<PAGE>

               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                              FORM 10-QSB/A No. 1

     (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934
          For the quarterly period ended September 30, 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:  0-29205
                         -------

                           LIGHTHOUSE FAST FERRY, INC.
             ------------------------------------------------------
             (Exact name of small business issuer as in its charter)


       New Jersey                                    22-3241823
-------------------------------                 -------------------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                  Identification No.)


        195 Fairfield Avenue, Suite 3C, West Caldwell, New Jersey 07006
        ---------------------------------------------------------------
                    (Address of principal executive offices)

                                (973) 618-9036
                               ----------------
                          (Issuer's telephone number)


                           LIGHTHOUSE LANDINGS, INC.
                         ----------------------------
     (Former name, former address and former fiscal year, if changed since
                                 last report)


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

Check whether the registrant (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 ___
    ---

The number of shares  outstanding of the issuer's classes of common equity,
as of December 6, 2000 is 6,645,587 shares of Common Stock.

Transitional Small Business Disclosure Format (check one):
YES ___     NO  X
               ---
<PAGE>

                        PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
          --------------------

LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
(Formerly Lighthouse Landings, Inc.)

Interim Consolidated Condensed Financial Statements
September 30, 2000
(Unaudited)


                                     INDEX
                                     =====

<TABLE>
<CAPTION>
                                                                            Page No.
                                                                            --------
          <S>                                                               <C>
          Consolidated Condensed Balance Sheets
          At September 30, 2000 and December 31, 1999 (unaudited)..........     3

          Consolidated Condensed Statements of Operations
          For the Three and Nine Months Ended
          September 30, 2000 and 1999 (unaudited)..........................     4

          Consolidated Condensed Statement of Changes in Stockholders'
          Equity (Capital Deficiency) for the Nine months Ended
          September 30, 2000 (unaudited)...................................     5

          Consolidated Condensed Statements of Cash Flows
          For the Nine Months Ended
          September 30, 2000 and 1999 (unaudited)..........................   6-7

          Notes to Consolidated Condensed
          Financial Statements (unaudited).................................  8-18
</TABLE>

                                       2

<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
                     (Formerly Lighthouse Landings, Inc.)
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                                  (Unaudited)

<TABLE>
<CAPTION>
                       A S S E T S                  September 30, December 31,
                       -----------                      2000          1999
                                                    -----------   ------------
<S>                                                 <C>           <C>
Current Assets:
  Cash                                              $    73,515   $    97,957
  Inventories                                            39,543        40,948
  Net assets of discontinued operations                 400,722        32,582
  Prepaid expenses and other current assets              33,179       127,994
                                                    -----------   -----------
        Total current assets                            546,959       299,481

Property and equipment - at cost,
  less accumulated depreciation                      11,604,153    12,288,880

Goodwill net of accumulated amortization              1,052,227     1,112,935

Other assets                                            703,536        51,764
                                                    -----------   -----------
                                                    $13,906,875   $13,753,060
                                                    ===========   ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)
           ---------------------------------------------------------

Current Liabilities:
  Convertible promissory notes and
         accrued interest                           $ 2,598,888   $         -
  Current maturities of long-term debt                1,633,643     1,879,764
  Notes payable - stockholders                          100,743       125,000
  Accounts payable and accrued expenses                 803,132       948,606
  Deferred revenues                                     112,153        68,765
  Due to officers/stockholders                          198,871       449,540
                                                    -----------   -----------
        Total current liabilities                     5,447,430     3,471,675

Long-term debt - net of current maturities            9,516,854    10,064,110
                                                    -----------   -----------
        Total liabilities                            14,964,284    13,535,785
                                                    -----------   -----------
Stockholders' Equity, (Capital Deficiency):
  Preferred Stock - $.01 par value
    Authorized and unissued - 10,000,000 shares               -             -
  Common stock - $.01 par value
    Authorized - 40,000,000 shares
    Issued and outstanding - 6,548,962 shares
      September 30, 2000 and 4,905,795 in
      December 31, 1999                                  65,490        49,058
  Additional paid-in capital                          6,859,346     5,312,588
  Accumulated deficit                                (7,982,245)   (5,144,371)
                                                    -----------   -----------
     Total stockholders' equity (Capital Deficiency) (1,057,409)      217,275
                                                    -----------   -----------
                                                    $13,906,875   $13,753,060
                                                    ===========   ===========
</TABLE>


    See accompanying notes to consolidated condensed financial statements.

                                       3

<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
                     (Formerly Lighthouse Landings, Inc.)
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                    For the three            For the nine
                                                    months ended             months ended
                                                    September 30             September 30
                                                    ------------             ------------

                                                   2000        1999          2000        1999
                                                 --------    --------      --------    --------
<S>                                            <C>          <C>           <C>         <C>
Revenue                                        $1,316,469   $  949,636    $2,959,440  $2,550,701
                                               ----------   ----------    ----------  ----------
  Costs of Services:
  Ferry operations                                824,837      443,725     2,127,745   1,169,577
  Depreciation                                    215,511      223,099       689,843     667,957
                                               ----------   ----------    ----------  ----------
Total Costs of Services                         1,040,348      666,824     2,817,588   1,837,534
                                               ----------   ----------    ----------  ----------


Selling, General & administrative                 438,482      380,604     1,141,184     921,180
Marketing                                          18,682        8,431        60,608      19,323
Amortization of goodwill                           20,236       20,236        60,708      60,708
                                               ----------   ----------    ----------  ----------
Loss from operations                             (201,279)    (126,459)   (1,120,648)   (288,044)
                                               ----------   ----------    ----------  ----------
Other expenses:
  Interest (net)                                  753,934      340,001     1,481,942   1,070,258
  Provision for state income taxes                      -            -             -       1,687
                                               ----------   ----------    ----------  ----------
    Total other expenses                          753,934      340,001     1,481,942   1,071,945
                                               ----------   ----------    ----------  ----------

Loss from continuing operations before
 minority share loss in subsidiary               (955,213)    (466,460)   (2,602,590) (1,359,989)

Minority share in loss of subsidiary                    -            -             -      11,071
                                               ----------   ----------    ----------  ----------
Loss from continuing operations                  (955,213)    (466,460)   (2,602,590) (1,348,918)

Loss on discontinued operations                         -     ( 67,065)     (235,284)   (114,788)
                                               ----------   ----------    ----------  ----------
Net loss                                         (955,213)    (533,525)   (2,837,874) (1,463,706)
                                               ----------   ----------    ----------  ----------
Per share data:
  Basic and diluted:
    Loss from continuing operations                ($ .15)      ($ .12)       ($ .43)      ($.41)
    Loss from discontinued operations                   -       ($ .02)       ($ .04)      ($.03)
                                               ----------   ----------    ----------  ----------

    Net loss                                       ($ .15)      ($ .14)       ($ .47)      ($.44)
                                               ==========   ==========    ==========  ==========
    Weighted average number of shares
     outstanding
     Basic and diluted                          6,493,008    3,388,076     6,016,263   3,311,598
                                               ==========   ==========    ==========  ==========
</TABLE>

See accompanying notes to consolidated condensed financial statements.

                                       4
<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
                     (Formerly Lighthouse Landings, Inc.)

    CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY AND (CAPITAL
                                  DEFICIENCY)

                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          Additional     Accumulated
                                         Common Stock      Paid-In     Stockholders'
                                       Number    Amount    Capital       (Deficit)       Total
                                       ------    -------   -------    -------------    --------
<S>                                   <C>        <C>      <C>         <C>              <C>
Balance at January 1, 2000            4,905,795  $49,058  $5,312,588   ($5,144,371)    $217,275

Sales of Shares
  and Warrants for cash                 712,667    7,127     475,473             -      482,600

Shares and warrants issued
  for interest and
  services rendered                     578,000    5,780     735,185             -      740,965

Shares issued for
  satisfaction of liabilities           352,500    3,525     336,100             -      339,625

Net loss for the period                       -        -           -    (2,837,874)  (2,837,874)
                                      ---------  -------  ----------   ------------  ----------
Balance at September 30, 2000         6,548,962  $65,490  $6,859,346   ($7,982,245)  (1,057,409)
                                      =========  =======  ==========   ===========   ==========
</TABLE>

    See accompanying notes to consolidated condensed financial statements.

                                       5
<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
                     (Formerly Lighthouse Landings, Inc.)
                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                              For the Nine
                                                                              Months Ended
                                                                             September 30,
                                                                    -------------------------------
                                                                        2000               1999
                                                                    ------------       ------------
<S>                                                                <C>                <C>
Cash flows from operating activities:
  Net loss continuing operations                                    ($2,602,590)       ($1,348,918)
                                                                     ----------         ----------
  Adjustments to reconcile net loss to net cash
      provided by (used in) operating activities:
    Minority interests                                                        -            (11,071)
    Depreciation                                                        693,547            675,156
    Amortization of goodwill                                             60,708             60,708
    Amortization of deferred finance cost                               506,064              3,000
    Accrued interest                                                    128,035                  -
    Imputed interest                                                          -            124,402
    Stock issued for service rendered and interest                       50,000            100,000
    Deferred revenue                                                     43,388              8,970
    Increase (decrease) in cash flows as a result of
        changes in assets and liability accounts balances:
      Inventories                                                         1,405             (4,551)
      Prepaid expenses and other current assets                          94,815              5,707
      Other assets                                                       28,629             (1,318)
      Accounts payable and accrued expenses                            (145,475)           765,928
      Accrued officers compensation                                     (36,044)            31,063
                                                                     ----------         ----------
  Total adjustments                                                   1,425,072          1,757,994
                                                                     ----------         ----------

Net cash provided by (used in) operating activities
  of continuing operations                                           (1,177,518)           409,076

Net cash used in discontinued operations                               (288,424)                 -
                                                                     ----------         ----------
Net cash flow provided by (used in) operating activities             (1,465,942)           409,076
                                                                     ----------         ----------
Cash flows used in investing activities:
  Acquisition of operating activities                                    (8,820)           (40,264)
  Construction in process                                              (287,500)                 -
                                                                     ----------         ----------
Net cash used in investing activities                                  (296,320)           (40,264)
                                                                     ----------         ----------
Cash flows from financing activities:
  Payments to stockholders                                              (43,756)           (50,000)
  Proceeds from loans                                                 2,165,000            400,000
  Repayment of long-term debt                                          (866,024)          (982,861)
  Proceeds from stock subscription                                            -            250,000
  Proceeds from issuance of common stock                                482,600            226,400
                                                                     ----------         ----------
Net cash provided by financing activities
  of continuing operations                                            1,737,820           (156,461)
                                                                     ----------         ----------
Net increase (decrease) in cash                                         (24,442)           212,351

Cash at beginning of year                                                97,957             62,606
                                                                     ----------         ----------
Cash at end of year                                                  $   73,515         $  274,957
                                                                     ==========         ==========
</TABLE>

See accompanying notes to consolidated condensed financial statements.

