SECURITIES AND EXCHANGE COMMISSION
                                  WASHINGTON, D.C. 20549

                                       Form 10-KSB

                            FOR ANNUAL AND TRANSITION REPORTS
                          PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                                SECURITIES EXCHANGE ACT OF 1934

                                 X      Annual Report  Pursuant to Section 13 or
                                        15(d) of The Securities  Exchange Act of
                                        1934

                                    For the fiscal year ended December 31, 1998
                                                        or
                         Transitional Report Pursuant to Section 13 or 15(d) of
                                        The Securities Exchange Act of 1934
                                         For the transition period from to
                                        Commission File Number 033-19522-NY

                                         GENISYS RESERVATION SYSTEMS, INC.
                                          (formerly Robotic Lasers, Inc.)
                         (Exact Name of registrant as specified in its charter)

New Jersey                                                22-2719541
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                         Identification No.)

2401 Morris Avenue, Union, New Jersey                          07083
(Address of principal executive offices)                     (Zip Code)

Registrant's  telephone number,  including area code: (908) 810-8767  Securities
registered  pursuant to Section  12(b) of the Act:  NONE  Securities  registered
pursuant to Section 12(g) of the Act:
                                     Common Stock, par value $.0001 per share
                                            Class A Redeemable Warrants
                                            Class B Redeemable Warrants

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                           Yes - X          No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by  reference in Part III of this Form 10-K or any  amendments  to
this Form 10-K. [X]





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         State Issuers revenues for its most recent fiscal year. $33,290

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  of the registrant.  The aggregate market value shall be computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock,  as of a specified  date within 60 days prior to the
date of filing.

                 $10,630,069.22 as of the close of business on March 25, 1999

                          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                             PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Indicate by check mark whether the  registrant  filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                                      Yes No 


                                     APPLICABLE ONLY TO CORPORATE REGISTRANTS

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest practicable date. The number of shares
outstanding of the registrant's  Common Stock as of March 26, 1999 was 6,734,694
shares.


                                        DOCUMENTS INCORPORATED BY REFERENCE

         List hereunder the following documents if incorporated by reference and
the part of the Form 10-K (e.g.,  Part I, Part II, etc.) into which the document
is  incorporated:  (1) any annual report to  security-holders;  (2) any proxy or
information  statement;  and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the  Securities Act of 1933.  The listed  documents  should be clearly
described for identification purposes.


1. Rule 424(b) Prospectus dated March 20, 1997 is incorporated by reference into
Parts I, II and III

         3.1*     Registrant's Articles of Incorporation
         3.2*     Registrant's By-Laws
         4.1*     Form of Common Stock Certificate
         4.2**  Redeemable  Warrant  Agreement  with Form of Class A and Class B
         Warrant 4.3**  Redeemable  Class X and Class Y Warrant  issued to Brian
         Shuster to purchase up to
                  200,00 shares of the Company's Common Stock.
         4.4**    Redeemable  Class  V and  Class W  Warrant  issued  to  United
                  Internet Technologies, Inc. to purchase up to 800,00 shares of
                  the Company's Common Stock.
         10.1** Copy of  Agreement  dated June 30, 1998  between the Company and
              United  Internet  Technologies,  Inc.,  formerly  known as  United
              Leisure Interactive, Inc. relating to the purchase of a technology
              license and certain related assets.


All of the above referenced documents marked with an (*) are incorporated herein
by  reference  to the  Exhibit  bearing  the  same  number  in the  Registrant's
Registration Statement on Form SB-2, File No. 333- 15011.

All of the  above  referenced  documents  marked  with an (**) are  incorporated
herein by reference to the Exhibit the Company's Form 8-K dated March 26, 1998.

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                                         Part I

Item 1.  Business

History

Until June 1998,  the  principal  business  activity of the Company has been the
operation of a  computerized  limousine  reservation  and payment system for the
business traveler.  The proprietary  software that the Company developed enables
limousine reservations to be completely computerized i.e., be entirely automatic
and operate  without  human  intervention  except for the initial  inputting  of
travel information.

Prior to the sale of the limousine  reservation  business and the acquisition of
the technology  license and certain  related assets from UIT, which is discussed
below, the Company worked with travel agents and corporate travel departments by
providing a computerized system for securing limousine reservations. The Company
had  created  its own  computerized  system  which was linked with the SABRE and
Apollo computer  reservation  systems, two of the four major airline reservation
systems.  Limousine  reservations  made  through  the SABRE and Apollo  computer
reservation  systems were relayed  instantaneously to the Company's computer and
then  to  a  service   provider  of  the  clients   choice--all   without  human
intervention--and an immediate limousine reservation is confirmed.

         As of June 30, 1998, the Company,  through Netcruise Interactive,  Inc.
("Netcruise"),  entered into an Asset Purchase  Agreement  with United  Internet
Technologies  f/k/a  United  Leisure  Interactive,  Inc.,  in which the  Company
acquired a technology  license and certain  related assets from United  Internet
Technology  in exchange for 2,000,000  shares of the Company's  Common Stock and
two warrants ("Warrants"),  each entitling the holder to purchase 800,000 shares
of the Common  Stock of the  Company  (the "UIT  Transaction").  One  warrant is
exercisable  for 800,000 shares at $2.50 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding  $5,000,000 for the years 1999, 2000 and 2001. The other Warrant is
exercisable  for 800,000 shares at $6.00 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding $10,000,000 for the years 1999, 2000 and 2001.

On November 5 , 1998, the Company entered into an Asset Purchase  Agreement with
Sterling AKG Corp. d/b/a Sterling Travel, in which the Company purchased all the
assets relating to Sterling's  network of independent  travel  consultants for a
total purchase price of 25,000 shares of the Company's  Common Stock which,  for
accounting  purposes,  is being  valued at $1.50 per share for an  aggregate  of
$37,500.  An  additional  17,500 shares of the Company's  Common Stock ("Escrow
Shares")  will be held in escrow by counsel to the Company.  If the Company does
not  achieve  $3,000,000  of  gross  sales  from the  sale of  travel  services,
including  renewal fees from the Sterling Travel  Consultants,  over the initial
twelve  month  period  beginning  on  November 1, 1998 and ending on October 31,
1999,  the Escrow Shares shall  immediately  be returned to the Company.  If the
Company achieves $3,000,000 of gross sales from Sterling Travel Consultants over
the initial  twelve month period as describe  herein,  the Escrow Shares will be
released by the Company.

On November 6, 1998 the Company  entered  into an  Acquisition  Agreement by and
between the Company and Corporate  Travel Link,  Inc., a wholly owned subsidiary
of the Company (the sellers in the transaction) and TranspoNet (a non-affiliated
company),  Mark A. Kenny,  Paul Murray and Gen 02, Inc.  (the  purchaser  in the
transaction),  a newly organized  corporation  formed by Mark A. Kenny, a former
director  and  founder of the  Company.  The  Company  sold all of the assets of
Corporate  Travel Link which are  utilized  in  connection  with the  ownership,
operation and marketing of the  computerized  limousine  reservation and payment
system which had a net book value of $744,122,  for (i) 2,450 shares of Series A
Convertible  Preferred Stock of Gen O2, Inc.,  constituting a 32.66% interest in
Gen O2,  Inc.,  which the Company  carries on its balance  sheet as December 31,
1998 at an asset value of $624,204;  (ii)  certain  contingent  payments  over a
period of 5 years,  totaling  $1,080,000  if all  payments  to the  Company  are
realized,  however,  since  there  are no  minimum  contingent  payments,  it is
possible that the Company will receive no significant  contingent  payments from
GEN 02, Inc.

On  February  1,  1999 the  Company  acquired  Sammy's  Travel  World,  Inc.,  a
full-service  travel agency  specializing  in leisure and  corporate  travel and
serving the New York City and northern New Jersey area ("Sammy's"),  with annual
gross  bookings  of  approximately  $1,800,000.   The  purchase  price  for  the
acquisition  was  36,600  shares  of  the  Company's  Common  Stock  which,  for
accounting  purposes,  is being  valued at $1.50 per  share or an  aggregate  of
$54,900.



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General 

         As of June 30, 1998 NetCruise,  Inc., (a wholly owned subsidiary of the
Company formed on July 21, 1998 for the purpose of operating an internet  travel
business) entered into an agreement to purchase a technology license and certain
related assets from United Internet  Technology,  Inc. The Company determined to
expand into the  internet  travel  business  for several  reasons.  Although the
Company had begun to generate  revenues,  the Company found that many  limousine
providers were  resisting the payment of commissions or fees in connection  with
bookings on the  Company's  system  resulting  in a much slower  development  of
revenues for the Company than was originally  anticipated.  Management evaluated
the cost of operations for a more extended  period of time and  determined  that
the Company's available funds would be better spent in other areas of the travel
business and therefore determined to expand into the internet travel business.

         Pursuant  to  the  Asset  Purchase  Agreement,   NetCruise  acquired  a
technology  license and certain  related  assets  from UIT in  consideration  of
2,000,000  shares of the Company's  Common Stock and two warrants  ("Warrants"),
each entitling the holder to purchase  800,000 shares of the Common Stock of the
Company (the "UIT  Transaction").  One warrant is exercisable for 800,000 shares
at $2.50 per share and may be exercised between April 1, 2002 and June 30, 2002,
but only if NetCruise achieves profits equal to or exceeding  $5,000,000 for the
years 1999,  2000 and 2001. The other Warrant is exercisable  for 800,000 shares
at $6.00 per share and may be exercised between April 1, 2002 and June 30, 2002,
but only if NetCruise achieves profits equal to or exceeding $10,000,000 for the
years 1999,  2000 and 2001.  No value has been placed on the warrants  since the
warrants are each contingent upon future earnings.

         The Company has since been advised that the issuance of such securities
has caused the Company to inadvertently be in violation of a Nasdaq  MarketPlace
Rule because the issuance of the 2,000,000 shares and Warrants  amounted to more
than 20% of the  issued  and  outstanding  shares  of the  Company  and were not
approved by  Shareholders  as required by such Rule.  Nasdaq advised the Company
that the Company's Common Stock would be delisted as a result of such violation.
The Company  requested a hearing on the delisting which was held on November 20,
1998.  Nasdaq issued its written  determination  on January 12, 1999 to continue
listing the Company's  securities on The Nasdaq  SmallCap Market pursuant to the
following  conditions:  (i) the UIT  Transaction  must be  unwound  in the event
shareholders do not ratify the acquisition of the technology license and certain
related  assets from UIT and approve the  issuance of 1,100,00  shares of Common
Stock and two Stock  Purchase  Warrants  to UIT;  (ii) the  Company  must file a
Definitive  Proxy  Statement  with the  Securities  and Exchange  Commission and
Nasdaq on or before  February  15,  1999;  and (iii)  the  Company  must  submit
documentation  to Nasdaq  on or before  April 15,  1999  evidencing  either  the
receipt of shareholder  approval of the issuance of additional  shares to UIT or
the  unwinding  of the  issuance of  additional  shares to UIT and purchase of a
technology  license  and  certain  related  assets  from UIT.  The  Company  has
requested  an extension  from Nasdaq with  respect to the  deadlines to July 31,
1999.

The Company and UIT have restructured the transaction so that UIT will return to
the Company  1,100,000 shares of the Company's  Common Stock (retaining  900,000
shares  that  are not in  violation  of the  Nasdaq  MarketPlace  Rule)  and the
Warrants. The Company will issue to UIT 1,100,000 shares of Convertible Series B
Preferred Stock (the "Series B Preferred Stock"), which Series B Preferred Stock
is automatically convertible into 1,100,000 shares of the Company's Common Stock
upon  Shareholder  approval of the  issuance of the  1,100,000  shares of Common
Stock and the Warrants.  The Series B Preferred  Stock is  non-voting  stock and
carries a mandatory  dividend of $275,000,  payable on September  30, 1999 and a
mandatory  quarterly dividend at the rate of $68,750 commencing with the quarter
ended December 31, 1999. No dividend will be payable if the Shareholders approve
the issuance of the 1,100,000 shares Common Stock and Warrants prior to the time
that the dividend is payable.  Therefore,  the total  purchase  price in the UIT
Transaction is 900,000 shares of the Company's Common Stock and 1,100,000 shares
of the Company's Series B Convertible  Preferred  Stock. If shareholders  ratify
the  acquisition,  the Series B Preferred Stock will  automatically be converted
into 1,100,000  shares of the Company's  Common Stock and the Company will issue
two  warrants,  each to purchase  800,000  shares of Common  Stock,  as outlined
above.

In the event  shareholders  do not  ratify  the  acquisition  of the  assets and
approve the issuance of

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<PAGE>



1,100,000  shares of  Common  Stock and two  stock  purchase  warrants,  the UIT
Transaction will be unwound.  In such event the Company  estimates that the cost
to undo  the  transaction  will  not  exceed  $50,000.  This  estimate  includes
accounting fees, legal fees,  recording fees and employee  termination  fees. In
the event that the UIT Transaction  must be unwound,  the following shall occur:
(i) the Company  shall  reassign the  technology  license and return the related
assets to UIT;  (ii) UIT will  return  to the  Company  all  stock  certificates
received pursuant to the UIT Transaction and (iii) Mr. Brian Shuster will return
the  warrants  issued to him by the Company;  and (iv)  Messrs.  Brian and Harry
Shuster  will  resign from any officer or  director  position  held by them.  In
addition,  Mr. Brian Shuster's  consulting fee shall be pro-rated to the date of
his resignation and shall cease as of such date. Reference should be made to Pro
Forma Condensed  Consolidated  Financial Statements as of December 31, 1998
for the effect of undoing the UIT Transaction..

         As a result of the  transaction,  the  Company  acquired  the  internet
travel  web site  called  "Netcruise"  and a  perpetual,  world-wide  technology
license  for  "Parallel  Addressing  Video  Technology"  for all travel  related
applications,  along  with all of the  custom  software,  computer  systems  and
intellectual properties.  No royalty  payments are required under the licensing
agreement for the "Parallel  Addressing  Video  Technology" and the license is
exclusive as it relates to the technology as applied to the travel industry. UIT
has  retained  the right to the  technology  for all other  uses  outside of the
travel industry.  The intellectual  property  acquired consists of a license for
the "Parallel  Addressing Video  Technology" and a business plan premised on the
idea of creating and  establishing a network of independent  travel  consultants
which is to be marketed to consumers  and travel  agents and which  includes the
Netcruise name, logo, trade-marks and service-marks. The company did not acquire
the patent to the "Parallel  Addressing Video Technology." Also included as part
of the  intellectual  property was an agreement  between UIT and Internet Travel
Network of Palo Alto, CA which UIT  transferred  to the Company.  This agreement
provides for a "private  label" site on the  Internet  Travel  Network  "booking
engine".  The  agreement  expires in April,  1999 and  automatically  renews for
successive one year periods  unless either party gives notice,  no later than 30
days  prior  to the end of the  period,  of its  intent  not to  renew.  The ITN
"booking  engine" is essentially a world wide web based graphical user interface
to the airline owned Apollo  computerized  reservation  system.  This technology
allows a layperson  with  access to the  internet  to access the  databases  and
pricing  systems  used by travel  agents to research and procure air, car rental
and hotel reservations. By "private labeling" this functionality, the Company is
able to offer its travel  consultants  access to a leading travel system,  while
not having to expend the Company's  capital resources which would be required to
create its own access. The custom software acquired by the Company consists of a
video  player  program  (called a ULI player)  that permits the end user to view
video files, a cruise  database,  a CD-ROM video disc database  containing video
images of travel-related  information and miscellaneous  commercially  purchased
software.  The technological  feasibility of the custom software was established
at the time of the  acquisition,  as a working model of the custom  software had
been  completed  at that time.  The Company  formed  NetCruise as a wholly owned
subsidiary for the purpose of operating an internet  travel  business  featuring
the technology obtained through this acquisition.

