<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB
                                   -----------

(Mark One)

( X )  QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.

For the quarterly period ended March 31, 2000

(   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.

For the transition period from                                             to
                               -------------------------------------------
                                                                            .
----------------------------------------------------------------------------

Commission File Number 0-29627



                                    PSA, INC.
                                    ---------
        (Exact name of small business issuer as specified in its charter)

     District of Nevada                                        88-0212662
-------------------------------                            ----------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                            Identification No.)

                           9800 South Sepulveda Blvd.
                                    Suite 810
                              Los Angeles, CA 90045
                    (Address of principal executive offices)

                                 (310) 258-0500
                           (Issuer=s telephone number)

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

Check 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   (    )

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 34,702,548 shares of Common Stock,
$.001 par value, were outstanding as of May 15, 2000.

Transitional Small Business Disclosure Forms (check one):

             Yes   (    )                              No   ( X )



<PAGE>



ITEM I - FINANCIAL STATEMENTS.

                                    PSA, INC.

                              INDEX TO FORM 10-QSB

                                 MARCH 31, 2000








                                                                       PAGE NOS.
                                                                       ---------

PART I - FINANCIAL INFORMATION:

       CONSOLIDATED BALANCE SHEETS                                         1
         At December 31, 1999 and March 31, 2000

       CONSOLIDATED STATEMENTS OF OPERATIONS                               2
         For the Three Months Ended March 31, 1999
         For the Three Months Ended March 31, 2000

       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
         (DEFICIENCY)                                                     3-4
         For the Three Months Ended March 31, 1999
         For the Three Months Ended March 31, 2000

       CONSOLIDATED STATEMENTS OF CASH FLOWS                               5
         For the Three Months Ended March 31, 1999
         For the Three Months Ended March 31, 2000

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                         6-25


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


PART II - OTHER INFORMATION



<PAGE>

                                    PSA, INC.

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS
                                     ------

                                                  At December 31,   At March 31,
                                                       1999             2000
                                                   -------------   -------------
CURRENT ASSETS:
   Cash and cash equivalents                       $  1,183,289    $  7,246,088
   Marketable securities                              1,685,378       1,032,625
                                                   -------------   -------------

     TOTAL CURRENT ASSETS

PROPERTY AND EQUIPMENT - net of accumulated
  depreciation of $250                                        -          14,750

EXCESS OF COST OVER NET ASSETS OF BUSINESSES
  ACQUIRED - net of accumulated amortization
  of $11,649                                                  -       1,202,326

CAPITALIZED SOFTWARE COSTS                                    -         517,500

OTHER ASSETS                                                  -           9,725
                                                   -------------   -------------

     TOTAL ASSETS                                  $  2,868,667    $ 10,023,014
                                                   =============   =============

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


CURRENT LIABILITIES
  Accounts payable and accrued liabilities         $  2,831,997    $  3,235,952
  Due to officer                                         25,191           9,033
  Net current liabilities of discontinued
    operations                                          803,813               -
                                                   -------------   -------------
     TOTAL CURRENT LIABILITIES                        3,661,001       3,244,985
                                                   -------------   -------------

COMMITMENTS AND CONTINGENCIES (Notes 2, 5, 6,
  8, 9 and 12)

STOCKHOLDERS' EQUITY (DEFICIENCY):
  Common stock, par value $.001 per share;
    authorized 75,000,000 shares; issued and
    outstanding 30,814,919 and 33,757,967
    shares at December 31, 1999 and March
    31, 2000, respectively                               30,814          33,757
  Additional paid-in capital                         14,056,972      23,739,000
  Unearned compensation                              (1,335,937)     (1,264,687)
  Accumulated deficit                               (13,823,433)    (15,794,321)
  Accumulated other comprehensive income                279,250          64,280
                                                   -------------   -------------
     TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)           (792,334)      6,778,029
                                                   -------------   -------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
        EQUITY (DEFICIENCY)                        $  2,868,667    $ 10,023,014
                                                   =============   =============

See notes to consolidated financial statements.



<PAGE>

                                   PSA, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                                                     For the Three Months Ended
                                                             March 31,
                                                   -----------------------------
                                                       1999             2000
                                                   -------------   -------------
REVENUES - NET                                     $          -    $    126,242
                                                   -------------   -------------

OPERATING EXPENSES:
  Cost of travel sales                                        -         107,501
  Selling, general and administrative                   803,368       1,512,351
  Software development                                        -          83,786
  Compensatory element of stock issuances
    pursuant to consulting and other agreements         429,167               -
                                                   -------------   -------------
     TOTAL OPERATING EXPENSES                         1,232,535       1,703,638
                                                   -------------   -------------
OPERATING LOSS                                       (1,232,535)     (1,577,396)

OTHER (EXPENSE) INCOME:
  Costs of acquisition of Canticle Corporation                -        (700,000)
  Issuance of common shares in settlement of
    dispute with principal shareholder               (3,975,000)              -
  Net realized gain on sale of securities                     -         277,368
  Interest income                                             -          50,340
                                                   -------------   -------------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
  TAXES                                              (5,207,535)     (1,949,688)

PROVISION FOR INCOME TAXES                                    -               -
                                                   -------------   -------------
LOSS FROM CONTINUING OPERATIONS                      (5,207,535)     (1,949,688)

LOSS FROM DISCONTINUED OPERATIONS, Net of
  income taxes of $-0- and $-0-, respectively          (160,068)        (21,200)
                                                   -------------   -------------
NET LOSS                                           $ (5,367,603)   $ (1,970,888)
                                                   =============   =============

BASIC AND DILUTED NET LOSS PER SHARE:
  From continuing operations                       $      (0.84)   $      (0.06)
  From discontinued operations                            (0.02)              -
                                                   -------------   -------------
NET LOSS PER SHARE                                 $      (0.86)   $      (0.06)
                                                   =============   =============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING - BASIC AND DILUTED                     6,209,997      32,461,301
                                                   =============   =============

See notes to consolidated financial statements.


<PAGE>
<TABLE>

                                                  PSA, INC.