                                       6
<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
                     (Formerly Lighthouse Landings, Inc.)
          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                  For the Nine Months Ended
                                                         September 30,
                                                  -------------------------

                                                       2000       1999
                                                    ---------   ---------
<S>                                               <C>           <C>
Supplemental Disclosures of Cash Flow
 Information:
  Cash paid during the year:

    Interest                                         $880,093   $1,065,661
                                                     ========   ==========

    Income taxes                                     $      -   $        -
                                                     ========   ==========


Supplemental Schedules of Noncash
 Activities:

  Common stock issued as additional interest         $644,465   $        -
                                                     ========   ==========


  Common stock issued in payment of
   Consulting and legal fees                         $ 96,500   $        -
                                                     ========   ==========


  Common stock issued as payment of liabilities:
    Related parties                                  $214,625   $        -
                                                     ========   ==========

    Others                                           $125,000   $        -
                                                     ========   ==========

Note issued as payment of consultants' fee           $198,000   $        -
                                                     ========   ==========
</TABLE>


    See accompanying notes to consolidated condensed financial statements.

                                       7
<PAGE>

                 LIGHTHOUSE FAST FERRY, INC. AND SUBSIDIARIES
             (Formerly Lighthouse Landing, Inc. and Subsidiaries)
             NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                              September 30, 2000



NOTE 1 - REALIZATION OF ASSETS - GOING CONCERN.

                    The accompanying consolidated financial statements have been
         prepared in conformity with generally accepted accounting principles,
         which contemplate continuation of the Company as a going concern.
         Lighthouse Fast Ferry, Inc. (the "Company") has sustained substantial
         losses for the year ended December 31, 1999 and the nine months ended
         September 30, 2000. In addition, the accompanying consolidated balance
         sheet as at September 30, 2000 reflects negative working capital of
         $4,900,471 and net tangible capital deficiency of $2,514,632.

                    Future viability of the Company is dependent upon the
         Company obtaining additional funding. During 1999, the Company arranged
         private placements of its common stock for net cash proceeds of
         $1,530,000 and obtained short term loans in the amount of $700,000 for
         both its continuing and discontinued segments. The proceeds were used
         to provide funds for the payment of certain obligations and ongoing
         operations. Commencing in January 2000 through September 30, 2000, the
         company received cash of $482,600 through the sale of its securities
         and $2,165,000 from convertible promissory notes.

                    The Company was incorporated in New Jersey in 1993. The
         Company currently operates a commuter ferry service from Highlands, NJ
         to and from Manhattan, and is pursuing the establishment of other
         routes in the Greater New York City area. In November 1999, the Company
         completed negotiations and executed a lease for a property in Stamford,
         CT as a base for fast ferry service to and from Manhattan and LaGuardia
         Airport. The site requires improvements and governmental approvals. On
         August 8, 2000, the Company received a notice from its landlord
         terminating the Stamford lease. The Company disputes the lease
         termination and has filed a complaint with the Court seeking to enforce
         the lease. The Company is proceeding with preparations for establishing
         ferry service, and expects to be able to commence service in the summer
         of 2001. Initially, it is expected that service on these new routes
         will be provided by a vessel on a short-term charter. The Company is
         proceeding with plans for construction and financing of at least three
         vessels specifically to meet the needs of the new service.

                    During 1998 and 1999, the Company assessed its strategic
         direction and concluded that focusing on the commuter ferry business
         would provide the greatest return on assets and discontinued the marina
         restaurant property and the retail cigar operations in 1999.
         Accordingly, the Company is pursuing the divestiture of the
         discontinued segments' assets. The carrying value of the related net
         assets have been reclassified as "Net assets of discontinued
         operations" in the accompanying consolidated balance sheet.

                    It is management's opinion that the funds to be raised by
         the sales of its securities and borrowings plus the funds anticipated
         to be raised through the sale of net assets of the discontinued
         segments will be sufficient to meet the Company's obligations as they
         become due.

                    The conditions previously mentioned raise substantial doubt
         about the Company's ability to continue as a going concern. The
         financial statements do not include any adjustments that might result
         from the outcome of this uncertainty.

                                       8
<PAGE>

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.


         (a)          Description of Business:

                    The Company was incorporated in New Jersey in 1993 and is
         in the commuter ferry business. The Company currently operates a
         commuter ferry service from Highlands, New Jersey to and from Manhattan
         and is pursuing the establishment of other routes in the greater New
         York City metropolitan area.

         (b)          Basis of Presentation:

                    The accompanying unaudited financial statements have been
         prepared in accordance with generally accepted accounting principles
         for interim financial information and with the instructions for Form
         10-Q and Article 10 of Regulations S-X. Accordingly, they do not
         include all of the information and disclosures required by generally
         accepted accounting principles for complete financial statements. In
         the opinion of management, the statements contain all adjustments
         (consisting only of normal recurring accruals) necessary to present
         fairly the financial position as of September 30, 2000 and the results
         of operations and cash flows for the nine month period ended September
         30, 2000 and 1999. The results of operations for the nine month period
         ended September 30, 2000 and 1999 are not necessarily indicative of the
         results to be expected for the full year.

                    The December 31, 1999 balance sheet has been derived from
         the audited financial statements at the date included in the Company's
         annual report contained in Form 10-KSB. These unaudited financial
         statements should be read in conjunction with the financial statements
         and notes thereto included in the Company's annual report contained in
         Form 10-KSB.

         (c)          Principles of Consolidation:

                    The consolidated condensed financial statements include the
         accounts of Lighthouse Fast Ferry, Inc. and its subsidiaries. Inclusion
         of the results of subsidiary companies' operations is on the "Purchase"
         method, from the dates of their respective acquisition. All significant
         intercompany balances and transactions have been eliminated in
         consolidation. Recognition of the interest of minority stockholders is
         provided for in the accounts. As discussed more thoroughly in Note 3,
         the retail and marina segments are presented as discontinued
         operations.

         (d)          Change of Accounting Period:

                    The Company has changed its April 30 fiscal year end to
         December 31st. Accordingly, the accompanying consolidated financial
         statements reflect balance sheets as of September 30, 2000 and December
         31, 1999 and the results of operations cash flows and stockholders
         equity (Capital deficiency) for the nine month period ended September
         30, 2000 and 1999 then ended.


         (e)          Inventories:

                    Inventories which consist of parts inventory and cafeteria
         products are stated at the lower of cost or market on the first-in,
         first-out method.

                                       9
<PAGE>

         (f)          Property and Equipment:

                    Property and equipment is recorded at cost. The cost of the
         ferries obtained through the New York Fast Ferry Holding Corp.
         acquisition in December 1998 has been determined as an allocation of
         the purchase price of the business acquired based upon an appraisal.
         Depreciation is computed using the straight-line method. Depreciation
         on equipment, including the ferries, is calculated principally over
         their estimated useful lives of fifteen years.

                    Expenditures that substantially increase estimated useful
         lives are capitalized. Maintenance, repairs and minor renewals are
         expensed as incurred. When assets are sold or otherwise disposed of,
         their costs and accumulated depreciation are removed from the accounts
         and any resulting gain or loss is recorded in operations.


         (g)          Goodwill:

                    Goodwill arising from acquisitions initially represents the
         excess of the purchase cost over the fair value of identifiable assets
         less identifiable liabilities. Goodwill is reviewed on an ongoing basis
         to determine that the value has not been impaired. In 1999 it was
         determined that the value of the goodwill arising from the purchase of
         The Cigar Box, Inc. was impaired and accordingly the remaining
         unamortized goodwill of $198,654 was written off to discontinued
         operations during 1999. The goodwill arising from the acquisition of
         New York Fast Ferry Holding Corp. and its wholly owned subsidiaries
         aggregating $1,214,174 is being amortized over 15 years. Amortization
         of goodwill charged to operations was $60,708 for the nine months ended
         September 30, 2000 and 1999.


         (h)          Revenue Recognition:

                    Revenue is recognized when earned. The Company's ferry
         business sells the majority of commuter tickets in advance of use. The
         tickets which expire (90) ninety days after issuance and are
         nonrefundable and non-extendable. Accordingly, the Company determines
         the unused portion of tickets sales and defers that value to future
         periods. Deferred income aggregated $112,153 and $68,765 at September
         30, 2000 and December 31, 1999, respectively.

                      The other revenues generated by the Company, for example
         the sale of food through the ferries' concession stands, are recognized
         when the services have been rendered. To date, other revenues have not
         been significant.


         (i)          Income Taxes:

                    The Company complies with Statement of Financial Accounting
         Standards No. ("SFAS 109"), "Accounting for Income Taxes," which
         requires an asset and liability approach to financial accounting and
         reporting for income taxes. Deferred income tax assets are computed for
         differences between financial statement and tax basis of assets and
         liabilities that will result in future taxable or deductible amounts,
         based on the enacted tax laws and rates in the periods in which
         differences are expected to affect taxable income. The principal asset
         and liability differences are deferred revenues, valuation allowances
         for long-term assets, the estimated loss on the disposal of
         discontinued operations, and utilization of the Company's tax loss
         carry forwards. Management has fully reserved the net deferred tax
         assets as it is more likely than not that the deferred tax asset will
         not be utilized in the future.

                                       10
<PAGE>

         (j)          Impairment of Long-Lived Asset:

                    The Company accounts for impairment of long-lived assets in
         accordance with Statement of Financial Accounting Standards (SFAS) No.
         121, "Accounting for the Impairments of Long-Lived Assets and for Long-
         Lived Assets to be Disposed of." SFAS No. 121 requires that long-lived
         assets be reviewed for impairment whenever events or changes in
         circumstances indicate that the book value of the asset may not be
         recoverable. Due to significant losses incurred during 1999, the
         Company evaluated its long-term assets of its continuing operations
         which as at December 31, 1999 and at September 30, 2000 were comprised
         of property and equipment (principally two (2) ferries) with an
         undepreciated cost of $11,500,000 and goodwill on the acquisition of
         the Fast Ferry Holding Corp. with a unamortized cost of $1,100,000.
         Based upon an estimate of the future undiscounted net cash flows of the
         related asset or asset grouping over the remaining life, it was
         determined that there was no impairment in either the net book value of
         the ferries or the goodwill.