         Although the internet  web-site is still in the  development  stage and
the Company only has a limited number of individuals  (280) who have  subscribed
to be independent  travel  consultants and does not yet have any internet travel
customers,  the Company intends to launch,  through television  advertising,  an
aggressive  marketing campaign inviting the general public,  along with existing
travel agents, to become NetCruise travel consultants. The goal of the Company's
marketing  campaign is to encourage  individuals to enroll as independent travel
consultants by paying a fee to the Company.  The independent  travel consultants
will then be able to make  reservations  either  through the password  protected
section of the  Netcruise web site or via  telephone  conversations  with travel
agents who work directly for Netcruise.  Non-members who visit the non- password
protected section of the Netcruise web-site (the "Visitor's Section") shall have
access to a portion of the site which  contains  general  information  about the
Company,  describes the  independent  travel  consultant  program and allows the
public to request information or enroll as an independent travel consultant.  To
date, the Visitor's  Section of the web-site is being used for  demonstration to
potential  travel  consultants.   The  password  protected  section  will  allow
independent  travel  consultants  to see  destinations  in full motion video and
stereo audio and to make hotel, air and car reservations. The password protected
section  is  only  accessible  by  company  personnel  and  independent   travel
consultants using a password. The Company expects that the

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web  site  will  not be fully  integrated  to  support  the  independent  travel
consultants until mid- 1999. The Company has budgeted  approximately $198,000 to
complete the web-site. Additional costs of bringing the internet travel business
operational  are  expected  to  be  approximately  $1,144,000,   which  includes
producing a television video  infomercial and purchasing media time. The Company
believes that it will be able  to finance such  development substantially from
proceeds of a recent private placement, but there can be no assurance that such
funds will be sufficient. 

         The Company believes it will be successful in encouraging people to pay
the subscription fee and sign up as independent travel consultants because as an
independent  travel  consultant  individuals  will have an opportunity to earn a
commission  on all  reservations  made by them.  Airlines,  hotels,  car  rental
companies,  cruise lines,  tour  operators and other travel vendors will pay the
Company  commissions  for all sales generated by the Company.  Such  commissions
will be shared with the  independent  travel  consultants.  The Company hopes to
enroll both the general public and existing travel agents.  The Company believes
that there is an emerging trend in the travel industry,  whereby individuals who
are presently travel agents are leaving their salaried positions and moving into
positions  similar to that of an independent  travel  consultant  with their own
home based travel  business.  The Company  believes that existing  travel agents
will be drawn to the opportunity to earn commissions,  create their own flexible
hours,  maintain  their client base and utilize  their  existing  skills.  Other
advantages  of a home based travel  business are no commuting to an office,  low
overhead,  no need to rent expensive airline owned computer  reservation  system
equipment and personal travel benefits.  However, there can be no assurance that
the  Company's  marketing  strategy  directed to existing  travel agents will be
successful. The Company plans to offer, through a combination of direct response
TV,  print,  radio,  and  web-  based  advertising,  a CD ROM  library  of video
destinations;  a marketing  kit which  includes a guide to  marketing an at-home
business,  a training manual  describing the travel  industry,  a welcome letter
containing a password for the web site and an outline of Netcruise  policies and
procedures; and full-service support from the Company's live travel agents.

         "Parallel  Addressing  Video  Technology"  will  allow the  independent
travel  consultants  to see a destination  in full motion video and stereo audio
never  before  available  on the  internet,  without  waiting for a lengthy file
download.  Utilizing  this  proprietary  technology  the NetCruise web site will
interact with the  individual's PC, find the requested video clip on its CD ROM,
and plays it  locally  in a clear,  full  screen  mode.  Included  in the assets
acquired by NetCruise is an extensive library of video clips complete with music
and narratives in stereo,  which will bring views of cruise ships,  hotels,  and
destinations  from  around  the world to the user in  seconds.  When the  travel
consultant is ready, airline,  hotel, car rental and cruise bookings will all be
made quickly and easily via NetCruise's reservation web site.

         When  the  Company's   web-site  is  fully  operational  the  "Parallel
Addressing Video  Technology" will provide zero-wait time, full motion video and
stereo  audio  to  the  independent  travel  consultants  interacting  with  the
web-site. Unlike various forms of streaming video, live media and internet video
broadcasts,  this  technology  does  not rely on  bandwidth  as the  medium  for
delivery of video. UIT and its parent,  ULC, developed this technology and filed
for patents in July 1997. Although the "Parallel Addressing Video Technology" is
fully operational,  the internet web-site utilizing this technology is currently
still in development. Management expects the web-site to be fully operational by
mid-1999. Although the general public will be able to access much of the site to
obtain information and enroll as an independent  travel consultant,  the Company
intends that only  participating  travel  consultants who have paid a fee to the
Company and received a password will be able to access the  reservation  area of
the site.

         If at  any  point  the  individual  requires  additional  expertise,  a
personal NetCruise travel agent will be available by phone to guide them through
the process.  On February 1, 1999 the Company  acquired  Sammy's  Travel  World,
Inc., a full-service  travel agency specializing in leisure and corporate travel
and serving the New York City and  northern  New Jersey area  ("Sammy's"),  with
annual gross bookings of approximately  $1,800,000.  "Bookings"  consists of the
total dollar  amount of airline  tickets sold,  cruises sold,  and hotel and car
reservations  made. Sammy's will provide,  when necessary,  full service support
via telephone to the Company's independent travel consultants.  Sammy's is now a
wholly owned subsidiary of the Company and has five (5) employees.  The purchase
price for the acquisition was 36,600 shares of the Company's common stock which,
for accounting purposes, is being valued at $1.50 per

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share or an aggregate of $54,900. The Company acquired the following assets from
Sammy's:  telephones,  desks,  chairs,  fax and copy machines,  filing cabinets,
safe, shelves, typewriters and computers.

Mr. Harry Shuster has been appointed Chairman and Brian Shuster the President of
NetCruise Interactive,  Inc. Pursuant to the Asset Purchase Agreement, Mr. Brian
Shuster  will receive  $5,000 per month for his services as a consultant  to the
Company. In addition,  Messrs. Harry Shuster and Brian Shuster have been serving
as  directors  of the Company  since the  transaction  closed and both have been
nominated for election as directors of the Company.

On November 5 , 1998, in order to augment the Company's  entry into the internet
travel  business,  the Company  entered into an Asset  Purchase  Agreement  with
Sterling AKG Corp.  d/b/a  Sterling  Travel  ("Sterling"),  in which the Company
purchased all the assets  relating to Sterling's  network of independent  travel
consultants ("Sterling Travel Consultants") for a total purchase price of 25,000
shares of the Company's  Common Stock which, for accounting  purposes,  is being
valued at $1.50 per share for an  aggregate  of $37,500.  An  additional  17,500
shares  ("Escrow  Shares") will be held in escrow by counsel to the Company.  If
the Company does not achieve  $3,000,000  of gross sales from the sale of travel
services, including renewal fees from the Sterling Travel Consultants,  over the
initial twelve month period  beginning on November 1, 1998 and ending on October
31, 1999, the Escrow Shares shall immediately be returned to the Company. If the
Company achieves $3,000,000 of gross sales from Sterling Travel Consultants over
the initial twelve month period as described  herein,  the Escrow Shares will be
released by the Company. The valuation of the Company's stock at $1.50 per share
was a  negotiated  price  based  upon the  value of the stock at the time of the
negotiation.  It differs from the valuation given to the Company's  Common Stock
in the UIT  transaction  because the valuation was negotiated at a time when the
Common Stock was trading at a lower price.  Included in the assets  purchased by
the Company was a list of Sterling Travel Consultants (both active and inactive)
that had done or were doing business with Sterling.  Also included in the assets
purchased were contracts, files, correspondence, earning records, a data base of
former and current  customers  of Sterling  estimated  at  approximately  20,000
entries, property and equipment, including desks, chairs, fax and copy machines,
filing cabinets,  computers and miscellaneous office supplies.  The data base of
former and current customers also included the Sterling Travel  Consultants,  as
they were  considered  customers,  not  employees  of Sterling  and the names of
travel  agents  who  had  done   business  with  Sterling  as  Sterling   Travel
Consultants.  In addition,  included were  agreements  with such Sterling Travel
Consultants  setting  forth the  commissions  they  could  earn and  operational
matters relating to their position as an independent travel consultant.

            The Company's current  independent travel consultants are all former
Sterling  Travel  Consultants  whose contracts were assigned to the Company from
Sterling  as part of the  acquisition  and who paid  their  subscription  fee to
Sterling. In the event the independent travel consultants (formerly the Sterling
Travel Consultants) desire to renew their contracts,  a renewal subscription fee
will be paid to the Company.

         Since  on-line  transactions  can be faster,  less  expensive  and more
convenient than transactions  conducted via traditional  means, a growing number
of consumers are transacting  business over the World Wide Web. Examples of such
transactions  include buying  consumer  goods,  trading  securities,  purchasing
airline tickets and paying bills.  Based upon its research and discussions  with
individuals  knowledgeable  in  electronic  commerce  on  the  World  Wide  Web,
management  believes  that  27% of  adult  World  Wide Web  users  made  on-line
purchases  in 1997 and that 50% of adult World Wide Web users will make  on-line
purchases in 2000.  Management  believes  that as electronic  commerce  expands,
advertisers and direct  marketers will  increasingly  seek to use the World Wide
Web to locate  customers,  advertise  their products and services and facilitate
transactions.

         The Company also  believes  that  lodging and airline  travel will be a
major leader in this market with total on-line travel revenues possibly reaching
over $50  billion by 2001.  With travel  taking such a large  portion of on-line
sales,  management  of the Company  expects  that the enhanced  travel  services
offered by  NetCruise  will  attract a wide range of  internet  using  consumers
enabling NetCruise to become a significant participant in

                                                         7

<PAGE>



internet travel. In the event  shareholders do not approve this acquisition of a
technology  license and certain related assets,  the Company intends to continue
its entry into the internet  travel  business  either by negotiating a licensing
agreement  with UIT for the use of its  technology  license and certain  related
assets or by utilizing alternative technologies.

         Management  of the  Company set revenue  objectives  for the  limousine
reservation business and made the decision to review the operation at the end of
the third quarter to determine the best approach to maximize  utilization of the
Company's resources. The limousine reservation business did not meet its revenue
objectives and in early  September  1998, the Company decided to seek a buyer or
joint venture partner for its limousine reservation business.

         Management is of the opinion that the costs in developing  the new line
of  business  is  less  than  the  costs  required  to  maintain  the  limousine
reservation business until such time as revenues will be able to cover the costs
of  operation.  Further,  it is  management's  opinion that the internet  travel
business,  which is not compatible with the limousine reservation business,  can
be brought to market  sooner and will provide,  on a long term basis,  a greater
return to shareholders.

         On November 6, 1998 the Company  entered into an Acquisition  Agreement
(the "Sales  Agreement")  by and between the Company and Corporate  Travel Link,
Inc.  ("Travel  Link"), a wholly owned subsidiary of the Company (the sellers in
the transaction) and TranspoNet (a non-affiliated  company), Mark A. Kenny, Paul
Murray and Gen 02, Inc. (the purchaser in the  transaction),  a newly  organized
corporation  formed by Mark A.  Kenny,  a former  director  and  founder  of the
Company.  This sale will allow the  Company to  concentrate  its  resources  and
efforts on the continued build-up of its internet travel business.

          Under the terms of the Sale Agreement, which is subject to shareholder
approval,  the sellers will sell and  transfer  certain  contractual  rights and
obligations of the Company,  all of the assets of Travel Link which are utilized
in  connection  with the  ownership,  operation  and  marketing  of the  Genisys
Reservation System and its entire ownership interest in ProSoft to the purchaser
in the transaction,  constituting  approximately  20% of the total assets of the
Company.  (At September 30, 1998 the Company had total assets of $3,964,903,  of
which $744,122 were sold to Gen O2, Inc. ) ProSoft is an 80% owned subsidiary of
the  Company  which was  acquired  by the  Company in June,  1997.  ProSoft is a
software  development  company  which  developed  the software for the Company's
computerized  limousine  reservation and payment system.  Paul Murray,  a former
employee of the Company and  President  and  Shareholder  of ProSoft,  is also a
shareholder of Gen O2, Inc.

The  Company  sold  these  assets,  which had a net book value of $744,122,
for (i) 2,450 shares of Series A Convertible Preferred Stock of Gen O2, Inc.,
constituting a 32.66% interest in Gen O2, Inc.,  which  the  Company  carries
on its  balance  sheet as of December  31, 1998 at an asset value of  $624,204;
(ii)  certain contingent payments over a period of 5 years, totaling $1,080,000
if all payments to the Company are realized, however, since there are no 
minimum  contingent  payments,  it is  possible  that the Company will receive
no significant  contingent payments from GEN 02, Inc. and (iii) other 
significant terms as described below:

         a.   For each  completed  limousine  transaction  through  the  current
              system from corporate  users,  a payment of $0.20 per  transaction
              with a $100,000 maximum payment per year.
         b.   For each completed  limousine  transaction through the Almost Real
              Time System (the "ART System")  under  development  by the sellers
              that will be directed toward leisure customers, a payment of $0.20
              per transaction  with a $100,000 maximum payment in the first year
              and a  $0.30  payment  per  transaction  with a  $120,000  maximum
              payment per year thereafter.
         c.   If the  system  and the ART  System  are merged at any time in the
              future, the sellers shall receive a payment of $0.25 per completed
              transaction  with a $200,000 maximum payment in the first year and
              a $220,000 maximum payment per year thereafter.
         d.   If the payments are not reached in a particular year, the payments
              defined  in  letters  a-c  above  will  have a  carry-over  to the
              following year.
         e.   In no event shall any payments defined in letters a-c above be due
              to the sellers for transactions completed after December 10, 2003.

                                                         8

<PAGE>

f. For the transfer of the assets by the sellers and the  assumption  of certain
liabilities  of the sellers by the  purchaser as described  above along with the
agreement by the sellers to provide the  purchaser  with a series of loans,  the
purchaser  granted an equity  interest to the  sellers in Gen O2, Inc.  equal to
32.66% of the equity of Gen O2, Inc. The loans provided by the sellers include a
ninety day secured bridge loan in the amount of $40,000 secured by 22,857 shares
of Common Stock of the Company  owned by Mr.  Kenny,  a secured loan of $135,000
payable  commencing  in the second year and  secured by 77,143  shares of Common
Stock of the Company  owned by Mr.  Kenny.  Mr.  Kenny has also  pledged  23,428
shares of the  Company's  Common  Stock  owned by him to secure  the return of a
security  deposit to the Company and 68,000 shares of the Company's Common Stock
to secure  minimum  payments  which are required to be made by the Company under
certain contracts which were transferred to the purchaser in connection with the
sale.

g. A 32.66%  shareholder  of Gen O2, Inc.,  TranspoNet  has committed to provide
funding  for the  purchaser  of up to $240,000 in the form of a series of loans.
TranspoNet has a right to convert the unpaid  principal of the loans at any time
into a maximum  number of shares of common stock of the  purchaser not to exceed
an additional 6% equity interest in the purchaser.

         The Series A Preferred  Stock issued to the Company and  TranspoNet  in
accordance  with the  transaction  are part of a class of preferred stock of Gen
O2, Inc. designated as "Series A Preferred  Convertible Stock" and the number of
shares of preferred stock constituting such class is 4,900. The shares of Series
A Preferred  Stock  issued to the Company  together  with the shares of Series A
Preferred Stock issued to TranspoNet  constitute all of the authorized shares of
the Series A  Preferred  Stock of Gen O2,  Inc. So long as any share of Series A
Preferred  Stock  remains  outstanding,  Gen O2, Inc.  shall not  authorize  the
issuance  or issue any  additional  shares of  Series A  Preferred  Stock or any
shares of any series or class of stock  ranking  senior to, or on a parity with,
the Series A  Preferred  Stock as to rights  upon  liquidation,  dissolution  or
winding  up of Gen O2,  Inc.  without  the prior  written  consent of at least a
majority of the holders of the Series A Preferred Stock.