                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                                  (UNAUDITED)

                                  FOR THE THREE MONTHS ENDED MARCH 31, 1999

<CAPTION>
                                                                    Common Stock                Paid-in
                                              Per Share      -----------------------------      Capital
                                                Amount          Shares          Amount         Par Value
                                             -------------   -------------   -------------   -------------
                                                                 (1)
<S>                                          <C>             <C>             <C>             <C>
Balance - December 31, 1998                                     2,497,330    $      2,497    $  4,277,905
                                                                                             -------------

Comprehensive income:
  Net loss                                                              -               -              -
  Other comprehensive income:
     Unrealized gain on marketable
       Securities                                                       -               -              -
                                                                                             -------------
       Total Comprehensive Income

Shares issued in settlement of claims
  by Walsh Family Trust                              .250      15,900,000          15,900       3,959,100
Issuance of common stock for services
  Rendered                                           .211       4,710,000           4,710         990,290
                                                             -------------   -------------   -------------
Balance - March 31, 1999                                       23,107,330    $     23,107    $  9,227,295
                                                             =============   =============   =============
<CAPTION>
                                                                             Accumulated
                                                                                 Other
                                               Unearned      Accumulated     Comprehensive
                                             Compensation       Deficit         Income            Total
                                             -------------   -------------   -------------   -------------
<S>                                          <C>             <C>             <C>             <C>
Balance - December 31, 1998                  $          -    $ (6,212,207)   $          -    $ (1,931,805)
                                                                                             -------------
Comprehensive income:
  Net loss                                              -      (5,367,603)                     (5,367,603)
  Other comprehensive income:
    Unrealized gain on marketable
      securities                                        -                                               -
                                                                                             -------------
      Total Comprehensive Income                                                               (5,367,603)
                                                                                             -------------
Shares issued in settlement of claims
  by Walsh Family Trust                                 -               -               -       3,975,000
Issuance of common stock for services
  rendered                                              -               -               -         995,000
                                             -------------   -------------   -------------   -------------
Balance - March 31, 1999                     $          -    $(11,579,810)   $          -    $ (2,329,408)
                                             =============   =============   =============   =============
</TABLE>

(1)  Share amounts have been restated to reflect the one-for-fifty reverse stock
     split effective on September 16, 1998 and the 200% stock dividend effective
     on May 14, 1999.


See notes to consolidated financial statements.


<PAGE>
<TABLE>

                                                   PSA, INC.

                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                                 (UNAUDITED)

                                    FOR THE THREE MONTHS ENDED MARCH 31, 2000

<CAPTION>
                                                                    Common Stock                Paid-in
                                              Per Share      -----------------------------      Capital
                                                Amount          Shares          Amount         Par Value
                                             -------------   -------------   -------------   -------------
                                                                 (1)
<S>                                                  <C>     <C>             <C>             <C>

Balance - December 31, 1999                                    30,814,919    $     30,814    $ 14,056,972
                                                                                             -------------
Comprehensive income (loss):
  Net loss                                                              -               -               -
  Other comprehensive income (loss):
    Unrealized loss on marketable
      Securities - net of
      Reclassification adjustments                                      -               -               -
                                                                                             -------------
     Total Comprehensive Income (Loss)                                                                  -
                                                                                             -------------
Shares issued for acquisition of
  Canticle Corp.                                     8.93          56,000              56         499,944
Shares issued for acquisition of Royal
  International Tours, Inc.                          2.00          78,370              78         391,772
Issuance of common stock under Reg. S                3.13       2,808,678           2,809       8,790,312
Amortization of unearned compensation                                   -               -               -
                                                             -------------   -------------   -------------
Balance - March 31, 2000                                       33,757,967    $     33,757    $ 23,739,000
                                                             =============   =============   =============

<CAPTION>
                                                                             Accumulated
                                                                                 Other
                                               Unearned      Accumulated     Comprehensive
                                             Compensation       Deficit         Income            Total
                                             -------------   -------------   -------------   -------------
<S>                                          <C>             <C>             <C>             <C>
Balance - December 31, 1999                  $ (1,335,937)   $(13,823,433)   $    279,250    $   (792,334)
                                                                                             -------------
Comprehensive income (loss):
  Net loss                                              -      (1,970,888)              -      (1,970,888)
  Other comprehensive income (loss):
    Unrealized loss on marketable
      securities - net of
      reclassification adjustments                      -               -        (214,970)       (214,970)
                                                                                             --------------
     Total Comprehensive Income (Loss)                                                          (2,185,858)
                                                                                             --------------
Shares issued for acquisition of
  Canticle Corp.                                        -               -               -         500,000
Shares issued for acquisition of Royal
  International Tours, Inc.                             -               -               -         391,850
Issuance of common stock under Reg. S                   -               -               -       8,793,121
Amortization of unearned compensation              71,250               -               -          71,250
                                             -------------   -------------   -------------   -------------
Balance - March 31, 2000                     $ (1,264,687)   $(15,794,321)   $     64,280    $  6,778,029
                                             =============   =============   =============   =============
</TABLE>

(1)  Share amounts have been restated to reflect the one-for- fifty reverse
     stock split effective on September 16, 1998 and the 200% stock dividend
     effective on May 14, 1999. See notes to consolidated financial statements.


<PAGE>
<TABLE>

                                              PSA, INC.

                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (UNAUDITED)
<CAPTION>

                                                                            For the Three Months Ended
                                                                                      March 31,
                                                                           -----------------------------
                                                                               1999            2000
                                                                           -------------   -------------
<S>                                                                        <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                 $ (5,367,603)   $ (1,970,888)
  Adjustments to reconcile net loss to net cash
    used in operating activities from continuing
    operations:
      Loss from discontinued operations                                         160,068          21,200
      Compensatory element of stock issuances                                   429,167               -
      Common stock issued in settlement of claims by
        Walsh Family Trust                                                    3,975,000               -
      Costs of acquisition of Canticle Corporation                                    -         700,000
      Depreciation and amortization                                                   -          11,899
      Amortization of unearned compensation                                           -          71,250
      Gain on sale of marketable securities                                           -        (277,368)

  (Increase) decrease in assets and liabilities, net
    of effects from acquisitions:
      Other assets                                                                    -          (9,725)
      Accounts payable and accrued liabilities                                  (24,019)        (21,170)
      Due from officer                                                          492,336         (16,158)
                                                                           -------------   -------------
        NET CASH USED IN OPERATING ACTIVITIES                                  (353,680)     (1,490,960)
                                                                           -------------   -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for acquisitions                                                       -        (612,000)
  Payments for capitalized software costs                                             -        (517,500)
  Purchase of marketable securities                                                   -      (1,397,305)
  Proceeds from sale of marketable securities                                         -       2,112,456
                                                                           -------------   -------------
        NET CASH USED IN INVESTING ACTIVITIES                                         -        (414,349)
                                                                           -------------   -------------
CASH PROVIDED BY FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                                              -       8,793,121
                                                                           -------------   -------------

CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS                              360,769        (825,013)
                                                                           -------------   -------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                         7,089       6,062,799

CASH AND CASH EQUIVALENTS - BEGINNING                                               294       1,183,289
                                                                           -------------   -------------

CASH AND CASH EQUIVALENTS - ENDING                                         $      7,383    $  7,246,088
                                                                           =============   =============
</TABLE>


See notes to consolidated financial statements.


