UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   Form 10-QSB

[X]  Quarterly  Report  Pursuant  to Section 13 or 15(d) of the  Securities  and
Exchange Act of 1934 For the quarter ended March 31, 2000

                                       or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from _______________to_________________

Commission File Number:                              001-12885
                        --------------------------------------

                        AVENUE ENTERTAINMENT GROUP, INC.
                   -----------------------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)

         Delaware                                        95-4622429
---------------------------                          -------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization                         Identification No.)


11111 Santa Monica Blvd., Suite 525

Los Angeles, California                                   90025
--------------------------------------------          --------------
(Address of principal executive offices)              (Zip Code)

                                 (310) 996-6815
                       ------------------ --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period) that the Registrant
was  required  to file such  reports  and (2) has been  subject  to such  filing
requirements for the past 90 days.

           Yes     X                                 No ______


Number of shares  outstanding of each of issuer's  classes of common stock as of
May 4, 2000:

     Common Stock                                       4,589,030



<PAGE>




                        AVENUE ENTERTAINMENT GROUP, INC.

                                Table of Contents

PART I.  FINANCIAL INFORMATION                                         Page No.
                                                                       --------

         Consolidated Condensed Balance Sheets -
         March 31, 2000 (unaudited) and December 31, 1999                  1

         Unaudited Consolidated Condensed Statements of Operations -
         Three Months Ended March 31, 2000 and 1999                        2

         Unaudited Consolidated Condensed Statements of Cash Flows -
         Three Months Ended March 31, 2000 and 1999                        3

         Unaudited Notes to Consolidated Condensed Financial Statements    5

         Management's Discussion and Analysis or Plan of Operation         7

PART II. OTHER INFORMATION

         Signatures                                                       10



<PAGE>





                          PART I. FINANCIAL INFORMATION

                        AVENUE ENTERTAINMENT GROUP, INC.

                      Consolidated Condensed Balance Sheets

                                            March 31,          December 31,
                                              2000                1999
                                            --------           ----------

                                             (unaudited)

Assets

Cash                                        $    534,231     $         476,198
Accounts receivable                              268,099               652,429
Income tax receivable                             29,703                29,703
Film costs, net                                  949,106               959,850
Property and equipment, net                       67,885                72,664
Goodwill                                       1,823,379             1,893,509
Other assets                                      16,774                18,169
                                             -----------            ----------
Total assets                                $  3,689,177     $       4,102,522
                                               =========             =========


Liabilities and Stockholder's Equity

Accounts payable and accrued expenses       $  1,138,362     $       1,151,045
Deferred income                                  202,278               149,128
Loan payable                                     277,500               277,500
Deferred compensation                            332,206               340,783
Due to related party                              99,172                99,172
                                             -----------           -----------
Total liabilities

Stockholders' equity

Common stock, par value $.01 per share            45,890                45,890
Additional paid-in capital                     6,957,269             6,947,894
Deficit                                       (5,209,813)           (4,755,203)
Treasury Stock                                    (3,687)               (3,687)
Note receivable for common stock                (150,000)             (150,000)
                                                ---------            ----------
Total stockholders' equity                      1,639,659             2,084,894
                                               ----------             ---------
Total liabilities and stockholders'
  equity                                    $   3,689,177     $       4,102,522
                                              ==========             =========

   See accompanying notes to the consolidated condensed financial statements.


<PAGE>


                        avenue entertainment group, Inc.

                 Consolidated CONDENSED StatementS of Operations

                                   (unaudited)

                                              Three months        Three months
                                                ended               ended
                                               March 31,           March 31,
                                                 2000                1999
                                              -----------          ----------


Operating revenues                            $     99,926         $    177,669
                                                ----------           ----------

Costs and expenses:
Film production costs                               51,383               66,826
Selling, general and administrative expenses       503,025              471,069
                                                ----------           ----------
Total costs and expenses                           554,408              537,895
                                                ----------           ----------

Unrealized gain on trading securities                    0               30,268
Gain on sale of investments                                              24,480
                                              --------------        -----------
                                                         0

Loss before income tax                            (454,482)            (305,478)

Income tax expense                                      128               2,001
                                              -------------        ------------

Net loss                                       $   (454,610)       $   (307,479)
                                                ===========           ==========

Basic and diluted loss per common stock        $       (.10)               (.07)
                                                      =====                =====





   See accompanying notes to the consolidated condensed financial statements.