The par  value of the  Series A  Preferred  Stock is  $0.0001  per  share and no
dividends  shall be  declared or paid on the Series A  Preferred  Stock.  In the
event of a voluntary or  involuntary  liquidation,  dissolution or winding up of
Gen O2, Inc.,  the holders of the Series A Preferred  Stock shall be entitled to
receive  out of the  assets  of Gen  O2,  Inc.  available  for  distribution  to
stockholders,  before any  distribution  of assets is made to the holders of any
other  series  or class of stock of Gen O2,  Inc.,  a  liquidating  preferential
distribution  in an amount  equal to  $400.00  per  share of Series A  Preferred
Stock.  The holders of the Series A Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the shareholders of Gen O2, Inc. and shall be
entitled to one vote for each share of Series A Preferred  Stock. The holders of
the Series A Preferred  Stock shall not have  cumulative  voting rights.  At any
time and from time to time,  upon  notice to Gen O2,  Inc.,  the  holders of the
Series A Preferred  Stock  shall be  entitled to convert  each share of Series A
Preferred Stock into one fully paid and non-assessable  share of common stock of
Gen O2, Inc.  subject to  adjustments  for any stock  splits,  stock  dividends,
reverse stock splits or recapitalization.

         Upon  conversion  of the Series A Preferred  Stock into common stock of
Gen O2, , Inc. the Company and  TranspoNet  will each own 2,450 shares or 32.66%
of the issued and  outstanding  common  stock of Gen O2, Inc. It is  anticipated
that the Purchaser will issue an additional  2,500 shares of common stock in the
near  future,  thereby  diluting  the  ownership  interest  of the  Company  and
TranspoNet in Gen O2, Inc. to 24.5%. The Company's  influence in Gen O2, Inc. is
limited  to the  right  to  elect  one  member  of a five  (5)  member  Board of
Directors.  As part of the sale,  the  Company  is  loaning  to GEN 02,  Inc.  a
$135,000  installment  loan  and  a  $40,000  bridge  loan.  The  TranspoNet  is
providing,  commencing December 10, 1998, $20,000 per month to GEN 02, Inc., for
an aggregate of $240,000.  TranspoNet is not affiliated  with the Company or any
of its  shareholders.  The  primary  capitalization  of GEN 02,  Inc.,  is being
provided by the loans from the Company and  TranspoNet.  In  addition,  the sole
asset of GEN 02, Inc. Is the limousine  reservation  business.  As a result, the
Company will absorb all losses to the extent of the assets transferred. Although
there are no  minimum  contingent  payments,  the  Company  has begun to receive
minimal  contingent  payments  from GEN 02,  Inc.,  consisting  of two  payments
totaling  $3,656.20.  However,  it is possible that the Company will not receive
significant  contingent  payments  from GEN 02,  Inc.  over  the 5 year  period.
Shareholders should note that they

                                                         9

<PAGE>



are being asked to ratify the sale of the limousine  business to GEN 02, Inc., a
company organized by Mark A. Kenny, who is a former director of the Company. The
sale of the  limousine  reservation  business was  negotiated  with GEN 02, Inc.
while  Mr.  Kenny was  still a  director  of the  Company,  although  he did not
participate  in the directors  analysis and decision to sell the business to GEN
02, Inc.

         In the event that Shareholders do not approve the sale of the limousine
reservation  business,  the Company will be required to raise additional capital
to bring the limousine reservation business to full operation.  No assurance can
be given  that  the  Company  will be able to raise  such  funds.  In the  event
shareholders do not ratify the  acquisition of a technology  license and certain
related  assets  from UIT the  Company  intends to  continue  to expand into the
internet travel  business  either by negotiating a licensing  agreement with UIT
for the use of its technology license and certain related assets or by utilizing
alternative  technologies.  In the event  that the  purchase  of the  technology
license and certain related assets is not approved by the  Shareholders  and the
sale of the limousine reservation business is approved, the Company will not own
the  limousine  reservation  business or the internet  travel  business but will
continue to expand into the internet travel business.

         Management of the Company is confident  that there were no conflicts of
interest in negotiating the acquisition of the internet travel business and that
all negotiations with UIT were at "arms length".

If the  shareholders  approve  the  acquisition  of the  technology  license and
certain related assets and the sale of the limousine reservation  business,  the
effect to  shareholders is a change in the nature of the business of the Company
from the limousine reservation business to an internet travel business.


Employees

         The Company  presently  has 2 executive  officers and 11  non-executive
employees,  including 5 employees of the  Company's  wholly-owned  subsidiary.
None of these  employees is covered by a collective  bargaining  agreement.  The
Company  utilizes  several  software and  marketing  consultants  on a part-time
basis. The company believes its personnel relations to be satisfactory.


         Item 2.  Properties

         The Company and its subsidiaries  presently lease  approximately  2,380
square feet of office space at 2401 Morris Avenue, Union, New Jersey, 07083, and
1,000 square feet of office space at 6 Wall Street, Rockaway, New Jersey, 07866.
The  five-year  Union  lease  expires in March 2002 and  provides  for a monthly
rental of $3,731.53.  The Rockaway lease expires in August 2000 and provides for
a monthly rental of $850.

         The  properties  have been leased from  unaffiliated  third parties and
adequately satisfy the present needs of the Company and its subsidiaries.



                                                        10

<PAGE>



Item 3.  Legal Proceedings

On April 17, 1997, a former officer of the Company filed an action in the United
States District Court, District of New Jersey, against the Company, Travel Link,
the  officers of both  companies  and  various  related  and  unrealted  parties
seeking,  among other things, a declaratory  judgment that the former officer is
the owner of 333,216 shares of Common Stock of the Company which had been issued
to him at the  inception of Travel Link for services he was to have provided and
for unspecified compensatory and punitive damages. The Company believes that the
plaintiff's claims are without merit and intends to vigorously defend the action
and to assert numerous defenses and counterclaims in its answer.

On December 23, 1997, an  individual,  filed an action in the Superior  Court of
New Jersey against the Company and the former President of the Company, alleging
that the former  President of the Company induced such person to leave her place
of employment to assume  employment  with the Company.  The claim seeks monetary
damages  based upon an oral  promise of  employment  allegedly  made by the same
officer of the  Company.  The Company  believes  that the  plaintiff's  claim is
without merit and intends to vigorously defend the action and to assert numerous
defenses in its answer.  A former  officer and  director  has agreed to hold the
Company harmless and indemnify the Company from any and all claims.  Management
believes  that there will be no  material  effects on the Company as a result of
this action.


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

         Not applicable.

                                                      Part II


Item 5.  Market for the Registrant's Common Equity and Related Stockholder 
         Matters.


                                                        11

<PAGE>



Market Information

         Prior to 1998, the Company's  Common Stock was eligible to trade in the
over-the  counter  market,  however,  the  Company was unable to locate a quoted
price for its stock.  The Following  table  indicates the quarterly high and low
bid prices for the last two years for the Company's Common Stock.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                 Bid Price                Bid Price
                                                     1998                   1997         

                  Quarter Ended             High     Low               High     Low
                  -------------             ----     ---               ----     ---
                  March 31                 3.5      2.125             6.5      5.75
                  June 30                  3.937    2.375              9        5.75
                  September 30             3.5      2.25               9        3.875
                  December 31              4.125    2.75               5.375    2.75
</TABLE>

         The foregoing prices were provided by National Quotation Bureau.

         The  Company's  Common Stock,  Class A Redeemable  Warrants and Class B
Redeemable Warrants trade on The NASDAQ Stock MarketSM under the symbols,  NETC,
NETCW and NETCZ respectively.

         Approximate Number of Equity Security Holders

                                                         Approximate Number of
                                                          Holders of Record as
              Title of Class                              of March 25, 1999     
              --------------                            ----------------------

              Common Stock,
              $.0001 par value                                 1,100

         Included  in the number of  stockholders  of record are shares  held in
"nominee" or "street" name.

Dividends

         The Company has never paid any cash  dividends.  The Company  presently
intends to retain any future earnings for use in its operations and,  therefore,
does not expect to pay cash dividends in the foreseeable future.


Item 6.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations.


Comparison of Fiscal 1998 to Fiscal 1997

Revenues

         The principal  business  activity of the Company has been the operation
of a  computerized  limousine  reservation  and payment  system for the business
traveler.  The proprietary software that the Company developed enables limousine
reservations  to be  completely  computerized  i.e.,  be entirely  automatic and
operate without human  intervention  except for the initial  inputting of travel
information.

Prior to the sale of the limousine  reservation  business and the acquisition 
of the technology  license and certain related assets from UIT, which is
discussed  below,  the  Company  worked with travel agents and  corporate 
travel  departments  by providing a computerized system for securing limousine
reservations (collectively the "CRS's"). The

                                                        12

<PAGE>



Company had created its own computerized  system which was linked with the SABRE
and Apollo computer reservation systems, two of the four major airline
reservation  systems.  Limousine  reservations made through the SABRE and Apollo
computer  reservation  systems were  relayed  instantaneously  to the  Company's
computer  and then to a service  provider of the  clients  choice -- all without
human intervention -- and an immediate limousine reservation is confirmed.

         As of June 30, 1998, NetCruise, Inc. ( a wholly owned subsidiary of the
Company  formed on July 21, 1998 for the purpose of operating an internet travel
business) entered into an Agreement to purchase a technology license and certain
related assets from United Internet  Technology,  Inc. The Company determined to
expand into the  internet  travel  business  for several  reasons.  Although the
Company had begun to generate  revenues,  the Company found that many  limousine
providers were  resisting the payment of commissions or fees in connection  with
bookings on the  Company's  system  resulting  in a much slower  development  of
revenues for the Company than was originally  anticipated.  Management evaluated
the cost of operations for a more extended  period of time and  determined  that
the Company's available funds would be better spent in other areas of the travel
business and therefore determined to expand into the internet travel business.

         On November 5, 1998, in order to augment the  Company's  entry into the
internet travel business,  the Company entered into an Asset Purchase  Agreement
with Sterling AKG Corp.,  d/b/a Sterling Travel,  in which the Company purchased
all the assets relating to Sterling's network of independent travel consultants.

         In order to  concentrate  its  resources  and efforts on its  NetCruise
Internet  Travel  business,  in  November,  1998 the Company  agreed to sell the
assets of its computerized  limousine  reservation and payment system to Gen O2,
Inc., a company newly formed by a management group lead by Mark A. Kenny, former
director  and founder of the Company.  The Company owns a minority  interests in
the new company and will receive royalties on transactions  processed by the new
company for a period of five years.

         The Company's  internet travel business  generates revenues from people
who  have  paid  a  subscription  fee  and  signed  up  as  independent   travel
consultants. In addition,  airlines, hotels, car rental companies, cruise lines,
tour operators and other travel vendors will pay the Company commissions for all
sales generated by the Company's network of independent travel consultants. Such
commissions are then shared with the independent travel consultants.

The Company has also begun to receive limited contingent payments from  Gen  O2 
pursuant  to  the  November  6,  1998  Acquisition Agreement  whereby  the 
Company  sold all of the  assets  of its computerized limousine reservation
and payment system to Gen O2.

         The Company's revenues to date have not been significant.  Accordingly,
the Company and its subsidiaries continue to be in the development stage.




                                                        13

<PAGE>
Expenses

         The most  significant  component  of cost of service  for the  internet
travel business is the portion of the  commissions  received by the Company that
are shared with the independent  travel  consultants.  Another  component is the
cost of the implementation or start-up kits,  including CDROM,  provided to each
new independent travel consultant.

         General and administrative  expenses include salaries,  commissions and
benefits,  travel costs,  professional fees, rent, telephone and other operating
costs of the Company. The only internal expenditures capitalized with respect to
the costs of developing and  implementing  the Genisys  Reservation  and Payment
Systems have been $200,181 of salaries paid to Prosoft employees in fiscal
1998.

Results of Operations

         The  Company has been in the development stage and has only  generated
limited revenues.  The Company has been unprofitable since inception and expects
to incur  additional  operating  losses over the next several  fiscal  quarters.
Total  revenues for the year ended  December  31, 1998 were $33,290  compared to
no revenues for the years ended December 31, 1997 and December 31, 1996.

The corresponding cost of sales for fiscal 1998 was $19,306 compared to no costs
of sales for fiscal 1997.  The net loss for the year ended December 31, 1998 was
$2,344,485 or $.42 cents a share  compared to a loss of $1,590,125 or $.39 cents
a share for the year ended  December  31,  1997 and  $1,051,203  or $.36 cents a
share for the year ended  December  31, 1996.  As reflected in the  accompanying
financial statements,  the Company has incurred losses totaling $5,579,617 since
inception  and at  December  31,  1998,  had a  working  capital  deficiency  of
$196,212.

General and  administrative  expenses were $963,122 for the year ended  December
31, 1998 as  compared to $581,345  for the year ended  December  31,  1997.  The
primary reasons for the difference between the two years ended December 31, 1998
and December 31, 1997 are increased payroll costs due to staff increases for 
web site development and increases in legal expenses related to litigations.

         Payroll and  payroll-related  costs  increased  approximately $177,000
during the fiscal year ended December 31, 1998. Other approximate cost increases
during fiscal 1998 consist of professional fees ($105,000), insurance ($8,000),
and other  administrative  costs ($134,150) while consulting fees decreased 
$46,500.  Professional and consulting fees for the year ended December 31, 1998
total $248,000. Such amount consisted of attorneys' fees of $151,000, accounting
fees of $18,000, outside bookkeeping fees of $17,500, consulting fees of $36,000
payable to Loeb Partners and miscellaneous fees of $25,000.

          Prior to 1997 all expenses were related to the limousine business
and therefore are included in the equity loss of GEN 02, Inc.

The Company is  conducting a  comprehensive  review of its  computer  systems to
identify the systems

                                                        14

<PAGE>



that  could  be  affected  by  the  "Year  2000"  issue  and  is  developing  an
implementation plan to resolve the issue. The Year 2000 problem is the result of
computer  programs being written using two digits rather than four to define the
applicable year. Any of the Company's programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000 which
could cause a system failure or other computer  errors,  leading to a disruption
in operations. No easy technological "quick fix" has yet been developed for this
problem.  This Year 2000 problem  creates  risk for the Company from  unforeseen
problems  in its own  computer  systems  and from  third  parties  with whom the
Company deals on financial  transactions.  Such failures of the Company's and/or
third parties  computer  systems  could have a material  impact on the Company's
ability to conduct its business,  and  especially to process and account for the
transfer of funds electronically.

         With the goal of making the Company  Year 2000  compliant,  the Company
has developed a four phase implementation plan as follows:

         Inventory phase
         Vendor - contact phase
         Reintegration phase
         Testing phase

         The Company has budgeted  approximately  $15,000 to implement this plan
and has assigned overall  responsibility for the project to its Systems Manager.
All software  currently  being  developed by the Company or through  third party
contractors is being written to be Year 2000  compliant.  The Company,  with the
assistance of outside  software  contractors,  is in the process of changing its
accounting  system from  non-compliant  MAS-90 software to a compliant  software
system. Final implementation of fully tested and operational Year 2000 compliant
systems is projected  to be completed by the end of the second  quarter of 1999.
The Company's  banks and lenders have  communicated  that they will be Year 2000
compliant by the end of 1999.  No other third  party's Year 2000  compliance  is
expected to have a material impact on the operations of the Company.


Liquidity and Capital Resources

         The Company's  funds have  principally  been provided from Loeb Holding
Corp. as escrow agent, Loeb Holding Corp., LTI Ventures Leasing  Corporation,  
two private offerings and a public offering.

         In September 1995,  January 1996 and December 1996, the Company entered
into sale and lease-back  arrangements  whereby the Company sold the bulk of its
computer  hardware and commercially  purchased  software to a lessor for amounts
totaling  $295,000  and agreed to lease back such  equipment  for initial  terms
ranging from 24 to 30 months.  Pursuant to the November  1998 exchange of assets
for a 32.7%  interest  in Gen O2,  Inc.,  the  obligations  under  the  sale and
lease-back arrangements were assumed by Gen O2, Inc.

         In March 1998, Loeb Holding  Corp.,  as escrow agent for Warren D.
Bagatelle,  Managing Director of Loeb Partners,  Corp., HSB Capital,  trusts for
the benefit of families of two principals of Loeb Holding  Corporation and three
unaffiliated  individuals  of  two  Term  Promissory  Convertible  Notes  in the
principal amounts of $475,000 and $237,500  converted  $400,000 of the principal
amount of the former  note and  $200,000 of the  principal  amount of the latter
note  into  188,235  shares  and  94,118  shares  respectively  of the  Series A
Preferred Stock of the Company at a price of $2.125 per share.