<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  1 -  BASIS OF PRESENTATION

The accompanying consolidated financial statements are unaudited. These
statements have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission ( the "SEC"). Certain information and
footnote disclosures normally included in the consolidated financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. In the opinion of
management, the consolidated financial statements reflect all adjustments (which
include only normal recurring adjustments) necessary to state fairly the
financial position and results of operations as of and for the periods
indicated. These consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and notes thereto for the
year ended December 31, 1999, included in the Company's Form 10-KSB as filed
with the Securities and Exchange Commission.

NOTE  2 - BUSINESS

PSA, Inc. (the "Company") was incorporated in the state of Nevada in 1985.
Formerly known as American Telecommunications Standard International, Inc.
("ASAT"), the Company completed its merger with PSA, Inc., a California
corporation, ("PSA of California") in April 1998. In connection with the merger,
ASAT changed its name to the Company's present name.

The Company is a holding company for entities comprising its proposed broad-
based global travel and transportation services network that will include global
electronic commerce ("E-Commerce"), international tour services, air
transportation, ground services and Internet television broadcast. The Company
intends to search and acquire Internet and non-Internet companies that fit its
acquisition portfolio criteria to complement its own products and services and
extend its content offering.

As of December 31, 1999, the Company owned and operated two majority-owned and
one wholly-owned subsidiaries, which are PSA Internet, Inc., Pacific States
Airline Services, Inc. ("PSAS"), and PSAZZ Air, Inc. ("PSAZZ"), respectively. In
addition, PSA Internet, Inc. owns 80% of PSAZZ.com.

In conjunction with its business plan, during March of 2000, the Company
acquired 100% of the outstanding stock of two travel tour operators for cash and
shares of its common stock (see Note 5 - Acquisitions).

As discussed further in Note 6, on March 14, 2000, the Company completed the
sale of 100% of the issued and outstanding stock of PSAS to a member of the
Board of Directors of the Company. PSAS is an airport/airline service company
providing skycap services at various airports in the United States. The sale
will enable the Company to concentrate on its proposed on-line travel services
business. Accordingly, the Company has accounted for the operations of PSAS as a
discontinued operations.


<PAGE>
                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investment in Marketable Securities
-----------------------------------

The Company accounts for its investments using Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in debt and Equity
Securities" ("SFAS No. 115"). This standard requires that certain debt and
equity securities be adjusted to market value at the end of each accounting
period. Unrealized market value gains and losses are charged to earnings if the
securities are traded for short-term profit. Otherwise, such unrealized gains
and losses are charged or credited to comprehensive income.

Management determines the proper classifications of investments in obligations
with fixed maturities and marketable equity securities at the time of purchase
and reevaluates such designations as of each balance sheet date. At December 31,
1999 and March 31, 2000, all securities covered by SFAS No. 115 were designated
as available for sale. Accordingly, these securities are stated at fair value,
with unrealized gains and losses reported in comprehensive income. Realized
gains and losses on sales of investments, as determined on a specific
identification basis, are included in the Consolidated Statement of Operations.

Property and Equipment
----------------------

Property and equipment are stated at cost, less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of five years.

Excess of Cost Over Net Assets of Businesses Acquired
-----------------------------------------------------

The excess of the purchase price over the fair market value of net assets of
businesses acquired is being amortized using the straight-line method over 5
years.

Capitalized Software Costs
--------------------------

The Company capitalizes costs of computer software developed or obtained for
internal use. Capitalized costs primarily include the cost of a software license
purchased from a third party (Note 9). The costs will be amortized on a
straight-line basis over five years, commencing when the computer software is
ready for its intended use. As of March 31, 2000, the use of the computer
software had not commenced.


<PAGE>
                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Long-Lived Assets
-----------------

The Company periodically assesses the recoverability of long-lived assets,
including property and equipment, intangibles and excess of cost over net assets
of businesses acquired, when there are indications of potential impairment,
based on estimates of undiscounted future cash flows. The amount of impairment
is calculated by comparing anticipated discounted future cash flows with the
carrying value of the related asset. In performing this analysis, management
considers such factors as current results, trends, and future prospects, in
addition to other economic factors.

Recognition of Income
---------------------

Income and direct expenses related to travel sales are recognized as revenue and
expenses during the month of travel.

Advertising Expenses
--------------------

Advertising expenses are charged to operations when incurred. Advertising
expense for the three months ended March 31, 1999 and 2000 approximated $11,031
and $22,009, respectively.

Income Taxes
------------

Deferred tax liabilities and assets are determined based on the difference
between the financial statement carrying amount and tax bases of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse.

Stock-Based Compensation
------------------------

As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation", the
Company accounts for its stock-based compensation arrangements pursuant to APB
Opinion No. 25, "Accounting for Stock Issued to Employees". In accordance with
the provisions of SFAS No. 123, the Company discloses the proforma effects of
accounting for these arrangements using the minimum value method to determine
fair value.



<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock Split and Stock Dividend
------------------------------

On September 8, 1998, the Board of Directors authorized, and a majority vote of
the shareholders approved, a one-for-fifty reverse split of its issued and
outstanding common stock as of September 1, 1998 to be effective upon the filing
date, September 16, 1998.

On March 12, 1999, the Board of Directors declared, and a majority vote of the
shareholders approved, a stock dividend for issuance to each of the shareholders
of the common stock who was a shareholder of record on May 14, 1999, as a stock
dividend, two shares of restricted common stock for each outstanding share of
the common stock owned by each shareholder.

