U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSBA

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


                 For the quarterly period ended August 31, 1997


/   /    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 August 31, 1997
       --------------                             ---------------------
    Common Stock, $.01 Par Value                          7,679,441


Transitional Small Business Disclosure Format: Yes / /      No /X/


<PAGE>
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

                                                                        Page
                                                                        ----
Item 1  Financial Statements

        Consolidated Balance Sheets at August 31, 1997 and May 31, 1997    3

        Consolidated Statements of Operations for the three months and
        six months ended August 31, 1997 and 1996                          4

        Consolidated Statements of Cash Flows for the six months ended
        August 31, 1997 and 1996                                           5

        Notes to Financial Statements                                      6

SIGNATURES                                                                 9


<PAGE>
                        ENTERACTIVE INC. and Subsidiaries
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>


                                                                 August 31                 May 31
                                                                    1997                    1997
                                                                 ----------               --------
ASSETS                                                           (unaudited)
Current Assets
<S>                                                            <C>                       <C>         
      Cash and cash equivalents                                $  3,063,400              $  4,952,900
      Accounts receivable                                           213,400                   224,400
      Assets held for sale                                           62,700                   100,000
      Prepaid expenses and other                                    143,600                    93,800
                                                               ------------              ------------
         Total current assets                                     3,483,100                 5,371,100

Affiliation Rights, net                                             578,100                   593,800
Property and equipment, net                                         351,800                   154,900
Other                                                                54,000                    61,500
                                                               ------------              ------------
                                                               $  4,467,000              $  6,181,300
                                                               ------------              ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
      Accounts payable                                         $    311,300              $    287,900
      Accrued expenses                                              570,200                   623,900
      Deferred revenue                                               19,600                    69,500
      Current maturities of long-term debt                           40,200                    40,200
                                                               ------------              ------------
         Total current liabilities                                  941,300                 1,021,500

Commitments and contingencies

Stockholders' Equity
    Preferred Stock $.01 par value, 2,000,000 shares                    100                       100
    authorized and 6,720 shares issued and outstanding

    Common Stock $.01 par value, 50,000,000 shares
    authorized; 7,679,441 issued and                                 76,800                    76,800
    outstanding

    Additional paid-in capital                                   28,038,400                28,038,400

    Accumulated deficit                                         (24,589,600)              (22,955,500)
                                                               ------------              ------------
          Total stockholders' equity                              3,525,700                 5,159,800

    See notes to consolidated  financial statements            $  4,467,000              $  6,181,300
                                                               ------------              ------------
</TABLE>

                                       3

<PAGE>
                        ENTERACTIVE INC. and Subsidiaries
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                                                Three Months             Three Months
                                                                                    Ended                    Ended
                                                                                  August 31                 August 31
                                                                                     1997                     1996
                                                                                ------------              ----------
                                                                                                          (unaudited)

<S>                                                                                 <C>                   <C>      
Internet services revenues                                                          $   142,400           $      --
Net product sales                                                                          --                 324,600
Product development revenue                                                                --                  40,700
Software licensing and royalty revenue                                                   34,500               177,700
                                                                                    -----------           -----------
       Total revenues                                                                   176,900               543,000

Cost of internet services revenues                                                       99,500                  --
Cost of product sales                                                                      --                 236,100
Cost of development revenue                                                                --                  27,600
Research and development expenses                                                       399,500               820,800
Marketing and selling expenses                                                          799,000               696,500
General and administrative expenses                                                     566,600               439,300
                                                                                    -----------           -----------
       Total costs and expenses                                                       1,864,600             2,220,300

Operating loss                                                                       (1,687,700)           (1,677,300)
                                                                                    -----------           -----------

Other income (expense):
      Interest expense                                                                     --                 (17,400)
      Interest income                                                                    53,600                57,000
                                                                                    -----------           -----------

            Net loss                                                                $(1,634,100)          $(1,637,700)
                                                                                    -----------           -----------

Preferred stock preferences (1997 restated - Note 5)                                 (1,952,100)                 --

Net loss to common shareholders (1997 restated - Note 5)                            $(3,586,200)          $(1,637,700)
                                                                                    -----------           -----------

Loss per common and common equivalent share (1997 restated - Note 5)
                                                                                    $     (0.47)          $     (0.21)
                                                                                    -----------           -----------
            Weighted average shares of common
                stock and common stock equivalents                                    7,679,441             7,678,989
</TABLE>

See notes to consolidated financial statements.

