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, 1998


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

            For the transition period from __________ to _______________

            Commission file number:             1-13360



                     Cornerstone Internet Solutions Company
        (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.)


                   584 Broadway, Suite 509, New York, NY 10012
                    (Address of Principal Executive Offices)

                                 (212) 343-3920
                (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, 1998
          --------------                                  ---------------------
    Common Stock, $.01 Par Value                                11,574,895

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, 1998 
               and May 31, 1998                                              3

            Consolidated Statements of Operations for the 
               three month period ended August 31, 1998                      4

            Consolidated Statements of Cash Flows for the 
               three month period ended August 31, 1998                      5


            Notes to Financial Statements                                    6

Item 2.     Management's Discussion and Analysis of Financial 
               Condition and Results of Operations                           8


,
PART II - OTHER INFORMATION
                                                                            Page

Item 1.     Legal Proceedings                                                10

Item 2.     Change in Securities                                             10

Item 3.     Defaults upon Senior Securities                                  10

Item 4.     Submissions of Matters to a Vote by Security Holders             10

Item 5.     Other Information                                                11

Item 6.     Exhibits and Reports on Form 8-K                                 11


SIGNATURES                                                                   12


                                       2
<PAGE>



             Cornerstone Internet Solutions Company and Subsidiaries
                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                                  Aug. 31           May 31
                                                                                   1998              1998
                                                                                (unaudited)
                                                                                ------------    ------------
<S>                                                                             <C>             <C>         
ASSETS

Current Assets

      Cash and cash equivalents                                                 $    711,000    $    392,200
      Investments                                                                    125,900         167,400
      Accounts receivable, net                                                       505,700         343,700
      Other Receivables                                                               75,000         100,000
      Prepaid expenses and other                                                     190,600         269,300
                                                                                ------------    ------------
         Total current assets                                                      1,608,200       1,272,600
Affiliation rights, net                                                              212,300         219,200

Property and equipment, net                                                          408,400         485,900

Other                                                                                134,200          69,200
                                                                                ------------    ------------
                                                                                $  2,363,100    $  2,046,900
                                                                                ------------    ------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

      Accounts payable                                                          $    573,500    $    538,100
      Accrued restructuring expenses                                                  35,700          95,400
      Accrued payroll and related expenses                                           226,400         202,800
      Other accrued expenses                                                         273,400         410,300
      Deferred revenue                                                               138,600           9,300
      Current maturities of long-term debt                                           106,900          99,500
                                                                                ------------    ------------
         Total current liabilities                                                 1,354,500       1,355,400
     Long-term debt                                                                   74,900         106,400
                                                                                ------------    ------------
         Total liabilities                                                         1,429,400       1,461,800
Commitments and contingencies
Stockholders' Equity
    Preferred Stock $.01 par value, 2,000,000
    shares authorized;
                Class A  0 and 340 shares issued and outstanding
                at August 31, 1998, and May 31, 1998.                                   --              --
                Class B 2,000 shares issued and outstanding at August
                31, 1998, and May  31, 1998.                                              20              20
                Class C 6,260 shares issued and outstanding at August
                31,1998, and May 31, 1998.                                               100             100

    Common Stock $.01 par value, 50,000,000 shares authorized; 
    11,574,895 and 9,441,117 issued and outstanding at 
    August 31, 1998, and May 31, 1998 respectively.                                  115,700          94,400
    Additional paid-in capital                                                    31,800,980      30,222,480
    Unrealized Gain on marketable equity securities                                  125,900         167,400
    Accumulated deficit                                                          (31,109,000)    (29,899,300)
                                                                                ------------    ------------
          Total stockholders' equity                                                 933,700         585,100
                                                                                ------------    ------------
                                                                                $  2,363,100    $  2,046,900
                                                                                ------------    ------------
</TABLE>
See notes to consolidated financial statements

                                       3
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>
                                                         Three months ended August 31
                                                         1998                  1997
                                                         --------------------------

<S>                                                      <C>             <C>      
Internet services revenues                                 528,900         142,400
Software licensing and royalty revenue                      38,000          34,500
                                                      ----------------------------
       Total revenues                                      566,900         176,900


