U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

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

                For the Quarterly Period Ended December 31, 2000

     [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF
                                      1934

         For the transition period from _____________ to _______________

                           Commission File No. 0-25357


                               TRAVELNOW.COM INC.
                  --------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


                 Delaware                                 59-3391244
       ------------------------------        ----------------------------------
      (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
       Incorporation or Organization)


             318 Park Central East, Suite 418, Springfield, MO 65806
                ------------------------------------------------
               (Address of Principal Executive Offices)(Zip Code)


                                 (417) 864-3600
                 ----------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

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
                                     -----  -----

State the number of shares outstanding of each of the registrant's classes of
common equity, as of the latest practicable date: As of February 1, 2001,
TravelNow.com Inc. had 10,959,008 shares of common stock outstanding, par value
$0.01 per share.

<PAGE>
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<CAPTION>

                         Part I - Financial Information

Item 1.  Financial Statements


                                                    TRAVELNOW.COM INC.
                                            CONDENSED STATEMENTS OF OPERATIONS
                              THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999
                                                       (Unaudited)


                                                Three Months Ended Dec. 31       Nine Months Ended Dec. 31
                                               ----------------------------    ----------------------------
                                                                   1999                           1999
                                                   2000        As Restated         2000        As Restated
                                               ------------    ------------    ------------    ------------

<S>                                            <C>             <C>             <C>             <C>
Total Revenues                                 $  2,392,092    $  1,041,991    $  7,611,320    $  2,487,050
Cost of Revenues                                  1,424,010         664,556       4,866,152       1,580,820
                                               ------------    ------------    ------------    ------------
     Gross Profit                                   968,082         377,435       2,745,168         906,230
                                               ------------    ------------    ------------    ------------

Operating Expenses
     Sales and Marketing                            188,793          57,281         614,550         121,447
     General and Administrative                   1,092,522         424,957       4,211,046       1,021,122
     Merger Transaction Expenses                    221,355               0         221,355               0
     Stock-Based Compensation                       163,281         163,281         489,843         892,535
                                               ------------    ------------    ------------    ------------
          Total Operating Expenses                1,665,951         645,519       5,536,794       2,035,104
                                               ------------    ------------    ------------    ------------

Income/(Loss) From Operations                      (697,869)       (268,084)     (2,791,626)     (1,128,874)

Interest Income                                      23,726               0          98,564               0
Loss From Unconsolidated Subsidiary                       0         (42,468)              0         (42,468)
                                               ------------    ------------    ------------    ------------

Income/(Loss) Before Taxes                         (674,143)       (310,552)     (2,693,062)     (1,171,342)

Provision for Income Taxes                                0               0               0               0
                                               ------------    ------------    ------------    ------------
     Net Income/(Loss)                             (674,143)       (310,552)     (2,693,062)     (1,171,342)

Cumulative Preferred Stock Dividends                      0               0        (126,651)              0
                                               ------------    ------------    ------------    ------------
     Net Income/(Loss) Applicable
     To Common Stockholders                    ($   674,143)   ($   310,552)   ($ 2,819,713)   ($ 1,171,342)
                                               ============    ============    ============    ============


Average Number of Shares
Of Common Stock Outstanding*                     10,872,951      10,336,804      10,640,210       8,893,296

Net Income/(Loss) Per Share
     Basic                                     ($      0.06)   ($      0.03)   ($      0.27)   ($      0.13)
     Diluted                                   ($      0.06)   ($      0.03)   ($      0.27)   ($      0.13)


*In the three and nine-month periods ended December 31, 2000, 1,264,001
outstanding stock options are excluded because they are antidilutive.

                                                      2
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<TABLE>
<CAPTION>


                               TRAVELNOW.COM INC.
                           OPERATING STATEMENT RATIOS
          THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999
                                   (Unaudited)


                                             Three Months          Nine Months
                                             Ended Dec. 31        Ended Dec. 31
                                          -------------------   -------------------
                                                     1999                   1999
As a Percent of Total Revenues             2000   As Restated   2000    As Restated
------------------------------             ----   -----------   ----    -----------
<S>                                       <C>        <C>        <C>        <C>
Total Revenues                            100.0%     100.0%     100.0%     100.0%
Cost of Revenues                           59.5%      63.8%      63.9%      63.6%
                                          ------     ------     ------     ------
     Gross Profit                          40.5%      36.2%      36.1%      36.4%
                                          ------     ------     ------     ------

Operating Expenses
     Sales and Marketing                    7.9%       5.5%       8.1%       4.9%
     General and Administrative            45.7%      40.8%      55.3%      41.1%
     Merger Transaction Expenses            9.3%       0.0%       2.9%       0.0%
     Stock-Based Compensation               6.8%      15.6%       6.5%      35.9%
                                          ------     ------     ------     ------
          Total Operating Expenses         69.7%      61.9%      72.8%      81.8%
                                          ------     ------     ------     ------

Income/(Loss) From Operations             (29.2%)    (25.7%)    (36.7%)    (45.4%)

Interest Income                             1.0%       0.0%       1.3%       0.0%
Loss From Unconsolidated Subsidiary         0.0%      (4.1%)      0.0%      (1.7%)
                                          ------     ------     ------     ------