         (k)          Use of Estimates:

                    The preparation of financial statements in conformity with
         generally accepted accounting principles requires management to make
         estimates and assumptions that affect certain reported amounts and
         disclosures. Accordingly, actual results could differ from those
         estimates.


         (l)          Concentrations of Credit Risk:

                    Financial instruments which potentially subject the Company
         to concentrations of credit risk consist primarily of cash. The Company
         places its cash with high credit quality financial institutions which
         at times may be in excess of the FDIC insurance limit.


         (m)          Loss Per Common Share:

                    Loss per common share is based on the weighted average
         number of common shares outstanding. In March 1997, the Financial
         Accounting Standards Broad issued Statement No. 128 ("SFAS 128"),
         "Earnings Per Share," which requires dual presentation of basic and
         diluted earnings per share on the face of the statements of operations,
         and which the Company has adopted. Basic loss per share excludes
         dilution and is computed by dividing income available to common
         stockholders by the weighted-average common shares outstanding for the
         period. Diluted loss per share reflects the potential dilution that
         could occur if convertible debentures, options and warrants were to be
         exercised or converted or otherwise resulted in the issuance of common
         stock that then shared in the earnings of the entity.

                    Since the effect of outstanding options, warrant and
         convertible debenture conversions are antidilutive in all periods
         presented, it has been excluded from the computation of loss per common
         share.

                                       11
<PAGE>

NOTE 3 - DISCONTINUED OPERATIONS.

   On October 28, 1999, the Company adopted a plan to sell its real estate and
retail/wholesale segments. Accordingly both segments have been accounted for as
discontinued operations in the accompanying consolidated financial statements.
The net assets to be disposed of as of September 30, 2000 aggregating $400,722
consist principally of real estate and its related secured indebtednesses. The
net assets are recorded as current assets in the accompanying consolidated
balance sheet under the caption "Net assets of discontinued operations."
Management expects the real estate to be sold in late 2000 or early 2001.

   In the second quarter of 2000 management became aware that its previous
estimate of the time required to dispose of these segments was incorrect and
accordingly the original estimate of the carrying charges of the real property
- real estate taxes and interest- would have to be increased to reflect these
charges through June 2001. The accompanying financial statements reflect a
charge for $110,000 for these costs incurred through June 2000 plus an estimate
of an additional $125,000 for interest and taxes through June 2001.

   During the nine months ended September 30, 2000, $403,000 of these segments'
liabilities were paid and a second mortgage was converted into a 10% interest
bearing promissory note convertible into the Company's common stock initially at
$1.50 per share.

   The net assets of discontinued operations, which have been segregated in the
accompanying balance sheet are summarized as follows:

                                                            September 30,
                                                                2000
                                                              --------
Assets:
  Inventory                                                   $  2,001
  Property assets, net (See Note 4)                            931,180
                                                              --------
                                                               933,181
                                                              --------
Liabilities:
  Accounts Payable                                              32,000
  Mortgage payable                                              40,679
  Accrued real estate taxes and interest (a)                   459,780
                                                             ---------
                                                               532,459
                                                             ---------

Net assets of discontinued operations                         400,722
                                                             =========


   (a) Real estate taxes liens have been recorded by local governmental
authorities because of non-payment of said property taxes arising from a dispute
over property tax valuations. The Company is currently attempting to resolve the
dispute.

                                       12
<PAGE>

NOTE 4 - PROPERTY AND EQUIPMENT.

                    Property and equipment is summarized as follows:

                                                               September 30,
                                                               ------------
                                                                   2000
                                                               ------------
Continuing operations:
  Ferries                                                      $13,300,000
  Computers and office equipment                                    55,612
  Furniture and fixtures                                           100,288
                                                               -----------
                                                                13,455,900
  Less:  Accumulated depreciation                                1,851,747
                                                               -----------
                                                               $11,604,153
                                                               ===========

Discontinued operations:
  Land and buildings                                           $   931,180
                                                               ===========



NOTE 5 - LONG-TERM DEBT.                                       September 30,
                                                               ------------
                                                                  2000
                                                               ------------
Mortgage note payable, secured by the vessel
  "Finest" due in monthly installments of
  $61,875 through March 10, 1999, and $56,719
  through September 10, 2005, including
  interest at 9.25% per annum, with a final
  payment of $3,626,691 due October 10, 2005.          (a)     $ 5,029,965


Mortgage note payable, secured by the vessel
  "Bravest" due in monthly installments of
  $59,063 through March 10, 1999 and $56,719
  through September 10, 2005, including
  interest at 9.25% per annum, with a final
  payment of $3,572,971 due October 10, 2005.          (a)       4,995,903

Note payable, secured by the vessel "Finest"
  and "Bravest", payable in fifteen monthly
  installments of $15,000 commencing in
  February 1999, payment of $343,333 on
  March 31, 2000 and a final payment of
  $934,319 due on December 10, 2000
  including imputed interest of 9.25%.                 (a)         920,410

10% interest bearing obligation payable in
  two installments of $100,000 each on March
  15, 2000 and July 15, 2000 and a final
  payment of $200,000 January 15, 2001.                            204,219
                                                               -----------
                                                                11,150,497
Portion due within one year                                      1,633,643
                                                               -----------
Long-term debt - less current maturities                       $ 9,516,854
                                                               ===========

(a)    The two first mortgages on the ships and note payable are secured through
(i) cross collateralization agreements; (ii) assignments of charter agreements
and other personal property, (iii) a pledge of a potential receivable arising
from a lawsuit against the City of New York and (iv) cross corporate guarantees.
Reference is made to Note 9(c)(i) regarding warrants issued to the note holder.

                                       13
<PAGE>

        The secured debt obligations mature as follows:


           2001                                                $ 1,633,643
           2002                                                    501,864
           2003                                                    550,306
           2004                                                    603,423
           2005                                                    661,668
        Thereafter                                               7,199,593
                                                               -----------
                                                               $11,150,497
                                                               ===========



NOTE 6 -  CONVERTIBLE PROMISSORY NOTES.

June - September 2000 - During the months of June through September 2000, the
company received proceeds from nineteen convertible promissory notes, (three for
$40,000, nine for $20,000, one for $15,000, four for $10,000 and two for
$5,000), totaling $365,000 dollars. Each convertible promissory note carries a
simple interest rate of 10.5%. Interest only is payable quarterly, and the notes
mature one-year from date of issuance. In addition, each convertible promissory
note holder was issued shares of the company's common stock for each $5,000
dollars of indebtedness owed to the convertible promissory note holder at date
of issuance. These shares of stock are restricted securities. The fair value of
the common shares on the dates of issuance aggregated $19,469 that will be
charged to operations as additional interest over the life of the notes.

   The lenders have the right, at their sole and exclusive option, to convert
the outstanding indebtedness to common shares (the "Conversion Rights") of the
company at any time prior to borrower making payment. Should such "Conversion
Rights" be exercised, the Company shall issue such shares to the Lender at the
rate of one share of common stock for each two ($2.00) dollars of the
indebtedness then due and owing. The shares issued by the company through the
exercise of the "Conversion Rights" will be restricted securities. The option
and conversion as provided herein shall be exercised by each lender issuing
written notice to the borrower. The outstanding balance for the nineteen
convertible promissory notes including interest accrued as of September 30, 2000
is $368,118.

JULY 2000 - The Company employed the services of a financial consultant to
arrange for four convertible promissory loans, one dated July 10, and three
dated July 14, 2000. The consultant received as payment for this service (i) a
10% interest bearing note payable on January 14, 2001 in the amount of $88,000
(ii) 22,000 shares of the Company's restricted common stock, with a fair market
value at date of issuance of $44,000, and (iii) the same default remedies as the
bridge loan holders and (iv) warrants to acquire 5,000 common shares at $2.00
per share. The balance of the promissory note and interest accrued as of
September 30, 2000 is $89,882.

                                       14
<PAGE>

     On July 10, 2000, the Company received proceeds of one of these convertible
notes aggregating $500,000. The loan, which bears interest at 10% per annum
payable quarterly, is payable six months from issuance. To obtain the loan, the
Company issued to the loan holder 125,000 shares of restricted common stock of
the Company with on-demand registration and unlimited piggyback rights. The fair
value of the shares at issuance aggregating $250,000 will be charged to
operations as additional interest over the life of the notes. The outstanding
balance of the promissory note and interest accrued as of September 30, 2000 is
$511,250.

     On July 14, 2000, the Company received proceeds from three of these
convertible notes aggregating $300,000. Additionally, the Company issued another
$200,000 convertible promissory notes to a stockholder in exchange for a
$200,000 second mortgage on real property of the Company's discontinued
operations. The notes, which bear interest at 10% per annum payable quarterly,
are payable six months from issuance. To obtain the notes, the Company issued a
total of 125,000 shares of the Company's unregistered common stock with on-
demand registration and unlimited piggyback rights. The fair value of the shares
at issuance aggregating $250,000 will be charged to operations as additional
interest over the life of the notes.

     The four convertible notes above may be repaid anytime within three months
of issuance. However, the loans must be repaid out of the proceeds of a
financing greater than $3,000,000. Initially, the notes are convertible into the
Company's common stock at $1.50 per share. In the event the notes are not
redeemed in full within six months from issuance, the notes are in default, and
become convertible at $1.00 per share for the first 90 days of the default
period, and the conversion price is further reduced to $0.50 thereafter. In
addition, in the event of default, the Company must issue to each loan holder
50,000 warrants exercisable at $.25 per share for each 30 days period until
repaid. The outstanding balance of the four notes including interest accrued as
of September 30, 2000 is $510,694.

JUNE 2000 - On June 14, 2000, New York Fast Ferry Services Inc., received
proceeds of two bridge loans aggregating $60,000. The loans bear interest at 14%
per annum. Loans aggregating $45,000 plus accrued interest are payable on July
14, 2000, which were made, and the balance of the loans with accrued interest on
or before September 14, 2000 which was also paid.

