300

Commitments and contingencies

Stockholders' Equity
    Preferred Stock $.01 par value,
    2,000,000 shares authorized and none issued                                 -                                   -

    Common Stock $.01 par value, 30,000,000 shares
    authorized; 7,679,441 and 7,656,435 shares 
    issued and outstanding for August 31, 1996 
    and May 31 1996, respectively                                          76,800                              76,600

    Additional paid-in capital                                         19,813,300                          19,620,900

    Accumulated deficit                                               (16,356,500)                        (14,718,800)
                                                         -------------------------------------------------------------
          Total stockholders' equity                                    3,533,600                           4,978,700

                                                                  $     5,345,100                   $       7,945,000
                                                         =============================================================
</TABLE>

See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                              Enteractive, Inc.


                                                                     For the Three Months Ended August 31
                                                         ---------------------------------------------------------
                                                                  1996                             1995
                                                         ---------------------------------------------------------
                                                                                   (unaudited)
<S>                                                              <C>                            <C>              
Net product sales                                                $       324,600                $          25,500
Product development revenue                                               40,700                           48,500
Royalty revenue                                                          177,700                            2,200
                                                         ---------------------------------------------------------
       Total revenues                                                    543,000                           76,200

Cost of product sales                                                    129,000                            8,300
Amortization of capitalized software                                     107,100                            -
Cost of development revenue                                               27,600                           38,200
Research and development expenses                                        820,800                          748,100
Marketing and selling expenses                                           696,500                          440,700
General and administrative expenses                                      439,300                          335,000
                                                         ---------------------------------------------------------
       Total costs and expenses                                        2,220,300                        1,570,300

Operating loss                                                        (1,677,300)                      (1,494,100)
                                                         ---------------------------------------------------------

Other income (expense):
      Interest expense                                                   (17,400)                            (600)
      Interest income                                                     57,000                           33,700
     Other                                                                   -                              9,300
                                                         ---------------------------------------------------------

            Loss before income taxes                                  (1,637,700)                      (1,451,700)
Income tax benefit                                                           -                              -
                                                         ---------------------------------------------------------

            Net loss                                             $    (1,637,700)                $     (1,451,700)
                                                         =========================================================


            Loss per common and
               common equivalent share                           $         (0.21)                $          (0.30)
                                                         =========================================================

            Weighted average shares of common
                stock and common stock equivalents                     7,678,989                        4,775,489

See notes to financial statements.
</TABLE>
<PAGE>
                                ENTERACTIVE, INC.

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                        Three Months Ended August 31
                                                                        ------------------------------------------------------------
                                                                                   1996                             1995
                                                                        ------------------------------------------------------------
                                                                                                   (unaudited)
<S>                                                                                  <C>                              <C>           
Cash flows from operating activities
       Net loss                                                                      $  (1,637,700)                   $  (1,451,700)
       Adjustments to reconcile net loss to net
         cash used in operating activities:
           Depreciation and amortization                                                   148,600                           46,900
           Stock option consulting expense                                                 118,800                                -
       Changes in assets and liabilities:
           Accounts receivable                                                            (344,700)                        (116,800)
           Inventories                                                                    (113,300)                         (74,300)
           Prepaid expenses and other                                                      (35,100)                          13,200
           Other assets                                                                          -                           (2,300)
           Accounts payable                                                               (402,500)                           2,400
           Accrued expenses                                                               (641,900)                         (44,500)
                                                                        ------------------------------------------------------------
               Net cash used in operating activities                                    (2,907,800)                      (1,627,100)
                                                                        ------------------------------------------------------------

Cash flows from investing activities
           Proceeds from sale of investments                                                     -                          155,000
           Purchases of property and equipment                                             (14,500)                          (8,500)
                                                                        ------------------------------------------------------------
               Net cash provided by investing activities                                   (14,500)                         146,500
                                                                        ------------------------------------------------------------

Cash flows from financing activities
           Exercise of stock options                                                        73,800                                -
           Principal payments under long-term debt                                        (110,400)                         (15,200)
           Principal payments under capital lease obligations                                    -                           (1,100)
                                                                        ------------------------------------------------------------
               Net cash used in financing activities                                       (36,600)                         (16,300)

               Net decrease in cash and equivalents                                     (2,958,900)                      (1,496,900)