Income/(Loss) Before Taxes                (28.2%)    (29.8%)    (35.4%)    (47.1%)
Provision for Income Taxes                  0.0%       0.0%       0.0%       0.0%
                                          ------     ------     ------     ------
     Net Income/(Loss)                    (28.2%)    (29.8%)    (35.4%)    (47.1%)

Cumulative Preferred Stock Dividends        0.0%       0.0%      (1.6%)      0.0%
                                          ------     ------     ------     ------
     Net Income/(Loss) Applicable
     To Common Stockholders               (28.2%)    (29.8%)    (37.0%)    (47.1%)
                                          ======     ======     ======     ======

                                        3

</TABLE>

<PAGE>


                               TRAVELNOW.COM INC.
                            CONDENSED BALANCE SHEETS
                         DECEMBER 31 AND MARCH 31, 2000


                                                 Dec. 31, 2000   March 31, 2000
ASSETS                                            (Unaudited)
-----------------------------------------         -----------      -----------

Cash and Cash Equivalents                         $ 1,493,105      $ 3,654,281
Accounts Receivable                                 1,368,647          729,467
Other Current Assets                                  100,322          128,273
                                                  -----------      -----------
     Current Assets                                 2,962,074        4,512,021

Property and Equipment - Net                          775,300          420,970
Capitalized Software - Net                            634,021          770,255
                                                  -----------      -----------
     Total Assets                                 $ 4,371,395      $ 5,703,246
                                                  ===========      ===========


LIABILITIES AND
STOCKHOLDERS' EQUITY/(DEFICIT)
-----------------------------------------

Accounts Payable                                  $ 1,282,397      $ 1,098,071
Accrued Liabilities                                   901,211          279,947
Cumulative Preferred Stock Dividends                        0           85,808
Deferred Revenue                                      128,325           14,052
                                                  -----------      -----------
     Current and Total Liabilities                  2,311,933        1,477,878
                                                  -----------      -----------

Redeemable Convertible Preferred Stock                      0        4,340,694

Common Stock                                          108,732          103,493
Additional Paid-In Capital                          6,759,542        1,896,931
Accumulated Deficit                                (4,808,812)      (2,115,750)
                                                  -----------      -----------
     Stockholders' Equity/(Deficit)                 2,059,462         (115,326)
                                                  -----------      -----------

     Total Liabilities and Equity                 $ 4,371,395      $ 5,703,246
                                                  ===========      ===========

                                       4

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<TABLE>
<CAPTION>


                                                TRAVELNOW.COM INC.
                                    STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)
                                     NINE MONTH PERIOD ENDED DECEMBER 31, 2000
                                                    (Unaudited)


                                                    COMMON STOCK         ADDITIONAL
                                            -------------------------     PAID-IN      ACCUMULATED    STOCKHOLDERS'
                                               SHARES        AMOUNT       CAPITAL        DEFICIT    EQUITY/(DEFICIT)
                                            -----------   -----------   -----------    -----------    -----------
<S>                                          <C>          <C>           <C>            <C>            <C>
BALANCE - MARCH 31, 2000                     10,349,304   $   103,493   $ 1,896,931    ($2,115,750)   ($  115,326)

     Net Loss                                         0             0             0     (2,693,062)    (2,693,062)
     Cumulative Preferred Stock Dividends             0             0      (126,651)             0       (126,651)
     Conversion of Preferred Dividends           23,605           236       212,208              0        212,444
     Stock Compensation                               0             0       489,843              0        489,843
     Stock Grant                                    250             3         1,037              0          1,040
     Conversion of Preferred Stock              500,000         5,000     4,286,174              0      4,291,174
                                            -----------   -----------   -----------    -----------    -----------

BALANCE - December 31, 2000                  10,873,159   $   108,732   $ 6,759,542    ($4,808,812)   $ 2,059,462
                                            ===========   ===========   ===========    ===========    ===========

                                                        5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                               TRAVELNOW.COM INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
               NINE MONTH PERIODS ENDED DECEMBER 31, 2000 AND 1999
                                   (Unaudited)


                                                            Nine Months Ended Dec. 31
                                                            --------------------------
                                                                              1999
                                                                2000       As Restated
                                                            -----------    -----------
<S>                                                         <C>            <C>
OPERATING ACTIVITIES:
      Net Loss                                              ($2,693,062)   ($1,171,342)
      Adjustments to reconcile net loss to
      net cash used in operating activities:
           Stock-based compensation                             489,843        892,535
           Depreciation and amortization                        321,334         24,207
           Loss From Unconsolidated Subsidiary                        0         42,468
           Changes in Operating Assets and Liabilities:
                Accounts receivable                            (639,180)      (427,364)
                Other current assets                             27,951              0
                Accounts payable                                184,326        443,557
                Accrued liabilities and deferred revenue        735,537        145,099
                                                            -----------    -----------
      Net Cash Used In Operating Activities                  (1,573,251)       (50,840)
                                                            -----------    -----------

INVESTING ACTIVITIES:
      Acquisition of Property, Equipment
           and Capitalized Software                            (539,430)      (259,874)
      Investment In Unconsolidated Subsidiary                         0        (42,468)
                                                            -----------    -----------
      Net Cash Used In Investing Activities                    (539,430)      (302,342)
                                                            -----------    -----------