MARCH 2000 - On March 11, 2000, the Company received proceeds of two convertible
promissory notes aggregating $1,000,000. The notes, which bear interest at 10%
per annum payable quarterly, are payable nine months from issuance. To obtain
the notes, the Company issued to each note holder 125,000 shares of restricted
common stock with on-demand registration and unlimited piggyback rights. The
fair value of the shares at issuance aggregating $125,000 will be charged to
operations as additional interest over the life of the loans.

     The notes may be repaid anytime within nine months of issuance; however,
the notes must be repaid from the proceeds of a financing greater than
$2,000,000. Initially the notes are convertible into common stock at $1.50 per
share. In the event the notes are not redeemed in full within nine months from
issuance, the notes are in default, and become convertible at $1.00 per share
for the first 90

                                       15
<PAGE>

days of the default period and are further reduced to $.50 thereafter. In
addition, in the event of default, the Company must issue to each of the note
holders 50,000 warrants exercisable at $.25 per share for each 30 days period
until repaid. The outstanding balance for the two convertible notes including
accrued interest as of September 30, 2000 is $1,008,333.

MARCH 2000 - The Company employed the services of a financial consultant to
arrange for the two March, 2000 convertible notes. The consultant received as
payment for this service (i) a 10% interest bearing note payable on December 10,
2000 in the amount of $110,000, (ii) 25,000 shares of the company's common stock
whose fair market value at date of issuance was $12,500, and (iii) the same
default remedies as the bridge note holders. The outstanding balance including
accrued interest as of September 30, 2000 is $110,611. The consultant also has
agreed to perform consulting services for the Company and will receive payment
for his services in the form of warrants to acquire 50,000 common shares at
$2.00 per share for each three month period his services are required. The
consultant was issued warrants to acquire 50,000 common shares at $2.00 per
share in the second and third quarters. The fair value of the warrants
aggregating $10,000 was charged to operations.


NOTE 7 -  CAPITAL STOCK.

          (a)       Common stock sold for consideration other than cash:

   During the third quarter of 2000, the Company issued $259,094 shares having a
fair market value on the date of issuance of $259,094. The shares were issued as
additional interest and as payment of a consultant's fee, and this amount is
being charged to operations over the life of the convertible promissory notes
issued in through out the third quarter of 2000.

   During the second quarter of 2000, the Company issued 20,000 of its common
shares having a fair market value on the date of issuance of $40,000 to outside
legal and financial consultants for services rendered.

   During the second quarter of 2000, the Company issued 100,000 shares having a
fair market value on the date of issuance of $125,000. This issuance was for
satisfaction of a note and other liabilities related to the discontinued
operations.

   During the second quarter of 2000, the Company issued 3,375 shares having a
fair market value on the date of issuance of $4,219. The shares were issued as
additional interest, and this amount is being charged to operations over the
life of the convertible promissory notes issued in June 2000.


   During the first quarter of 2000, the Company issued 252,500 shares having a
fair market value on the date of issuance of $214,625 to two officer/directors
and another director for satisfaction for accrued compensation in the amount of
$214,625.

   During the first quarter of 2000, a financial consultant was issued 25,000
shares having a fair market value on the date of

                                       16
<PAGE>

issuance was $12,500 for service rendered in arranging a financing. This amount
is being charged to operations over the life of the loan.

   During the first quarter of 2000, the Company issued 250,000 of its common
shares having a fair market value on the date of issuance of $125,000 as
additional interest.

          (b)         Common Stock And Warrants Issued for Cash:

   During 2000, the Company sold 712,667 shares of its common stock and warrants
to acquire an additional 666,167 common shares at prices ranging from $1.00 to
$1.25 per share for an aggregate of $482,600.

NOTE 8 -  STOCK OPTIONS AND WARRANTS.

       A summary of activity related to non-qualifying stock options and
warrants granted by the Company is as follows:

                                                      Exercise
                                                       Price
                                                        Per
                              Options    Warrants      Share
                             ----------  ---------  --------------
Outstanding at January 1,
 1999                           10,000     200,000  $.96 to  $2.60

Cancelled                      (10,000)             $2.53
Granted during 1999            420,000   1,330,000  $1.00 to $1.75
                              --------   ---------
Outstanding at December
 31, 1999                      420,000   1,530,000  $1.00 to $2.60

Granted during 2000            250,000     822,917  $.50 to  $2.00
                              --------   ---------
Outstanding at September 30,
 2000                          670,000   2,352,917  $.50 to  $2.60
                              ========   =========

(a)         Stock Options:

   The Company has entered into new employment agreements with its Chief
Executive Officer and its V.P., Secretary in 2000. These officers received as a
condition of their contract options to purchase 100,000 and 150,000,
respectively, shares of common stock at $1.00 per share, the fair market value
at the date of grant, through January 2007. Half of these options are
exercisable in January 2002 and the officers are first able to exercise the
other 50% in January 2003.

   Assuming the fair market value of the stock at the date of grant to be equal
to option exercise price, the life of the options to be from 1.3 years to 7
years the expected volatility at 400%, expected dividends are none, and the
risk-free interest rate of 10%, the Company would have recorded compensation
expense of $205,506 and $38,616 for the nine months ended September 30, 2000 and
1999, respectively, as calculated by the Black-Scholes option pricing model. As
such, proforma net loss and loss per share would be as follows:

                                       17
<PAGE>

                                                     For the Nine Months Ended
                                                            September 30,
                                                    ---------------------------
                                                        2000           1999
                                                    -----------     -----------
Net loss as reported                                ($2,837,874)    ($1,463,706)
Additional compensation                                (205,506)        (38,616)
                                                    -----------     -----------
Adjusted net loss                                   ($3,043,380)    ($1,502,322)
                                                    ===========     ===========
Loss per share as reported                                ($.47)          ($.44)
                                                    ===========     ===========
Adjusted loss per share                                   ($.51)          ($.45)
                                                    ===========     ===========

(b)       Warrants Granted in 2000:

   As an inducement to purchase shares of the Company's common stock, warrants
to purchase 666,167 shares were granted to individuals who purchased stock in
2000. The warrants are exercisable at various times through March 15, 2002 at
prices ranging from $.50 to $2.00.

   Employees and financial consultants were issued warrants to acquire 156,750
common shares for services at $2.00 per share which was the fair value of the
common stock on the date of issuance.

NOTE 9 - RESTATEMENT

   The consolidated financial statements have been restated to give effect to
certain comments made by the Securities and Exchange Commission.

NOTE 10 - CONTINGENCIES

     Litigation:

   (a)    On June 30, 2000, D. Weckstein & Co., Inc. ("Weckstein") filed suit
against the Company in the Supreme Court of the State of New York. The Complaint
alleges that the Company owes Weckstein $360,000 for services rendered by
Weckstein in connection with the Company's purchase of The Cigar Box, pursuant
to a letter agreement between Weckstein and the Company. In the alternative, if
the Court finds that Weckstein is not entitled to damages for breach of the
letter agreement, Weckstein seeks an award in quantum meruit for services
rendered. Weckstein also seeks an award of its costs and disbursements.

   On July 28, 2000, the Company filed an Answer, denying that the Company owes
Weckstein damages for breach of contract or in quantum meruit, raising several
defenses, including that Weckstein failed to perform its obligations under the
letter agreement, and seeking dismissal of the Complaint and an award of the
Company's attorney's fees, costs and further relief that the Court deems just
and acceptable.

   On July 28, 2000, the Company filed a Motion of Removal, and the case has
been removed from the Supreme Court of the State of New York to the United
States District Court for the Southern District of New York, based on the
diversity jurisdiction of the Federal Court.

   (b)    On August 3, 2000, the Company received a notice from a subsidiary of
The Connecticut Light & Power Co. (the "Landlord"), terminating its lease for
the property that is the proposed site for

                                       18
<PAGE>

the Company's Stamford, Connecticut ferry terminal. The Landlord based the
termination of the lease on the failure of the Company to get certain necessary
permits for is use of the site. The Company disputes the Landlord's right to
terminate the lease.

   On August 8, 2000, the Company filed a complaint against the Landlord in
Connecticut Superior Court against alleging breach of lease, promissory
estoppel, breach of the duty of good faith and fair dealing, intentional
misrepresentation, negligent misrepresentation, and violation of the Connecticut
Unfair Trade Practices Act by the Landlord. The Company claims that the Landlord
had agreed that the permits issue would not be used to attempt to terminate the
lease. The Company is seeking specific performance of the lease, compensatory
and punitive damages, attorney's fees, and other relief.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         -----------------------------------------------------------
         AND RESULTS OF OPERATIONS
         -------------------------

OVERVIEW - Lighthouse Fast Ferry Inc. (the "Company"), is a New Jersey
--------
corporation formed on May 12, 1993 under the name Drydock Cafe, Inc. On
September 21, 1994, the Company changed its name to Lighthouse Landings, Inc. On
September 19, 2000, the Company changed its name to Lighthouse Fast Ferry, Inc.
The Company, through its subsidiary New York Fast Ferry Holding Corp. ("NYFF"),
is an operator of high speed, commuter passenger ferry boats in the New York
City metropolitan region.

The following discussion should be read in conjunction with the unaudited
Consolidated Financial Statements and the Notes to those statements, which are
prepared in accordance with generally accepted accounting principles ("GAAP") in
the United States for interim financial information, along with other
information included in this Form 10-QSB.

Comparison of three and nine month periods ended September 30, 2000 compared
with three and nine month periods ended September 30, 1999 are as follows.

REVENUES - NYFF's operations consolidated revenues increased by 38.63% to
--------
$1,316,469 for the three months ended September 30, 2000 compared to $949,636
for the three months ended September 30, 1999. For the nine months ended
September 30, 2000, consolidated revenues increased by 16% to $2,959,440
compared to $2,550,701 for the comparable period in 1999. The overall increase
net of decreases are explained as follows:

   PASSENGERS TICKET SALES - Passenger ticket sales increased by 62.53% to
$965,728 for the three months ended September 30, 2000 compared to $594,178 for
the three months ended September 30, 1999. For the nine months ended September
30, 2000, earned passenger ticket sales increased by 47.49% to $2,479,509
compared to $1,681,157 for the comparable period in 1999.

   The increase is the result of adding additional scheduled  runs with the M/V
Finest. The M/V Finest was originally chartered to the Massachusetts Steamship
Authority. This charter terminated in October 1999.


                                       19
<PAGE>

   GALLEY SALES - Galley sales increased by 19.25% to $62,198 for the three
months ended September 30, 2000 compared to $52,158 for the three months ended
September 30, 1999. For the nine months ended September 30, 2000, galley sales
increased by 14.59% to $163,334 compared to $142,542 for the comparable period
in 1999.