<PAGE>





                        AVENUE ENTERTAINMENT GROUP, INC.

           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)

                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                 Three months        Three months
                                                                                    ended               ended
                                                                                  March 31,           March 31,
                                                                                       2000                1999
                                                                                  -------------       ----------


Cash flows from operating activities:

<S>                                                                           <C>                 <C>
   Net loss                                                                   $       (454,610)   $        (307,479)
Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities:
   Depreciation                                                                          6,043                6,124
   Amortization - film production costs                                                 23,321               60,396
   Amortization - goodwill                                                              70,130               70,130
   Gain on sale of investments                                                               0              (24,480)
   Unrealized gain on trading securities                                                     0              (30,268)
   Proceeds from sale of marketable securities                                               0              142,574
   Deferred compensation                                                                (8,577)              38,500
   Stock compensation                                                                    9,375                9,375
   Changes in assets and liabilities which affect net income:
       Accounts receivable                                                             384,330               29,896
       Film costs                                                                      (12,577)             (18,373)
       Other assets                                                                      1,395               (6,488)
       Accounts payable and accrued expenses                                           (12,683)             (10,848)
       Deferred income                                                                  53,150                    0
       Due to related party                                                                                   4,996
                                                                                  --------------       ------------
                                                                                             0

           Net cash used in operating activities                                        59,297              (35,945)

Cash flows from investing activities:

       Purchase of equipment                                                            (1,264)              (1,231)
                                                                                   ------------         -----------

           Net cash used in investing activities                                        (1,264)              (1,231)
                                                                                   ------------         ------------

</TABLE>


   See accompanying notes to the consolidated condensed financial statements.


<PAGE>



                        AVENUE ENTERTAINMENT GROUP, INC.

           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)

                                   (unaudited)

                                               Three months        Three months
                                                  ended               ended
                                                March 31,           March 31,
                                                     2000                1999
                                                -------------      ----------


     Net increase (decrease) in cash                 58,033            (37,176)

Cash at beginning of year                            476,198            427,240
                                                     -------         ----------

Cash at end of period                          $     534,231       $    390,064
                                                  ==========         ==========

Supplemental cash flow information:
 Cash paid during the year for:

     Interest                                  $         403       $      2,707
                                                  ==========       ============
     Income taxes                              $         128       $      2,001
                                                  ==========       ============






     See accompanying notes to consolidated condensed financial statements.


<PAGE>



                        AVENUE ENTERTAINMENT GROUP, INC.

              Notes to Consolidated CONDENSED financial Statements

                                   (Unaudited)

1.       Summary of significant accounting policies

The Company

         Avenue Entertainment Group, Inc. (the "Company") is principally engaged
in the  development,  production and  distribution of feature films,  television
series, movies-for-television, mini-series and film star biographies.



         Generally, theatrical films are first distributed in the theatrical and
home  video  markets.  Subsequently,  theatrical  films are made  available  for
worldwide   television   network   exhibition  or  pay  television,   television
syndication and cable television. Generally, television films are first licensed
for network  exhibition and foreign  syndication or home video, and subsequently
for  domestic  syndication  on cable  television.  The revenue  cycle  generally
extends 7 to 10 years on film and television product.

Basis of presentation

         The  accompanying  interim  consolidated  financial  statements  of the
Company are  unaudited  and have been  prepared  by the Company  pursuant to the
rules and  regulations  of the  Securities  and  Exchange  Commission  regarding
interim  financial  reporting.  Accordingly,  they  do  not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete  financial  statements and should be read in  conjunction  with the
consolidated  financial  statements and notes thereto  included in the Company's
Form 10-KSB for the year ended  December 31, 1999. In the opinion of management,
all adjustments,  consisting only of normal recurring adjustments,  necessary to
present  fairly the  financial  position of the Company at March 31,  2000,  the
results of  operations  and its cash flows for the three  months ended March 31,
2000 and 1999 have been  included.  The  results of  operations  for the interim
period are not necessarily  indicative of results, which may be realized for the
full year.