         In March 1998,  Loeb Holding  Corp.,  as escrow agent for Warren D.
Bagatelle,  Managing Director of Loeb Partners,  Corp., HSB Capital,  trusts for
the benefit of families of two principals of Loeb Holding  Corporation and three
unaffiliated  individuals of four eighteen month  Convertible  Promissory  Notes
aggregating  $210,000,  converted the total  principal  amount of the four notes
($210,000)  into 98,824 shares of the Series A Preferred Stock of the Company at
a price of $2.125 per share.


                                                        15

<PAGE>



         In March 1998,  Loeb Holding  Corp.,  as escrow agent for Warren D.
Bagatelle,  Managing Director of Loeb Partners,  Corp., HSB Capital,  trusts for
the benefit of families of two principals of Loeb Holding  Corporation and three
unaffiliated  individuals of two Term Promissory  Convertible  Notes aggregating
$37,500,  converted  the total  principal  amount of the  notes  ($37,500)  into
400,000  shares of the Common  Stock of the Company at a price of  $0.09375  per
share.

The financing of Loeb Holding  Corp.  and the sale and  lease-back  arrangements
entered into by the Company  contributed to the original  capitalization  of the
Company.

         The  budgeted   cost  of  becoming   operational   is  expected  to  be
approximately  $1,342,000.  Of such amount,  approximately $198,000 is needed to
complete the web-site.  The remainder will be used to produce a television video
commercial  and purchase  media time.  The Company believes that it will be
able to finance such  development substantially from proceeds of a recent 
private placement, but there can be no assurance that such funds will be 
sufficient.

On December 31, 1998, the Company had cash of $145,921  and a working  capital
deficit  of  $196,212.  As of  November  5, 1998,  the  Company  has begun to
generate  revenues  from  shared  commissions  earned by the network of Sterling
Travel Consultants recently acquired,  although these revenues were not expected
to be  significant  for the balance of the fourth fiscal  quarter ended December
31, 1998.  Management of the Company  expects the internet travel business to be
fully  operational in mid 1999 and is planning to begin television  marketing of
the Company's  products in mid 1999. These efforts are expected to significantly
increase  revenues.  The Company  plans to  continue  the  aggressive  marketing
campaign as well as expand its network of travel  consultants  throughout  1999.
Although the Company has also begun to receive contingent  payments from Gen O2,
these revenues were not significant for the fourth fiscal quarter ended December
31, 1998. The Company expects its operations to achieve break-even by the end of
fiscal  1999.  The Company  completed  a private  placement  of common  stock in
January 1999 whereby it sold 1,000,000 shares of Common Stock for an aggregate
of $1,500,000. The Company estimates, including anticipated cash to be received
from revenues, that it will have sufficient resources to provide for its planned
operations for the next twelve months.  At the present time the Company does not
have any  alternative  plans to raise  additional  funds  needed  to  market  or
complete development of the web site.

          Inflation is not expected to have any material effect on the Company.


Item 7.  Financial Statements and Supplementary Data.

         See Pages F-1 through F-18.


Item  8.  Changes  In and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosures

         Not applicable


                                                        16

<PAGE>



                                                     PART III

Item 9.  Directors and Executive Officers of the Registrant

         The following table sets forth certain information with respect to each
of the Company's directors and executive officers.

   Name                    Age                           Position

Lawrence E. Burk          57           President, Chief Executive Officer 
                                             and Director

John H. Wasko             60      Chief Financial Officer, Secretary, Treasurer
                                            and Director

David W. Sass             63          Director

S. Charles Tabak          66          Director

Warren D. Bagatelle       60          Chairman

Harry Shuster             63          Director

Brian Shuster             40          Director

The Company's Audit and  Compensation  Committees  consist of Messrs.  Warren D.
Bagatelle,  S.  Charles  Tabak and David W. Sass.  All  officers  of the Company
devote their full time to the Company's business.

         Lawrence  E. Burk joined the Company on June 23,  1997,  as  President,
Chief Executive Officer,  and Director following a 27 year career with Alexander
& Alexander  Services.  From 1993 to early 1996, Mr. Burk served as Chairman and
CEO of  Alexander  &  Alexander,  Inc.,  the  U.S.  Retail  Subsidiary  of A & A
Services, and from early 1996 until the company's acquisition by AON Corporation
in late 1996, Mr. Burk served as President and Chief Operating  Officer of A & A
International,  the company's  global retail  operation.  Mr. Burk served on the
company's Global Retail Board from 1985; on A & A Services Operations Board from
1989; and on A & A Inc.s' Executive  Committee and Operations Board from 1989. A
& A was a NYSE  listed  Financial  Services  firm  with  revenues  of over  $1.3
billion.  Mr.  Burk  has a B.A.  degree  in  Economics  from  Southern  Illinois
University and is a member of the schools' Advisory Board.

         John H. Wasko has served the Company as a Director  since April,  1986,
as Secretary since September 1995, and as Treasurer and Chief Financial  Officer
since  April  1996.  Mr.  Wasko has also  served the  Company as  President  and
Chairman of the Board since its inception to August 1995,  and as Treasurer from
April 1986 to  September  1987 and from May 1988 to August  1995.  Mr. Wasko has
also  served as  Chairman of the Board,  President  and  Director of JEC Lasers,
Inc.,  presently an inactive company,  since it was organized in September 1977.
He was awarded a bachelor  of science  degree in physics in 1963 and a master of
science  degree in physics  (summa cum laude) in 1965 from  Fairleigh  Dickinson
University.

         David W.  Sass has been a  Director  since  April,  1997 and has been a
practicing  attorney  in New York City for the past 38 years and is  currently a
senior partner in the law firm of McLaughlin & Stern, LLP, securities counsel to
the Company.  Mr. Sass is also a director of Pallet Management Systems,  Inc., a
company  engaged  in the  manufacture  and  repair of wooden  pallets  and other
packaging services and a director of The Harmat  Organization,  Inc., a New York
based  construction  company  and a member  and Vice  Chairman  of the  Board of
Trustees of Ithaca College.  Mr. Sass earned a B.A. from Ithaca College,  a J.D.
from Temple  University  School of Law and an L.L.M. (in taxation) from New York
University School of Law.


                                                        17

<PAGE>



         S. Charles Tabak has been a Director since April,  1997.  Since 1991 he
has been the Chief  Executive  Officer of Arc Medical &  Professional,  Inc., an
employment  agency  specializing in placement of scientific,  medical and office
personnel.  From 1969 to 1990, he was the Executive  Vice  President and General
Counsel for Channel Home Centers Inc.  From 1967 to 1969, he was the Director of
Finance of J.J. Newbury Co. Mr. Tabak is a past member of the Board of Directors
of Channel Home  Centers,  Inc. and Charge A Plate Group of Greater New York. He
is a graduate of both NYU School of Business  and School of Law, and is admitted
to practice law in New York state and before the U.S. Supreme Court.

Warren D. Bagatelle has been a Director and Chairman of the Board of the Company
since  August,  1995. He served as Chief  Executive  Officer of the Company from
December 1996 through June, 1997. Since 1988, he has been a Managing Director at
Loeb  Partners  Corporation,  a New  York  City  investment  banking  firm.  Mr.
Bagatelle is also a director of Energy Research  Corporation,  a company engaged
in the  development  and  commercialization  of  electrical  storage  and  power
generation equipment,  principally fuel cells and rechargeable storage batteries
and a director of  Evercell,  Inc.,  a company  engaged in the  development  and
commercialization of batteries. Mr. Bagatelle has a B.A. in economics from Union
College and an M.B.A. from Rutgers University.

         Harry Shuster has been Chairman of the Board of NetCruise  Interactive,
Inc.,  a wholly  owned  subsidiary  of the Company and a Director of the Company
since July, 1998. Mr. Shuster has served as Chairman of the Board, President and
Chief Executive Officer of United Leisure Corporation  ("ULC"), a public company
engaged  in  children's   recreational  activities  and  interactive  technology
development,  since April,  1975. Mr. Shuster is also the Chairman of the Board,
President  and Chief  Executive  Officer of Grand  Havana  Enterprises,  Inc., a
public company  primarily  engaged in the business of ownership and operation of
private membership restaurants and cigar clubs. Mr. Shuster is also the Chairman
of the Board of United Film  Distributors,  Inc., a privately  held  independent
motion picture production corporation and the General Partner of HEP II, Inc., a
limited partnership engaged in the motion picture production business. Mr.
Shuster is the father of Mr. Brian Shuster.

Brian Shuster has been President of NetCruise  Interactive,  Inc. and a Director
of the  Company  since July,  1998.  He has served as Chief  Executive  Officer,
President and a director of United Film  Distributors,  Inc. since its inception
in May,  1995.  Since he has been with  United  Film  Distributors,  Inc. he has
served  as  the  producer  of  seven  films.   Prior  to  joining   United  Film
Distributors,  Inc., he served as President of Beverly Hills Producers  Group, a
private  production  company,  where he produced one motion  picture,  served as
executive  producer of another motion picture,  and oversaw  production of three
other  films.  From 1990  until 1993 Mr.  Shuster  served as Vice  President  of
Worldwide  Entertainment Group, where he also produced three motion pictures. He
is also currently a director of ULC and President of UIT. Mr. Shuster is the son
of Mr. Harry Shuster.

         Messrs. Harry Shuster and Brian Shuster are currently directors of UIT.
The Company  recently  acquired a technology  license and certain related assets
from UIT, which is a wholly owned  subsidiary of ULC, as more fully described in
Item 1. Messrs. Harry Shuster and Brian Shuster were elected as directors of the
Company  following this  transaction  pursuant to the acquisition  agreement and
will so serve  for three (3)  years,  if so  elected.  In  connection  with this
transaction,  Mr. Brian  Shuster  received two warrants,  each  entitling him to
purchase  200,000  shares of the Common  Stock of the  Company.  One  warrant is
exercisable  for 200,000 shares at $2.50 per share and may be exercised  between
April 1,  2002  and June 30,  2002,  but  only if  NetCruise  Interactive,  Inc.
("NetCruise")  achieves  profits equal to or exceeding  $5,000,000 for the years
1999,  2000 and 2001.  The other Warrant is  exercisable  for 200,000  shares at
$6.00 per share and may be  exercised  between  April 1, 2002 and June 30, 2002,
but only if NetCruise achieves profits equal to or exceeding $10,000,000 for the
years 1999, 2000 and 2001.



                                                        18

<PAGE>



Item 10.  Executive Compensation

         The  following  tabulation  shows  the total  compensation  paid by the
Company for services in all capacities during the years ended December 31, 1998,
1997 and 1996 to the  officers  of the Company  and total  compensation  for all
Officers as a group for such period:
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                           Annual Compensation                                  Long Term Compensation

                                                                                Awards           Payout
                                                                       Other            Restricted                 All
                                                              Annual            Stock   Options  LTIP     Other
Name and                   Year     Salary           Bonus    Compensation      Awards  /SAR's   Payout   Compensation
--------                   ----     ------           -----    ------------      ------  ------   ------   ------------
Principal
---------
Position                                                               (Mgmt. Fee)

Lawrence E. Burk           1998     $147,500         $0       $0                 $0     $0       $0                $0
President, & Chief         1997     $75,000(1)       $0       $0                 $0     $0       $0                $0
Executive Officer          1996     $0               $0       $0                 $0     $0       $0                $0

Joseph  Cutrona(2)         1998     $0               $0       $0                 $0     $0       $0               $0
                           1997     $41,631          $0       $6,667             $0     $0       $0               $0
                           1996     $73,500          $0       $5,000             $0     $0       $0               $0

Mark A. Kenny (3)          1998     $88,462          $0       $0                 $0     $0       $0               $0
                           1997     $64,231          $0       $28,967           $0      $0       $0               $0
                           1995     $42,000          $0       $16,250            $0     $0       $0               $0


John H. Wasko              1998     $80,000          $0       $0                 $0     $0       $0               $0
Chief Financial Officer,   1997     $81,247          $0       $20,000            $0     $0       $0               $0
Secretary & Treasurer      1996     $10,000          $0       $49,500            $0     $0       $0               $0

Warren D. Bagatelle        1998     $0               $0       $39,000(6)        $0      $0       $0               $0
Chairman                   1997     $0               $0       $59,500(4)        $0      $0       $0               $0
                           1996     $0               $0       $36,000(5)        $0      $0       $0               $0

</TABLE>
        
(1) Salary paid to Mr. Burk for the period June 23, 1997 thru December 31, 1997.
Mr. Burk's annual salary is $150,000.

(2) As of May 12,  1997,  Mr.  Cutrona  is no longer  an  employee,  officer  or
Director of the Company.

(3) Mr. Kenny formerly was the Company's  Executive Vice President.  He resigned
as an employee and a Director of the Company as of November 6, 1998.

(4) Includes  $51,000 of consulting  fees paid to Loeb Partners  Corporation  of
which Warren D. Bagatelle is Managing Director.

(5) Represents consulting fees paid to Loeb Partners Corporation.

(6)  Includes $36,000 of consulting fees paid to Loeb Partners Corporation of
which Warren D. Bagatelle is managing director. 



                                                                 19

<PAGE>



Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following  tabulation  shows the security  ownership as of February
22, 1999 of (i) each person known to the Company to be the  beneficial  owner of
more than 5% of the Company's  outstanding  Common Stock, (ii) each Director and
officer of the Company and (iii) all Directors and Officers as a group.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                            NUMBER OF                           PERCENT
NAME & ADDRESS                              SHARES OWNED                        OF CLASS

Loeb Holding Corporation
As Escrow Agent (1)
61 Broadway
New York, NY 10006                                   1,188,973                  17.6%

Loeb Holding Corporation (2)
61 Broadway
New York, NY 10006                                   98,824                     1.46%

United Internet Technologies, Inc. (3)(7)
18081 Magnolia Avenue
Fountain Valley, CA 92708                            900,000                     13.3%

Warren D. Bagatelle  (1)(2)
Loeb Partners Corporation
61 Broadway
New York, NY 10006                                   1,287,797                  19.1%

Mark A. Kenny
Gen O2, Inc.
15 Clyde Road, Suite 201
Somerset, NJ 08873                                   324,175                    4.8%

John H. Wasko (4)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083                                      137,046                    2%

Lawrence E. Burk (5)
Genisys Reservation Systems
2401 Morris Avenue
Union, NJ 07083                                      205,000                    3%

S. Charles Tabak (6)
ARC Medical Professional Personnel
36 Route 10W, Suite D
East Hanover, NJ 07936                                22,000                    *

David W. Sass (6)
McLaughlin & Stern, LLP
260 Madison Ave. 18th Fl.
New York, NY 10016                                    20,000                    *


                                                      

                                                        20


<PAGE>




Harry Shuster(3)(7)(8)
United Internet Technologies, Inc.
18081 Magnolia Avenue
Fountain Valley, CA 92708                              900,000                    13.3%

Brian Shuster (3)(8)
United Internet Technologies, Inc.
18081 Magnolia Avenue
Fountain Valley, CA 92708                                  0                    *


Yeshiva Beth Hillel of Krasner, Inc.                      400,000               5.9%
1371 42nd Street
Brooklyn, New York 11219


All Officers and Directors
as a group (7 persons)                             2,571,843(9)                 38%
---------------------
* less than 1%
</TABLE>
         (1) Includes  853,679 shares of Common Stock  purchased by Loeb Holding
Corporation, as escrow agent for Warren D. Bagatelle,  Managing Director of Loeb
Partners Corp.,  HSB Capital (of which Mr.  Bagatelle is a partner),  trusts for
the benefit of families of two principals of Loeb Holding  Corporation and three
unaffiliated persons, 282,353 shares of Common Stock issuable upon conversion of
282,353  shares of Series A Preferred  Stock of the Company and 52,941 shares of
Common Stock  issuable upon  conversion  of two  Convertible  Notes  aggregating
$112,500.  Loeb Holding  Corporation  disclaims any beneficial interest in these
shares.