   The increase is primarily the result of adding the M/V Finest as a commuter
passenger ferry.

   CHARTER SALES - Charter sales decreased by 4.87% to $288,543 for the three
months ended September 30, 2000 compared to $303,300 for the three months ended
September 30, 1999. For the nine months ended September 30, 2000, charter sales
decreased by 56.45% to $316,597 compared to $727,002 for the comparable period
in 1999. The decrease is the result of terminating the charter business of the
M/V Finest and utilizing this vessel for commuter transportation.

COST OF SERVICES - NYFF's cost of services increased by 85.88% to $824,837 for
----------------
the three months ended September 30, 2000 compared to $443,725 for the three
months ended September 30, 1999. For the nine months ended September 30, 2000,
cost of services increased by 81.92% to $2,127,745 compared to $1,169,577 for
the comparable period in 1999. The overall changes are detailed follows:

   SALARY and RELATED BENEFITS - Salary and related benefits increased by
70.40% to $198,430 for the three months ended September 30, 2000 compared to
$116,452 for the three months ended September 30, 1999. For the nine months
ended September 30, 2000, salary and related benefits increased by 50.24% to
$503,836 compared to $335,365 for the comparable period in 1999.

   The increase is the result of adding a crew for additional scheduled runs
with the Motor Vessel (M/V) Finest. The M/V Finest was originally chartered to
the Massachusetts Steamship Authority. This charter terminated in October 1999.

   FUEL and OIL RELATED COSTS - Fuel and oil related costs increased by 137.86%
to $196,135 for the three months ended September 30, 2000 compared to $82,458
for the three months ended September 30, 1999. For the nine months ended
September 30, 2000, fuel and oil related costs increased by 131.87% to $488,506
compared to $210,679 for the comparable period in 1999.

   The increase is attributable to an increase in the cost of fuel, an increase
in the scheduled runs and the operation of the M/V Finest.

   BOAT MAINTENANCE and RELATED SUPPLIES - Boat maintenance and related costs
increased by 34.93% to $112,292 for the three months ended September 30, 2000
compared to $83,223 for the three months ended September 30, 1999. For the nine
months ended September 30, 2000, boat maintenance and related costs increased by
105.12% to $357,580 compared to $174,325 for the comparable period in 1999.

   The increase in Boat maintenance and related costs, which included a
scheduled engine overhaul and other unscheduled maintenance, is the result of an
increase in the scheduled runs and the operation of the M/V Finest.

                                       20
<PAGE>

   DOCKING and PARKING RELATED FEES - Docking and parking related fees increased
by 138.86% to $154,285 for the three months ended September 30, 2000 compared to
$64,592 for the three months ended September 30, 1999. For the nine months ended
September 30, 2000, docking related fees increased by 61.17% to $393,454
compared to $244,131 for the comparable period in 1999.

   The increase in docking and parking related fees are the result of an
increase in the scheduled runs and the operation of the M/V Finest translating
to more passengers traveled. The number of passengers traveled is a component of
the parking fee calculation charged by the owner of the parking facility in
Highlands, New Jersey.

   INSURANCE - Insurance costs decreased by 12.49% to $20,121 for the three
months ended September 30, 2000 compared to $22,993 for the three months ended
September 30, 1999. For the nine months ended September 30, 2000, insurance
related costs increased by 79.09% to $116,418 compared to $65,004 for the
comparable period in 1999.

   The overall increase in insurance related costs is primarily the result of
the operation of the Motor Vessel M/V Finest, as well as a general price
increase in the insurance premiums.

   GALLEY COST of GOODS SOLD - The galley cost of goods sold increased by 97.23%
to $50,782 for the three months ended September 30, 2000 compared to $25,747 for
the three months ended September 30, 1999. For the nine months ended September
30, 2000, galley cost of goods increased by 72.31% to $117,379 compared to
$68,122 for the comparable period in 1999.

   The increase is attributable to an increase in the number of scheduled runs
and the operation of the M/V Finest, translating into more passengers traveled
aboard the boats.

   CHARTER AND EXCURSION - The charter and excursion expenses decreased by 7.98%
to $34,079 for the three months ended September 30, 2000 compared to $37,035 for
the three months ended September 30, 1999. For the nine months ended September
30, 2000, charter and excursion expenses decreased by 1.21% to $38,748 compared
to $38,284 for the comparable period in 1999.

   The overall decrease is immaterial.

STAMFORD DIRECT OPERATING COSTS - Stamford direct operating costs increased by
100% to $16,665 for the three months ended September 30, 2000 compared to $0 for
the three months ended September 30, 1999. For the nine months ended September
30, 2000, other direct operating costs increased by 100% to $49,998 compared to
$0 for the comparable period in 1999.

   The increase is attributable to an investment in start up costs associated
with a planned run from Stamford, Ct. to Manhattan, N.Y.

OTHER DIRECT OPERATING COSTS - Other direct operating costs increased by 274.59%
to $42,048 for the three months ended September 30, 2000 compared to $11,225 for
the three months ended September 30, 1999. For the nine months ended September
30, 2000, other direct operating

                                       21
<PAGE>

costs increased by 83.64% to $61,826 compared to $33,667 for the comparable
period in 1999.

   The increase is attributable to an increase in the number of scheduled runs
and the operation of the M/V Finest.

DEPRECIATION - Depreciation decreased by 3.40% to $215,511 for the three months
ended September 30, 2000 compared to $223,099 for the three months ended
September 30, 1999. For the nine months ended September 30, 2000, depreciation
increased by 3.28% to $689,843 compared to $667,957 for the comparable period in
1999.

   The overall increase is attributable to an increase in other boat equipment
associated with operation of the M/V Finest and continued upgrades of equipment
on the Bravest.

SELLING, GENERAL and ADMINISTRATIVE EXPENSES - The consolidated company's
--------------------------------------------
selling, general and administrative expenses increased by 15.21% to $438,482 for
the three months ended September 30, 2000 compared to $380,604 for the three
months ended September 30, 1999. For the nine months ended September 30, 2000,
selling, general and administrative expenses increased by 23.88% to $1,141,184
compared to $921,180 for the comparable period in 1999. The overall changes are
detailed as follows:

   FERRY ADMINISTRATION, SALARY and RELATED BENEFITS - Salary and related
benefits for the Ferry Administration increased by 18.64% to $87,174 for the
three months ended September 30, 2000 compared to $73,475 for the three months
ended September 30, 1999. For the nine months ended September 30, 2000, salary
and related benefits for the "Ferry Administration" increased by 12.36% to
$241,769 compared to $215,183 for the comparable period in 1999.

   The increase is attributable to the addition of one head count increase,
overall salary increases, and overtime of clerical staff.

   CORPORATE ADMINISTRATION, SALARY and RELATED BENEFITS - Salary and related
benefits for the Corporate Administration increased by 3.48% to $121,709 for the
three months ended September 30, 2000 compared to $117,613 for the three months
ended September 30, 1999. For the nine months ended September 30, 2000, salary
and related benefits for the "Corporate Administration" decreased by 2.23% to
$304,076 compared to $311,000 for the comparable period in 1999.

   The three-month increase is related to salary increases associated with the
addition of the VP Secretary and the new chief financial officer. The overall
nine-month decrease was the result of changes in the employment agreements with
certain current and former officers.

   PROFESSIONAL SERVICES - Professional services, which include legal,
accounting and consulting services, increased by 20.33% to $115,570 for the
three months ended September 30, 2000 compared to $96,047 for the three months
ended September 30, 1999. For the nine months ended September 30, 2000,
professional services increased by 55.65% to $305,388 compared to $196,206 for
the comparable period in 1999.

   The increase is related to the 10-KSB audits and 10-QSB reviews of the
company's financial statements, as well as various SEC filings

                                       22
<PAGE>

requiring both legal and accounting services. In addition, there were various
engineering and related expenses associated with the new planned ferry routes
(i.e. Stamford, CT., Highlands, NJ (new location) and Keyport, N.J.).

   TRAVEL and RELATED AUTOMOBILE EXPENSES - Travel and related automobile
expenses decreased by 6.76% to $15,093 for the three months ended September 30,
2000 compared to $16,187 for the three months ended September 30, 1999. For the
nine months ended September 30, 2000, travel and related automobile decreased by
27.27% to $38,137 compared to $52,435 for the comparable period in 1999.

   The decrease is related to an overall decrease in travel within the
organization over the comparable period in 1999.

   OFFICE FACILITY RELATED EXPENSES- Office facility related expenses includes
rent, utilities, maintenance and general office expenditures for the Company's
corporate office in West Caldwell, New Jersey and the NYFF marina office in
Highlands, New Jersey.

   These office facility related expenses increased by 47.99% to $35,218 for the
three months ended September 30, 2000 compared to $23,798 for the three months
ended September 30, 1999. For the nine months ended September 30, 2000, office
facility related expenses increased by 118.88% to $128,465 compared to $58,692
for the comparable period in 1999.

   The increase primarily relates to the establishment of a new corporate
headquarters in West Caldwell, New Jersey as well as increased costs associated
with the maintenance of the marina office located in Highlands, New Jersey.

   DEPRECIATION EXPENSE - Depreciation expense decreased by 29.12% to $1,874 for
the three months ended September 30, 2000 compared to $2,644 for the three
months ended September 30, 1999. For the nine months ended September 30, 2000,
depreciation expense decreased by 56.78% to $3,994 compared to $9,242 for the
comparable period in 1999.

   The decrease is related to assets that have been fully depreciated.

   CORPORATE EXPENSE - OTHER - Other corporate related expenses increased by
21.64% to $61,844 for the three months ended September 30, 2000 compared to
$50,840 for the three months ended September 30, 1999. For the nine months ended
September 30, 2000, other corporate related expenses increased by 52.20% to
$119,355 compared to $78,422 for the comparable period in 1999.

The increase is related to the expenses associated with filing the 10-KSB and
10-QSB with the company's financials statements, as well as various other SEC
filings.

MARKETING EXPENSES - Marketing expenses increased by 121.59% to $18,682 for the
------------------
three months ended September 30, 2000 compared to $8,431 for the three months
ended September 30, 1999. For the nine months ended September 30, 2000,
marketing expenses increased by 213.66% to $60,608 compared to $19,323 for the
comparable period in 1999.