The accompanying consolidated financial statements, notes and other references
to share and per share data have been retroactively restated to reflect the
reverse stock split and stock dividend for all periods presented.

Loss Per Share
--------------

Basic net loss per common share has been computed based on the weighted average
number of shares of common stock outstanding during the periods presented, which
were retroactively adjusted to give recognition to the reverse stock split on
September 16, 1998 and the stock dividend on May 14, 1999.

Fair Value of Financial Instruments
-----------------------------------

The financial statements include various estimated fair value information as
required by Statement of Financial Accounting Standards 107, "Disclosures about
Fair Value of Financial Instruments". Such information, which pertains to the
Company's financial instruments, is based on the requirements set forth in that
Statement and does not purport to represent the aggregate net fair value to the
Company.

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and cash equivalents: The carrying amount approximates fair value because
of the short-term maturity of those instruments.

Investment in marketable securities: The fair value of investments in marketable
securities is based on quoted prices.

<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments (Continued)
-----------------------------------

Receivables and payables: The carrying amounts approximates fair value because
of the short maturity of those instruments.

All of the Company's financial instruments are held for purposes other than
trading.

Impact of Recently Issued Accounting Standards
----------------------------------------------

Effective January 1, 1998, the Company adopted the provisions of SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information". SFAS No.
131 establishes standards for the way public enterprises report information
about operating segments in annual financial statements and requires those
enterprises to report selected information about operating segments in interim
financial reports issued to stockholders. Adoption of SFAS No. 131 did not have
a material effect on the Company's financial position or results of operations.

Effective December 29, 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 132, "Employers" Disclosures About Pensions and
Postretirement Benefits", which standardizes the disclosure requirements for
pensions and other postretirement benefits. The Statement addresses disclosure
only. It does not address liability measurement or expense recognition. There
was no effect on financial position or results of operations as a result of
adopting SFAS No. 132.

In March 1998, the American Institute of Certified Public Accountants issued SOP
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use", which revises the accounting for software development costs and
will require the capitalization of certain costs. The adoption of SOP 98-1 did
not have an effect on the Company's financial position or results of operations.

Effective January 1, 1998, the Company adopted the provisions of SFAS No. 130,
"Reporting Comprehensive Income". SFAS No. 130 establishes standards for
reporting comprehensive income, defined as all changes in equity from non-owner
sources. Adoption of SFAS No. 130 did not have a material effect on the
Company's financial position or results of operations.



<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  4 - MARKETABLE SECURITIES
<TABLE>
Marketable securities consist of the following:
<CAPTION>
                               At December 31, 1999                At March 31, 2000
                      -----------------------------------   ---------------------------------
                                   Unrealized     Fair                 Unrealized     Fair
                                    Holdings     Market                  Holdings    Market
                         Cost        Gains       Value         Cost       Gains       Value
                      ----------   ---------   ----------   ---------   --------   ----------

<S>                   <C>          <C>         <C>          <C>         <C>        <C>
Equity securities     $1,406,128   $ 279,250   $1,685,378   $ 968,345   $ 64,280   $1,032,625
                      ==========   =========   ==========   =========   ========   ==========
</TABLE>

No deferred taxes have been provided for unrealized holding gains.

The equity securities are maintained in an account at LGT Bank located in
Zurich, Switzerland.

NOTE  5 - ACQUISITIONS

Canticle Corporation
--------------------

Pursuant to an Agreement and Plan of Reorganization, effective February 18,
2000, the Company acquired all the outstanding shares of common stock of
Canticle Corporation ("Canticle"), a Delaware corporation, from the shareholders
thereof, in an exchange for $200,000 in cash and 56,000 shares of common stock
of the Company valued at $500,000. As a result of this transaction, Canticle has
become a wholly-owned subsidiary of PSA effective on February 18, 2000. The
acquisition is intended to qualify as a reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.

Canticle had no operating history nor any revenues or earnings from operations.
Canticle had no significant assets and no financial resources. In evaluating
Canticle as a candidate for the proposed acquisition, the Company placed a
primary emphasis on Canticle's status as a reporting company under Section 12(g)
of the Securities Exchange Act of 1934, as amended, and Canticle's facilitation
of the Company becoming a reporting company under the Act. Accordingly, the cost
of the acquisition, $700,000, has been charged to operations during the three
months ended March 31, 2000.


<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  5 - ACQUISITIONS (Continued)

Royal International Tours, Inc.
-------------------------------

On March 14, 2000, the Company completed the acquisition of 100% of the issued
and outstanding stock of Royal International Tours, Inc. ("Royal"), a travel
tour operator, specializing in tours for European visitors to the United States.
Royal's office is located in Los Angeles, California. Pursuant to the terms of
the Acquisition Agreement, the former shareholders of Royal received 78,370
shares of restricted common stock of the Company valued at $391,850 and cash of
$350,000.

The acquisition was accounted for as a purchase, under which the purchase price
was allocated to the acquired assets and assumed liabilities based upon fair
values at the date of the acquisition. The excess of the purchase price over the
fair value of the net assets acquired amounted to $1,183,975 and is being
amortized on a straight-line basis over 5 years. The accompanying consolidated
financial statements include the operations of Royal from the date of
acquisition, March 14, 2000.

Travel Treasures, Inc.
----------------------

On March 15, 2000, the Company completed the acquisition of 100% of the issued
and outstanding stock of Travel Treasures, Inc. ("Travel"), a travel tour
operator. Travel is a California corporation currently located in Los Angeles,
California. Pursuant to the terms of the Acquisition Agreement, the former
shareholders of Royal received $30,000.

The acquisition was accounted for as a purchase, under which the purchase price
was allocated to the acquired assets and assumed liabilities based upon fair
values at the date of the acquisition. The excess of the purchase price over the
fair value of the net assets acquired amounted to $30,000 and is being amortized
on a straight-line basis over 5 years. The accompanying consolidated financial
statements include the operations of Travel from the date of acquisition, March
15, 2000.



<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  6 - DISCONTINUED OPERATIONS

On March 14, 2000, the Company completed the sale of 100% of the issued and
outstanding stock of PSAS, a wholly-owned subsidiary of the Company. PSAS is an
airport/airline services company providing skycap services at various airports
in the United States. The purchaser of PSAS was a member of the Board of
Directors of the Company.