         (2) Includes  98,824 shares of Common Stock issuable upon conversion of
98,824 shares of Series A Preferred Stock of the Company.

         (3) UIT will also receive 1,100,000 shares of Series B Preferred Stock,
convertible  into 1,100,000  shares of Common Stock if Shareholders  approve the
issuance of 1,100,000  shares of Common Stock and two Warrants,  each  entitling
the  holder  to  purchase  800,000  shares  of  Common  Stock.  One  warrant  is
exercisable  for 800,000 shares at $2.50 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding  $5,000,000 for the years 1999, 2000 and 2001. The other Warrant is
exercisable  for 800,000 shares at $6.00 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding $10,000,000 for the years 1999, 2000 and 2001.

         (4) Includes  14,362  shares of Common Stock owned of record by Joan E.
Wasko, John Wasko's wife, of which Mr. Wasko disclaims beneficial ownership, but
of which he may be deemed  beneficial  owner, a five (5) year option to purchase
35,000  shares  of the  Company's  Common  Stock at a price of $2.00  per  share
granted to Mr.  Wasko by the Company on November 1, 1996, a five (5) year option
to purchase an  aggregate  of 25,000  shares of Common Stock at a price of $4.75
per share  granted on March 12, 1999 and 5,333 shares of Common  Stock  issuable
upon  conversion  of Mr.  Wasko's  prorata  share of a  Convertible  Note in the
principal amount of $12,500.

         (5) Includes a five (5) year option to purchase an aggregate of 200,000
shares of Common Stock at a price of $4.75 per share granted on March 12, 1999

         (6) Includes a five (5) year option to purchase 15,000 shares of Common
Stock at a price of $4.75 per share granted on March 12, 1999.

                                                        

                                                        21

<PAGE>

          (7)  Includes the 900,000 shares of the Company's Common Stock owned
by UIT.  Mr. Harry Shuster is a significant shareholder, director and the 
Chairman of the Board of UIT and may be deemed the beneficial owner of these 
shares.

         (8) Does  not  include  two  warrants  issued  in  connection  with the
acquisition of assets from UIT, each  entitling Mr. Shuster to purchase  200,000
shares of the Company's  Common Stock.  One warrant is  exercisable  for 200,000
shares at $2.50 per share and may be  exercised  between  April 1, 2002 and June
30,  2002,  but  only  if  NetCruise  achieves  profits  equal  to or  exceeding
$5,000,000  for the years 1999,  2000 and 2001. The other warrant is exercisable
for 200,000 shares at $6.00 per share an may be exercised  between April 1, 2002
and June 30, 2002, but only if NetCruise  achieves profits equal to or exceeding
$10,000,000 for the years 1999, 2000 and 2001.

         (9)  Includes  all of the  options  granted  to  certain  officers  and
directors pursuant to the foot notes numbered (1) through (7) above.


Item 12.  Certain Relationships and Related Transactions

              In  February  1995,  Loeb  Holding  Corporation,  as escrow  agent
("Loeb"),  for Warren D.  Bagatelle,  HSB  Capital,  trusts  for the  benefit of
families of two principals of Loeb Holding  Corporation  and three  unaffiliated
individuals,  agreed  to loan the  Company  $500,000  evidenced  by a series  of
Convertible  Promissory Notes  ("Convertible  Promissory  Notes"). In September,
1995, Loeb converted the Convertible Promissory Notes into 841,455 common shares
of the Company and two Term  Promissory  Notes,  one in the principal  amount of
$475,000 and the other in the principal amount of $25,000.

         On August 11,  1995,  Robotic  Lasers,  Inc.  acquired  Travel  Link by
issuing  1,682,924  shares of  restricted  new  Common  Stock of the  Company in
exchange  for the  shares of the  common  stock of Travel  Link  owned by Joseph
Cutrona,  Mark A. Kenny and Steven E. Pollan,  which  represented all the issued
and outstanding shares of common stock of Travel Link.

         In August 1995 the Company  granted Mr. Wasko a five (5) year option to
purchase  25,000  shares of Common  Stock at a price of $0.60 per  share,  which
option has been  exercised.  In November,  1996 the Company  granted Mr. Wasko a
five (5) year option to  purchase  35,000  shares of Common  Stock at a price of
$2.00 per share,  and in March 1999 the Company  granted Mr. Wasko a five (5)
year option to purchase an aggregate of 25,000 shares of Common Stock at a price
of $4.75 per share.

         On September 5, 1995 the Company  entered into a three year  consulting
and investment banking agreement with Loeb Partners Corporation. Under the terms
of the agreement the Company pays Loeb  Partners  Corporation  $3,000 per month.
Loeb  Partners  Corporation  will  also  receive  a fee  for  arranging  private
financing  and  acquisitions.  This banking  agreement  has been extended by the
Company  for three (3)  years on the same  terms.  Mr.  Warren D.  Bagatelle,  a
Director and Chairman of the Company,  is a Managing  Director of Loeb  Partners
Corporation.

         During  December  1995,  Loeb  agreed  to  loan  the  Company  $250,000
evidenced by a series of Convertible  Promissory  Notes.  In November 1996, Loeb
converted the Convertible  Promissory Notes into (i) two Term Promissory  Notes,
one in the principal amount of $237,500 and the other in the principal amount of
$12,500  issued in December 1995 and discussed  below and (ii) 420,728 shares of
Common Stock of the Company,  of which 420,000  shares of Common Stock are owned
by four  unaffiliated  parties.  Loeb  Holding  Corporation  did not receive any
shares of Common Stock in this transaction.

         In March 1998 the holder of two Term  Convertible  Promissory  Notes in
the  principal  amounts of  $475,000  and  $237,500,  converted  $400,000 of the
principal  amount of the former note and $200,000 of the principal amount of the
latter note into 188,235 shares and 94,118 shares  respectively  of the Series A
Preferred Stock of the Company at a price of $2.125 per share.


                                                        22



                                                        

<PAGE>




         The holder of the term promissory notes is Loeb Holding Corporation, as
escrow agent for Warren D. Bagatelle,  Managing Director of Loeb Partners Corp.,
HSB Capital  (of which Mr.  Bagatelle  is a partner),  trusts for the benefit of
families of two principals of Loeb Holding  Corporation  and three  unaffiliated
persons.  Loeb Holding  Corporation  disclaims any beneficial  interest in these
shares. Warren D. Bagatelle is Chairman of the Company.

         The  Term  Promissory  Note in the  amount  of  $25,000  and  the  Term
Promissory  Note in the amount of $12,500 issued in December 1995 were converted
in March 1998 into 400,000  shares of the Common Stock of the Company at a price
of $0.09375 per share.

         In August  1996,  the  Company  gave  notice to Mr.  Pollan that it was
canceling  the  333,216  shares of Common  Stock which had been issued to him in
August of 1995.  It is the  Company's  position  that the Common Stock should be
canceled because, among other reasons, Mr. Pollan failed to provide the services
to the  Company  which  were to be the  consideration  for the  issuance  of the
shares. Mr. Pollan has commenced an action against the Company and others in the
New Jersey  Federal  Court which  contests  the  Company's  effort to cancel the
shares issued to him, and which seeks  monetary  damages and other  relief.  The
action is in its  preliminary  stages,  and no assurance  can be given as to its
ultimate outcome.

         During  November  and  December  1996,  the  Company  and Loeb  Holding
Corporation signed four eighteen (18) month Convertible Promissory Notes whereby
Loeb  Holding  Corporation  loaned the  Company  the sums of  $75,000,  $30,000,
$10,000 and $95,000 (totaling $210,00). The Promissory Notes which bear interest
at 10%, matured on May 11, 1998, May 25, 1998, June 2, 1998 and June 9, 1998. In
March 1998,  Loeb,  converted the total principal amount of the four Convertible
Promissory  Notes  ($210,000) into 98,824 shares of the Series A Preferred Stock
of the Company at a price of $2.125 per share.

         In connection  with the  acquisition of the technology  license and the
assets from UIT by  NetCruise,  Mr. Brian Shuster  received two  warrants,  each
entitling him to purchase 200,000 shares of the Common Stock of the Company. One
warrant  is  exercisable  for  200,000  shares  at $2.50  per  share  and may be
exercised  between  April  1,  2002 and June  30,  2002,  but only if  NetCruise
achieves  profits equal to or exceeding  $5,000,000 for the years 1999, 2000 and
2001. The other Warrant is exercisable for 200,000 shares at $6.00 per share and
may be exercised  between April 1, 2002 and June 30, 2002, but only if NetCruise
achieves profits equal to or exceeding  $10,000,000 for the years 1999, 2000 and
2001.

         In November 1998 the Company entered into an Acquisition Agreement with
a company  newly  formed by a management  group led by Mark A. Kenny,  a Company
founder and former  director.  This new company was organized for the purpose of
this acquisition. Mr. Kenny is still a shareholder of the Company.

          For the year ended  December  31, 1997 the Company paid to the firm of
McLaughlin  & Stern,  LLP the sum of $145,762  for legal  services.  Mr. Sass, a
director of the Company, is a member of said firm.

         The Company  believes that each of these  transactions was entered into
on terms at least as favorable to the Company as could have been  obtained  from
unaffiliated third parties.


Item 13.  Exhibits, Financial Statement Schedules and Reports on Form 8-k

(a)      (1)  Financial Statements
              Included in Part II of this report:



                                                        23



                                                        

<PAGE>



              Balance Sheets - December 31, 1998 and 1997.

              Statements of Operations  During the  Development  Stage - For the
              Period  from  Inception  through  December  31, 1998 and the Years
              Ended December 31, 1998 and December 31, 1997.

              Statements of Cash Flows - For the Period from  Inception  through
              December  31, 1998 and for the Years Ended  December  31, 1998 and
              December 31, 1997.

              Statement of Changes in Stockholders' Equity - For the Years Ended
              December 31, 1998 and December 31, 1997.

              Notes to Financial Statements


         (2)  Exhibits

         3.1*     Registrant's Articles of Incorporation
         3.2*     Registrant's By-Laws
         4.1*     Form of Common Stock Certificate
         4.2**    Redeemable  Warrant  Agreement  with Form of Class A and 
                  Class B Warrant 
         4.3**    Redeemable  Class X and Class Y Warrant  issued to Brian
                  Shuster to purchase up to
                  200,00 shares of the Company's Common Stock.
         4.4**    Redeemable  Class  V and  Class W  Warrant  issued  to  United
                  Internet Technologies, Inc. to purchase up to 800,00 shares of
                  the Company's Common Stock.
         10.1**   Copy of Agreement dated June 30, 1999 between the Company and 
                  United Internet Technologies, Inc., formerly known as United 
                  Leisure Interactive, Inc. relating to the purchase of a
                  technology license and certain related assets.
         10.2     Copy of Agreement  dated  November 6, 1998 between the Company
                  and Corporate  Travel Link, Inc., a wholly owned subsidiary of
                  the Company,  TranspoNet,  Mark A. Kenny,  Paul Murray and Gen
                  02,  Inc.,  relating  to the sale of the  Genisys  Reservation
                  Systems business.

All of the above referenced documents marked with an (*) are incorporated herein
by  reference  to the  Exhibit  bearing  the  same  number  in the  Registrant's
Registration Statement on Form SB-2, File No. 333-15011.

All of the  above  referenced  documents  marked  with an (**) are  incorporated
herein by reference to the Exhibit the Company's Form 8-K dated March 26, 1998.

(b)      (1)  Reports on Form 8-K




<PAGE>
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                                              Page

Independent Auditors' Report                                                                                  F-2

Consolidated Financial Statements:

     Consolidated Balance Sheets at December 31, 1998 and 1997                                                F-3

     Consolidated Statements of Operations for the Years Ended December 31, 1998
        and 1997 and the Period From March 7, 1994  (commencement of development
        stage activities) to December 31, 1998
                                                                                                              F-4

     Consolidated Statements of Changes in Stockholders' Equity
         from inception to December 31, 1996 and for the Years Ended December 31, 1998 and 1997
                                                                                                              F-5

     Consolidated Statements of Cash Flows for the Years Ended December 31, 1998
        and 1997, and the Period From March 7, 1994 (commencement of development
        stage activities) to December 31 ,1998
                                                                                                              F-6

     Notes to Consolidated Financial Statements                                                           F-7 to F-21

   </TABLE>
                                           F-1
<PAGE>


                                               INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Genisys Reservation Systems, Inc.
(A Development Stage Company)


We  have  audited  the  accompanying  consolidated  balance  sheets  of  Genisys
Reservation Systems,  Inc. and Subsidiaries as of December 31, 1998 and 1997 and
the related  consolidated  statements of  operations,  changes in  stockholders'
equity and cash flows for the years ended  December  31, 1998 and 1997,  and for
the period from March 7, 1994  (commencement of development stage activities) to
December 31, 1998.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Genisys Reservation
Systems,  Inc. and Subsidiaries at December 31, 1998 and 1997 and the results of
their  operations and their cash flows for the years ended December 31, 1998 and
1997, and for the period from March 7, 1994  (commencement of development  stage
activities)  to  December  31,  1998,  in  conformity  with  generally  accepted
accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the  Company  is a  development  stage  company  and has
suffered recurring losses from operations that raise substantial doubt about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 2. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



                                                          WISS & COMPANY, LLP


Livingston, New Jersey
March 9, 1999
    
                                     F-2
<PAGE>
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                           Development Stage Companies
                           CONSOLIDATED BALANCE SHEETS

                                                                                                        December 31,
                                                                                                   1998              1997

Cash and equivalents                                                                             $ 145,921        $2,207,841
Accounts receivable, less allowance for doubtful
 accounts of $15,000 (1998)                                                                         67,174             8,784
Prepaid expenses                                                                                       835             5,127
                                                                                                      ----            -----
      Total Current Assets                                                                         213,930         2,221,752
                                                                                                   664,204                 -
                                                                                                    91,400           261,643

 RELATED ASSETS, LESS ACCUMULATED AMORTIZATION                                                   2,376,265           581,193
                                                                                                    94,638            88,278
                                                                                                   -------           ------
                                                                                              $  3,440,437        $3,152,866
                                                                                               ============       ==========


Current maturities of long-term debt                                                              $ 21,875         $ 114,957
Accounts payable and accrued expenses                                                              208,509           192,712
Accrued interest payable - related parties                                                         179,758           163,296
                                                                                                  --------          -------
      Total Current Liabilities                                                                   410,142           470,965
                                                                                                  --------          -------
                                                                                                   90,625           982,742
                                                                                                   -------          -------


Preferred stock, $.0001 par value: 24,294,000 shares
  authorized, none outstanding                                                                           -                 -
Series A preferred stock, $.0001 par value, 706,000 shares
  authorized; issued and outstanding 381,177 shares (1998)                                              38                 -
Common stock, $.0001 par value: 75,000,000 shares
  authorized; issued and outstanding 6,913,965* shares
  (1998) and 4,355,594 shares (1997)                                                                   691               436
Additional paid-in capital                                                                       8,518,558         4,933,851
Deficit accumulated during development stage                                                    (5,579,617)       (3,235,128)
                                                                                                -----------       -----------
      Total Stockholders' Equity                                                                 2,939,670         1,699,159
                                                                                                ----------         ---------
                                                                                              $  3,440,437        $3,152,866
                                                                                              ============         ==========
                                            F-3
<PAGE>
      GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                  Development Stage Companies
             CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                             Period from
                                                                                                            March 7, 1994
                                                                                                           (Commencement of
                                                                                                             Development
                                                                                                         Stage Activities) to
                                                                       Year Ended December 31,               December 31,
                                                                       1998                1997                  1998
                                                                       -----               ----                  ----

SERVICE REVENUES                                                          $ 33,290                 $ -               $ 33,290
                                                                          ---------                ----              --------

     Cost of services                                                        19,306                   -                 19,306
     General and administrative                                             963,122             581,345              1,544,467
     Depreciation and amortization                                          228,563              21,686                250,249
     Interest expense (income), net                                         (20,507)            55,407                205,699
                                                                            --------            -------               -------
                                                                         1,190,484             658,438              2,019,721
                                                                         ----------            --------             ---------
LOSS BEFORE EQUITY IN GEN 02, INC.                                       (1,157,194)           (658,438)            (1,986,431)
EQUITY IN LOSS OF GEN 02, INC.                                           (1,187,295)           (931,687)            (3,593,186)
                                                                         -----------           ---------            -----------
NET LOSS INCURRED DURING THE
     DEVELOPMENT STAGE                                                  $(2,344,489)       $ (1,590,125)          $ (5,579,617)
                                                                        ============       =============          =============
WEIGHTED AVERAGE NUMBER OF
     COMMON SHARES OUTSTANDING                                           5,561,000           4,121,000              3,313,000
                                                                         ==========          ==========             =========
BASIC AND DILUTED LOSS
 PER COMMON SHARE                                                            $ (.42)             $ (.39)               $ (1.69)
                                                                             =======             =======               ========

See accompanying notes to consolidated financial statements.
         