                                       4


<PAGE>
                        ENTERACTIVE INC. and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                                                    Three Months     Three Months 
                                                                                                  Ended August 31   Ended August 31
                                                                                                        1997               1996
                                                                                                  ---------------   ----------------
                                                                                                   (unaudited)        (unaudited)

<S>                                                                                                  <C>                <C>
Net Loss                                                                                             $(1,634,100)       $(1,637,700)
Adjustments to reconcile net loss to net cash used in operating activities
                 Depreciation and amortization                                                            46,600            148,600
                 Stock option consulting expense                                                            --              118,800
Changes in assets and liabilities
                 Accounts Receivable                                                                      11,000           (344,700)
                 Assets held for sale                                                                     37,300               --
                 Inventories                                                                                --             (113,300)
                 Prepaid expenses and other                                                              (49,800)           (35,100)
                 Other assets                                                                              7,500
                 Accounts payable                                                                         23,400           (402,500)
                 Accrued expenses                                                                        (53,700)          (641,900)
                 Deferred revenue                                                                        (49,900)              --
                                                                                                     -----------        -----------
                                  Net cash used in operating activities                               (1,661,700)        (2,907,800)
                                                                                                     -----------        -----------

Cash flows from investing activities
                 Purchases of property and equipment                                                    (227,800)           (14,500)
                                                                                                                        -----------
                                                                                                     -----------        -----------
                                  Net cash used in investing activities                                 (227,800)           (14,500)
                                                                                                     -----------        -----------

Cash flows from financing activities
                 Proceeds from exercise of stock options                                                    --               73,800
                 Principal payments under long-term debt                                                    --             (110,400)
                                                                                                     -----------        -----------
                             Net cash provided by financing activities                                      --              (36,600)
                                                                                                     -----------        -----------
                             Net increase (decrease) in cash and cash equivalents                     (1,889,500)        (2,958,900)

Cash and cash equivalents
                 Beginning of year                                                                     4,952,900          6,005,400
                                                                                                     -----------        -----------
                                                                                                     -----------        -----------
                 End of period                                                                       $ 3,063,400        $ 3,046,500
                                                                                                     -----------        -----------
</TABLE>

See notes to consolidated financial statements

                                       5


<PAGE>
                                ENTERACTIVE, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

1.       General

         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 (consisting of only normal recurring
         entries)  necessary to present fairly the Company's  financial position
         as of August 31, 1997,  and the results of its  operations and its cash
         flows for the three  months  ended  August 31,  1997 and 1996.  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, 1997 Annual  Report on Form  10-KSB.  The
         results  for the three  month  period  ended  August  31,  1997 are not
         necessarily indicative of the results to be obtained for the full year.

2.       Business

         Headquartered in New York, New York, Enteractive,  Inc. (the "Company")
         offers products and services to customers for the design,  development,
         operation  and  maintenance  of  customer  Intranets  or  sites  on the
         Internet  and World  Wide Web and  publishes  multimedia  titles to the
         home.  As  described  below,  the  Company  recently  entered  into  an
         agreement,  which  provides  that the  Company  will sell its  domestic
         distribution rights, inventory and certain accounts receivable from its
         interactive  multimedia  publishing  business  to a  third  party.  The
         Company's  address is 110 West 40th Street,  Suite 2100,  New York, New
         York 10018 and its telephone  number is (212) 221-6559.  Its World Wide
         Web site address is http://www.crstone.com.

         Throughout  the first half of fiscal  1997 the  Company  was  primarily
         engaged in the  development,  publishing  and  marketing of  multimedia
         interactive  software  with an  emphasis on the CD-ROM  platform.  As a
         result  of a  rigorous  review  of the  CD-ROM  market,  the  Company's
         performance  and the related  risks of continuing to develop and market
         interactive  multimedia  titles,  the Company  concluded  that it could
         capitalize on what the Company believes to be a vibrant market and upon
         its expertise in  development  by  redirecting  its business to provide
         network and web-related solutions,  products and services to businesses
         and other entities.