Pursuant to the terms of the agreement, the Company is entitled to receive
$425,000 to be paid in 17 equal quarterly installments of $25,000, commencing
with and contingent on net profits of PSAS for each subsequent quarter exceeding
$25,000. There is no assurance that the Company will receive any of these
payments, since they are contingent on PSAS becoming profitable. PSAS has
incurred operating losses, since the Company acquired it in 1998. In addition,
the Company shall provide funding to PSAS in an amount sufficient to meet PSAS'
obligations through April 30, 2000. Such funds advanced by the Company shall be
reimbursed to the Company as supplemental payments subsequent to the payment of
the $425,000 and based on the same contingent payment formula.

Due to the uncertainty related to the payment of the purchase price, the Company
has not recognized any receivable from the purchaser and any gain related to
this sale.



<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  6 - DISCONTINUED OPERATIONS (Continued)

The results of operations for PSAS for the respective periods presented are
reported as a component of discontinued operations in the consolidated
statements of operations. The following reflects the condensed balance sheet of
PSAS as of December 31, 1999, the summarized results of operations for the three
months ending March 31, 1999 and for the period beginning January 1, 2000 and
ending March 14, 2000:


                                                                     At
                                                                 December 31,
                                                                     1999
                                                                ------------

     CURRENT ASSETS
       Cash and cash equivalents                                $       965
       Accounts receivables, less allowance
         for doubtful accounts                                      170,875
                                                                ------------
           TOTAL CURRENT ASSETS                                     171,840

     PROPERTY AND EQUIPMENT - NET                                    34,796
                                                                ------------
           TOTAL ASSETS                                         $   206,636
                                                                ============

     CURRENT LIABILITIES
       Accounts payable and accrued
         liabilities                                            $   839,165
       Loans payable                                                171,284
                                                                ------------
           TOTAL CURRENT LIABILITIES                            $ 1,010,449
                                                                ============
     NET LIABILITIES                                            $  (803,813)
                                                                ============


<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000


NOTE  6 - DISCONTINUED OPERATIONS (Continued)

Summarized results of operations of PSAS are as follows:
<TABLE>
<CAPTION>
                                                                       For the Period
                                                   For the                Beginning
                                                Three Months           January 1, 2000
                                               Ended March 31,       and Ending March 14,
                                                     1999                     2000
                                               ---------------       --------------------

<S>                                              <C>                       <C>
        REVENUE                                  $  390,760                $ 397,733
                                                 ===========               ==========

        OPERATING EXPENSES                       $  550,828                $ 420,326
                                                 ===========               ==========

        LOSS FROM DISCONTINUED
           OPERATIONS                            $ (160,068)               $ (22,593)
                                                 ===========               ==========
</TABLE>


NOTE  7 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consist of the following:

<TABLE>
<CAPTION>

                                                           December 31,          March 31,
                                                                1999                2000
                                                           ------------         ------------
<S>                                                        <C>                  <C>
      Accrued claims and litigation
       settlements                                         $   550,000          $   550,000
      Accrued professional fees                              1,045,137              871,849
      Customer deposits and accrued tour costs                       -              425,125
      Retained liabilities of discontinued
         operations                                            628,538              888,307
      Other                                                    608,322              500,671
                                                           ------------         ------------

                                                           $ 2,831,997          $ 3,235,952
                                                           ============         ============
</TABLE>

<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  8 - STOCKHOLDERS' EQUITY (DEFICIENCY)

The transactions discussed below have been retroactively restated to reflect the
one-for-fifty reverse stock split effected on September 16, 1998 and the 200%
stock dividend effective on May 14, 1999.

Common Stock Issuances
----------------------

On March 13, 1998, the Company entered into a stock exchange agreement and plan
of reorganization, whereby the Company acquired PSA of California, which it
subsequently merged into the Company. Control of the corporation shifted to the
Walsh Family Trust, David E. Walsh, Trustee, and the Company changed its name to
the Company's current name. David E. Walsh and other individuals replaced the
existing officers and directors. This transaction resulted in the issuance to
the Walsh Family Trust of 1,424,319 shares of the Company's common stock, which,
after issuance, was to have equaled 81.58% of the outstanding common stock at
the time of the reorganization. The Walsh Family Trust owned 97% of the common
stock of the acquired California corporation prior to the acquisition by the
Company.

On March 20, 1998, the Board of Directors authorized an amendment to the
Articles of Incorporation of the Company to increase the authorized number of
shares of common stock from 30,000,000 shares to 75,000,000 shares with a $0.001
par value per share.

On May 20, 1998, the Board of Directors approved the issuance of 163,800 shares
of unrestricted common stock to David E. Walsh in consideration for his
management services to the Company during 1997. On June 15, 1998, the Board of
Directors approved 240,000 shares of restricted common stock to be issued to Mr.
Walsh for past services from May 1994 through May 1998, excluding calendar year
1997.

On March 10, 1999, as consideration for executing a settlement and mutual
release agreement, the Board of Directors approved the issuance of 15,900,000
shares of common stock to the Walsh Family Trust to correct inequities created
by undisclosed liabilities and undisclosed stock transactions implemented by
former management and/or their agents before the March 13, 1998 acquisition. The
stock was also issued in consideration for subsequent unauthorized stock
transactions by this former management, which were not disclosed to current
management, and in consideration for the Walsh Family Trust not rescinding the
business combination between the California corporation and the Company.

On March 15, 1999, the Board of Directors approved the issuance of 4,635,000
shares of unrestricted common stock valued at $970,000 to David E. Walsh, as
consideration for compensation of his management services to the Company for
past services from June 1998 through May 1999.

On September 15, 1999, the Board of Directors approved the issuance of 5,700,000
shares of restricted common stock valued at $1,425,000 to David E. Walsh,
pursuant to a five-year employment agreement.