FINANCING ACTIVITIES:
      Proceeds from capital contributions                             0        499,985
      Proceeds from sale of common stock                              0        250,180
      Common Stock Grants                                         1,040              0
      Expenses related to sale of preferred stock               (49,520)             0
      Preferred stock dividends paid in cash                        (15)             0
      Repayments of notes payable to stockholders                     0        (10,000)
      Repayments of notes payable                                     0        (58,535)
                                                            -----------    -----------
      Net Cash Provided By/(Used In) Financing Activities       (48,495)       681,630
                                                            -----------    -----------

Net Increase/(Decrease) In Cash and Cash Equivalents         (2,161,176)       328,448

CASH AND CASH EQUIVALENTS:
      Beginning of Period                                     3,654,281          6,227
                                                            -----------    -----------
      End of Period                                         $ 1,493,105    $   334,675
                                                            ===========    ===========

NON-CASH TRANSACTIONS:
      Cumulative Preferred Stock Dividends                  $   126,636    $         0
      Acquisition of Software In Accounts Payable           $         0    $   419,572

</TABLE>

                                       6
<PAGE>



                               TRAVELNOW.COM INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Basis of Presentation

     The accompanying condensed financial statements of TravelNow.com Inc.
     ("TravelNow" or "the Company") are unaudited, but in the opinion of
     management, reflect all adjustments which are necessary for a fair
     presentation of our operating results for the periods shown. These
     statements should be read in conjunction with our Form 10-KSB for the year
     ended March 31, 2000.

2.   Merger with Sentry Accounting, Inc.

     Pursuant to an Agreement and Plan of Reorganization consummated on July 23,
     1999 between TravelNow.com Inc., a Missouri corporation ("TravelNow of
     Missouri"), and Sentry Accounting, Inc., a Florida corporation ("Old
     Sentry"), Old Sentry acquired 100% of the issued and outstanding stock of
     TravelNow of Missouri for 1,475,533 shares of restricted common stock of
     Old Sentry. The stock exchange ratio was one share of Old Sentry stock for
     each 1.97 shares of TravelNow of Missouri stock outstanding.

     The acquisition became effective as of July 27, 1999 and TravelNow of
     Missouri was merged into Old Sentry as of that date. Old Sentry then
     changed its name to TravelNow.com Inc.

     At the time of the merger, 491,000 shares of Old Sentry common stock were
     freely transferable or unrestricted and held by Old Sentry shareholders.
     The total shares outstanding at that point were 1,966,533. On July 28,
     1999, we issued a stock dividend of approximately 4.25 shares for each
     share outstanding, increasing the total shares from 1,966,533 to 10,324,304
     shares issued and outstanding.

     The former shareholders of TravelNow of Missouri received approximately 75%
     of the common shares of the combined entity. TravelNow of Missouri is
     considered the "acquiring" corporation from an accounting standpoint.
     TravelNow's March 31 fiscal year-end was adopted for the combined company.

3.   Restatement of Common Shares Outstanding

     The number of common stock shares outstanding for all periods has been
     restated on an equivalent basis.

4.   Sale of Stock

     On January 5, 2000, we issued 500,000 shares of Class A Convertible
     Preferred Stock at $9.00 per share. These shares of convertible preferred
     stock automatically converted into 500,000 shares of our common stock as of
     August 8, 2000 when the two pre-conditions for such conversion were met.
     First, our stock was approved for listing on the Nasdaq SmallCap Market
     effective May 25, 2000. Second, the Securities and Exchange Commission
     declared our Form SB-2 registration statement covering up to 527,000 common
     shares for conversion of the convertible preferred stock effective as of
     August 9, 2000.

     The Class A Convertible Preferred Stock accrued dividends at 8% per annum
     until the conversion into our common stock. As of August 8, 2000 when the
     conversion was effective, $212,459 had been accrued for such dividends. The
     holders of the convertible preferred stock elected to receive these
     dividends in the form of additional shares of our common stock instead of
     cash. Therefore, all of the convertible preferred stock, plus all accrued
     and unpaid dividends, were converted into a total of 523,605 shares of our
     common stock. In addition, $15 in dividends was paid in cash in lieu of
     fractional shares.

                                       7

<PAGE>


     In connection with the sale of the convertible preferred stock, we incurred
     certain professional fees related to the sale transaction, the listing of
     our common stock on the Nasdaq Small Cap Market, and the registration of
     common stock for conversion of the convertible preferred stock. Through
     December 31, 2000, these costs have been approximately $209,000. The
     two-year contractual requirement to maintain an effective registration
     statement for the 523,605 shares of common stock issued in conjunction with
     this transaction has terminated due to the sale of the shares by the
     initial holders.

5.   Capitalization of Software Development Costs

     The American Institute of Certified Public Accountants issued Statement of
     Position No. 98-1 ("SOP No. 98-1"), Accounting for the Costs of Computer
     Software Developed or Obtained for Internal Use, which requires that
     certain direct costs associated with such software be capitalized and
     amortized over an appropriate time period. Prior to the effective date of
     SOP 98-1 and the beginning of our most recent fiscal year on April 1, 1999,
     we expensed all costs of computer software developed or acquired for
     internal use.

     During August 1999, we began the development of a second generation
     proprietary software platform for our online reservations systems. This new
     system has been completed at a cost of approximately $746,000, including
     the direct costs of our personnel devoted to the project, outside
     consulting fees and purchased software. These costs are being amortized
     over five years.