Cash and equivalents
       Beginning of period                                                               6,005,400                        2,932,400
                                                                        ------------------------------------------------------------

       End of period                                                                 $   3,046,500                    $   1,435,500
                                                                        ============================================================
</TABLE>

See notes to financial statements.
<PAGE>

                                ENTERACTIVE, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.       BASIS OF PRESENTATION

         The accompanying  unaudited financial  statements have been prepared in
         accordance  with the  instructions to Form 10-QSB and in the opinion of
         management  contain  all  adjustments  necessary,  (consisting  of only
         normal  recurring  entries) to present  fairly the Company's  financial
         position as of August 31, 1996 and the  results of its  operations  and
         its cash flows for the three  months  ended  August 31,  1996 and 1995.
         Certain  information  and  footnote  disclosures  normally  included in
         financial  statements  prepared in accordance  with generally  accepted
         accounting   principles  have  been  omitted.   The  interim  financial
         statements  should be read in conjunction with the Company's  financial
         statements  and related notes in the May 31, 1996 Annual Report on Form
         10-KSB.  The results for the three month  period  ended August 31, 1996
         are not  necessarily  indicative  of the results to be obtained for the
         full year.


2.       BUSINESS

         Enteractive,  Inc.  (the  "Company")  designs,  publishes  and  markets
         interactive multimedia titles to the home and school markets.

         On  February  29,  1996,  the  Company  acquired  Lyriq   International
         Corporation   ("Lyriq"),  a  developer  and  publisher  of  interactive
         multimedia  software,  whereby  Lyriq was  merged  into a  wholly-owned
         subsidiary  of the  Company.  The  merger was  accounted  for under the
         purchase  method of  accounting  and,  accordingly,  the net assets and
         operations  of  Lyriq  are  included  in  the  Company's   consolidated
         financial statements commencing February 29, 1996.

<PAGE>
         The purchase price was determined as follows:

<TABLE>
<CAPTION>
<S>                                                                             <C>
         725,212 shares of Enteractive common stock at fair value
         ($4.00 per share)                                                                      $2,900,800
         Excess of fair value of liabilities assumed over assets
         acquired of Lyriq                                                                         625,400
         Acquisition costs                                                                          52,100
                                                                                  -------------------------
                Total                                                                           $3,578,300
                                                                                  =========================
</TABLE>

         In connection with the  acquisition,  the Company recorded a $2,293,500
         expense for  purchased  research  and  development  and  $1,284,800  of
         capitalized  software which is being amortized on a straight-line basis
         over three years.  The charge for  purchased  research and  development
         equaled the  estimated  current  fair value of the future  related cash
         flows  to  be  derived  from   specifically   identified   technologies
         (discounted  at a  risk-adjusted  rate of 30%) for which  technological
         feasibility  had not yet  been  established  pursuant  to SFAS  No.  86
         (consistent  with  management's   definition  of  internally  developed
         software).  In addition,  such technologies have no alternative  future
         use.

         The following  unaudited pro forma  consolidated  results of operations
         reflects the results of the Company's  operations for the quarter ended
         August  31,  1995 as if the  merger  with  Lyriq  had  occurred  at the
         beginning  of  the  period  and  reflect  the  historical   results  of
         operations   of  the   purchased   business   adjusted  for   increased
         amortization  expense and increased common shares  outstanding from the
         acquisition.

                                                            Quarter ended
                                                           August 31, 1995
                                                           ---------------
                  Total revenues                           $    248,374
                  Net loss                                 $  1,782,800
                  Net loss per share                       $       (.32)

         The pro forma information does not necessarily indicate what would have
         occurred had the acquisition  been  consummated at the beginning of the
         respective periods, or of the results that may occur in the future.
<PAGE>
3.      OFFERING OF COMMON STOCK - MAY 1996

         In May, 1996, the Company sold 2,415,000 shares of the Company's common
         stock to the  public  at a price of $3.375  per  share.  Proceeds  were
         approximately  $6,791,600,  net of related  expenses  of  approximately
         $1,359,000.  In  connection  with  this  sale the  Company  sold to the
         underwriter,  for an aggregate of $100,  the right to purchase  210,000
         shares of common  stock at a price of $3.71 per share  through  May 21,
         2001.  In  connection  with this right the  underwriter  also  received
         certain "piggyback" and demand registration rights.