Cost of Internet services revenues                       1,091,700         499,000
Marketing and selling expenses                             114,200         799,000
General and administrative expenses                        565,600         566,600
                                                      ----------------------------
       Total costs and expenses                          1,771,500       1,864,600
                                                      ----------------------------


Operating loss                                          (1,204,600)     (1,687,700)

Other income (expense):
      Interest expense                                      (4,400)           --
      Other income/expense                                  (1,200)           --
      Interest income                                          500          53,600
                                                      ----------------------------
Net Loss                                              $ (1,209,700)   $ (1,634,100)
                                                      ----------------------------

Preferred stock dividends and preferences                 (669,600)     (1,952,100)
                                                      ----------------------------
Net loss available to common shareholders             $ (1,879,300)   $ (3,586,200)
                                                      ----------------------------


            Basic and diluted loss per share          $       (.17)   $      (0.47)
                                                      ----------------------------

            Weighted average shares of common stock     10,989,409       7,679,441
                                                      ----------------------------
</TABLE>

See notes to consolidated financial statements

                                       4
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                  Three Months Ended August 31
                                                                                      1998             1997
                                                                                  ----------------------------

<S>                                                                                <C>            <C>         
Cash flows from Operating Activities
Net Loss                                                                           $(1,209,700)   $(1,634,100)
Adjustments to reconcile net loss to net cash used in operating activities         
     Depreciation and amortization                                                      98,800         46,600
     Stock option consulting expense                                                     6,400           --
Changes in assets and liabilities                                                  
     Accounts receivable                                                              (162,000)        11,000
     Other receivables                                                                  25,000         37,300
     Prepaid expenses and other                                                         78,700        (49,800)
     Other assets                                                                      (65,000)         7,500
     Accounts payable                                                                   35,400         23,400
     Accrued expenses                                                                  (94,700)       (53,700)
     Deferred revenue                                                                  129,300        (49,900)
                                                                                    --------------------------
           Net cash used in operating activities                                    (1,157,800)    (1,661,700)
                                                                                   
Cash flows from investing activities                                               
      Purchases of property and equipment                                              (14,400)      (227,800)
                                                                                    --------------------------
           Net cash (used in) investing activities                                     (14,400)      (227,800)
                                                                                   
Cash flows from financing activities                                               
       Proceeds from private placement                                               1,487,900           --
       Proceeds from exercise of stock options                                          27,200           --
       Principal payments under long-term debt                                         (24,100)          --
                                                                                    --------------------------
            Net cash provided by financing activities                                1,491,000           --
                                                                                    --------------------------
            Net increase (decrease) in cash and cash equivalents                       318,800     (1,889,500)
                                                                                   
Cash and cash equivalents                                                          
      Beginning of period                                                              392,200      4,952,900
                                                                                    --------------------------
      End of period                                                                $   711,000    $ 3,063,400
                                                                                    --------------------------
</TABLE>

See notes to consolidated financial statements

                                       5
<PAGE>
                     CORNERSTONE INTERNET SOLUTIONS COMPANY
              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 financial
            position of Cornerstone Internet Solutions Company,  (the "Company")
            as of August 31, 1998 and the results of its operations and its cash
            flows for the three month  periods  ended August 31, 1998 and August
            31, 1997.  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, 1998
            Annual Report on Form 10-KSB. The results for the three month period
            ended August 31, 1998 are not necessarily  indicative of the results
            to be obtained for the full year.

2.          Business

            On July 2, 1998, the Company's  shareholders  ratified a proposal to
            change the  Company?s  name from  Enteractive,  Inc. to  Cornerstone
            Internet  Solutions  Company.  Headquartered  in New York, New York,
            Cornerstone Internet Solutions Company (the "Company") is a provider
            of business solutions based on Internet technologies.  The Company's
            address  is 584  Broadway,  Suite  509,  New York,  NY 10012 and its
            Internet address is 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.

            In August 1997, the Company sold its domestic  distribution  rights,
            inventory  and  certain  accounts  receivable  from its  interactive
            multimedia publishing business to a third party.