6.   Stock Options and Common Stock-Based Compensation

     During the year ended March 31, 2000, we granted options on 530,000 shares
     of TravelNow common stock to three employees. The options have exercise
     prices ranging from $1.50 per share to $65.00 per share and exercise dates
     from July 2000 to August 2004 for 500,000 of the shares and September 2000
     to September 2006 for 30,000 shares.

     We account for stock options on an intrinsic value basis under the
     provisions of APB Opinion No. 25 as permitted by SFAS No. 123. The 530,000
     stock options granted had an intrinsic value at the dates of the grants of
     $1,068,750. Accordingly, for the three and nine month periods ended
     December 31, 2000, stock-based compensation costs of $163,281 and $489,843,
     respectively, were recognized in our financial statements.

     In addition, a total of 60,000 options are outstanding that were granted to
     two employees and one director. All of these options were granted at prices
     equal to or above fair market value at the dates of grant. As a result,
     these options had no "intrinsic" value at the grant dates and no
     compensation expense has been recognized in our financial statements.

     The Company's Board of Directors has granted approximately 85,849 shares of
     our common stock to our public and investor relations firms and to outside
     consultants for services rendered principally subsequent to March 31, 2000.
     These shares, which were not outstanding as of December 31, 2000, were
     issued in January and February 2001.

     On May 3, 2000, we granted to all current employees of the Company, except
     the CEO, stock options equal to the employees' annual salary. Each employee
     is required to execute a non-compete agreement with the Company prior to
     being awarded these stock options. The number of stock options was
     determined by dividing the closing market price of the Company's common
     stock on May 3, 2000 into the employees' annual salary. This grant and
     subsequent quarterly grants for eligible employees resulted in stock
     options for the purchase of approximately 347,618 shares being granted that
     are currently outstanding. These options have a contractual life of three

                                       8

<PAGE>


     years and 90 days from their respective grant dates and vest in equal
     amounts over three years. No compensation expense has been recognized for
     these options in our financial statements because the options were issued
     at the market value of our common stock as of the grant dates and as a
     result had no "intrinsic" value at those grant dates.

     On December 1, 2000, we granted additional stock options to all employees
     holding existing stock options from the May 3 and the September 30
     quarterly stock option grants. These new stock options were granted at the
     closing market price on December 1, 2000. This grant resulted in stock
     options for the purchase of approximately 300,415 shares which are
     currently outstanding. These options have a contractual life of three years
     and 90 days from their grant date and vest in equal amounts over three
     years. No compensation expense has been recognized for these options in our
     financial statements because the options were issued at the market value of
     our common stock as of the grant date and as a result had no "intrinsic"
     value at that grant date.


     Had compensation expense for stock options been determined based on the
     fair value of the options at the grant dates, as prescribed in SFAS No.
     123, our stock-based compensation for the three and nine month periods
     ended December 31, 2000, would have been $460,956 and $1,075,968,
     respectively. The effect on our net loss would have been an increase of
     $297,675 and $586,125 in the three and nine month periods ended December
     31, 2000, respectively. Loss per share for the three and nine month periods
     would have increased by $0.03 and $0.06, respectively.

7.   Income Taxes

     No provision for income taxes has been recorded in our financial
     statements. The Company has predominantly incurred net losses and to date
     we have not received a tax benefit for such losses. In the opinion of
     management, the realizability of our deferred tax assets is sufficiently
     uncertain that a full valuation allowance has been recorded.

8.   Derivative Instruments and Hedging Activities

     The Company is in the process of evaluating the effect, if any, that
     Statement of Accounting Standards No. 133, Accounting for Derivative
     Instruments and Hedging Activities ("SFAS No. 133"), will have on its
     financial position and results of operations.

9.   Restatement of Unaudited Financial Statements

     Subsequent to the issuance of the Company's unaudited financial statements
     for the three and nine month periods ending December 31, 1999, management
     has determined that the liability for commission payments to affiliates was
     underaccrued. In addition, certain commission revenues from hotels which
     are received through a third party commission processing company were
     previously recognized on a "net" basis, i.e., net of the charges from the
     processing company. These charges have been reclassified as an expense and
     the revenue is now recognized on a "gross" basis. This reclassification has
     no effect on income and is immaterial for all previous periods not
     restated.

     Management has also determined that stock-based compensation cost for the
     three and nine month periods ended December 31, 1999 was understated. The
     adjustment was related to stock options for restricted common stock granted
     in August and September 1999 with exercise prices less than the market
     price of the Company's registered common stock.

     The impact of the restatements and the reclassification are shown on the
     following tables.