4.       REVENUE RECOGNITION

         Revenue from product sales is  recognized  upon  shipment,  provided no
         significant  vendor  obligations remain and collection of the resulting
         receivable  is deemed  probable.  Revenue  under  fixed  price  product
         development  contracts is recognized using the percentage of completion
         method based on progress to date,  which is measured by comparing costs
         to date to total  estimated  costs.  Royalty revenue is recognized when
         earned.

         The  Company's   agreements  with  certain  product   distributors  and
         retailers  permit  them to exchange  or return  products  for which the
         Company  provides an  allowance  reflected  as a reduction  of accounts
         receivable in the accompanying balance sheets.


5.       COST OF  PRODUCT SALES

         Cost of product sales consist of manufacturing, packaging, and customer
         support costs.


6.       SOFTWARE DEVELOPMENT COSTS

         Capitalization of costs associated with internally  developed  software
         begins   upon  the   determination   by  the  Company  of  a  product's
         technological feasibility, as evidenced by a working model. Capitalized
         software development costs are amortized

<PAGE>
         over related sales on a per-unit basis based on estimated  total sales,
         with a minimum  amortization based on a straight-line method over three
         years.  Capitalized software at August 31, 1996 resulted from the Lyriq
         acquisition and is net of accumulated amortization of $321,300.

         In  March  1995,  the  Financial   Accounting  Standards  Board  issued
         Statement of Financial Accounting Standards No 121 ("SFAS No 121") that
         establishes  accounting  standards  for the  impairment  of long  lived
         assets,  certain intangibles and goodwill related to those assets to be
         held and used,  and for  long-lived  assets  and  certain  identifiable
         intangibles  to be disposed of. In conformity  with SFAS No. 121, it is
         the  Company's  policy to  evaluate  and  recognize  an  impairment  of
         capitalized software and other long lived assets if it is probable that
         the recorded amounts are in excess of anticipated  undiscounted  future
         cash flows.


7.       USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amount of assets and
         liabilities and disclosures of contingent assets and liabilities at the
         date of the financial statements and the reported amount of revenues
         and expenses during the reporting period. Among the more significant
         estimates included in these financial statements are the estimated
         allowance for doubtful accounts receivable, reserves for returns and
         exchanges and charges for purchased research and development. Actual
         results could differ from those estimates.


<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.




The  discussion  and  analysis  below  should  be read in  conjunction  with the
Financial  Statements  of  Enteractive  and the  Notes to  Financial  Statements
included elsewhere in this Form 10-QSB.

OVERVIEW

Enteractive  was  formed  in  December  1993  to  develop,  publish  and  market
interactive  multimedia software products, and consummated the merger with Sonic
Images  Productions,   Inc.  ("Sonic"),   an  established   multimedia  software
developer,  in May 1994. Prior to the merger,  Enteractive had no operations and
had only expenses  related to  administrative  costs  associated with formation,
raising equity and debt financing and certain other merger  activities and Sonic
was engaged in the development of multimedia software products.

Prior to fiscal 1996,  the Company  derived the  majority of its  revenues  from
grants or contracts to develop specific titles. In the fiscal year ended May 31,
1995, the Company undertook a transition from such externally-funded development
projects to developing, either by itself or with a co-publisher,  its own titles
and, accordingly, will derive its future revenues principally from product sales
and royalties.

As is typical in the  interactive  multimedia  software  industry,  the  Company
depends on the  introduction  of new titles or  sequels  to  existing  titles to
replace  declining  revenues from older titles. In order to generate revenues in
the future,  the Company  believes it will be  necessary  to develop,  or obtain
rights to, new titles that are  developed  for the  appropriate  platforms,  are
introduced in a timely manner and are able to achieve  market  acceptance  for a
significant  period of time.  As a result , the Company  will  continue to incur
additional costs in connection with developing and marketing its own titles. For
the quarters ended August 31, 1996 and August 31, 1995  approximately  68.3% and
75.7% of the Company's  costs and expenses were incurred in connection  with the
development  and/or  marketing  of specific  titles.  The  Company's  costs vary
significantly  based on the number of titles being developed for and marketed by
the  Company.  Accordingly,  adjustments  in the  level of  expenditures  can be
readily implemented.