         The Company plans to,  directly or in  cooperation  with third parties,
         design, develop, install, maintain and host customer Intranets or sites
         on the Internet and World Wide Web.  According to an August 1996 report
         by Forrester Research the number of Web sites is projected to grow from
         43,000 at the end of 1996 to 657,000 at the end of 2000.  In  addition,
         businesses are demanding more complex Web sites,  as these sites become
         increasingly  important  first  points  of  contact  with  current  and
         prospective  customers.   Accordingly,  the  Company  believes  that  a
         company's  web site is  becoming a  mission-critical  component  of the
         enterprise.  Companies  are also  increasingly  deploying  Intranets to
         manage  their  internal  corporate  communications  because they enable
         employees and business associates to receive corporate  information and
         training  efficiently,  communicate  through  e-mail,  use the internal
         network's client  applications and access  proprietary  information and
         legacy databases.

         On  December  4, 1996,  the  Company  entered  into an  agreement  (the
         "Enteractive  Affiliates  Agreement") with USWeb Corporation  ("USWeb")
         pursuant to which the Company became an affiliate of USWeb and a member
         of USWeb's  network of independent  affiliates  (the "USWeb  Network").
         Under the Affiliates Agreement, the Company paid $625,000 for the right
         to operate USWeb affiliate  offices in certain  localities for 10 years
         as provided below. USWeb is a relatively new venture,  which has raised
         approximately $34 million to date. Principal investors include Softbank
         Corporation,  which owns Comdex and Ziff-Davis Publishing, 21st Century
         Communications  Partners L.P., Wheatly Partners L.P. and Reuters. USWeb
         is seeking to capitalize on the service opportunities  presented by the
         increasing use of the Internet and Intranets as commercial  tools.  The
         Company has formed a subsidiary,  Enteractive  Network  Solutions Inc.,
         doing  business  as USWeb  Cornerstone,  which is intended to provide a
         full range of Internet and Intranet-based business solutions, including
         Website design,  hosting and management,  design and  implementation of

                                       6
<PAGE>
                                ENTERACTIVE, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

         database and e-commerce solutions, educational programs and Web-related
         strategic  consulting  and  marketing.  The Company is obligated to pay
         USWeb monthly  royalty and service and marketing and  advertising  fees
         equal in the  aggregate  to 7% of  Adjusted  Gross  Revenues  from this
         business,  as  defined  in the  agreement,  but not less  than  certain
         contractual fee levels.

         The  Company  has been  granted  exclusive  rights to develop new USWeb
         Affiliate offices in Long Island (Nassau-Suffolk County), Philadelphia,
         Baltimore,  Stamford, CT, and Bergen County and Newark, NJ. The Company
         has established a USWeb  Affiliate  office in New York City and in each
         of the above  territories.  The exclusive rights granted to the Company
         are subject to certain minimum  performance  standards set forth in the
         Affiliates  Agreement.  If the Company is unable to meet these  minimum
         performance standards, its exclusive rights may be terminated.

         On  August  15,  1997  the  Company   consummated   an  agreement  with
         Enteractive  Distribution  Company,  LLC ("EDC"), an unrelated company.
         Under the terms of the agreement EDC acquired the inventory and certain
         accounts  receivable  existing  August  15,  1997  resulting  from  the
         Company's  interactive  multimedia publishing business. In addition the
         Company has  assigned  its  domestic  distribution  contracts  with its
         domestic  distributors  to EDC and granted EDC an exclusive  license to
         market the Company's interactive multimedia titles in North America for
         a minimum  of two  years.  The sales  price  includes  the  greater  of
         $100,000 or 50% of EDC's proceeds from the sale of the inventory in the
         9 months  following  the  closing  and 50% of the  accounts  receivable
         balances collected by EDC within 24 months of closing. The Company will
         also  receive  royalties  on  sales  of  its  products   subsequent  to
         liquidation  of  existing  inventory  of 15% for  three  years  and 10%
         thereafter.  EDC will also pay the Company a 5% royalty  from the sales
         of any third party products it sells through August,  2002. The Company
         is evaluating  the most  appropriate  manner to continue  licensing its
         multimedia  titles  outside the United  States.  The  Company  does not
         believe that it will incur any future significant costs associated with
         the domestic or international distribution of its multimedia titles.

         As a result of the Company's agreement with EDC, the Company wrote down
         the majority of its interactive  multimedia  related business assets in
         the fourth  quarter of fiscal 1997 to the related  anticipated  minimum
         proceeds of $100,000.  These assets are  classified as "assets held for
         sale" in the  financial  statements  and in the  Company's May 31, 1997
         balance sheet in the Form 10-KSB.