                                       9

<PAGE>
<TABLE>
<CAPTION>

                                              Three Months Ended 12/31/1999
                                      --------------------------------------------
                                           As          Previously       Increase/
Statements of Operations Data           Restated        Reported        (Decrease)
----------------------------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>
Total Revenues                        $  1,041,991    $  1,008,161    $     33,830
Cost of Revenues                           664,556         588,575          75,981
                                      ------------    ------------    ------------
     Gross Profit                          377,435         419,586         (42,151)
                                      ------------    ------------    ------------

Operating Expenses
     Sales and Marketing                    57,281          54,325           2,956
     General and Administrative            424,957         440,296         (15,339)
     Stock-Based Compensation              163,281               0         163,281
                                      ------------    ------------    ------------
          Total Operating Expenses         645,519         494,621         150,898
                                      ------------    ------------    ------------

Income/(Loss From Operations              (268,084)        (75,035)       (193,049)

Loss From Unconsolidated Subsidiary        (42,468)        (42,468)              0
                                      ------------    ------------    ------------

Income/(Loss) Before Taxes                (310,552)       (117,503)       (193,049)
Provision for Income Taxes                       0               0               0
                                      ------------    ------------    ------------
     Net Income/(Loss)                ($   310,552)   ($   117,503)   ($   193,049)
                                      ============    ============    ============

Average Number of Shares
Of Common Stock Outstanding             10,336,804      10,336,804               0

Net Income/(Loss) Per Share
     Basic                            ($      0.03)   ($      0.01)   ($      0.02)
     Diluted                          ($      0.03)   ($      0.01)   ($      0.02)






                                       10

</TABLE>
<PAGE>
                                            Nine Months Ended 12/31/1999
                                      ---------------------------------------
                                            As        Previously    Increase/
Statements of Operations Data            Restated      Reported    (Decrease)
----------------------------------    ------------   -----------   ----------

Total Revenues                          $2,487,050    $2,413,062   $   73,988
Cost of Revenues                         1,580,820     1,383,909      196,911
                                       -----------   -----------  -----------
     Gross Profit                          906,230     1,029,153     (122,923)
                                       -----------   -----------  -----------

Operating Expenses
     Sales and Marketing                   121,447       118,491        2,956
     General and Administrative          1,021,122     1,036,461      (15,339)
     Stock-Based Compensation              892,535       650,000      242,535
                                      ------------   -----------  -----------
          Total Operating
Expenses                                 2,035,104     1,804,952      230,152
                                      ------------   -----------  -----------

Income/(Loss From Operations            (1,128,874)     (775,799)    (353,075)

Loss From Unconsolidated Subsidiary        (42,468)      (42,468)           0
                                      ------------   -----------  -----------

Income/(Loss) Before Taxes              (1,171,342)     (818,267)    (353,075)
Provision for Income Taxes                       0             0            0
                                      ------------   -----------  -----------
     Net Income/(Loss)                 ($1,171,342)    ($818,267)   ($353,075)
                                      ============   ===========  ===========

Average Number of Shares
Of Common Stock Outstanding              8,893,296     8,893,296            0

Net Income/(Loss) Per Share
     Basic                                 ($0.13)       ($0.09)      ($0.04)
     Diluted                               ($0.13)       ($0.09)      ($0.04)



                                                    December 31, 1999
                                           ------------------------------------
                                               As       Previously   Increase/
Balance Sheet Data                          Restated     Reported    (Decrease)
----------------------------------         ----------   ----------   ----------

Cash and Cash Equivalents                  $  334,672   $  334,672   $        0
Accounts Receivable                           533,926      533,926            0
                                           ----------   ----------   ----------
     Current Assets                           868,598      868,598            0

Property and Equipment - Net                  142,804      142,804            0
Software Under Development                    558,780      558,780            0
                                           ----------   ----------   ----------
     Total Assets                          $1,570,182   $1,570,182   $        0
                                           ==========   ==========   ==========


Accounts Payable                           $  946,195   $  835,655   $  110,540
Accrued Liabilities                           189,695      189,695            0
                                           ----------   ----------   ----------
     Current and Total Liabilities          1,135,890    1,025,350      110,540

Stockholders' Equity                          434,292      544,832     (110,540)
                                           ----------   ----------   ----------
     Total Liabilities and Equity          $1,570,182   $1,570,182   $        0
                                           ==========   ==========   ==========

                                       11

<PAGE>


10.  Subsequent Event

     On January 3, 2001, TravelNow entered into an Agreement and Plan of Merger
with Hotel Reservations Network, Inc. (HRN) (NASDAQ: ROOM) for the acquisition
of TravelNow by HRN. Located in Dallas, Texas, HRN is a majority-owned
subsidiary of USA Networks, Inc.'s (NASDAQ: USAI) Information Services unit.

HRN has purchased 1,080,000 TravelNow common shares in private transactions.
Pursuant to the Agreement and Plan of Merger, HRN initiated a tender offer at
$4.16 per share for the balance of TravelNow's shares on January 12, 2001
through its wholly-owned subsidiary, Wonsub, Inc., which was formed for that
purpose. This offer expired on February 9, 2001 with the acquisition of
9,617,990 additional TravelNow shares, increasing HRN's ownership to 97.6% of
the 10,959,008 common shares outstanding as of February 12, 2001. It is
anticipated that the acquisition of TravelNow by HRN will be completed in the
near future through the merger of Wonsub, Inc. into TravelNow, resulting in
TravelNow becoming a wholly-owned subsidiary of HRN. TravelNow shareholders who
did not tender their stock to HRN will receive $4.16 per share for their stock
through the merger transaction.

As part of the Agreement and Plan of Merger, the TravelNow Board of Directors
agreed to recommend the proposed transaction to TravelNow's shareholders. In
addition, directors, officers and certain employees of TravelNow holding
approximately 40.6% of TravelNow's outstanding common stock agreed to tender
their shares to HRN.