            On August 14, 1998 the Company entered into a new agreement with the
            same party and terminated the August 15, 1997 agreement, except with
            respect to the sale of  inventory  and accounts  receivable  and the
            assignment  of the  distribution  contracts  (the "1998  contract").
            Under  the  terms of the 1998  contract,  the  Company  sold all its
            rights to its  multimedia  titles and has  assigned  all third party
            rights in the  titles  to the  acquirer  for  $100,000,  payable  at
            varying monthly amounts through January 1, 1999. The August 31, 1998
            and May 31, 1998 balance sheet caption "Other receivables"  reflects
            the amounts due under the contract.

                                       6
<PAGE>

            On December 4, 1996 the Company  through a  wholly-owned  subsidiary
            signed multiple market affiliate  agreements with USWeb  Corporation
            and paid $625,000 for the right to operate USWeb  affiliate  offices
            in New York City, and certain other markets in the Northeast portion
            of the United States,  for a ten-year period.  The operation,  which
            has been conducting  business as USWeb Cornerstone,  provides a full
            range of Internet and Intranet-based  business solutions,  including
            Web site design,  hosting and management,  design and implementation
            of database  and  e-commerce  solutions,  educational  programs  and
            Web-related strategic consulting and marketing.

            The  Company's  Internet and Intranet  solutions  services  business
            commenced  operations in the fourth  quarter of fiscal 1997, but did
            not generate  revenue until fiscal 1998. The Company is obligated to
            pay USWeb  monthly  fees equal in the  aggregate  to 7% of  adjusted
            gross revenues,  as defined,  but not less than certain  contractual
            minimum fees.  During  fiscal 1998,  the Company  reduced  operating
            expenses by  concentrating  its  development  activities in New York
            City and its marketing activities in the surrounding tri-state area.
            As a result  in the  second  quarter  of  fiscal  1998  the  Company
            incurred restructuring expenses of $427,700 for the estimated losses
            from subleasing the closed offices and related  severance  costs. In
            addition in the fourth quarter of fiscal 1998, the Company, with the
            approval  of USWeb  surrendered  its  affiliation  rights in certain
            geographic regions and recorded a write off of $315,000 representing
            the unamortized portion of the related Affiliation Rights.

            The accompanying  financial  statements have been prepared  assuming
            that the Company will  continue as a going  concern.  The  Company's
            continuing losses from operations could impact the Company's ability
            to meet its  obligations as they become due. As part of its business
            plan to enhance  liquidity,  the Company  has reduced its  operating
            expenses,  secured  approximately  $1,487,900  in July 1998 from the
            sale of common stock in a private placement and is in the process of
            attempting to increase its revenues and secure a line of credit.

3.          Affiliation Rights

            Fees for affiliation rights were paid to USWeb for the right to join
            the USWeb  network  and  operate as an  affiliate.  The fee is being
            amortized  over  the  10-year  life  of the  agreement  with  USWeb.
            Affiliation  rights  at  August  31,  1998  were net of  accumulated
            amortization of $97,700.

                                       7
<PAGE>
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.          Convertible Preferred  Stock Class A and C 

            On December 12, 1996 the Company completed a private placement of 84
            units, each consisting of 80 shares of Class A Convertible Preferred
            Stock (Class A Preferred) 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 and expiring December 13, 2001(the
            "Warrants").  Proceeds were approximately $7,869,100, net of related
            expenses of  $531,000.  The  preferred  stock has a stated  value of
            $1,250 per share.

            On November 19, 1997 the Company  offered to exchange the  4,200,000
            Warrants for common stock (the "Exchange  Offer"),  whereby for each
            2.8 warrants  exchanged,  the Company issued one share of its Common
            Stock.  In connection  with the Exchange Offer the Company  received
            the written consent of the participating  preferred  shareholders to
            amend  the terms of the  Preferred  Stock to delay the date when the
            Preferred Stock can first be converted into Common Stock from May 1,
            1998 to July 1, 1999 and modify certain  redemption  features of the
            Preferred  Stock.  Holders of 6,260 shares of preferred stock agreed
            to the terms of the Exchange Offer. As a result, on February 6, 1998
            the Company issued  1,397,323 shares of common stock in exchange for
            the cancellation of 3,912,500 Warrants. The fair value of the common
            shares issued  approximated the fair value of the canceled warrants.
            Subsequently  the Company  redesignated  the 6,260 shares of Class A
            Preferred held by the  shareholders  who approved the Exchange Offer
            as Class C Convertible  Preferred  Stock (Class C  Preferred).  Such
            preferred  shareholders  will  receive a dividend at 12% per year of
            the stated  value of the  preferred  stock for the period from April
            30,  1998 and ending the  earlier of June 30,  1999 or a  redemption
            date, if any. The dividend is payable in common stock an amounted to
            $234,700 for the quarter ended August 31, 1998.