                                       23
<PAGE>

   The increase is related to increased efforts to attract new passengers.

GOODWILL AMORTIZATION - In each of the quarters ended September 30, 2000 and
---------------------
1999, the Company recorded amortization of goodwill expense of $20,236, which
was related to its acquisition of NYFF.

INTEREST EXPENSE - Interest expense primarily relates to meeting the current
----------------
obligations of the NYFF, including the mortgages on the vessels and debt
financing of the Company's current operations and business development.

Interest expense decreased by 121.74% to $753,934 for the three months ended
September 30, 2000 compared to $340,001 for the three months ended September 30,
1999. For the nine months ended September 30, 2000, interest expense decreased
by 38.47% to $1,481,942 compared to $1,070,258 for the comparable period in
1999.

   The increase primarily relates to new bridge financing entered into during
2000.

Liquidity and Capital Resources.
--------------------------------

        Since inception, the Company has funded its operations primarily through
cash generated from private placements of debt and equity securities and
institutional financing. In October 1998, the Company acquired 80% of the stock
of NY Fast Ferry and commenced operating fast ferry service from Highlands, New
Jersey. As part of the transaction, the Company guaranteed payment and
satisfaction of NY Fast Ferry's outstanding liabilities, which included
mortgages on its two ferry vessels and a line of credit. In July 2000, the
Company entered into an oral agreement with the holders of the remaining 20% of
issued and outstanding shares of NY Fast Ferry to purchase those shares by the
now extended deadline of January 31, 2001. The Company and the holders of the NY
Fast Ferry shares are currently negotiating a written stock purchase agreement
for the purchase by the Company of the remaining NY Fast Ferry shares for a
combination of cash and restricted common shares of the Company. The purchase
price in the agreement under negotiation is $28,753 in cash and 102,271 common
shares of the Company. Management expects that this written agreement will be
finalized and executed in January 2001. The NY Fast Ferry operation generates
sufficient cash-flow to cover its direct operating costs. However, the NY Fast
Ferry operation does not yet generate enough cash to make principal and interest
payments for both boat mortgages, carry its other debt, to fund the capital
improvements and capital expenditures necessary for the Company to expand its
operations and to implement its strategic business objectives.

        In the first quarter of 2000, the Company successfully raised a net of
approximately $390,000 in equity funding through private placements with
accredited investors of 634,500 shares with warrants for the purchase of an
additional 634,500 shares of common stock at $1.00 to $1.25 per share
exercisable for one year from date of issuance.

                                       24
<PAGE>

        On March 1, 2000 the company received a total of $1,000,000 in proceeds
from senior convertible promissory notes from two investment funds, originally
due December 11, 2000 with interest at 10% per annum, and is payable quarterly.
The Company issued a $110,000 senior convertible promissory note to a third
investment fund as a finder's fee. In addition to the 10% interest, the Company
issued 275,000 common shares, which the Company valued at $0.50 per share, as
additional consideration. Further shares are issuable in the event of a default.
In December 2000 the Company, the investment funds, and the finder agreed to
extend the maturity date of the notes to June 30, 2001 and in consideration
therefor, the Company agreed to issue to the investment funds shares of the
Company's Common Stock at a rate of one share for each $2.00 of the outstanding
indebtedness then due and owing. Further, the Company agreed to reduce the
conversion price from $1.50 per share to $1.00 per share and upon a ninety day
default, the conversion price is reduced from $1.00 per share to $0.75 per
share. Each lender has the right at its sole and exclusive option to convert the
outstanding indebtedness under the notes to common stock of the Company at any
time prior to the Company making payment and should such conversion rights be
exercised, the Company shall issue common stock to the lender at the rate of one
share for each $1.00 of indebtedness then due and owing. The loans may be
prepaid at any time, but must be repaid out of the proceeds of any financing in
excess of $2,000,000.

        As of September 30, 2000, two outstanding notes payable and preferred
ship mortgages held by Debis Financial Services, Inc. ("Debis"), one on the
ferry M/V Finest and one on the ferry M/V Bravest, were $5,029,965 and
$4,995,903, respectively, which bear interest at 9.25% per annum. Both ship
mortgages each require monthly payments of principal and interest in the amount
of $56,719 through September 10, 2005, with final payments of $3,626,691 and
$3,572,971, respectively, due on October 10, 2005. The Company is current in
these payments.

        The line of credit held by Debis assumed by the Company had an
outstanding balance at September 30, 2000 of $920,410 with the same financial
institution that holds the preferred ship mortgages. The line of credit, secured
by the M/V Finest and the M/V Bravest, required monthly payments of $15,000
through April 10, 2000, plus principal payments of $45,000 in January 1999,
$920,410 on May 1, 1999 and October 1, 1999, a payment of $343,333 on March 1,
2000, and originally required a final payment of $934,319 on December 10, 2000.
The Company and Debis have agreed to restructure the payment of the debt. The
remaining principal balance on the line of credit shall be paid through eight
quarterly principal payments, plus accrued interest. The first payment was due
December 31, 2000 with seven subsequent payments due at each calendar quarter.
In consideration for the restructuring of the debt payment, Debis will receive a
restructure fee of $50,000, $25,000 of which was payable on December 31, 2000
and $25,000 of which is payable on March 31, 2001. The Company expects to make
the first of such payments in the first quarter of 2001. Quarterly principal and
interest payments will be equal, except that the first payment on December 31,
2000 will be divided in half, and the second half of such payment will be due
January 31, 2001 with accrued interest. The note carries no interest, but has
been discounted to a net present value using a discount rate of 9.25% per annum.
These two preferred ship mortgages and the line of credit are further secured by
cross collateralization agreements, assignment of personal property, a

                                       25
<PAGE>

pledge of a potential receivable arising out of a lawsuit against the City of
New York, and a Company guarantee. Moreover, the financial institution was
granted warrants to purchase 200,000 shares of Company stock at $2.60 per share
exercisable through March 16, 2004.

        During June 2000 the Company received proceeds from eight 10.5%
convertible promissory notes, (six for $20,000, one for $10,000 and one for
$5,000), totaling $135,000. During July 2000 the Company received proceeds from
two 10.5% convertible promissory notes (two for $40,000) totaling $80,000.
During August 2000 the Company received proceeds from four 10.5% convertible
promissory notes (one for $40,000, one for $10,000, one for $15,000 and one for
$5,100) totaling $70,100. During September 2000 the Company received proceeds
from five 10.5% convertible promissory notes (three for $20,000 and two for
$10,000) totaling $80,000. Each convertible promissory note carries a simple
interest rate of 10.5%, interest only is payable quarterly, and matures one-year
from date of issuance.

        The lender has the right, at its sole and exclusive option, to convert
the outstanding indebtedness to common shares (the "Conversion Rights") of the
company at any time prior to borrower making payment. Should such Conversion
Rights be exercised, the Company shall issue such shares to the Lender at the
rate of one share of common stock for each $2.00 of the indebtedness then due
and owing. The shares issued by the company through the exercise of the
Conversion Rights will be restricted securities. The option and conversion will
be exercised by the lender issuing written notice to the borrower.

        On June 14, 2000, New York Fast Ferry Services Inc. received proceeds of
two bridge loans aggregating $60,000. New York Fast Ferry Services Inc. has
since paid off the balance on the loans. The loans were paid with funds from
ferry operations.

        In July 2000, the Company received a total of $1,000,000 in proceeds
from senior convertible promissory notes from four lenders, originally due
January 14, 2001 with interest at 10% per annum, payable quarterly, and paid a
finder's fee by issuance of a $88,000 note. One of these lenders exchanged a
$200,000 note for its $200,000 mortgage note receivable. In December 2000 the
Company and the lenders agreed to extend the maturity date of the notes to June
30, 2001 and in consideration therefor, the Company agreed to issue to the
lenders shares of the Company's common stock at a rate of one share for each
$2.00 of outstanding indebtedness then due and owing. Further, the Company
agreed to reduce the conversion price from $1.50 per share to $1.00 per share
and upon a ninety day default, the conversion price is reduced from $1.00 per
share to $0.75 per share. Each lender has the right at its sole and exclusive
option to convert the outstanding indebtedness under the notes to common stock
of the Company at any time prior to the Company making payment and should such
conversion rights be exercised, the Company shall issue common stock to the
lender at the rate of one share for each $1.00 of indebtedness then due and
owing. The loans may be prepaid at any time, but must be repaid out of the
proceeds of any financing in excess of $2,000,000.

        In June 1999, the Company obtained financing in the net amount of
$300,000 from a then unrelated third party that is secured by a second mortgage
on the property of the Shrewsbury River, subject to a real estate tax lien, and
by a personal guarantee of a major shareholder. The note carries an annual
interest rate of 18% and was

                                       26
<PAGE>

payable in monthly installments, applied first to interest, as follows: from
July 10, 1999 through December 10, 1999, $10,000 per month; from January 10,
2000 through May 10, 2000, $15,000 per month; and commencing June 10, 2000,
three monthly installments each equal to one-third of the outstanding balance on
June 10, 2000. The Company made a principal payment in July 2000, reducing the
balance to $58,694. The Company is currently renegotiating the terms of the
note, such that the Company will make interest only payments on the balance
until a final payment is made before March 1, 2001. To date, the Company is
current in its obligation. As an inducement to enter into the loan, the Company
issued the lender 25,000 shares of common stock in June 1999 and an additional
25,000 shares in December 1999.

        In the nine months ended September 30, 2000, the Company had raised
proceeds of $482,600 through the private placement of 712,667 shares of
restricted common stock to accredited investors. The Company also issued 252,500
shares of restricted common stock to three directors and officers in
satisfaction of unpaid compensation amounting to $214,625. In addition, the
company issued 100,000 shares of restricted common stock on June 13, 2000 and
$25,000 on July 11, 2000 to a mortgage holder of the discounted operation in
satisfaction of $150,000 of debt.

        The Company, as of September 30, 2000, had a working capital deficiency
of $4,900,471. Furthermore, in the planned development of its commercial
operations, the Company's combined losses are expected to continue as the
Company divests its non-core assets and until it increases its ferry service
when each of its sites become fully operational. The Company's ability to meet
its obligations in the ordinary course of business is dependent upon its ability
to continue to obtain adequate financing and/or to successfully expand its ferry
operations. Furthermore, capital expenditures to acquire additional fast ferry
vessels and improve and expand its landside ferry facilities will require
significant funding.