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


     The following discussion and analysis should be read in conjunction with
our condensed financial statements and the notes to the statements contained in
this 10-QSB.

Introduction.
-------------

     Our revenues are comprised principally of commissions paid by travel
suppliers related to the online booking of travel reservations for our
customers. Commissions earned are recognized for hotel bookings as of the
customer's departure date, for car rentals as of the return date, and for
airline tickets as of the reservation date, all net of allowances for
cancellations and credit risk. Revenues for advertisements on our web site are
recognized over the period the advertisements are displayed.

     Cost of revenues includes the expenses of operating our travel reservation
systems, web site and customer service operations. It also includes commission
sharing payments to affiliated web sites that generate customer reservations
through the use of the TravelNow reservation systems. These affiliated web sites
have been the primary contributors to our revenue growth. Facilities expense,
depreciation and other indirect items related to the generation of revenue are
included in general and administrative expense.

Results of Operations and Comparison of Operating Results.
----------------------------------------------------------

     Total revenues for the three-month period ended December 31, 2000 were
$2,392,092, which was nearly 2.3 times the $1,041,991 of revenues for the
three-month period ended December 31, 1999. Net loss for the quarter ended
December 31, 2000 was $674,143, due in part to $163,281 of non-cash charges for
stock-based compensation and $221,355 of merger-related transaction expenses
(see Merger Agreement below). The stock-based compensation was for employee
stock options granted in 1999. In the quarter ended December 31, 1999, net loss
was $310,552, which also included non-cash stock-based compensation of $163,281.

     Total revenues for the nine-month period ended December 31, 2000 were
$7,611,320, which was nearly 3.1 times the $2,487,050 of revenues for the
comparable nine-month period of 1999. Net loss for the nine-month period ended
December 31, 2000 was $2,693,062, which included $489,843 in non-cash charges

                                       12

<PAGE>


for stock-based compensation, $267,000 of severance charges related to a former
officer and director of the Company, and the $221,355 merger-related transaction
expenses. Net loss for the comparable nine-month period of 1999 was $1,171,342,
which was due substantially to $892,535 in stock-based compensation charges.
These non-cash charges were comprised of $650,000 related to an employee stock
bonus paid on May 18, 1999 and $242,535 related to stock options granted in
1999.

Revenues.
---------

     Our principal source of revenue is commissions related to hotel bookings.
The level of weekly confirmed hotel bookings increased by more than 78% between
the three-month period ended December 31, 1999 and the three-month period ended
December 31, 2000. Much of the year-over-year growth is attributable to the
expansion of our affiliate program through which affiliated web sites are
dynamically linked to our reservation systems.

     When a hotel booking is confirmed, we do not automatically receive revenue.
However, hotel bookings are an indicator of the anticipated level of customer
hotel stays which ultimately will result in revenues for the Company.

     In January 1999, we implemented our own car reservation system on the
TravelNow web site and began providing links to this system for our affiliates.
Car reservations have grown progressively since January 1999 to an average of
approximately 3,100 confirmed reservations per week during the quarter ended
December 31, 2000. Historically, we outsourced our airline reservations to
another company and commissions from airline bookings had not been a significant
portion of total revenues. In November 1999, we began to introduce our own
airline system on selected web sites. This system accounted for approximately 5%
of our revenues in the quarter ended December 31, 2000 and is expected to
further increase our revenues in the future.

Cost of Revenues.
-----------------

     Our cost of revenues as a percent of revenues decreased from 63.8% to 59.5%
in the three-month periods ended December 31, 1999 and 2000, respectively. This
change in the cost of revenues as a percent of revenues was due primarily to
reductions in outside services expenses and the increase in revenues. Offsetting
this reduction was an increase in commission payments to affiliated web sites.
Beginning in the spring of 1999, commissions to affiliated web sites were
generally increased to 50% of collected commissions related to those affiliates.
Since that time, the number of affiliates has expanded rapidly and the
proportion of our business generated by these affiliates has increased
substantially.

     In addition, our cost of revenue has increased on an absolute basis because
we significantly expanded our personnel and other infrastructure costs to
support the requirements of anticipated revenue growth. In particular, personnel
were added to the software development and customer service staffs.

     In the nine-month periods ended December 31, 1999 and 2000, the cost of
revenues as a percent of revenues increased from 63.6% to 63.9%, respectively.
This increase was also the result of higher commission payments to affiliates,
partially offset by reductions in purchases of outside services.

     Although our existing staff and facilities are generally adequate to
support higher levels of revenues, we may further expand our personnel and
facilities to prepare for future growth. As a result, the cost of revenues as a
percent of revenues will fluctuate on a cyclical basis until the anticipated
revenue increases are realized.

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<PAGE>


Sales and Marketing Expenses.
-----------------------------

     Sales and marketing expenses include payroll and other costs associated
with developing and managing our affiliate program as well as advertising and
promotional expenditures. Sales and marketing expenses were 7.9% and 5.5% of
revenues in the three-month periods ended December 31, 2000 and 1999,
respectively. We have increased our staff in this area to generate additional
revenue growth. In the nine-month periods ended December 31, 2000 and 1999,
sales and marketing expenses were 8.1% and 4.9% of revenues, respectively.