            On April 27, 1998,  the Company  notified the holders of the Class A
            Preferred  that the Company would redeem the remaining 460 shares of
            outstanding  Class A  Preferred  as of May 28,  1998 at a price  per
            share equal to 1.1  multiplied  by the stated value of each share of
            Class A Preferred.  Holders of 340 shares of Class A Preferred Stock
            exercised  their right to convert  such Class A  Preferred  Stock to
            Common Stock,  which  resulted in the issuance of 348,361  shares of
            common  stock in June  1998.  120 shares of Class A  Preferred  were
            redeemed for $165,000 in May 1998.


                                       8
<PAGE>
6.          Class B Convertible Preferred Stock

            On February 19, 1998, the Company  consummated a $2,000,000  private
            placement  resulting  in the issuance of 2,000 shares of Class B par
            value  $.01  Convertible  Preferred  Stock  (Preferred  Stock).  Net
            proceeds to the Company were $ 1,990,800.  The Preferred Stock, with
            a stated  value of $1,000  per  share,  is  entitled  to vote on all
            matters submitted to holders of the Company's common stock, at 1,000
            votes per share, pays no dividends and is not redeemable.

            The conversion rights for the Preferred Stock are: if prior to March
            1, 1999 the Company has a private  placement  or public  offering of
            common  stock where the gross  proceeds to the Company are in excess
            of $2,000,000  (the  financing),  all of the  Preferred  Stock shall
            automatically  convert  into shares of the  Company's  common  stock
            equal  to  the  aggregate   stated  value  of  the  Preferred  Stock
            ($2,000,000)  divided  by the  greater  of (a) 90% of the per  share
            offering price of the financing or (b) $1.00. Subsequent to March 1,
            1999 the Preferred Stock is convertible  into shares of common stock
            equal to the  aggregate  stated  value  of  preferred  shares  to be
            converted  divided by $1.00.  The  maximum  number of common  shares
            issuable upon conversion of preferred stock is 2,000,000.

            Based on the market price of the Company's  common stock on the date
            of issuance  the Class B Preferred  Stock had a non-cash  beneficial
            conversion feature of $2,250,000.  The beneficial conversion feature
            is  recognized  solely in the  calculation  of loss per common share
            over a 14 month period, beginning with the issuance of the preferred
            stock to March 1999 the first date that  conversion can occur.  As a
            result, the net loss to common shareholders includes preferred stock
            preferences of $434,900 for the quarter ended August 31, 1998.

7.          Private Placement of Common Stock

            On July 24,  1998 the Company  consummated  a private  placement  of
            1,768,750 unregistered shares of Common Stock, for $1 per share. The
            net proceeds of the offering were approximately $1,487,900.


                                       9
<PAGE>
Item 2      Management's  Discussion  and  Analysis of Financial  Condition  and
            Results of Operations

The discussion and analysis should be read in conjunction with the Consolidated
Financial Statements of Cornerstone Internet Solutions Company and Subsidiaries
and Notes to the Consolidated Financial Statements included elsewhere in this
Form 10-QSB.

Quarterly results

The Company expects its quarterly  results to vary  significantly in the future.
The number of customer  contracts signed as well as the ability of the solutions
to be readily  implemented  by the  development  staff  significantly  influence
revenues.  Further market acceptance of the Company's  offerings is dependent on
(1) the growth and utilization of the Internet as a medium for commerce, (2) the
success of USWeb establishing and positioning the USWeb brand in the territories
where the Company operates (3) the degree of market  acceptance of the Company's
offerings and (4) the success of offerings by competitors.  The Company does not
expect seasonal factors to be a significant influence on revenues.

Results of Operations - Quarter Ended August 31, 1998 and 1997
Revenues

Internet   services  revenues  Internet  services  revenues  were  $528,900  and
$142,400,  in the  quarters  ended August 31, 1998 and 1997,  respectively.  The
increase in revenues is a result of securing new contracts with  customers.  The
company  anticipates that revenues will be impacted in the future by its ability
to expand its services in existing accounts and grow its client base.