<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  8 - STOCKHOLDERS' EQUITY (DEFICIENCY) (Continued)

Regulation S Offering
---------------------

On October 1, 1999, pursuant to Rule 902 of Regulation S of the Securities Act
of 1933, as amended, the Company offered to sell a maximum value of $20,000,000
of shares of common stock of the Company at the purchase price per share of 90%
of the closing bid as quoted on the NASD OTC Bulletin Board on the date of
purchase or $2.00 per share, whichever was greater, to selected institutional
and individual investors. The minimum purchase value was $25,000, subject to the
Company's right to accept less. Through December 31, 1999, 1,462,294 shares were
sold, yielding $2,896,025 in proceeds, net of commissions. Per share prices
varied from $2.00 to $10.50. During the three months ended March 31, 2000,
2,808,678 shares have been sold yielding $8,793,144 in proceeds, net of
commissions. Per share prices varied from $2.00 to $7.15. The Company intends to
use the net proceeds of this offering of its common stock to fund future
acquisitions and for working capital. There is no assurance that the Company
will be able to sell any additional shares of its common stock in the course of
this offering.

In connection with this offering, the Company entered into an exclusive
agreement with a placement agent to solicit offers from individuals to purchase
shares. As consideration, the Company is obligated to pay the placement agent a
commission equal to 7% of the gross proceeds of the offering.

NOTE  9 - COMMITMENTS AND CONTINGENCIES

Litigation and Claims
---------------------

As of March 31, 2000, the Company was subject to the following litigation
claims:



<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  9 - COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims (Continued)
---------------------

PSA, Inc.:
---------

During May 1997, a suit was filed by Thomas Halder against the Company and
several officers and directors of the Company in the Superior Court of
California, San Diego County Case No. 719562, alleging fraud in the issuance of
securities of PSAZZ, a subsidiary of the Company. Plaintiff Thomas Halder, has
been dismissed as plaintiff per his request and replaced by substitute plaintiff
Michael Dupont. Plaintiff Dupont sought to have the case certified as an
investor class action, but the Court denied his request. Despite the notice,
none has so far joined this action. Thus, the case is, at this time, limited to
Mr. Dupont's individual claim pertaining to his $75,000 investment. In November
1999, the Court abated the action and required Mr. Dupont to pursue his claim in
arbitration, pursuant to his subscription agreement, if he chooses to pursue the
matter. If he should, the Company will defend this case vigorously.

During October 1998, a suit was filed by F. Hawkins and H. Hawkins against the
Company in the Superior Court of California, Los Angeles County, Case No.
YC033477. Plaintiff F. Hawkins seeks approximately $1 million in additional
consideration from the Company, Pacific States Airline Services, Inc. ("PSAS"),
a subsidiary of the Company, and certain individual officers and directors for
the Company's purchase of her interest in PSAS in June 1998. Plaintiff H.
Hawkins seeks damages for breach of an employment contract. The Company and Ms.
Hawkins are currently in settlement negotiations relating to this matter, but
there is no assurance as to whether a settlement agreement will be reached.

Meyer Group Ltd., et al., v. Douglas T. Beaver, et al. Superior Court of
California, Orange County, Case No. 775680, Third Amended Cross-Complaint filed
June 23, 1998 by defendant Robert E. Thompson. The complaint in this action does
not name the Company as a defendant. However, individual defendant Robert E.
Thompson filed a cross-complaint against over thirty cross-defendants, one of
which is American Telecommunications Standards International, Inc. ("ASAT"),
with whom the Company entered into a stock exchange agreement and plan of
reorganization on March 13, 1998. Later, Mr. Thompson also added the Company as
a Roe cross-defendant. Briefly, Mr. Thompson alleges that he was fraudulently
induced by ASAT and others to invest money in that venture and in other ventures
not related to the Company. Mr. Thompson seeks approximately $900,000 from all
the cross-defendants. The Company is currently in negotiations to settle all
claims with Mr. Thompson for an amount anticipated to be approximately $25,000.
The Company believes that this action will be settled and will include a "good
faith" dismissal for past and future claims by all claimants. There is no
assurance as to whether a settlement agreement will be reached.

<PAGE>


                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  9 - COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims (Continued)
---------------------

PSA, Inc.: (Continued)
---------

During August, 1999, a suit was filed by Jan Bonner against the Company in the
District Court of Harris County, Texas, Case No. 99-39761. Bonner alleges a
breach of contract, seeking approximately $20,000, plus 75,000 shares in the
Company. The Company believes that this claim has no merit because of a breach
of contract and failure to perform by the plaintiff. The case is in preliminary
stages.

PSA of California entered into a stock exchange agreement and plan of
reorganization on March 13, 1998 with American Telecommunications Standards
International, Inc. ("ASAT"), which has subsequently changed its name to PSA,
Inc. The transaction was entered into by the Walsh Family Trust based on
representations by former management that ASAT had no litigation, no material
contracts, no liabilities and positive stockholders' equity. On August 2, 1999,
the Securities and Exchange Commission filed a complaint in Federal District
Court against fifteen individuals and entities, among which were former
management of ASAT, for their roles in a fraudulent offering and market
manipulation of the stock of the Company. Neither the Company, its subsidiaries
or any of their current management were named in the complaint.

During 1999, a suit was filed by FNG & Associates, Inc. against the Company in
the Superior Court of California, County of Los Angeles, Case No. BC224041 for
compensatory damages of not less than $1,272,000 subject to proof at the time of
trial, plus punitive damages, according to proof and attorneys' fees. However,
discovery has not yet commenced. The Company is vigorously defending this claim.

The Company has received a demand from a lawyer purporting to represent someone
claiming that he is owed $27,100, plus 100,000 shares of the Company's stock for
services rendered. The Company is investigating the claim. If appropriate, it
will attempt to negotiate it. If negotiation is unsuccessful, it will vigorously
defend the claim.

<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  9 - COMMITMENTS AND CONTINGENCIES (Continued)

Litigation and Claims (Continued)
---------------------

Pacific States Airline Services, Inc. ("PSAS"):
--------------------------------------------

During 1999, a suit was filed by James Winford against PSAS in the Superior
Court of California, San Francisco County, Case No. 30201. Mr. Winford alleges
that he was wrongfully terminated from PSAS and seeks damages of $25,000, plus a
daily penalty, alleged to be $87,000 at the time of the complaint. The case is
in preliminary stages. The Company is vigorously defending this claim.