        The Company has been successful to date in its efforts to raise funds
and believes that proceeds from interim financing from convertible promissory
notes sold during the second, third and fourth quarters, together with available
funds and cash flows expected to be generated by operations will be sufficient
to meet its anticipated cash needs for working capital and capital expenditures
for at least the next twelve months. As of September 30, 2000, $2,165,000 was
raised from the sale of convertible promissory notes. Furthermore, the Company
has negotiated more favorable terms with certain creditors, and is negotiating
more favorable payment terms with other creditors, that require significant
principal payments in the next twelve months. In the event the Company's plans
change, its assumptions change or prove to be inaccurate or if the proceeds of
the interim financing or cash flows prove to be insufficient to fund operations,
the Company may find it necessary or desirable to reallocate funds within the
above described business strategies, seek additional financing or curtail its
activities. There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all, or that the Company will
be able to negotiate more favorable payment terms with its existing creditors.
If adequate funds are not available or are not available on acceptable terms,
the Company may not be able to meet its current obligations, take advantage of
unanticipated opportunities, develop new services or otherwise respond to
unanticipated competitive


                                       27
<PAGE>

pressures. Such inability could have a material adverse effect on the Company's
business, financial condition and results of operations.

Subsequent Events
-----------------

     In October, the Company received a total of $500,000 in proceeds from
senior convertible promissory notes from two lenders, and issued a $55,000 note
as a finder's fee, originally due January 30, 2001 with interest at 10% per
annum, payable quarterly. In December 2000 the Company and the lenders agreed to
extend the maturity date of the loans to June 30, 2001 and in consideration
therefor, the Company agreed to issue to the lenders shares of the Company's
common stock at a rate of one share for each $2.00 of outstanding indebtedness
then due and owing. Further, the Company agreed to reduce the conversion price
from $1.50 per share to $1.00 per share and upon a ninety day default, the
conversion price is reduced from $1.00 per share to $0.75 per share. Each lender
has the right at its sole and exclusive option to convert the outstanding
indebtedness under the notes to common stock of the Company at any time prior to
the Company making payment and should such conversion rights to exercised, the
Company shall issue common stock to the lender at the rate of one share for each
$1.00 of indebtedness then due and owing. The loans may be prepaid at any time,
but must be repaid out of the proceeds of any financing in excess of $2,000,000.

     In addition, during the month of October, the Company received proceeds
from four 10.5% convertible promissory notes (one for $5,000, two for $40,000
and one for $10,000) totaling $95,000. During the month of November, the Company
received proceeds from three 10.5% convertible promissory notes (two for $60,000
and one for $20,000) totaling $140,000. Each convertible promissory note carries
a simple interest rate of 10.5%, interest only is payable quarterly, and matures
one-year from date of issuance.

     The lender has the right, at its sole and exclusive option, to convert the
outstanding indebtedness to common shares (the "Conversion Rights") of the
company at any time prior to borrower making payment. Should such Conversion
Rights be exercised, the Company shall issue such shares to the Lender at the
rate of one share of common stock for each $2.00 of the indebtedness then due
and owing. The shares issued by the company through the exercise of the
Conversion Rights will be restricted securities. The option and conversion will
be exercised by the lender issuing written notice to the borrower.

     The loan balance for the twenty-six 10.5% convertible promissory notes
including interest accrued as of November 30, 2000 was approximately
$511,000.

Forward-Looking Statements
--------------------------

     Discussions and information in this document that are not historical facts
should be considered forward-looking statements. With regard to forward-looking
statements, including those regarding the potential interim financing, the
sufficiency of the cash flow, and the business prospects or any other aspect of
the Company, actual results and business performance may differ materially from
that

                                       28
<PAGE>

projected or estimated in such forward-looking statements. The Company has
attempted to identify in this document certain of the factors that it currently
believes may cause actual future experience and results to differ from its
current expectations. Differences may be caused by a variety of factors,
including adverse economic conditions, entry of new and stronger competitors in
the ferry business, insufficient parking space for potential ferry customers,
inadequate capital and the inability to obtain funding from third parties,
unexpected costs, and the inability to obtain or keep qualified personnel.

                          PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
          -----------------

      On June 30, 2000, D. Weckstein & Co., Inc. ("Weckstein") filed suit
against the Company in the Supreme Court of the State of New York. The Complaint
alleges that the Company owes Weckstein $360,000 for services rendered by
Weckstein in connection with the Company's purchase of The Cigar Box, pursuant
to a letter agreement between Weckstein and the Company. In the alternative, if
the Court finds that Weckstein is not entitled to damages for breach of the
letter agreement, Weckstein seeks an award in quantum meruit for services
rendered. Weckstein also seeks an award of its costs and disbursements.

      On July 28, 2000, the Company filed an Answer, denying that the Company
owes Weckstein damages for breach of contract or in quantum meruit; raising
several defenses, including that Weckstein failed to perform its obligations
under the letter agreement; and seeking dismissal of the Complaint and an award
of the Company's attorney's fees, costs and further relief that the Court deems
just and equitable.

      On July 28, 2000, the Company filed a Notice of Removal, and the case has
been removed from the Supreme Court of the State of New York to the United
States District Court for the Southern District of New York, based on the
diversity jurisdiction of the Federal Court.

      On August 3, 2000, the Company received a notice from a subsidiary of The
Connecticut Light & Power Co. (the "Landlord"), terminating its lease for the
property that is the proposed site for the Company's Stamford, Connecticut ferry
terminal. The Landlord based the termination of the lease on the failure of the
Company to get certain necessary permits for its use of the site. The Company
disputes the Landlord's right to terminate the lease.

      On August 8, 2000, the Company filed a complaint against the Landlord in
Connecticut Superior Court alleging breach of lease, promissory estoppel, breach
of the duty of good faith and fair dealing, intentional misrepresentation,
negligent misrepresentation, and violation of the Connecticut Unfair Trade
Practices Act by the Landlord. The Company claims that the Landlord had agreed
that the permits issue would not be used to attempt to terminate the lease. The
Company is seeking specific performance of the lease, compensatory and punitive
damages, attorneys fees, and other relief.

                                       29
<PAGE>

ITEM 2.   CHANGES IN SECURITIES
          ---------------------

(a)  On September 19, 2000, the Company filed Articles of Amendment to the
     Company's Certificate of Incorporation to (1) authorize 10,000,000 shares
     of $0.01 par value preferred stock; (2) increase the number of authorized
     shares of common stock from 10,000,000 shares to 40,000,000 shares; and (3)
     to provide the Board of Directors with full authority to make divisions of
     shares into classes and series within any class or classes, to determine
     the designations and the number of shares of any class or classes, and to
     determine the relative rights, preferences and limitations of the shares of
     any class or series as the Board of Directors believes is appropriate.

     The general effects of each of the three amendments are as follows:

     1.        Increase in Number of Authorized Shares of Common Stock
               -------------------------------------------------------

     Anti-Takeover Effects. The issuance of additional shares of Common Stock by
     the Company may also potentially have an anti-takeover effect by making it
     more difficult to obtain stockholder approval of various actions, such as a
     merger or removal of management. The increase in authorized shares of
     Common Stock was not proposed for an anti-takeover related purpose and the
     Board of Directors and management have no knowledge of any current efforts
     to obtain control of the Company or to effect large accumulations of its
     Common Stock.

     Dilutive Effects. The authorization and subsequent issuance of additional
     shares of Common Stock may, among other things, have a dilutive effect on
     earnings per share and on the equity and voting power of existing holders
     of Common Stock. The actual effect on the holders of Common Stock cannot be
     ascertained until the shares of Common Stock are issued in the future.
     However, such effects might include dilution of the voting power and
     reduction of amounts available on liquidation.

     2.        Authorization of Preferred Stock
               --------------------------------

     Anti-Takeover Effects. The authorized but unissued shares of Preferred
     Stock could be used by incumbent management to make more difficult a change
     in control of the Company. Under certain circumstances such shares could be
     used to create voting impediments or to frustrate persons seeking to effect
     a takeover or otherwise gain control of the Company. In addition, the Board
     of Directors could authorize holders of a series of Preferred Stock to vote
     as a class, either separately or with the holders of Common Stock, upon any
     proposed merger, sale or exchange of assets by the Company or any other
     extraordinary corporate transaction.

     The authorization of Preferred Stock might be considered as having the
     effect of discouraging an attempt by another person or entity, through the
     acquisition of a substantial number of shares of the Common Stock, to
     acquire control of the Company with a view to imposing a merger, sale of
     all or any part of the Company's assets or a similar transaction that may
     not be in the best interest of all of the shareholders, since the issuance
     of new shares of

                                       30
<PAGE>

     Preferred Stock could be used to dilute the stock ownership of a person or
     entity seeking to obtain control of the Company. Additionally, Common Stock
     could be issued diluting the ownership interest of a potential acquirer.

     Dilutive Effects. The issuance of shares of Preferred Stock having
     conversion rights might have the effect of diluting the interests of other
     shareholders. In addition, it should be anticipated that any shares of
     Preferred Stock which may be issued would have dividend and liquidation
     preferences which would be superior to those of the Common Stock. Holders
     of Common Stock do not have preemptive rights to subscribe to additional
     securities which may be issued by the Company.

     3.        Authority of Board of Directors
               -------------------------------

     The Certificate of Incorporation, as amended, empowers the Board of
     Directors to make divisions of shares into classes and into series within
     any class or classes, to determine the designations and the number of
     shares of any class or classes, and to determine the relative rights,
     preferences and limitations of the shares of any class or series as the
     Board of Directors believes is appropriate. It allows the Directors the
     same discretion with respect to determining the relative rights,
     preferences and limitations of the shares of any series of Preferred Stock.
     Certain series of the Preferred Stock could have preference over other
     series of the Preferred Stock and certain series of the Common Stock could
     have preference over other series of the Common Stock. Among the
     determinations to be made by the Board of Directors for each issuance of a
     series of Preferred or Common Stock are:

          a.   the stated value of shares constituting a series, if different
     from the par value;

          b.   the rate of dividend, the time of payment of dividends, whether
     dividends are cumulative, and the date from which any dividend shall
     accrue;

          c.   whether shares may be redeemed and if so, the redemption price
     and the terms and conditions of redemption;

          d.   the amount payable upon shares in the event of involuntary
     liquidation;

          e.   the amount payable upon shares in the event of voluntary
     liquidation;

          f.   sinking fund or other provisions, if any, for the redemption or
     purchase of shares;

          g.   the terms and conditions on which shares may be converted, if the
     shares of any series are issued with the right of conversion; and

          h.   voting powers, if any.