Expenses

Cost of Internet  Services  Revenues  Cost of Internet  Services  Revenues  were
$1,091,700  and  $499,000,  in the  quarters  ended  August  31,  1998 and 1997,
respectively.  The  increase  in cost of  Internet  services  revenues is due to
hiring of technical personnel, the third party cost of software and hardware and
subcontractors  used to fulfill customer  contracts.  Cost of Internet  Services
Revenues  in the  quarter  ended  August 31,  1998  exceeded  Internet  services
revenues  as a result of the  Company's  decision to retain  technical  staff in
anticipation  of securing  higher  levels of revenue  producing  contracts.  The
company  expects that as the Company  secures  additional  contracts the cost of
revenues, as a percentage of revenues will decrease.

Marketing and Selling Expenses  Marketing and Selling expenses were $114,200 and
$799,000,  in the  quarters  ended August 31, 1998 and 1997,  respectively.  The
decrease  relates to the  reduction in sales force and closure of sales  offices
during the second half of fiscal  1998,  a result of the  Company's  fiscal 1998
decision to centralize its marketing activities in New York City.

General and  Administrative  Expenses General and  administrative  expenses were
$565,600 and $566,000, in the quarters ended August 31, 1998 and 1997.

Other Income and (Expense)  Other income and (expense) were $53,600 and ($5,100)
in the  quarters  ended  August 31, 1998 and 1997.  The  change,  an increase in
expense of $58,700 results from less interest income in the quarter ended August
31, 1998 due to the  Company's  lower cash  balances  than in the quarter  ended
August 31, 1997.

Income tax  benefit No income tax benefit was  recorded  in the  quarters  ended
August 31, 1998 and August 31, 1997.  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, if any.  Accordingly,  the Company has established a valuation allowance
against its deferred tax asset.

                                       10
<PAGE>

Liquidity and Capital Resources

Since June 1, 1997, the Company's principal sources of capital have been as
follows:

            (i)     On February 19, 1998,  the Company  consummated a $2,000,000
                    private placement  resulting in the issuance of 2,000 shares
                    of  Class  B par  value  $.01  Convertible  Preferred  Stock
                    ("Class B  Preferred  Stock").  Net  proceeds to the Company
                    were $ 1,990,800.

            (ii)    On  July  24,  1998,  the  Company   consummated  a  private
                    placement of 1,768,750  unregistered  shares of Common Stock
                    for $1.00 per share.  The net proceeds of the offering  were
                    approximately $1,487,900.

On April 27,  1998,  the Company  notified  the holders of the Class A Preferred
Stock that the Company  would  redeem the  remaining  460 shares of  outstanding
Class A  Preferred  Stock as of May 28,  1998 at a price per share  equal to 1.1
multiplied  by the stated value of each share of Class A  Preferred.  Holders of
340 shares of Class A Preferred  Stock  exercised  their  right to convert  such
Class A Preferred  Stock to Common  Stock,  which  resulted  in the  issuance of
348,361  shares of Common Stock in June 1998. One hundred twenty shares of Class
A Preferred Stock were redeemed for $165,000 in May 1998.

The Company had cash and cash equivalents of $711,000 and $392,200 at August 31,
1998 and May 31, 1998, respectively. The increase of $318,800 reflects primarily
the funding of operating activities - $1,157,800 offset by the private placement
described above which yielded $1,487,900.

Capital  expenditures  were $14,400 and $14,500 in the quarter  ended August 31,
1998 and August 31, 1997. The Company anticipates that capital expenditures will
increase as revenues  increase as a result of equipping  staff or contractors to
services customers.

The  Company's  continuing  losses from  operations  could impact the  Company's
ability to meet its  obligations as they become due. The  Independent  Auditor's
report for the fiscal year ended May 31, 1998 includes an explanatory  paragraph
regarding the  Company's  ability to continue as a going  concern.  Based on its
current  operating  plan,  the Company  believes  that its current cash and cash
equivalents  are not  sufficient  to meet its  operating  expenses  and  working
capital  requirements.  To  enhance  liquidity,  the  Company  has  reduced  its
operating expenses and secured, in July 1998,  approximately $1,487,900 from the
sale of common stock in a private placement.  In addition,  in order to generate
additional  cash, of which there is no  assurance,  the Company is attempting to
increase  its  revenues,  secure  a line of  credit,  further  reduce  operating
expenses and obtain additional financing. However, the cash generated from these
activities,  if any may not be sufficient to meet the Company's longer-term cash
requirements.