<PAGE>



                        AVENUE ENTERTAINMENT GROUP, INC.

        Notes to Consolidated CONDENSED Financial Statements (Continued)

                                   (Unaudited)

2.       Film costs

         Film costs consist of the following:

                                                    March 31,       December 31,
                                                       2000             1999
                                                    --------        ------ ----

In process or development                           $ 280,700       $   267,404
Released, net of accumulated amortization             668,406           692,446
                                                    ----------        ---------
  of $16,364,798 and $16,341,477, respectively        949,106       $   959,850
                                                    ==========       ==========


3.       Loan payable

       On May 27, 1997, the Company  entered into an unsecured  demand note (the
       "Note")  which  provided the Company  with  borrowings  in the  principal
       amount  of  $150,000,  at  prime  plus  1%,  with  Fleet  Bank,  National
       Association.  The Note is payable  on demand,  but in any event not later
       than May 27, 2000. As of March 31, 2000,  $47,500 had been borrowed under
       the Note.  The Company  believes  that it will be able to extend the note
       for an additional  period on similar terms and conditions,  however there
       can be no assurance that such loan will be extended.

       On  June  3,  1999,  the  Company  entered  into an  unsecured  loan  for
       $1,000,000  at prime plus 1% with City  National  Bank  which  matured on
       October 1, 1999. As of March 31, 2000  $230,000 had been  borrowed  under
       the loan of which  $80,000  was prepaid on April 3, 2000 and the loan has
       been extended through June 1, 2000.


<PAGE>


Item 2.  MANAGEEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following  discussion  and analysis  should be read in  conjunction
with the Company's consolidated condensed financial statements and related notes
thereto.

Liquidity and Capital Resources

         At March 31,  2000,  the  Company had  approximately  $534,000 of cash.
Revenues have been  insufficient  to cover costs of  operations  for the quarter
ended March 31, 2000.  The Company has a working  capital  deficiency and has an
accumulated  deficit  of  $5,210,000  through  March  31,  2000.  The  Company's
continuation as a going concern is dependent on its ability to ultimately attain
profitable  operations  and positive cash flows from  operations.  The Company's
management  believes that it can satisfy its working  capital needs based on its
estimates of revenues and expenses, together with improved operating cash flows,
as well as additional funding whether from financial  markets,  other sources or
other collaborative  arrangements.  The Company believes it will have sufficient
funds  available  to  continue  to exist  through  the next  year,  although  no
assurance  can be given in this  regard.  Insufficient  funds will  require  the
Company to scale back its  operations.  The Independent  Auditor's  Report dated
April 12, 2000 on the Company's  consolidated  financial  statements states that
the  Company  has  suffered  losses  from  operations,  has  a  working  capital
deficiency and has an accumulated  deficit that raises  substantial  doubt about
its  ability  to  continue  as  a  going  concern.  The  accompanying  financial
statements  do not include any  adjustments  that may result from the  Company's
inability to continue as a going concern.

Results of Operations

         For the  quarter  ended March 31,  2000,  the Company had a loss before
income taxes of  approximately  $454,000  compared to a loss of $305,000 for the
quarter  ended March 31, 1999.  The loss for the period was primarily the result
of reduced  revenues earned as well as a small increase in selling,  general and
administrative expense.  Included in the quarter ended March 31, 1999 was 30,268
and 24,480,  respectively of unrealized gains on trading securities and gains on
sales of  investments,  both  relating  to the  common  stock  of GP  Strategies
Corporation.

Revenues

         Revenues for the three  months ended March 31, 2000 were  approximately
$100,000  compared to $178,000 for the three  months  ended March 31, 1999.  The
revenues  earned  in 2000  were  derived  from the  licensing  of  rights of the
"Hollywood  Collection"  in secondary  markets  through  Janson  Associates.  In
addition,   the  Company   received  a  nonrefundable   $50,000  in  supervisory
development  fees related to the setup of two motion pictures with a third party
financier.  The  revenues  earned  in 1999  were  derived  from  the sale of the
domestic  rights to "Betty  Buckley,  In Performance and In Person" to the Bravo
Cable  network for $50,000,  as well as  licensing  of rights of the  "Hollywood
Collection" in secondary  markets.  In addition,  the Company received a $44,000
production fee in 1999, relating to the motion picture "Wayward Son".