During June 1995, a suit was filed by Phyllis Emerson against PSAS in the
Superior Court of California, County of Oakland, Case No. 753384-4. This case
has been reduced to judgement, on which plaintiff claims approximately $128,000
remains unpaid. The Company, nevertheless, contends that the judgement was
improperly perfected, is attempting to negotiate a lesser payment and/or payment
terms and, if unsuccessful in that attempt, will challenge the enforceability of
the judgement.

During May 1999, a suit was filed by Douglas Lloyd and Joseph Alibo against PSAS
in the Superior Court of California, Fresno County, Case No. 611044-9. There is
an unpaid judgement in this employment discrimination case of approximately
$21,900. The Company is attempting to negotiate a lesser payment.

PSAZZ Air, Inc. ("PSAZZ"):
-----------------------

A suit was filed by the Trustee for Air 21 Bankruptcy Estate against PSAZZ in
the U.S. Bankruptcy Court, Eastern District of California, Case No.
97-10084-B-7. During September 1999, this case has been reduced to judgement of
approximately $46,000. The Company is attempting to negotiate a lesser amount
and/or payment terms.

Other
-----

The Company and its subsidiaries are also involved in a number of smaller
litigations and claims. The Company has interposed answers in all cases, except
where an answer is not yet due. The Company has established provisions for most
of the liabilities represented by these smaller claims, and where provisions
have not been established, management believes it will prevail on the merits and
intends to vigorously contest the claims. Based on its past experience dealing
with such claims, the Company anticipates it will be able to settle most of
these smaller litigations with provisions to pay over periods of time, which are
manageable for the Company.

<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE  9 - COMMITMENTS AND CONTINGENCIES (Continued)

Concentrations of Credit Risk
-----------------------------

Financial instruments, which potentially subject the Company to concentrations
of credit risk, are primarily cash and cash equivalents. As of December 31, 1999
and March 31, 2000, cash and cash equivalents include $1,156,665 and $7,067,181,
respectively, in money funds and certificates of deposits maintained at a
foreign bank (LGT Bank located in Zurich, Switzerland). Such funds are
uninsured.

Leases
------

The Company currently leases approximately 6,000 square feet of office space at
a monthly rental rate of $6,505, subject to annual adjustment. Its lease term
expires in February 2004.

Employment Contract
-------------------

David E. Walsh, Chairman, Chief Executive Officer and President, receives a
salary of $350,000 per annum. Mr. Walsh is eligible for incentive compensation
payable in cash and stock options as determined by the Board of Directors,
pursuant to a five-year employment agreement, effective on September 30, 1999.

Pursuant to the employment agreement, Mr. Walsh received 5,700,000 shares of
common stock as additional consideration valued at $1,425,000 in 1999. The value
is being amortized over the five-year period of the agreement, of which $71,250
was charged to operations for the three months ended March 31, 2000.

Computer Software License and Services
--------------------------------------

On March 30, 2000, the Company entered into a software license and services
agreement with Datalex Limited, a company located in Dublin, Ireland. The
agreement calls for the Company to license certain computer software pertaining
to tour travel system for a five-year period. The cost of the license is
$1,725,000, of which $517,500 was paid in March, and $517,500 is payable upon
software delivery, $345,000 is payable upon acceptance of the software and the
balance, $345,000, is payable 60 days after delivery. The agreement also calls
for annual software maintenance costing $245,250 per year, payable in advance.

The $517,500 payment made in March of 2000 has been reflected on the March 31,
2000 consolidated balance sheet as a capitalized cost of computer software
developed or obtained for internal use.

<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE 10  - SUPPLEMENTAL CASH FLOW INFORMATION

During the three months ended March 31, 1999 and 2000, with respect to its
continuing operations, the Company paid $-0- for interest and income taxes.

Non-Cash Transactions
---------------------

During the three months ended March 31, 2000, the Company acquired the assets
and assumed the liabilities of various entities. The transactions had the
following non-cash impact on the balance sheet and income statement as of March
31, 2000:


            Property and equipment                            $    15,000
            Intangibles                                         1,213,975
            Accounts payable and accrued liabilities            (425,125)
            Equity                                              (891,850)
            Costs of acquiring Canticle charged to
              operations                                          700,000
                                                              ------------
                Net Cash Used for Acquisitions                $   612,000
                                                              ============


During the three months ended March 31, 1999:

a.       Common stock issued in settlement of claims by Walsh Family Trust
         aggregating $3,975,000.

b.       Common stock issued in settlement of 1999 and prior year's
         compensation aggregating $404,167 and $565,833, respectively.




<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE 11 - PROFORMA INFORMATION

The Company's consolidated financial statements for the three months ended March
31, 1999 do not include the results of operations of Royal and Travel and the
consolidated financial statements for the three months ended March 31, 2000 do
not include the results of operations of Royal for the period from January 1,
2000 through March 14, 2000 and Travel for the period January 1, 2000 through
March 15, 2000. The following summarizes the proforma results of operations for
the three months ended March 31, 1999 and 2000, assuming the foregoing
acquisitions had occurred on January 1, 1999 and 2000:


                                                         1999           2000
                                                     ------------   ------------

        Revenues - Net                               $   659,382    $   688,339
                                                     ============   ============
        Loss from Operations                         $(1,165,963)   $(1,616,271)
                                                     ============   ============
        Loss Before Taxes                            $(5,140,963)   $(1,988,563)
                                                     ============   ============
        Basic and Diluted Net Loss Per Share         $      (.83)   $      (.06)
                                                     ============   ============


NOTE 12  - SUBSEQUENT EVENT

Acquisition - S.M.A. Real Time Inc. ("SMA")
-------------------------------------------

On May 4, 2000, the Company entered into an agreement to transfer to SMA $10
million in cash and 1,958,824 shares of common stock, valued at $12 million, in
exchange for 55% of SMA's Class A voting common stock and 43.75% of SMA's Class
B non-voting common stock, together representing a 50% equity interest in SMA.
The following consideration is payable and/or issuable to SMA as follows:

                  $1,250,000 in cash on May 4, 2000
                  $3,750,000 in cash on May 16, 2000
                  $5,000,000 due October 4, 2000
                  1,958,824 shares of the Company's common stock

SMA provides a wide range of production and post-production services to
companies that produce commercials, television programs, music videos and
feature films. SMA's principal activities include studio videotape recording,
film to videotape transfer, computer generated visual effects and the coloring,
creation of customized virtual studio sets, editing and dubbing of various form
of emerging media, including film and video. Most of SMA's services are
performed at its headquarters in lower Manhattan, New York.