                                                      F-4
<PAGE>
         GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
          Development Stage Companies
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                                                                                                       Deficit
                                                                                                                     Accumulated
                                                  Amount    Series A Preferred                           Additional  During the
                                                    Per      Stock                    Common Stock        Paid-in    Development
                                                  Share      Shares    Par Value   Shares      Par Value  Capital      Stage

INCEPTION TO DECEMBER 31, 1996:
   Issuance of common stock in August 1995 for
     for services received in 1996 and 1995          $ .01          -       $ -    1,682,924      $ 168    $ 19,432          $ -
   Net liabilities (principally accounts payable)
     assumed in reverse acquisition in
     August 1995                                      (.05)         -         -      280,487         28     (14,115)           -
   Conversion of related party debt into
     common stock                                      .02          -         -      841,455         84      13,322            -
   Issuance of common stock in 1996 for:
     Cash                                             2.00          -         -       55,000          6     109,994            -
     Conversion of stockholder note                    .02          -         -      420,766         42       6,661            -
   Contributions to capital in 1996                      -          -         -            -          -     106,700            -
   Issuance of warrants                                  -          -         -            -          -      10,350            -
   Losses incurred during the development
     stage                                               -         -         -            -          -           -    (1,645,003)
                                                                   --        --           --         --          --   -----------



BALANCES, DECEMBER 31, 1996                                         -         -    3,280,632        328     252,344   (1,645,003)
YEAR ENDED DECEMBER 31, 1997:
   Contribution to capital by
     stockholder/officer                                            -         -            -          -     128,700            -
   Proceeds from public offering
     of common stock and
     warrants, less related costs                     5.00          -         -    1,035,000        103   4,507,812            -
   Conversion of convertible
     notes into common stock                          2.00          -         -       15,000          2      29,998            -
   Issuance of common stock
     upon exercise of option                           .60          -         -       25,000          3      14,997            -
   Net loss                                                        -         -            -          -           -    (1,590,125)
                                                                   ==        ==           ==         ==          ==   ===========

BALANCES, DECEMBER 31, 1997                                         -         -    4,355,632        436   4,933,851   (3,235,128)

   Issuance of stock upon Sterling acquisition        1.50          -         -       25,000          3      37,498            -
   Issuance of common stock upon
     acquisition of UIT assets                        1.53          -         -    2,000,000        200   2,499,800           *
   Conversion of convertible
     notes into:
       Common stock                                    .09          -         -      400,000         40      37,460            -
       Series A preferred stock                      2.125    381,177        38                             809,962
   Issuance of common stock for cash                                                 133,333         13     199,987            -
   Net loss                                           1.50         -         -            -          -           -    (2,344,489)
                                                                   ==        ==           ==         ==          ==   ===========

BALANCES, DECEMBER 31, 1998                                    381,177      $ 38    6,913,965      $ 691  $ 8,518,558 $ (5,579,617)
                                                               ========     =====   ==========     ====== =========================

*2,000,000 shares issued are subject to shareholder aproval (Note 3).


See accompanying notes to consolidated financial statements.

                                                                F-5
<PAGE>

                                            Development Stage Companies
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                              Period from
                                                                                                             March 7, 1994
                                                                                                             (Commencement of
                                                                                                              Development
                                                                                                           Stage Activities) to

                                                                                 Year Ended December 31,     December 31,
                                                                                     1998          1997          1998
                                                                              -----  -----   ----- -----         ----
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                   $ (2,344,489) $ (1,590,125)     $ (5,579,617)
     Adjustments to reconcile net loss to net
       cash flows from operating activities:
        Equity in loss of GEN 02, Inc. since its inception                           119,918             -           119,918
        Depreciation and amortization                                                534,503       217,387           868,397
        Contribution to capital for services rendered                                      -             -            49,600
        Changes in operating assets and liabilities:
          Accounts receivable                                                        (59,296)       (8,784)          (68,080)
          Prepaid expenses                                                            (7,478)       (4,286)          (12,845)
          Deposits and other                                                          (6,360)        3,241           (68,683)
          Accounts payable and accrued expenses                                      41,775       (147,669)         381,757
                                                                                     -------      ---------         -------
            Net cash flows from operating activities                              (1,721,427)   (1,530,236)       (4,309,553)
                                                                                  -----------   -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of equipment and software                                            (445,007)     (457,202)       (1,549,982)
     Acquisition of Prosoft, Inc.                                                          -       (34,602)          (34,601)
          Advances to GEN 02                                                         (40,000)           -            (40,000)
                                                                                     --------           --           --------
            Net cash flows from investing activities                                (485,007)     (491,804) -     (1,624,583)
                                                                                    ---------     --------- --    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments of long-term debt                                                      (92,986)      (78,340)         (171,326)
     Proceeds from public offering of common
        stock and warrants net of deferred offering costs                                  -     4,661,125         4,507,915
     Issuance of common stock for business acquisitions                               37,500             -            37,500
     Contribution to capital - stockholder/officer                                         -       128,700           205,400
     Proceeds from issuance of notes payable                                               -             -           955,000
     Payments under computer equipment leases                                              -             -           (63,076)
     Proceeds from sale and lease-back                                                     -             -           294,644
     Proceeds from sale of common stock                                              200,000             -           310,000
     Proceeds from issuance of 10% promissory
        notes and related warrants, less related costs                                     -             -           517,500
     Payments of 10% promissory notes                                                      -      (563,500)         (563,500)
     Other                                                                                -         (9,652)          50,000
                                                                                          --        -------          ------
            Net cash flows from financing activities                                144,514     4,138,333   -     6,080,057
                                                                                    --------    ----------  --    ---------
NET CHANGE IN CASH AND EQUIVALENTS                                                (2,061,920)    2,116,293           145,921
CASH AND EQUIVALENTS, BEGINNING OF PERIOD                                         2,207,841        91,548                 -
                                                                                  ----------       -------                -
CASH AND EQUIVALENTS, END OF PERIOD                                               $ 145,921   $ 2,207,841         $ 145,921
                                                                                  ==========  ============        =========
SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                                                                 $ 27,824      $ 94,822         $ 168,322
                                                                                   =========     =========        =========
     Issuance of common stock for UIT assets                                    $ 2,500,000           $ -       $ 2,500,000
                                                                                ============          ====     ===========
     Conversion of related party debt into common
        stock                                                                      $ 37,500           $ -          $ 57,609
                                                                                   =========          ====         ========
     Conversion of convertible notes payable
        to common stock                                                                 $ -      $ 30,000          $ 30,000
                                                                                        ====     =========         ========
     Conversion of related party debt into Series A preferred stock               $ 810,000           $ -         $ 810,000
                                                                                  ==========          ====        =========
     Net assets exchanged for investment in GEN 02, Inc.                          $ 744,122           $ -         $ 744,122
                                                                                  ==========          ====        =========

See accompanying notes to consolidated financial statements.
       
                                                                    F-6
<PAGE>

               GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                         Development Stage Companies

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1   -      Summary of Significant Accounting Policies:

                Development   Stage  Activities  -  Although  planned  principal
                operations  have  commenced,  revenues  to date  have  not  been
                significant;  accordingly,  the  Company  and  its  subsidiaries
                continue to be in the development stage.

                Estimates  and  Uncertainties  - The  preparation  of  financial
                statements  in conformity  with  generally  accepted  accounting
                principles requires management to make estimates and assumptions
                that affect the reported  amounts of assets and  liabilities and
                disclosure of contingent  assets and  liabilities at the date of
                the financial  statements  and the reported  amounts of revenues
                and expenses during the reporting  period.  Actual  results,  as
                determined at a later date, could differ from those estimates.

                Principles  of  Consolidation  -  The   consolidated   financial
                statements   include  the   accounts  of  the  Company  and  its
                majority-owned   subsidiaries.   All  significant   intercompany
                transactions and accounts have been eliminated in consolidation.

                Financial  Instruments - Financial  instruments include cash and
                equivalents,  other assets,  accounts payable,  accrued expenses
                and  long-term   debt.   The  amounts   reported  for  financial
                instruments   are   generally   considered   to  be   reasonable
                approximations of their fair values, based on market information
                available  to  management;  the  difference  is  not  considered
                significant.

                Cash and  Equivalents - The Company  considers all highly liquid
                debt  instruments  purchased with an original  maturity of three
                months or less to be cash equivalents.

                Concentration  of Credit Risk - The Company  maintains  its cash
                balances in several financial institutions. The accounts at each
                institution  are  insured  by  the  Federal  Deposit   Insurance
                Corporation  up to $100,000.  At December 31, 1997,  the Company
                had no uninsured cash  balances,  as  approximately  $90,000 was
                invested in an insured money market fund.

                Investment  in and  Advances  to Gen 02,  Inc. - The  Company is
                reporting  contingent payments received from Gen 02, Inc. on the
                cost recovery method.  Although any earnings will be reported on
                the equity  method,  all losses  incurred by Gen 02, Inc. to the
                extent  of  the   Company's   carrying   amount  of  the  assets
                transferred  plus  advances  will  be  reported  in  full by the
                Company,  since the only other capital being  contributed to Gen
                02, Inc. was $50. To the extent not recovered through contingent
                payments,  the difference is being  amortized on a straight-line
                basis over the  remaining  lives of the assets  transferred  and
                will  be  further  written  down  for  any  impairment.   It  is
                reasonably  possible that the  remaining  economic life of these
                assets  could be reduced  significantly  in the near term due to
                future  developments.  As a result,  the carrying amounts may be
                reduced materially in the near term.

                                               F-7
<PAGE>

                Property and  Equipment - Property and  equipment  are stated at
                cost and depreciation is provided using the straight-line method
                over an estimated useful life of 5 years.

                Computer  Software  Costs and  Technology  Licenses- The Company
                capitalizes the direct costs of materials, services and interest
                consumed  in  software  development  and the  cost  of  acquired
                technology  licenses  and related  assets.  Such costs are being
                amortized  on a  straight-line  basis over three to five  years,
                subject to periodic evaluation for impairment.  It is reasonably
                possible that the remaining  economic life of these assets could
                be  reduced  significantly  in  the  near  term  due  to  future
                developments.  As a result,  the carrying amounts may be reduced
                materially in the near term.

                Adoption of Statement of Position 98-1 had no material effect on
                the Company, as its prior policies substantially conformed.

                Debt Issue  Costs - Costs  related to the  issuance  of debt are
                capitalized  and amortized  over the term of the related debt as
                an adjustment to interest expense.

                Income Taxes - Deferred tax assets and  liabilities are computed
                for temporary  differences  between the financial  statement and
                tax bases of assets and liabilities  that will result in taxable
                or deductible  amounts in the future,  based on enacted tax laws
                and rates  applicable  to the  periods  in which  the  temporary
                differences  are expected to affect  taxable  income.  Valuation
                allowances are established when necessary to reduce deferred tax
                assets to the amount expected to be realized.

                Stock Based  Compensation  - Statement of  Financial  Accounting
                Standards No. 123  "Accounting  for  Stock-Based  Compensation,"
                ("FAS  123")  encourages,  but does not  require,  companies  to
                record compensation cost at fair value for stock-based  employee
                compensation  plans.  The  Company  has  chosen to  continue  to
                account for stock-based  compensation  using the intrinsic value
                method prescribed in Accounting Principles Board Opinion No. 25,
                "Accounting   for  Stock  Issued  to  Employees,"   and  related
                Interpretations.  Accordingly,  compensation  cost  for  options
                granted by the Company is measured as the excess, if any, of the
                quoted  market price of the  Company's  stock at the date of the
                grant over the amount an employee must pay to acquire the stock.
                Since the exercise  price equaled or exceeded the estimated fair
                value  of  the  underlying  shares  at the  date  of  grant,  no
                compensation was recognized in 1998 and 1997.

                                             F-8
<PAGE>

                Had  compensation  cost been  based  upon the fair  value of the
                options  on the date of grant,  as  prescribed  by FAS 123,  the
                Company's  proforma  net loss and net loss per share  would have
                been  approximately  $(2,681,000) or $0.48 per share in 1998 and
                approximately  $(2,801,000)  or $.68 per share in 1997. The fair
                value of the options  were  estimated at the date of grant using
                the  Black-Scholes  option  pricing  model  with  the  following
                weighted-average assumptions,  risk-free interest rates of 5.0%,
                dividend yield of 0.0%,  volatility factor equal to 70.4% (1998)
                and 59.2%  (1997) and an  expected  life  equaling  the  options
                exercise periods.

                Net Loss Per Common  Share  -Basic  loss per share is based upon
                the weighted  average number of outstanding  common shares.  The
                shares  issuable upon the exercise of  outstanding  warrants and
                options  or  upon  conversion  of  outstanding  debt  have  been
                excluded  since the  effect  would be  antidilutive,  due to net
                losses for all periods presented;  accordingly, diluted loss per
                share is the  same as  basic  loss  per  share  for all  periods
                reported. Common shares and warrants issuable upon contingencies
                described  in Note 7 are being  excluded  from basic and diluted
                earnings (loss) per share until the beginning of the year if and
                when the contingencies are met.


Note  2 -  Operating  and  Liquidity  Difficulties  and  Management's  Plans  to
           Overcome:

                The accompanying  financial  statements of the Company have been
                presented  on  the  basis  that  it is a  going  concern,  which
                contemplates  the realization of assets and the  satisfaction of
                liabilities  in the normal  course of business.  The Company has
                reported  net  losses  since  inception  and  expects  to  incur
                additional operating losses over the next several quarters.  The
                Company  has  also  experienced  liquidity   difficulties  since
                inception,  and in order to  continue  the  marketing  and sales
                efforts  of the  Company's  internet  travel  business  may need
                additional  financing.  The Company has financed its  operations
                since inception with the proceeds from the issuance of long-term
                debt,  with the proceeds  from its public and private  offerings
                and loans from a related party.

                From  inception  to  November  6, 1998,  the  operations  of the
                Company  were  devoted  to  market  research  and  developing  a
                software and hardware  system for  computerizing  the  limousine
                reservation and payment system.
                Upon  completion,   the  Company  commenced  generating  limited
                revenues.

                As of November 5, 1998,  the Company began  generating  revenues
                from shared commissions earned by the network of Sterling Travel
                Consultants recently acquired,  although these revenues were not
                significant  for the fourth fiscal  quarter  ended  December 31,
                1998.  Management  of the Company  expects the  internet  travel
                business to be fully  operational in mid-1999 and is planning to

                                             F-9
<PAGE>

                begin  television   marketing  of  the  Company's   products  in
                mid-1999.  These efforts are expected to significantly  increase
                revenues in 1999.  The Company  plans to continue an  aggressive
                marketing  campaign  as well as  expand  its  network  of travel
                consultants  throughout 1999. The Company expects its operations
                to achieve break-even by the end of fiscal 1999. The Company has
                also begun to receive  contingent  payments from GEN 02 although
                these  payments  were  not  significant  for the  fourth  fiscal
                quarter ended December 31, 1998. The Company completed a private
                placement of common  stock in January  1999 and  received  gross
                proceeds of $1,500,000  of which  $200,000 was received in 1998.
                With these  proceeds and  anticipated  cash to be received  from
                revenues, the Company  believes  that it will  have  sufficient
                resources  to provide  for its planned  operations  for the next
                twelve  months.  At the present time,  the Company does not have
                any alternative plans to raise additional funds needed to market
                or  complete  development  of  its  web  site  or to  fund  cash
                shortfalls should anticipated revenues not be achieved.