<PAGE>

Film production costs

         Film  production  costs for the three  months ended March 31, 2000 were
$51,000  compared  to $67,000  for the three  months  ended  March 31,  1999 and
included additional costs of $25,000 associated with the "Timeshifters."

Selling, General and Administrative

         Selling,  general and  administrative  (S,G&A)  expenses  for the three
months  ended March 31, 2000 were  $503,000  compared to $471,000  for the three
months ended March 31, 1999. The increased in S,G&A during 2000 is the result of
salary expenses which were covered by a production during the three months ended
March 31, 1999.

Recent Accounting Developments

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standard  (SFAS) No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities." This Statement  establishes  accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  This  Statement is effective  for all fiscal  quarters of fiscal
years  beginning  after June 15,  1999.  The Company has adopted SFAS No. 133 by
January 1, 2000. The Company is currently  evaluating the impact the adoption of
SFAS No. 133 will have on the consolidated financial statements.

Year 2000

         During 1999, the Company  completed any required  modifications  to its
critical systems and applications relating to year 2000 issues. The Company also
completed a survey of its significant suppliers to assess their vulnerability if
these companies were to fail to remediate their year 2000 issues.  The responses
received  indicated  that the  Company's  suppliers  were aware of the year 2000
issue and were  implementing all necessary  changes prior to the end of calendar
year  1999.  The  Company  also  formulated  contingency  plans to  ensure  that
business-critical  processes were protected from disruption and will continue to
function during and after the year 2000.  During 1999, the Company did not incur
any material  costs in connection  with  identifying,  evaluating or remediating
year 2000 issues.

         The Company's  business and operations  experienced no material adverse
effects  from the  calendar  change  to the year 2000 or from the leap year that
occurred  in 2000,  and we have  not  been  notified  of any  disruptions  to or
failures in the systems of any of our suppliers.


<PAGE>

         The Company will  continue to monitor our  information  technology  and
non-information  technology  systems  and  those of third  parties  with whom we
conduct  business  throughout  the year 2000 to ensure that any latent year 2000
issues that may arise are addressed promptly.  Although we do not anticipate any
additional expenditures relating to year 2000 compliance,  we cannot provide any
assurance as to the  magnitude of any future  costs until  significant  time has
passed.

Forward-Looking Statements

         This report  contains  certain  forward-looking  statements  reflecting
management's   current  views  with  respect  to  future  events  and  financial
performance.  These forward-looking  statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking  statements,  including,  but not limited to, the ability of
the Company to reverse its history of  operating  losses;  the ability to obtain
additional financing and improved cash flow in order to meet its obligations and
continue to exist as a going concern;  production risks; dependence on contracts
with certain customers; future foreign distribution arrangements;  the risk that
the Company's  preparations with respect to the risks presented by the year 2000
issue will not be adequate;  and dependence on certain key management personnel.
All of these above  factors are  difficult  to predict,  and many are beyond the
control of the Company.

Market Risk Exposure

The financial  position of the Company is subject to market risk associated with
interest rate  movements on outstanding  debt. The Company has debt  obligations
with variable  terms.  The carrying  value of the  Company's  variable rate debt
obligation approximates fair value as the market rate is based on prime.


<PAGE>


                           PART II. OTHER INFORMATION

                        AVENUE ENTERTAINMENT GROUP, INC.

                                 March 31, 2000

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  in its  behalf by the
undersigned thereunto duly authorized.

                        AVENUE ENTERTAINMENT GROUP, INC.

DATE:             May 15, 2000          BY:      Gene Feldman
                                                 Chairman of the Board

DATE:             May 15, 2000          BY:      Cary Brokaw
                                                 President and Chief Executive
                                                 Officer, Director

DATE:             May 15, 2000          BY:      Sheri L. Halfon
                                                 Senior Vice President,
                                                 Chief Financial Officer