     Such determination would take into account the circumstances pertinent at
     that time and would be made by resolution of the

                                       31
<PAGE>

     Board of Directors. Such resolution shall set forth the actions of the
     Board of Directors and state the designation and number of shares, and the
     relative rights, preferences and limitations of the shares, of each class
     and series thereby created or with respect to which it has make a
     determination or change. Prior to the issuance of any shares of a class or
     series with respect to which the Board of Directors has acted under this
     proposed amendment, the Company shall file a Certificate of Amendment to
     the Company's Certificate of Incorporation setting forth the relevant Board
     of Directors' resolution and providing for an amendment to the Certificate
     of Incorporation so that the designation and number of shares of each class
     and series acted upon in the resolution, and the relative rights,
     preferences and limitations of each such class and series, are as stated in
     the resolution.

(b)  Not Applicable.

(c)  Unregistered Equity Securities of the Companies Sold During the Quarter
     -----------------------------------------------------------------------

     During July 2000, the Company issued 2,000 shares, having a fair market
value on the date of issuance of $4,000, to the following purchasers of the
Company's convertible promissory notes and returned $5,000, in exchange for the
cancellation of 125 shares, having a fair value of $156, to Edward Holst. Each
convertible promissory note holder was issued 125 shares of common stock for
each $5,000 of indebtedness owed to the convertible promissory note holder at
the date of issuance. The offering was conducted in reliance on Section 4(2) of
the Act and Rule 506.

                Name               Principal Amount of Note    Number of Shares
                ----               ------------------------    ----------------

                Frederick Keifer            $ 40,000                1,000
                Charles Consagra            $ 40,000                1,000
                Edward Holst                 ($5,000)                (125)
                                                                    =====
                                                                    1,875

     During July 2000, the Company issued 272,000 shares, having a fair market
value on the date of issuance of $544,000, to the following purchasers of the
Company's senior convertible promissory notes. The offering was conducted in
reliance on Section 4(2) of the Act and Rule 506.

          Name                     Principal Amount of Note     Number of Shares
          ----                     ------------------------     ----------------

          Joseph Giamanco                  $300,000                   75,000
          Lancer Offshore, Inc.            $500,000                  125,000
          Capital Research, Ltd.           $ 88,000                   22,000
          James Kelly                      $100,000                   25,000
          Joseph Roselle                   $100,000                   25,000
                                                                    ========
                                                                     272,000

     During August 2000, the Company sold 6,667 common shares and warrants to
acquire 6,667 common shares at $2.00 per share to Thomas Coleman for $10,000 and
sold 20,000 shares to Robert Garcia for $25,000. Both investors were accredited
investors. The offering was conducted in reliance on Section 4(2) of the Act and
Rule 506.

     During August 2000, the Company issued 3,125 shares, having a fair market
value on the date of issuance of $6,250, to the following purchasers of the
Company's 10.5% convertible promissory notes. The number of shares issued in
connection with the convertible promissory notes was negotiated on an individual
investor basis. The offering was conducted in reliance on Section 4(2) of the
Act and Rule 506.

          Name                     Principal Amount of Note     Number of Shares
          ----                     ------------------------     ----------------

          Frederick Keifer                 $ 40,000                    2,000
          Lowell Kupfer                    $ 10,000                      250
          Gary Von Bargen                  $ 15,000                      750
          Arthur Klowden                   $  5,000                      125
                                                                    ========
                                                                       3,125

     During September 2000, the Company issued 2,500 shares, having a fair
market value on the date of issuance of $5,000, to the following purchasers of
the Company's 10.5% convertible promissory notes. Each convertible promissory
note holder was issued 125 shares of common stock for each $5,000 of
indebtedness owed to the convertible promissory note holder at the date of
issuance. The number of shares issued in connection with the convertible
promissory notes was negotiated on an individual investor basis. The offering
was conducted in reliance on Section 4(2) of the Act and Rule 506.


                                       32
<PAGE>

          Name                     Principal Amount of Note     Number of Shares
          ----                     ------------------------     ----------------

          Herman and Danny Vaden           $ 20,000                   1,000
          Herbert and Lois Rake            $ 20,000                     500
          Dorothy Bushnell                 $ 10,000                     250
          Dorothy Bushnell                 $ 10,000                     250
          John Head                        $ 20,000                     500
                                                                   ========
                                                                      2,500


                                       33
<PAGE>

     At September 30, 2000, the total convertible notes outstanding is
     $2,563,000. All of the notes are convertible into the Company's common
     stock at the rate of $2.00 per share. If all of the note holders exercised
     their sole conversion option and converted their notes, then an additional
     1,281,500 common shares would be outstanding.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

       (a)   On August 21, 2000 the Company held an annual meeting of
shareholders at which the following matters were submitted for voting:

       (b)   The following four persons were elected as directors to hold office
until the next annual meeting of shareholders and until their successors have
been elected and qualified:

                      Anthony Cappaze
                      Anthony Colasanti
                      Francis P. Matusek
                      Gregory J. Hauke

The tabulation with respect to each nominee was as follows:

<TABLE>
<CAPTION>
                                                        % of                              % of
                                                       Shares         Withhold          Shares
                                         For        Represented       Authority     Represented
                                                    -----------       ---------     -----------
<S>                                <C>               <C>              <C>           <C>
Anthony Cappaze                    3,496,093           99.72%           5,900            0.17%
Group C

Anthony T. Colasanti               3,496,093           99.72%           5,900            0.17%
Group B

Francis P. Matusek                 3,496,093           99.72%           5,900            0.17%
Group A

Gregory J. Hauke                   3,496,093           99.72%           5,900            0.17%
Group A
</TABLE>

       (c)  The other matters voted on at the shareholders' meeting and the
number of votes cast for, against or withheld as well as the number of
abstentions are set forth as follows:

       Proposal Two:   Amendment to the Company's Certificate of Incorporation
       ------------
to change the name of the Company to LIGHTHOUSE FAST FERRY, INC.:

<TABLE>
<CAPTION>
                     % of                              % of                              % of
                    Shares                            Shares                           Shares
    FOR          Represented       AGAINST         Represented      ABSTAIN        Represented
                 -----------                       -----------      -------        -----------
<S>              <C>               <C>              <C>             <C>             <C>
3,487,433            99.48%           18,010          0.51%             300           0.008%
</TABLE>

        Proposal Three:  Amendment to the Company's Certificate of
        --------------
Incorporation to authorize 10,000,000 shares of $0.01 par value Preferred Stock:

                                       34
<PAGE>

<TABLE>
<CAPTION>
                     % of                              % of                              % of
                    Shares                            Shares                           Shares
    FOR          Represented       AGAINST         Represented      ABSTAIN        Represented
                 -----------                       -----------      -------        -----------
<S>              <C>               <C>              <C>             <C>             <C>
2,934,423          83.70%            43,610             1.24%         4,050           0.12%
</TABLE>

        Proposal Four: Amendment to the Company's Certificate of Incorporation
        -------------
to increase the number of authorized shares of $0.01 par value Common Stock from
10,000,000 to 40,000,000 shares:

<TABLE>
<CAPTION>
                     % of                              % of                              % of
                    Shares                            Shares                           Shares
    FOR          Represented       AGAINST         Represented      ABSTAIN        Represented
                 -----------                       -----------      -------        -----------
<S>              <C>               <C>              <C>             <C>             <C>
3,469,493          98.97%            34,450           0.98%            1,800          0.05%
</TABLE>

        Proposal Five: Amendment to the Company's Certificate of Incorporation
        -------------
to provide the Board of Directors with full authority to make divisions of
shares into classes and into series within any class or classes, to determine
the designations and the number of shares of any class or classes, and to
determine the relative rights, preferences and limitations of the shares of any
class or series as the Board of Directors believes is appropriate:

<TABLE>
<CAPTION>
                     % of                              % of                              % of
                    Shares                            Shares                           Shares
    FOR          Represented       AGAINST         Represented      ABSTAIN        Represented
                 -----------                       -----------      -------        -----------
<S>              <C>               <C>              <C>             <C>             <C>
2,930,273           83.58%           51,810            1.48%             -0-            0%
</TABLE>

        Proposal  Six:  Approval of the 2000  Employee  Stock Option  Plan,
        -------------
pursuant to which 1,115,000 shares of Common Stock are reserved for issuance as
bonuses or upon exercise of stock options which may be granted to employees,
officers or directors of, and consultants and advisers to, the Company:

<TABLE>
<CAPTION>
                     % of                              % of                              % of
                    Shares                            Shares                           Shares
    FOR          Represented       AGAINST         Represented      ABSTAIN        Represented
                 -----------                       -----------      -------        -----------
<S>              <C>               <C>              <C>             <C>             <C>
2,951,948           84.20%            24,810           0.71%           5,325           0.15%
</TABLE>

                                       35
<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

(a)  Exhibit  3.1 - Certificate of Incorporation, as amended. (1)

     Exhibit  3.2 - Bylaws. (1)

     Exhibit 10.6 - Agreement with Robert E. Derecktor, Inc. for
                    vessel construction. (1)

     Exhibit 10.7 - Lease Agreement for Clam Hut site dated
                    12/15/00. (1)

     Exhibit 10.8 - Amendment to Senior Promissory Notes. (1)

Exhibit 27.1 - Financial Data Schedule.  Filed herewith.

---------
(1)     Incorporated by reference from the Company's Registration Statement on
        Form 10-SB, as amended.

(b)     Reports on Form 8-K: During the quarter ended September 30, 2000, the
        Company filed no reports on Form 8-K.

                                       36
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-QSB/A No. 1 to be signed on its behalf
by the undersigned thereunto duly authorized.




                                             LIGHTHOUSE FAST FERRY, INC.



Date: January 12, 2001                   By:   /s/ Anthony Cappaze
                                             ---------------------
                                               Anthony Cappaze, President
                                               Chief Executive Officer and
                                               Director


Date: January 12, 2001                   By:   /s/ Anthony Colasanti
                                             -----------------------
                                               Anthony Colasanti, Vice
                                               President, Secretary and
                                               Director


Date: January 12, 2001                   By:   /s/ John Ferreira, Jr.
                                             ------------------------
                                               John Ferreira, Jr., Chief
                                               Financial Officer

                                       37