     We intend to further increase our sales and marketing activities with the
purpose of generating additional revenue growth. Sales and marketing expenses as
a percent of revenues are expected to fluctuate until such additional revenues
are realized.

General and Administrative Expenses.
------------------------------------

     General and administrative costs increased from $424,957 in the three-month
period ended December 31, 1999 to $1,092,522 in the three-month period ended
December 31, 2000. As a percent of revenues, general and administrative expenses
increased from 40.8% to 45.7%. In the nine-month periods ended December 31, 1999
and 2000, general and administrative expenses increased as a percent of revenues
from 41.1% to 55.3%, respectively, and increased from $1,021,122 to $4,211,046.

     These increases in general and administrative expense, both on an absolute
and a percent of revenues basis, in the nine-month period ended December 31,
2000 relative to the comparable nine months of the prior year are due to three
primary factors: (1) expansion of staff and other activities to support our
growth, (2) professional fees associated with becoming a public company, and,
(3) the $267,000 of severance costs mentioned above. In particular, we have
incurred substantial accounting, legal, public relations and investor relations
expenses related to corporate matters and transactions. We have also invested in
professional services pursuant to the development of strategic initiatives in
Europe and other international markets.

     Fluctuations in general and administrative expenses as a percent of
revenues can be expected to continue as we expand our staff to generate and
support higher levels of revenues even though an overall declining trend is
anticipated.

Merger Transaction Expenses.
---------------------------

     During the three and nine month periods ended December 31, 2000, we
incurred $221,355 of professional services expenses related to the proposed
merger of TravelNow with a subsidiary of Hotel Reservations Network. These
expenses included financial advisory fees, legal fees and out-of-pocket costs
incurred by our financial and legal advisors.

Commitments.
------------

     On March 15, 2000, we entered into a consulting agreement for certain
public relations services in exchange for consideration totaling $180,000. Half
of such consideration is to be paid with restricted shares of our common stock.
For purposes of determining the number of shares to be issued, the last quoted
sale price of our common shares on March 30, 2000, was used. As of December 31,
2000, no shares have been issued pursuant to such agreement.

     On March 21, 2000, we entered into a consulting agreement for certain
consulting services in exchange for 2,000 restricted shares of our common stock.
As of December 31, 2000, no shares have been issued pursuant to such agreement.

     Beginning June 1, 2000, we engaged the services of a consulting
organization for certain investor relation services in exchange for 10,000
shares of our restricted common stock and the payment of $8,000 per month. As of
December 31, 2000, no shares have been issued pursuant to this arrangement.

                                       14

<PAGE>


     In September 2000, we engaged the services of a second investor relations
organization in exchange for the sale of 60,000 shares of our restricted common
stock at $0.01 per share and the issuance of a total of 50,000 warrants to
purchase an equal number of our restricted shares. One-half of the warrants are
exercisable at a price of $12.50 and one-half are exercisable at a price of
$15.00. These warrants expire on December 31, 2001.

     Pursuant to an agreement with a marketing consulting company we will issue
a total of 6,000 shares of our restricted common stock for services related to
corporate identification and marketing in partial payment for those services. As
of December 31, 2000, no shares have been issued pursuant to this agreement.

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

     On January 5, 2000, we sold 500,000 new restricted convertible preferred
shares of stock to an institutional investor at $9.00 per share for a total of
$4.5 million. These convertible preferred shares earned dividends at a rate of
8.0% per annum. The convertible preferred stock and all accrued and unpaid
dividends were converted into 523,605 shares of our common stock on August 8,
2000 pursuant to the terms of the convertible preferred stock. After the
conversion, $15 in dividends was paid in cash in lieu of fractional shares. The
conversion into common stock was automatic when two pre-conditions were met: (1)
the listing of our common stock on the Nasdaq SmallCap Market (which became
effective on May 25, 2000), and (2) a Securities and Exchange Commission
declaration of an effective Form SB-2 registration statement covering the common
shares for conversion (which occurred on August 9, 2000).

     The $4.5 million sale of convertible preferred stock has been included in
our financial statements as of December 31, 2000 net of approximately $209,000
of expenses related to the sale, our Nasdaq SmallCap Market listing, and the
registration of the common stock for conversion of the preferred shares.
Additional expenses to maintain the registration of the common shares for a
period of two years as required by the terms of the preferred stock will no
longer be required because the stock has been sold by the initial holders of
these shares.

     Effective March 27, 2000, our common and preferred stock was changed from
no par value to $0.01 par value per share. This change had no effect on total
Stockholders' Equity.

     We had a net loss of $674,143 for the three months ended December 31, 2000.
Non-cash charges of $163,281 for stock-based compensation and $221,355 of
merger-related transaction expenses were included in this loss. Our net loss for
the nine months ended December 31, 2000 was $2,693,062, including $489,843 of
non-cash charges for stock-based compensation, $267,000 of severance expense and
the $221,355 of merger transaction costs. Net cash used in operating activities
for the nine month period ended December 31, 2000 was $1,573,251. However, in
the most recent three months of this period, operating activities provided
$180,106 of cash to the Company.

     Cash used in investing activities during the nine month period ended
December 31, 2000, was $539,430. Of this amount, $487,366 was used in the first
six months of the period and $52,064 was used in the most recent quarter ended
December 31, 2000.