                Reference  should  be  made  to  "Management's   Discussion  and
                Analysis  of  Financial  Condition  and  Results of  Operations"
                included elsewhere herein for additional information.

Note 3 -  Acquisitions,  Exchange of Assets for Interest in Non  Majority  Owned
          Entity and Business Segments:

                Acquisitions  - In June 1997,  the Company  acquired  80% of the
                outstanding  common stock of Prosoft,  Inc.  ("Prosoft")  for an
                aggregate  purchase price of $34,602.  This transaction has been
                accounted  for as  purchase  and is  included  in the  Company's
                consolidated financial statements as of the date of acquisition.
                The assets acquired consist principally of equipment.

                Net Cruise - As of June 30, 1998,  the  Company's,  newly formed
                subsidiary, Net Cruise Interactive, Inc. ("Net Cruise") acquired
                computer software,  a technology license and related assets from
                United  Leisure  Interactive,   Inc.  ("UIT")  in  exchange  for
                2,000,000  shares  of  the  Company's  stock  and  two  warrants
                ("Warrants"). Subsequently, the Company was advised that because
                the  issuance of 2,000,000  shares and warrants  exceeded 20% of
                the issued and  outstanding  shares,  shareholder  approval  was
                required by a NASDAQ rule. NASDAQ has agreed to continue listing
                the Company's securities on the NASDAQ Small Cap Market pursuant
                to the following  conditions:  (i) the UIT  Transaction  must be
                unwound in the event  shareholders do not ratify the acquisition
                of the software,  technology  license and certain related assets
                from UIT and approve the issuance of 1,100,000  shares of Common
                Stock and two Stock  Purchase  Warrants to UIT; (ii) the Company
                must file a Definitive  Proxy  Statement with the Securities and
                Exchange  Commission and NASDAQ on or before  February 15, 1999;
                and (iii) the Company must submit  documentation to NASDAQ on or
                before  April  15,  1999   evidencing   either  the  receipt  of
                shareholder approval of the issuance of additional shares to UIT
                or the unwinding of the issuance of additional shares to UIT and
                purchase of the  technology  license and certain  related assets
                from UIT. The Company has  requested  an  extension  from NASDAQ
                with respect to the deadline to July 31, 1999.

                                                   F-10
<PAGE>
                The Company and UIT have  restructured  the transactions so that
                UIT will return to the Company 1,100,000 shares of the Company's
                Common Stock (retaining 900,000 shares that are not in violation
                of the NASDAQ Market Place Rule) and the  Warrants.  The Company
                will  issue to UIT  1,100,000  shares  of  Convertible  Series B
                Preferred Stock (the "Series B Preferred Stock"), which Series B
                Preferred  Stock is  automatically  convertible  into  1,100,000
                shares of the Company's Common Stock upon  Shareholder  approval
                of the  issuance of the  1,100,000  shares of Series B Preferred
                Stock  and  the  Warrants.  The  Series  B  Preferred  Stock  is
                non-voting  stock and carries a mandatory  dividend of $275,000,
                payable on September 30, 1999 and a mandatory quarterly dividend
                at the  rate  of  $68,750  commencing  with  the  quarter  ended
                December  31,  1999.   No  dividend   will  be  payable  if  the
                Shareholders approve the issuance of the 1,100,000 shares Common
                Stock  and  Warrants  prior to the time  that  the  dividend  is
                payable. Therefore, the total purchase in the UIT Transaction is
                900,000  shares of the  Company's  Common  Stock  and  1,100,000
                shares of the Company's Series B Convertible Preferred Stock. If
                shareholders  ratify the  acquisition,  the  Series B  Preferred
                Stock will  automatically  be converted into 1,100,000 shares of
                the  Company's  Common  Stock and the  Company  will  issues two
                warrants,  each to purchase  800,000 shares of Common Stock,  as
                outlined above (See Note 7).

                In the event  shareholders  do not ratify the acquisition of the
                assets and approve the  issuance of  1,100,000  shares of Common
                Stock and two stock purchase warrants,  the UIT Transaction will
                be unwound.  In such event, the Company  estimates that the cost
                to undo the transaction  will not exceed $50,000.  This estimate
                includes  accounting  fees,  legal  fees,   recording  fees  and
                employee termination fees. In the event that the UIT Transaction
                must be unwound,  (i) the Company shall  reassign the technology
                license  and return  the  related  assets to UIT;  (ii) UIT will
                return  to the  Company  all  stock  certificates  and  warrants
                received  pursuant to the UIT  Transaction  and (iii) Mr.  Brian
                Shuster will return the  warrants  issued to him by the Company;
                and (iv)  Messrs.  Brian and Harry  Shuster will resign from any
                officer or director  position  held by them.  In  addition,  Mr.
                Brian Shuster's consulting fee shall be pro-rated to the date of
                his resignation and shall cease as of such date.

                Other - On November 5, 1998, the Company  acquired  Sterling AKG
                Corp.  d/b/a Sterling Travel  ("Sterling")  for 25,000 shares of
                common stock and contingent shares (See Note 7).

                In February  1999,  the Company  acquired  Sammy's Travel World,
                Inc., a travel  agency for 36,600  shares of common stock valued
                at $1.50 per share ($54,900).

                                                   F-11
<PAGE>
                In  the  event  these  transactions  are  not  approved,   these
                transactions  would  be  rescinded  and the  shares  issued  for
                Sammy's  described  above  can be sold back to the  Company  for
                $109,800 at Sammy's option.

                Accounting  - For  accounting  purposes,  the fair  value of the
                shares  has been  allocated  to the assets  acquired  based upon
                management's  estimate of the relative fair values. No value has
                been  placed on the  warrants  issued  UIT or on the  contingent
                shares  issuable to Sterling,  as the value is  contingent  upon
                future  earnings.  When the  contingency  is resolved,  the fair
                value  of  the  warrants  and  shares  will  be  treated  as  an
                additional cost of the acquisitions.

                Pro forma results  assuming the  acquisitions had occurred as of
                January 1, 1997 have not been presented,  as the acquisitions of
                Pro Soft,  Sterling and Sammy's were not deemed  significant and
                the acquisition of assets from UIT was not of a business.

                Exchange of Assets - In November  1998,  the Company  decided to
                exchange the assets of its  computerized  limousine  reservation
                and  payment  system for a 32.7%  interest  in Gen O2,  Inc.,  a
                Company  newly  formed by a former  director  and founder of the
                Company,  and contingent payments for a period of five years (up
                to a  maximum  total of  $1,080,000).  For  financial  reporting
                purposes, this exchange resulted in a change in reporting to the
                equity  basis  whereby  the  operating  results of the  business
                exchanged in 1998 have been  reclassified to the equity basis of
                reporting in 1997; there was no effect on net income.

                The Company is also  obligated to lend $175,000 in 1998 and 1999
                of which  $40,000 has been loaned at December  31,  1998.  These
                loans are  payable  $10,000 in 1999 and  $30,000  in 2000.  (See
                "Item 1, Business - General" for additional information.)

                Costs and expenses  incurred  prior to the exchange for 1998 and
                1997 were  allocated  between Gen 02,  Inc.'s  business  and the
                remaining  business of the Company.  The latter  represents  the
                Company's corporate expenses (officers' and office compensation,
                professional  fees,  rent and similar costs) and, since June 30,
                1998,  the  operation  of its  Internet  travel  business.  Such
                general  and  administrative  expenses  relate  to  all  of  its
                business activities.  Common expenses have been allocated to the
                limousine  reservation and ProSoft business (Gen 02, Inc.) on an
                incremental basis and all other ongoing  corporate  expenses are
                reported as costs of the remaining  business.  In the opinion of
                management,  this allocation approximates costs which would have
                been incurred on a stand alone basis. However, operating results
                are not  necessarily  indicative  of  results  which  would have
                occurred  had  the  Company's  operations  been  conducted  as a
                separate and independent  company.  For years prior to 1997, all
                activities   were   attributed  to  the  limousine   reservation
                business.
                                               F-12
                                              
<PAGE>

                Business  Segment - The  Company  is  presently  engaged  in one
                business  segment,  computerized  applications for travel.  This
                business  presently  includes  the  operations  of Sterling  and
                development  stage activities from UIT. Gen 02, Inc.,  including
                ProSoft,  which is 32.7% owned is engaged in the  marketing of a
                computerized limousine reservation and payment system. There are
                no activities  between GEN 02, Inc. and the Company,  other than
                allocated expenses noted above.

                Summarized information on Gen 02, Inc. is as follows:

                                                                                         Year Ended December 31,
                                                                                           1998              1997

                  Revenues from external domestic customers                             $     96,680       $     25,863
                                                                                        ------------       ------------

                  Expenses:
                      Cost of services                                                       136,766             24,992
                      General and administrative                                             755,067            736,858
                      Depreciation and amortization                                          392,142            195,700
                                                                                       -------------       ------------
                  Net loss                                                                 1,283,975            975,550
                                                                                         -----------       ------------

                  Net loss                                                               $(1,187,295)       $  (931,687)
                                                                                         ===========        ===========

                  Capital expenditures                                                  $    221,697        $   457,202
                                                                                        ============        ===========

                                                                                       December 31,
                                                                                          1998


                  Current assets                                                        $     34,229

                  Property and equipment                                                     198,098
                  Computer software costs                                                    520,986
                  Other assets                                                                 7,420

                                                                                         $   760,733


                  Current liabilities                                                   $     74,529
                  Due to Company and Transponet                                               62,000
                  Equity                                                                     624,204

                                                                                         $   760,733

                Pro Forma Statements -The acquisition of assets from UIT and the
                exchange of assets for a non-controlling  equity interest in Gen
                02,  Inc.  are  subject  to  ratification  by the  shareholders.
                (Reference  should be made to "Pro Forma  Financial  Statements"
                and "Item 1, Business - General" appearing  elsewhere herein for
                description of the effects of either or both recissions.
 
                                           F-13
<PAGE>

Note 4   -      Property and Equipment:

Property and equipment at December 31, 1998 and 1997 are  summarized as follows:
                                                                                                 December 31,
                                                                                              1998            1997 

                           Computer equipment                                             $  98,925           $349,075
                           Furniture and fixtures                                             6,509             46,392
                                                                                        -----------         ----------
                                                                                            105,434            395,467
                           Less: Accumulated depreciation                                    14,034            133,824
                                                                                         ----------          ---------

                                                                                          $  91,400           $261,643
                                                                                          =========           ========

Note 5   -      Long-term Debt:

                Notes  Payable - Related  Party - Term  Promissory  Notes in the
                amount of $712,500 provided for accrued  interest at the rate of
                9% per annum payable  quarterly  commencing  September  1997 and
                unless previously  converted,  the principal amount of each note
                was to be repaid in twelve quarterly  installments,  commencing
                September  1,  1998,  or on such  earlier  date  as  such  notes
                provide.  The notes and the unpaid interest accrued thereon, are
                convertible  at the sole  option of the  holder  into  shares of
                Series A Preferred Stock of the Company at a conversion price of
                $2.125  per share.  In March  1998,  $600,000  of the notes were
                converted into 282,353 shares of Series A Preferred Stock of the
                Company.

                Term  Promissory  Notes in the  amount of  $37,500 provided for
                accrued  interest at the rate of 9% per annum payable  quarterly
                commencing September 1997 and, unless previously converted,  the
                principal amount of each note was to be repaid in twelve  equal
                quarterly installments, commencing September 1, 1998, or on such
                earlier date as such notes provide. In March 1998 the notes were
                converted  into an  aggregate  of 400,000  common  shares of the
                Company.

                During  November and December 1996, the Company and Loeb Holding
                Corporation  signed four  eighteen (18) month  Promissory  Notes
                totalling  $210,000  which bore interest at 10%. The  Promissory
                Notes  were  converted  in 1998 into  98,824  shares of Series A
                Preferred  Stock of the Company at a conversion  price of $2.125
                per share.

                Interest  paid  under  these  loan  agreements  to date has been
                immaterial.

                Capital  Leases - The Company had  sale/lease-back  arrangements
                relating  to  computer   hardware  and  commercially   purchased
                software for its limousine reservation operations.  The net book

                                                  F-14
<PAGE>

                value  of  capitalized   equipment  at  December  31,  1997  was
                approximately  $230,000.  Pursuant to the November 1998 exchange
                of assets (see Note 3), this  obligation  was assumed by GEN 02,
                Inc.

                Summary of long-term debt:

                                                                                                 December 31,
                                                                                          1998               1997
                Notes payable - stockholder,  less  unamortized debt discount of
                  $8,179 and $9,654 and 1998 and 1997, respectively
                                                                                         $   112,500        $   740,346
                Notes payable - related party                                                 -                 610,000
                Capital leases                                                                  -               147,353
                                                                                    ------------------     ------------
                                                                                             112,500          1,497,699
                Less:  Current maturities                                                     21,875            514,957
                                                                                       -------------       ------------

                                                                                        $     90,625        $   982,742
                                                                                        ============        ===========

                Future maturities of long-term debt are $37,500 (2000),  $37,500
(2001) and $15,625 (2002).:

Note 6    -     Income Taxes:

                Deferred  income  taxes  reflect  the net  effects of  temporary
                differences  between the amounts of assets and  liabilities  for
                financial reporting purposes and the amounts used for income tax
                purposes.  The principal  temporary  difference  arises from net
                operating loss carryforwards and results in a deferred tax asset
                of approximately $2,400,000 at December 31, 1998.

                A valuation  allowance  is provided  when it is more likely than
                not that some  portion  of the  deferred  tax asset  will not be
                realized. The Company has determined, based on its recurring net
                losses,  and it being a development  stage company,  that a full
                valuation allowance is appropriate at December 31, 1998.

                A  reconciliation  of the  provision  (benefit) for income taxes
                computed at the federal  statutory rate of 34% and the effective
                tax rate of income (loss) before income taxes is as follows:

                                                                                     Year Ended December 31,
                                                                                    1998                 1997
                    Computed tax benefit on net loss at federal statutory
                      rate                                                          $(800,000)         $ (550,000)

                    State income tax benefit, net of federal income tax
                      effect                                                         (140,000)           (100,000)

                    Tax effect of net operating losses not currently usable
                                                                                      940,000             650,000
                                                                                   ----------         -----------

                    Provision (benefit) for income taxes                      $        -         $         -
                                                                              ===============    ===========

                                                   F-15
<PAGE>
                At  December  31,  1998,  the  Company  had net  operating  loss
                carryforwards of approximately $6,000,000 expiring through 2013.

                Current   tax  law  limits  the  use  of  net   operating   loss
                carryforwards  after  there  has been a  substantial  change  in
                ownership  (as defined)  during a three year period.  Because of
                the possible future changes in common stock  ownership,  the use
                of the Company's net operating loss carryforwards may be subject
                to an annual  limitation.  To the extent amounts available under
                the annual  limitation are not used, they may be carried forward
                for the  remainder  of 15 years  from the year the  losses  were
                originally incurred.

Note 7    -     Stockholders' Equity:

                Preferred  Stock - The Company's  Certificate  of  Incorporation
                authorizes the issuance of up to 25,000,000  shares of Preferred
                Stock.  On March 10,  1998,  the Board of  Directors  designated
                706,000   shares  of  Series  A   Preferred   Stock   which  are
                convertible,   in  whole  or  in  part,   into  fully  paid  and
                nonassessable Common Shares on a one-for-one basis at the option
                of the respective holders thereof.  The Series A Preferred Stock
                holders  are not  entitled  to the  payment  of  dividends.  The
                Company,  at its sole  option,  has the right to redeem  all or,
                from time to time, any number of the then outstanding  shares of
                Series A  Preferred  Stock at a  redemption  price of $2.125 per
                share plus a 10% per year increase in the redemption rate.

                The Board of Directors is authorized to issue additional  shares
                of  Preferred  Stock from time to time in one or more series and
                to establish and designate any such series and to fix the number
                of shares and the relative  conversion  rights,  voting  rights,
                terms of redemption and liquidation.