REORGANIZATION

On July 15,  1996 the  Company  announced a  restructuring,  comprised  of a 45%
reduction of its Washington DC based  development  staff,  and changes in senior
management.  In connection with the downsizing,  John Ramo,  President and Chief
Operating Officer and Jolie Barbiere a Vice President


<PAGE>
have resigned their  positions as officers and members of the Company's Board of
Directors.

The Company believes that the restructuring will result in lower fixed costs and
increased  product  development   flexibility  while  maintaining  high  quality
standards.  The  management  changes and the reduction in fixed costs were based
upon the Company's  decision to focus on recreation and entertainment  products.
It is the  Company's  intention  to continue to market the Picture  Perfect golf
series,  Richie  Sambora:   Interactive  Guitar,  Sacred  Mirror  of  Kofun,  an
interactive  adventure  game, and to expand its presence on the Internet and the
on-line services.

QUARTERLY RESULTS

The Company's quarterly operating results have in the past and are likely in the
future to vary  significantly  depending  on  factors  such as the timing of new
hardware and software title  introductions,  the degree of market  acceptance of
such  titles  and the  introduction  of  titles  competitive  with  those of the
Company. In addition, the home recreation and entertainment software business is
highly  seasonal.  Typically,  revenues  are  highest  during the last  calendar
quarter  (which  includes  the  holiday  buying  season),  decline  in the first
calendar quarter and are lowest in the second and third calendar quarters.  This
seasonal  pattern is due primarily to the increased  demand for home  recreation
and entertainment software titles during the year-end holiday buying season. The
Company  expects its future  revenues and  operating  results will reflect these
seasonal factors.

MERGER

On February 29, 1996, the Company  completed the  acquisition of Lyriq,  whereby
Lyriq was  merged  into a  wholly-owned  subsidiary  of the  Company.  The Lyriq
acquisition  was accounted for under the purchase  method of accounting with the
Company as the acquiring entity. See footnote 2 to the accompanying consolidated
financial statements.


RESULTS OF OPERATIONS FOR THE QUARTER ENDED AUGUST 31, 1996 VS. AUGUST 31, 1995

The Company recognized revenue of $324,600 in the quarter ended August 31, 1996,
an increase of $299,100  over the figure for the quarter  ended August 31, 1995,
due to sales of its published titles through  independent  distributors,  net of
estimated  returns and  exchanges.  The first quarter of fiscal 1996 net product
sales of $25,500  represent initial sales of titles published by the Company The
increases in both accounts receivable and inventory are related to the Company's
expanded publishing operations.

Royalty  revenue for the quarter ended August 31, 1996 was $177,700  compared to
$2,200 for the quarter  ended August 31, 1995.  The increase is primarily due to
greater royalties from international licenses.


<PAGE>
Cost of product  sales was  $129,000  for the  quarter  ended  August  31,  1996
compared to $8,300 for the quarter ended August 31, 1996.  This increase was due
to higher sales volumes.

Research  and  development  expenses  for the quarter  ended August 31, 1996 was
$820,800 compared to $748,100 for the quarter ended August 31, 1995.

Marketing and selling  expenses  were  $696,500 and  $440,700,  for the quarters
ended August 31, 1996 and August 31, 1995, respectively. The increase relates to
the greater number of titles being marketed.

General and  administrative  expenses  increased by $104,300 or 31%, to $439,300
for the quarter  ended August 31,  1996,  from  $335,000  for the quarter  ended
August 31, 1995. This increase results from non-cash  consulting  expenses added
to implement the strategy previously discussed.

Interest  expense  increased to $17,400 from $600 for the quarters  ended August
31, 1996 and August 31, 1995, respectively. This increase is due to the interest
on the loans for repurchased shares of Company Common Stock.

Interest income increased to $57,000 for the quarter ended August 31, 1996, from
$33,700 for the quarter  ended  August 31, 1995,  due to interest  earned on the
higher  cash  balances  resulting  from the  proceeds  of the  Company's  public
offering, which was consummated in May 1996.

No income  tax  provisions  are  necessary  as the  Company is in a net tax loss
carryforward position.