     During the nine months, the primary financing activity was $49,520 of
expense related to the sale and registration of preferred stock. The other
financing activities were a $1,040 grant of stock and $15 of preferred dividends
paid in cash.

     During the quarter ended December 31, 2000, the Company had a positive cash
flow of $120,808. Cash and cash equivalents increased from $1,373,397 to
$1,493,105. This positive cash flow was achieved during the seasonally-slower
December quarter through reduced operating expenses, reduced selling, general
and administrative expenses, and lower investments in equipment and software.

     Even though our cash flow was positive during the quarter ended December
31, 2000, future quarters could have a negative cash flow depending on operating
revenues, expense levels and investments made in equipment and software.
However, we believe that our current cash resources in combination with the
anticipated levels of operating revenues are sufficient to meet our cash

                                       15

<PAGE>


requirements in the foreseeable future. Nevertheless, additional financing will
probably be required to fund our longer-term growth. There is no assurance that
such capital will be available to us at that time in sufficient amounts or on
acceptable terms.

Merger Agreement.

     On January 3, 2001, TravelNow entered into an Agreement and Plan of Merger
with Hotel Reservations Network, Inc. (HRN) (NASDAQ: ROOM) for the acquisition
of TravelNow by HRN. Located in Dallas, Texas, HRN is a majority-owned
subsidiary of USA Networks, Inc.'s (NASDAQ: USAI) Information Services unit.

     HRN has purchased 1,080,000 TravelNow common shares in private
transactions. Pursuant to the Agreement and Plan of Merger, HRN initiated a
tender offer at $4.16 per share for the balance of TravelNow's shares on January
12, 2001 through its wholly-owned subsidiary, Wonsub, Inc., which was formed for
that purpose. This offer closed on February 9, 2001 with the acquisition of
9,617,990 additional TravelNow shares, increasing HRN's ownership to 10,697,990
shares, or 97.6% of the 10,959,008 common shares outstanding as of February 12,
2001. It is anticipated that the acquisition of TravelNow by HRN will be
completed in the near future through the merger of Wonsub, Inc. into TravelNow,
resulting in TravelNow becoming a wholly-owned subsidiary of HRN. TravelNow
shareholders who did not tender their stock to HRN will receive $4.16 per share
for their stock through the merger transaction.

     As part of the Agreement and Plan of Merger, the TravelNow Board of
Directors agreed to recommend the proposed transaction to TravelNow's
shareholders. In addition, directors, officers and certain employees of
TravelNow holding approximately 40.6% of TravelNow's outstanding common stock
agreed to tender their shares to HRN.

     Through December 31, 2000, we incurred professional services expenses
related to the proposed acquisition of TravelNow by Hotel Reservations Network
which total $221,355. These expenses have been included in our financial
statements as Merger Transaction Costs on our Condensed Statement of Operations.

     As previously announced, we retained the financial advisory services of
Legg Mason Wood Walker, Incorporated to assist us the evaluating strategic
alternatives, including the possible sale of the Company. If the merger
transaction with HRN is consummated as planned, Legg Mason will earn a
contingent fee related to the transaction. This contingent fee has not been
included in our financial statements as of December 31, 2000.

     In addition, Legg Mason provided the Company's Board of Directors with a
Fairness Opinion on January 3, 2001 related to the HRN acquisition offer. The
fee for the Legg Mason Fairness Opinion has not been included in our financial
statements as of December 31, 2000.




                          PART II -- OTHER INFORMATION


Item 1. Legal Proceedings

None

Item 2. Changes in Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

                                       16

<PAGE>


Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

       (a)  Exhibits

Exhibit
Number             Document Name and Location
------             --------------------------

10.0      Material Contracts.

10.1      Letter Agreement by and among the Company and certain individual
          holders of the Company's Capital Stock, dated December 18, 2000.

10.2      First Amendment to the Employment Agreement by and between the Company
          and Michael Bauer, dated December 27, 2000.

10.3      Exclusivity Agreement by and between the Company and Hotel
          Reservations Network, Inc., dated December 29, 2000.


     (b)  Reports on Form 8-K

     1.   A current report on Form 8-K was filed on December 7, 2000, to report
          that the Company had retained Legg Mason Wood Walker, Incorporated to
          assist it in exploring strategic alternatives for purposes of
          maximizing shareholder value.

     2.   A current report on Form 8-K was filed on December 19, 2000, to report
          that certain of the Company's officers, members of its Board of
          Directors and two employees signed an agreement providing that they
          will not, for a specified period of time, vote in favor of or dispose
          of their common stock in any transaction not approved by the Company's
          Board of Directors.

     3.   A current report on Form 8-K was filed on January 10, 2001, to report
          that the Company had entered into several agreements with Hotel
          Reservations Network, Inc., one of which was an Agreement and Plan of
          Merger.

                                       17

<PAGE>


SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: February 14, 2001
                                            TRAVELNOW.COM INC.

                                            By:  /s/  Jeffrey A. Wasson
                                               --------------------------------
                                                      Jeffrey A. Wasson
                                                      Chief Executive Officer
                                                      Date: February 14, 2001

                                            By:  /s/  H. Whit Ehrler
                                               --------------------------------
                                                      H. Whit Ehrler
                                                      Vice President & CFO
                                                      Date: February 14, 2001


                                       18