                                       11
<PAGE>
NASDAQ Listing Standards; Possible NASDAQ and Boston Stock Exchange Delisting
In August 1997, the Nasdaq Stock Market ("Nasdaq") enacted new standards for the
listing of its member companies on Nasdaq. These standards, which took effect on
February 23, 1998,  require listed companies to maintain  certain  financial and
corporate  governance  criterion for continued listing on Nasdaq,  including net
tangible  assets of at least  $2,000,000 and a per share price of at least $1.00
per share.  As of May 31,  1998,  the  Company had less than  $2,000,000  in net
tangible  assets and as of August 31,  1998,  the  Company  had  $933,700 in net
tangible assets. Nasdaq has advised the Company that the Company no longer meets
the requirements for continued  listing and accordingly the Company was required
to provide  Nasdaq by September 30, 1998 its proposal for achieving  compliance.
If Nasdaq  determines  that the  proposal  will not warrant  continued  listing,
Nasdaq will issue a Formal  Notice of  Deficiency  and,  pending a hearing,  the
Common Stock will be delisted.  The Company may seek to enter a  transaction  or
transactions to raise additional  equity capital to ensure that its Common Stock
will  continue to be listed on the SmallCap  Market.  There can be no assurances
that additional  financing will be available to the Company. If the Common Stock
is  delisted  from  Nasdaq,  trading,  if any, in the Common  Stock,  would then
continue to be  conducted  in the  over-the-counter  market on the OTC  Bulletin
Board, an NASD-sponsored  inter-dealer quotation system, or in what are commonly
referred  to as  "pink  sheets."  As a  result,  an  investor  may  find it more
difficult to dispose of or to obtain accurate  quotations as to the market value
of the  Company's  Common Stock and the trading  price of the  Company's  Common
Stock may be adversely affected.

Furthermore,  on  September  11,  1998,  the Company  received a letter from the
Boston Stock Exchange  informing the Company that it believed the Company may no
longer met the Boston Stock Exchange's minimum  shareholder's equity maintenance
requirement of $500,000. The Company is required to submit a written response to
the  Boston  Stock  Exchange  by the  close of  trading  on  October  12,  1998,
indicating  that such  deficiency has been cured or explaining when and how such
deficiency  will be cured.  If the Company  cures such  deficiency  and fails to
provide the requested  response,  or, in the event the Company is unable to cure
the  deficiency and submits a plan to cure the  deficiency,  if the Boston Stock
Exchange  determines that the Company's  response does not provide the necessary
details  relating to its plans to cure the deficiency,  trading in the Company's
Common Stock could be  suspended  on the Boston  Stock  Exchange and such Common
Stock could be delisted.

New Accounting Pronouncement

During fiscal 1998, the Company  adopted the provisions of Statement of Position
No.  97-2,  "Software  Revenue  Recognition",  which did not have a  significant
impact on the financial statements.

The Company will implement the  provisions of Statement of Financial  Accounting
Standards  No.  133,   "Accounting   for  derivative   Instruments  and  Hedging
Activities"  in fiscal year 2000,  for which the Company is presently  assessing
its impact on the consolidated financial statements, if any.

Year 2000 Compliance

Many currently  installed  computer  systems and software  products are coded to
accept only  two-digit  entries in the date code  field.  These date code fields
will need to accept four digit  entries to  distinguish  21st century dates from
20th century dates. As a result,  in less than two years,  computer  systems and
software used by many companies,  including customers and potential customers of
the  Company,  may  need  to  be  upgraded  to  comply  with  such  "Year  2000"
requirements.  The Company is closely  monitoring the progress the developers of
the  

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<PAGE>
software the Company  utilizes in many of its customer  projects i.e.  Microsoft
Corporation,  as well as the  developers  of the  software  utilized in internal
systems are making towards  ensuring that the products the Company  utilizes are
Year 2000 compliant.  The Company  believes that its internal  systems and third
party software  incorporated  into client solutions will be Year 2000 compliant.
Failure to provide Year 2000  compliant  business  solutions and software to its
customers  could  have a  material  adverse  effect on the  Company's  business,
results of operations  and financial  condition.  The Company?s  costs to ensure
that internal systems and software acquired for integration into client business
solutions  are Year 2000  compliant  has not been and is not  expected to become
significant.