3.       Affiliate Rights

         Fees for  affiliation  rights  were paid to USWeb for the right to join
         the USWeb  network  and  operate  as an  affiliate  in the  territories
         indicated in note 2. The fee is being  amortized  over the 10 year life
         of the agreement with USWeb.  Affiliate  rights at August 31, 1997 were
         net of accumulated amortization of $46,900.

4.       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.  Actual results could differ
         from those estimates.

5.       Private Placement

         On December  12, 1996 the Company  completed a private  placement of 84
         units each  consisting  of 80 shares of Class A  Convertible  Preferred
         Stock ("Preferred  Stock") and 50,000 Common Stock Purchase Warrants to
         purchase  in the  aggregate  4,200,000  shares  of  Common  Stock at an
         exercise  price  of  $4.00  per  share.   Proceeds  were  approximately
         $7,869,100,  net of related  expenses of $531,000.  The Preferred Stock

                                       7

<PAGE>
                                ENTERACTIVE, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

         has a stated value of $1,250 per share and each share is convertible at
         any time  after  April 30,  1998 into  such  whole  number of shares of
         Common Stock equal to the aggregate stated value of the Preferred Stock
         to be  converted  divided by the lesser of (I) $2.00 or (ii) 50% of the
         average  closing  sale  price  for the  Common  Stock  for the last ten
         trading  days  in the  fiscal  quarter  of the  Company  prior  to such
         conversion. The Company must use the proceeds, if any, derived from the
         exercise of the  Company's  currently  outstanding  public Common Stock
         Warrants, which expire in October 1997, or 50% of the proceeds from any
         other equity financing, to redeem the Preferred Stock at 110% of stated
         value. The Company also has the option to redeem all, or any portion on
         a pro rata basis of the Preferred  Stock at any time upon 30 days prior
         written  notice,  at a  redemption  price  equal to 110% of the  stated
         value.  The Conversion  Rate of the  Convertible  Preferred Stock (when
         calculated  on the basis of  dividing  the Stated  Value by $2.00 only)
         will be subject to adjustment to protect against  dilution in the event
         of  stock  dividends,  stock  splits,  combinations,   subdivision  and
         reclassifications.

         In a 1997  announcement,  the  staff  of the  Securities  and  Exchange
         Commission  ("SEC")  indicated that when preferred stock is convertible
         at a discount  from the then current  common stock  market  price,  the
         discount  amount  reflects at that time an  incremental  yield,  e.g. a
         "beneficial conversion feature", which should be recognized as a return
         to the  preferred  shareholders.  Based  on  the  market  price  of the
         Company's  common  stock and the fair value of the warrants on the date
         of  issuance  the Class A  Preferred  Stock  had a non cash  beneficial
         conversion feature of $13,390,000. The beneficial conversion feature is
         recognized solely in the calculation of loss per common share over a 17
         month period,  beginning  with the issuance of the  Preferred  stock to
         April 30, 1998, the first date that  conversion can occur. As a result,
         the loss per common  share has been  restated to reflect an increase of
         ($0.26) for the three months ended August 31, 1997.

6.       Warrant Exchange

         On September  16, 1997,  the Company  announced  that it is offering to
         exchange (the "Exchange  Offer") twenty of its  publicly-traded  Common
         Stock Purchase Warrants (the "Warrants")  expiring October 20, 1997 for
         one share of newly-issued  Common Stock, $.01 par value. As of the date
         of this Form 10-QSB, there are 5,121,468 Warrants outstanding. Thus, if
         all the Warrants are exchanged,  approximately 256,000 shares of Common
         Stock will be issued.  Each Warrant  currently  entitles the registered
         holder to purchase  through October 20, 1997 one share of the Company's
         Common  Stock at an  exercise  price of $4.00 per share.  The  Exchange
         Offer will expire at 5:00 P.M., New York City Time on October 14, 1997,
         unless extended. The purpose of the Exchange Offer is to (i) reduce the
         overhang to the market for the  Company's  Common  Stock and (ii) offer
         Warrant  holders  the  opportunity  to  participate  in any  long  term
         appreciation  of the  Company's  securities,  since absent the Exchange
         Offer,  it is likely  that the  Warrants  will  expire  unexercised  on
         October 20, 1997.

                                       8

<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 April 30, 1998                 /s/ Kenneth Gruber
                                    ------------------------------
                                    Kenneth Gruber
                                    Chief Financial Officer and
                                    Principal Accounting Officer