                Public  Offering - On March 26, 1997, the Company  consummated a
                public offering of its securities consisting of 1,035,000 shares
                of common  stock,  1,725,000  Class A  Redeemable  Warrants  and
                1,035,000 Class B Redeemable  Warrants.  Each redeemable warrant
                is exercisable for a period of 48 months,  commencing  September
                20, 1997 and  entitles the holder to acquire one share of common
                stock  at  $5.75  (Class  A)  or  $6.75  (Class  B)  per  share.
                Commencing  March 20, 1998, the Company has had the right at any
                time to redeem  all,  but not less  than all,  of the Class A or
                Class B  warrants  at a price  equal to $.20 per Class A warrant
                and $.10 per Class B  warrant,  provided  that the  closing  bid
                price of the common stock  equals or exceeds  $6.25 (Class A) or
                $7.25 (Class B)
                per share.

                Cancellation of Shares - In August 1996, the Company gave notice
                to a former  officer and  director  of the  Company  that it was
                cancelling the 333,216 shares of its common stock which had been
 
                                               F-16
<PAGE>
                issued to the former  officer in connection  with services to be
                provided at the  inception  of Travel  Link.  Such  cancellation
                relates to various claims made by the Company against the former
                officer and  failure to provide  services  to the  Company.  The
                former  officer  has  contested  the  attempt by the  Company to
                cancel  his  shares.  Pending  return  of the  shares,  they are
                considered  outstanding for all periods presented  herein.  (See
                Note 8 for information  concerning  litigation  commenced by the
                former officer.)

                Warrants - Pursuant to a private  offering in May and June 1996,
                Class A Redeemable  Warrants  entitling  the holders to purchase
                287,500 shares of the Company's common stock through August 2001
                were issued.

                Subject  to  shareholder  approval,   warrants  were  issued  in
                connection  with the UIT  transaction  described  in Note 3. One
                warrant is  exercisable  for  800,000  shares at $2.50 per share
                between April 1, 2002 and June 30, 2002,  but only if Net Cruise
                achieves  net income (as  defined)  of at least  $5,000,000  for
                1999,  2000 and  2001.  The other  Warrant  is  exercisable  for
                800,000  shares at $6 per share  between  April 1, 2002 and June
                30,  2002,  but  only if Net  Cruise  achieves  net  income  (as
                defined)  of at least  $10,000,000  for  1999,  2000  and  2001.
                Subsequent  to the  acquisition  of UIT's  assets,  two of UIT's
                executives became consultants and directors of the Company.  One
                of the  directors  received  two  warrants to  purchase  200,000
                shares  each  under  the same  terms as those  issued  for UIT's
                assets. No value has been placed on these Warrants, as the value
                is contingent  upon future  earnings.  When the  contingency  is
                resolved, the fair value of the warrants issued for UIT's assets
                will be treated as an additional  cost of the  acquisition  and,
                those to the director, as compensation expense.

                Contingent Shares - In connection with the Sterling  acquisition
                described in Note 3, an additional  17,500 shares were placed in
                escrow and will be released  in the event the  Company  achieves
                $3,000,000 of gross sales during the twelve months ended October
                31, 1999.

                Non-incentive  Options - In August 1995, the Company  granted an
                option  to  purchase  25,000  shares of its  common  stock to an
                officer,  exercisable  at $.60 per share through August 2000. On
                May 29, 1997,  these options were  exercised.  In November 1995,
                the Company  granted an option to purchase  35,000 shares of its
                common  stock to the same  officer  exercisable  at $2 per share
                through November 2001.

                In connection  with the leases  described in Note 5, the Company
                granted to the lessor  warrants  to  purchase  22,098  shares of
                common stock at an exercise price of $2 per share.

                In May 1997,  the  Company  granted to each of the two  minority
                owners of  ProSoft,  non-incentive  stock  options  to  purchase
                40,000  shares of common  stock.  The options  expire five years

                                                 F-17
<PAGE>
                from  the  date of  grant  and are  immediately  exercisable  at
                $8.625.  In December  1997,  the  Company's  Board of  Directors
                resolved to modify the options to purchase  80,000 shares of the
                Company's  common stock granted in May 1997 to an exercise price
                of $6.00 per share  with three year  vesting  through  September
                2000.

                Incentive  Options - Effective May 12, 1997, the Company's Board
                of Directors approved the Genisys Reservation Systems, Inc. 1997
                Stock  Incentive  Plan,  (the "Plan").  Information on incentive
                stock options activity for this Plan is as follows:

                                                                                  Year Ended December 31,
                                                                            1998                            1997
                                                                                Weighted -                       Weighted -
                                                                  Shares          Average          Shares          Average
                                                                  Under          Exercise          Under          Exercise
                                                                  Option          Price            Option          Price

                    Balance, beginning of year                     354,000         $6.14             -         $      -

                    Options granted                                122,000          4.44            354,000          6.14
                    Options exercised                               -               -                -               -    
                    Options cancelled                              121,500          -                -               -    
                                                                 ---------                     ------------

                    Balance, end of year                           354,500         $5.55            354,000         $6.14
                                                                   =======         =====            =======         =====


                    Exercisable                                    135,422         $5.77             96,500         $6.68
                                                                   =======         =====           ========         =====

                Contribution to Capital - In February 1997, the former President
                of the Company sold shares of the  Company's  common stock owned
                by him and  simultaneously  remitted  the proceeds of $19,700 to
                the Company in the form of a capital contribution. The Company's
                former Executive Vice President,  using his own shares of common
                stock  of the  Company,  has  reimbursed  the  Company's  former
                President for one-half of the number of shares he sold.

                On July 28, 1997,  the  Company's  former  President  and former
                Executive  Vice-President  each contributed 14,553 shares of the
                Company's  common  stock,  valued  at a total  of  $109,000,  to
                ProSoft  in  payment  for  computer  software  design  and other
                consulting  services  provided to the  Company.  The Company has
                agreed to issue an equal number of new shares of common stock to
                such  stockholders  in six equal  installments,  if the  Company
                meets certain performance  criteria on six specified dates. Five
                of such performance  criteria have not been met on the specified
                due dates and,  accordingly,  no new  shares  will be issued for
                five of the targets. The sixth target was met and,  accordingly,
                4,851 shares will be issued in 1999.

                                                       F-18
<PAGE>
Note 8    -     Commitments and Contingencies:

                Leases - The Company leases its administrative  facilities under
                a five-year lease expiring in March 2002. The lease provides for
                annual rent of  approximately  $45,000.  The Company also has an
                office lease expiring in August 2000 which provides for annual
                rent of approximately $10,200.

                Rent  expense  totalled  $79,747  and $52,900 for the year ended
                December 31, 1998 and 1997, respectively.

                Consulting  and Employment  Agreements - In September  1995, the
                Company entered into a three year  consulting  agreement with an
                investment banking firm whose managing director is a stockholder
                and the Chairman of the Board of  Directors of the Company.  The
                agreement  provides for a consulting fee of $3,000 per month and
                has been  extended by the Company for an  additional  three year
                period (aggregate commitment at December 31, 1998 - $96,000).

                In  connection  with the  acquisition  of Sammy's  (Note 3), the
                Company  agreed  to pay an  executive  $50,000  per year for two
                years and granted  options to purchase  10,000  shares of common
                stock at fair market value.

                Contingencies  - On April  17,  1997,  a former  officer  of the
                Company  filed an action in the United  States  District  Court,
                District of New Jersey,  against the Company,  Travel Link,  the
                officers of both  companies,  and various  related and unrelated
                parties  seeking among other things a declaratory  judgment that
                the former  officer is the owner of the 333,216 shares of Common
                Stock  of  the  Company  which  had  been  issued  to him at the
                inception  of Travel Link for  services he was to have  provided
                (see  Note  6) and for  unspecified  compensatory  and  punitive
                damages.  The Company  believes that the plaintiff's  claims are
                without merit and intends to vigorously defend the action and to
                assert numerous defenses and  counterclaims in its answer.  (See
                note 7 Cancellation of Shares.)

                On  December  23,  1997,  an  individual  filed an action in the
                Superior  Court of New Jersey against the Company and the former
                President of the Company,  alleging that the former President of
                the Company induced such person to leave her place of employment
                to assume employment with the Company.  The claim seeks monetary
                damages based upon an oral promise of employment  allegedly made
                by the same officer of the Company.  The Company  believes  that
                the plaintiff's claim is without merit and intends to vigorously
                defend the action and to assert numerous defenses in its answer.
                A former  officer  and  director  has agreed to hold the Company
                harmless  and  indemnify  the  Company  from any and all claims.
                Management believes that there will be no material effect on the
                Company as a result of this action.

                                              F-19
<PAGE>
               GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                          (Development Stage Companies)
                 PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
                                DECEMBER 31, 1998
                                   (Unaudited)

The  following  statements  are based upon the  historical  balance sheet of the
Company  appearing  elsewhere herein to show the effect on the Company's balance
sheet  if the  shareholders  approve  or do not  approve  (1)  the  issuance  of
1,100,000  shares of Series B Convertible  Preferred  Stock which  automatically
converts into 1,100,000  shares of Common Stock and the related  ratification of
the Acquisition of software, a technology license and related assets from United
Internet Technologies,  Inc. ("UIT Transaction") and (2) the ratification of the
exchange of the Company's  limousine  reservation  business for a noncontrolling
interest in Gen 02, Inc.  ("Gen 02  Transaction").  Reference  should be made to
Note 3 to the Company's  financial  statements  appearing  elsewhere  herein for
additional information.  These statements should be read in conjunction with the
Company's financial statements and notes thereto appearing elsewhere herein.

                                                                                              Assuming
                                                                              Assuming       Shareholders
                                                                            Shareholders      Approve         Assuming
                                                                            Approve UIT        Gen 02        Shareholders
                                                              Assuming      Transaction     Transaction        Do Not
                                                            Shareholders    But Not the     But Not the       Approve
                                                            Approve Both       Gen 02           UIT            Either
                         ASSETS                             Transactions    Transaction     Transaction     Transaction
                                                              (Note A)        (Note B)        (Note C)        (Note D)

Current assets                                               $   213,930      $   248,159    $   213,930     $   248,159

Investment in, and advances to, Gen 02, Inc.                     664,204           -             664,204          -     

Property and equipment                                            91,400          289,498         91,400         289,498

Computer software and related assets                           2,376,265        2,897,251        101,265         622,251

Other assets                                                      94,638          102,058         94,638         102,058
                                                           -------------     ------------  -------------    ------------

                                                              $3,440,437       $3,536,966     $1,165,437      $1,261,966
                                                              ==========       ==========     ==========      ==========

        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                                          $   410,142       $  484,671    $   460,142     $   534,671

Long-term debt                                                    90,625          112,625         90,625         112,625

Stockholders' equity                                           2,939,670        2,939,670        614,670         614,670
                                                             -----------      -----------   ------------    ------------

                                                              $3,440,437       $3,536,966     $1,165,437      $1,261,966
                                                              ==========       ==========     ==========      ==========

Note A - Represents the  historical  balance sheet at December 31, 1998, as both
transactions were recorded as completed transactions.

Note B - Reflects the consolidation of Gen 02, Inc.'s balance sheet (as reported
in Note 3 to the Company's financial  statements appearing elsewhere herein) and
the elimination of intercompany balances.

Note C - Reflects the  elimination  of the  $2,275,000  book value of the assets
acquired from UIT at December 31, 1998, the related $2,500,000 value ascribed to
the common  stock  issued  and  accumulated  depreciation  and  amortization  of
$225,000.  In  addition,  the  estimated  costs of  $50,000  to  unwind  the UIT
transaction have been accrued.

Note D - Reflects both the  consolidation  and elimination  entries described in
Notes B and C.

                                        F-20
<PAGE>
               GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                          (Development Stage Companies)
            PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1998
                                   (Unaudited)



The following statements are based upon the historical consolidated statement of
operations of the Company  appearing  elsewhere herein to show the effect on the
Company's statement of operations if the shareholders  approve or do not approve
(1) the issuance of 1,100,000  shares of Series B  Convertible  Preferred  Stock
which  automatically  converts  into  1,100,000  shares of Common  Stock and the
related  ratification of the acquisition of software,  a technology  license and
related assets from United Internet  Technologies,  Inc. ("UIT Transaction") and
(2) the  ratification  of the exchange of the  Company's  limousine  reservation
business for a noncontrolling  interest in Gen 02, Inc. ("Gen 02  Transaction").
Reference  should  be  made  to  Note 3 to the  Company's  financial  statements
appearing elsewhere herein for additional  information.  These statements should
be read in conjunction with the Company's financial statements and notes thereto
appearing elsewhere herein.

                                                                                             Assuming
                                                                           Assuming         Shareholders
                                                                         Shareholders        Approve           Assuming
                                                                          Approve UIT         Gen 02         Shareholders
                                                          Assuming        Transaction      Transaction          Do Not
                                                        Shareholders      But Not the      But Not the          Approve
                                                        Approve Both        Gen 02             UIT              Either
                                                        Transactions      Transaction      Transaction        Transaction
                                                          (Note A)         (Note B)          (Note C)          (Note D)

SERVICE REVENUES                                         $     33,290       $   129,970     $     33,290        $   129,970
                                                         ------------       -----------     ------------        -----------

EXPENSES:
   Cost of services                                            19,306           156,072           19,306            156,072
   General and administrative                                 963,122         1,718,189          963,122          1,718,189
   Depreciation and amortization                              228,563           620,705            3,563            395,705
   Interest expense (income), net                             (20,507)          (20,507)         (20,507)           (20,507)
                                                        -------------     -------------    -------------       ------------
                                                            1,190,484         2,474,459          965,484          2,249,459
                                                          -----------       -----------     ------------        -----------

LOSS BEFORE EQUITY IN GEN 02, INC.                         (1,157,194)       (2,344,489)     $  (932,194)        (2,119,489)

EQUITY IN LOSS OF GEN 02, INC.                             (1,187,295)            -           (1,187,295)            -
                                                          -----------   ----------------     -----------   -----------
NET LOSS INCURRED DURING THE
   DEVELOPMENT STAGE                                      $(2,344,489)      $(2,344,489)     $(2,119,489)       $(2,119,489)
                                                          -----------       -----------      -----------        -----------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                                                            5,561,000         5,561,000        4,561,000          4,561,000
                                                          ===========       ===========      ===========        ===========
BASIC AND DILUTED LOSS PER
   COMMON SHARE                                       $          (.42)  $          (.42) $           (.46) $          (.46)
                                                      ===============   ===============  ================  ===============

Note A - Represents the historical statement of operations for the year ended at
December 31, 1998, as both transactions were recorded as completed transactions.

Note B - Reflects the  consolidation  of Gen 02, Inc.'s  statement of operations
(as reported in Note 3 to the Company's financial statements appearing elsewhere
herein).

Note C - Reflects the  elimination of the $225,000 of amortization on the assets
acquired  from UIT during  the year ended  December  31,  1998 and the  weighted
average number of shares of common stock issued to UIT.

Note D - Reflects both the  consolidation  and elimination  entries described in
Note B and C.


                                         F-21

<PAGE>



                                                    SIGNATURES


         Pursuant to the  requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                           GENISYS RESERVATION SYSTEMS, INC.



March  30, 1999                     By:___/s/ Lawrence E. Burk_______
                                                Lawrence E. Burk
                                        President & Chief Executive Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this report  signed below by the following  persons on behalf of the  Registrant
and in the capacities and on the dates indicated.


/s/ Lawrence E. Burk                        President, Chief Executive Officer,         March 30, 1999
Lawrence E. Burk                                     and Director



/s/ John H. Wasko                        Secretary, Treasurer, Chief Financial         March 30, 1999
John H. Wasko                                        Officer and Director



/s/ Warren D. Bagatelle                     Chairman and Director                        March 30, 1999
Warren D. Bagatelle



/s/ Brian Shuster                           Director                                     March 30, 1999
Brian Shuster



/s/ David W. Sass                          Director                                     March 30, 1999
David W. Sass



/s/ S. Charles Tabak                      Director                                     March 30, 1999
S. Charles Tabak


/s/ Harry Shuster                         Director                                     March 30, 1999
Harry Shuster
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