Further,  the Company  believes  that the  purchasing  patterns of customers and
potential  customers  may be affected by Year 2000  issues as  companies  expend
significant  resources to correct or patch their  current  software  systems for
Year 2000 compliance.  These  expenditures may result in reduced funds available
to purchase products and services such as those offered by the Company.

Forward looking statements

This Form 10-KSB 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,  the success of
its  USWeb  Cornerstone   subsidiary  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-KSB 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.

Item 1.     Legal Proceedings

None

Item 2.     Change in Securities

On July 24,  1998 the  Company  consummated  a private  placement  of  1,768,750
unregistered  shares of Common Stock,  for $1 per share. The net proceeds of the
offering  were  approximately  $1,487,900.  The sale was  made  pursuant  to the
exemption  contained in Section 4(2) of the  Securities  Act of 1933 as amended.
The Company engaged a placement agent in connection with the private placement.

Item 3.     Defaults upon Senior Securities

None

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<PAGE>

Item 4.     Submissions of Matters to a Vote Security Holders

On July 2, 1998,  the  Company  held its annual  meeting  of  Stockholders  (the
"Annual  Meeting").  As of May 13, 1998,  the record date for the Annual Meeting
(the "Record Date"), there were outstanding 9,435,016 shares of Common Stock. In
addition,  as of the Record Date,  there were  outstanding an aggregate of 6,720
shares of Class A Preferred  Stock and Class C Preferred  Stock and 2,000 shares
of Class B Preferred  Stock.  Holders of each share of Common Stock are entitled
to one vote for each share held on all  matters.  The Class A  Preferred  Stock,
Class B Preferred Stock and Class C Preferred  Stock are sometimes  collectively
referred  to herein as  Preferred  Stock with  respect  to the  Annual  Meeting.
Holders of each share of Class A and Class C  Preferred  Stock were  entitled to
approximately 1,025 votes per share, aggregating 6,885,246 votes, and holders of
each share of Class B  Preferred  Stock were  entitled to 1,000 votes per share,
aggregating  2,000,000  votes. For information with respect to the redemption of
the Class A Preferred  Stock and the conversion  rights of the Class B Preferred
Stock and the Class C Preferred Stock see Notes 5 and 6 of Notes to Consolidated
Financial Statements.

At the Annual Meeting, the Company's stockholders approved the election of the
following individuals as directors by the following vote:

       Name                              For                      Withheld
       ----                              ---                      --------
Edward Schroeder                      10,436,845                    13,765
Rino Bergonzi                         10,436,095                    14,515
Andrew Gyenes                         10,323,614                   126,996
Peter Gyenes                          10,323,614                   126,996
Harrison Weaver                       10,438,845                    11,765

The  stockholders  also  approved  proposals  which (i)  amended  the  Company's
Certificate  of   Incorporation  by  changing  the  name  of  the  Company  from
"Enteractive, Inc." to "Cornerstone Internet Solutions Company" (Proposal 1) and
(ii)  increased the number of shares of Common Stock reserved for issuance under
the Company's 1994 Incentive and  Non-Qualified  Stock Option Plan to 3,250,000.
(Proposal 2).

The stockholder votes for the two proposals were as follows:

                    For                        Against        Abstain
                    ---                        -------        -------
Proposal 1          10,397,909                  50,170          2,531
Proposal 2          10,328,435                 121,075          1,100

Item 5.     Other Information

Item 6.     Exhibits and Reports on Form 8-K

None

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<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.

                                          CORNERSTONE INTERNET SOLUTIONS COMPANY
                                          -----------------
                                          (Registrant)

            Date October 14, 1998         /s/ Kenneth Gruber
                                          ------------------------------
                                          Kenneth Gruber
                                          Chief Financial Officer and
                                          Principal Accounting Officer


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