The Company does not believe it will generate  taxable  income during the period
ending  May 31,  1997.  Beyond  such  time,  using  the  standards  set forth in
Financial  Accounting  Standard No. 109,  management cannot currently  determine
whether the Company  will  generate  taxable  income  during the period that the
Company's net operating loss carry forward may be applied  towards the Company's
taxable income.  Accordingly,  the Company has established a valuation allowance
against its deferred tax asset.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

Enteractive  was formed in December 1993 and raised  $1,531,100 from the sale of
600,000 shares of Common Stock in a January 1994 private  placement.  Subsequent
to January  1994 , the  Company's  principal  sources  of  capital  have been as
follows:

         (i) In May 1994 the  Company  raised $2 million  from the sale of notes
         and warrants. Such notes were repaid with the proceeds of the Company's
         initial  public  offering.  In October 1994, the Company sold 2,300,000
         units in the initial public offering, each unit consisting of one share
         of Common  Stock and a warrant to purchase  one share of Common  Stock.
         The net proceeds from the initial public offering were $7,579,900 .

         (ii) In a bridge  financing  consummated  in January 1996,  the Company
         received  approximately  $2,460,000  in net  proceeds  from the sale of
         convertible notes and warrants.  Simultaneously with the closing on May
         21, 1996 of the pubic offering  described below  convertible notes with
         an  aggregate  principal  of  $2,250,000  were  converted  into 740,734
         shares, while $450,000 of convertible notes were repaid.

         (iii) On May 21, 1996,  the Company  consummated  a public  offering by
         issuing  2,415,000  shares  of  Common  Stock  to the  public.  The net
         proceeds from this offering were $6,791,600.

In May 1996 the Company  consumated  an  agreement  with certain of its officers
pursuant to which the Company  repurchased  1,000,000  shares of Common Stock at
$1.00 per share.  To date  $443,700  of the  purchase  price has been paid.  The
balance is  currently  scheduled  to be paid as follows:  $338,500  May 1997 and
$167,800 - May 1998.  The  accompanying  August 31, 1996 balance sheet  reflects
agreements  among the Company,  GKN  Securities,  and certain of the individuals
participating  in the May 1996  agreement,  which could result in the  following
accelerated  payment  schedule:  $331,200 - January  1997,  $112,500 - May 1997,
$72,400 - November 1997 and $40,200 - May 1998.

At August 31, 1996,  the Company had cash and  equivalents  of  $3,046,500.  The
decrease of $2,958,900 in cash and equivalents  from May 31, 1996 is primarily a
result of the  increased  expenditures  associated  with  marketing  and selling
internally  developed  titles,  as well as additional  costs associated with the
reorganization.

Capital  expenditures  were  $14,500  for the first  quarter  of fiscal  1997 as
compared to $8,500 for fiscal 1996. The Company expects capital  expenditures in
the fiscal year ending May 31, 1997 to be consistent with the


<PAGE>

average  of  both fiscal  1996 and 1995 and may  increase  depending  on product
development needs and changes in technology.

The Company  believes that its existing cash and  equivalents,  investments  and
anticipated  revenues  will  be  sufficient  to  meet  its  liquidity  and  cash
requirements for the remainder of the fiscal year. However,  these funds may not
be  sufficient  to  meet  the  Company's  longer  term  cash   requirements  for
operations.  Since the Company's costs vary significantly based on the number of
titles being developed and marketed by the Company,  adjustments in the level of
expenditures can be readily implemented. Based on management's assessment of the
future  marketability  of its titles,  the Company may  significantly  alter the
level of expenses both within the next 12 months and  thereafter.  If necessary,
the  Company  may  return to  performing  product  development  for third  party
companies in order to maintain its infrastructure  while continuing with several
of its own titles.

FORWARD LOOKING STATEMENTS

This Form 10-QSB contains certain forward-looking  statements within the meaning
of Section 27A of the  Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   thereby.   Investors  are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the  ability of the  Company to develop  its  products,  as well as
general  market  conditions,  competition  and  pricing.  Although  the  Company
believes  that  the  assumptions   underlying  the  forward-looking   statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included in this Form 10-QSB will prove to be accurate.  In light of significant
uncertainties  inherent in the  forward-looking  statements included herein, the
inclusion of such information  should not be regarded as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved.

INFLATION

The past and expected future impact of inflation on the financial  statements is
not significant.
<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 on Form 8-K.

                  None.

<PAGE>
                                   SIGNATURES


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


                                          ENTERACTIVE, INC.
                                          (Registrant)








Date October 15, 1996                     /s/ Kenneth Gruber
                                          ------------------
                                          Kenneth Gruber
                                          Chief Financial Officer and
                                          Principal Accounting Officer