<PAGE>

                                    PSA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2000



NOTE 12  - SUBSEQUENT EVENT

Acquisition - S.M.A. Real Time Inc. ("SMA") (Continued)
-------------------------------------------

The agreement also calls for the Company to place into an escrow account an
additional 2,000,000 shares of its common stock to secure the payment of
$5,000,000 due October 4, 2000.











<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OF
OPERATION.


The following is a discussion of our financial condition, results of our
operations and liquidity. This discussion should be read together with our
financial statements and notes included in this 10-QSB.

The following discussion contains certain forward-looking statements that
involve risks and uncertainties. Our actual future results could differ
materially from those foreseen in this discussion.

OVERVIEW

We are a holding company for entities comprising our proposed broad-based global
travel and transportation services network that will include global electronic
commerce ("E-Commerce"), international tour services, air transportation, and
Internet television broadcast via "Spectrum Broadband Access".

We own and operate two majority-owned and two wholly-owned subsidiaries: PSA
Internet, Inc., PSAZZ Air, Inc., Royal International Tours, Inc. (acquired on
March 14, 2000) and Travel Treasures, Inc. (acquired on March 15, 2000),
respectively. In addition, PSA Internet, Inc. owns 80% of PSAZZ.COM.

Through PSA Internet, Inc., one of our majority-owned subsidiaries, we intend to
create, through strategic acquisitions/alliances and internal development, the
first global cyber-streaming network with multi-channel-broadband capacity for
travel and entertainment. It will be vertically integrated to deliver highly
targeted, interactive online content with horizontal line extensions into
television and print. Under the umbrella of "www.psazz.com", this Internet and
Television Network's initial focus will be on travel, followed by content
channels devoted to music, short subjects, live event coverage, film and digital
print. In our efforts to enhance our Web site capabilities, we intend to utilize
currently available Internet broad-based distribution travel software. Webmaster
Zone One, which has developed several large Web sites, is in final stages of
this site's development and another Web designer company, DATALEX, is currently
constructing the site's booking engine. We are also planning to feature on our
site broadband convergence to create a comprehensive database enabling
prospective travelers to search for travel intelligence, travel specials, news,
music, sporting and industry related events. We have entered into a business
alliance with an Internet company, Intervu, Inc., whereby we are entitled to the
use of Intervu, Inc.'s patented streaming media technology in exchange for an
initial cash fee and variable additional fees based on size and volume of
programming hosting.

In conjunction with our business plan, during March of 2000, we acquired 100% of
the outstanding stock of two travel tour operators for cash and shares of our
common stock and in May of 2000, we acquired a controlling interest in a
production and post-production company (see Note 5 - Acquisitions).

As discussed further in Note 6, on March 14, 2000, we completed the sale of 100%
of the issued and outstanding stock of PSAS to a member of our Board of
Directors. PSAS is an airport/airline service company providing skycap services
at various airports in the United States. The sale will enable us to concentrate
on our proposed on-line travel services business. Accordingly, we have accounted
for the operations of PSAS as a discontinued operations.


<PAGE>


RESULTS OF OPERATIONS

For the Three Months Ended March 31, 2000 vs. the Three Months Ended March
--------------------------------------------------------------------------
31, 1999:
--------

We reported revenue of $126,242 during the first quarter ended March 31, 2000,
as a result of the acquisition of Royal International Tours, Inc. ("Royal") on
March 14, 2000. Previously, we had no revenue from our continuing operations.
Selling, general and administrative expenses increased for the three months
ended March 31, 1999 from $803,368 to $1,512,351 for the three months ended
March 31, 2000. The increase was attributable to expenses incurred for public
relations and advisory fees, aggregating $1,018,425, and other corporate
overhead.

During the three months ended March 31, 1999, the Company incurred non-cash
compensation aggregating $429,167. This was the result of stock issued to David
E. Walsh as compensation for his management services to the Company.

For the three months ended March 31, 1999 and 2000, we incurred operating losses
of $1,232,535 and $1,577,396, respectively. The losses are principally due to
expenses incurred in the development of software, public relations, advisory
fees, general and administrative expenses, and the lack of revenues.

For the three months ended March 31, 1999 and 2000, other expense was $3,975,000
and $700,000, respectively. During the three months ended March 31, 2000, we
charged $700,000 to operations in connection with our purchase of the Canticle
Corporation (Note 5). On March 10, 1999, as consideration for executing a
settlement and mutual release agreement, the Board of Directors approved the
issuance of 15,900,000 shares of common stock, valued at $3,975,000, to the
Walsh Family Trust. For the three months ended March 31, 2000, the Company
realized a gain aggregating $277,368 from the sale of marketable securities and
interest income of $50,340.

We expect revenues to increase during 2000 as we recognize revenues from our
acquisitions. However, such revenues may not be sufficient to eliminate our
operating loss during 2000.

LIQUIDITY AND CAPITAL RESOURCES

We funded our operations during 1999 and 2000 through sales of our common stock
resulting in net proceeds to us of $2,901,025 in 1999 and $8,793,121 for the
three months ended March 31, 2000. Sales of our common stock in 1999 and 2000
were sold in private transactions in reliance on various exemptions from the
registration requirements of the Securities Act.

During the three months ended March 31, 2000, we expended $612,000 to fund
business acquisitions, $517,500 for the initial payment on the acquisition of a
software license, $1,490,000 for working capital needs and $825,000 for
discontinued operations.

<PAGE>


On May 4, 2000, we entered into an agreement to transfer to SMA Real Time Inc.
("SMA") $10 million in cash and 1,958,824 shares of our common stock, valued at
$12 million, in exchange for 55% of SMA's Class A voting common stock and 43.75%
of SMA's Class B non-voting common stock, together representing a 50% equity
interest in SMA. The following consideration is payable and/or issuable to SMA
as follows:

                  $1,250,000 in cash on May 4, 2000
                  $3,750,000 in cash on May 16, 2000
                  $5,000,000 due October 4, 2000
                  1,958,824 shares of the Company's common stock

SMA provides a wide range of production and post-production services to
companies that produce commercials, television programs, music videos and
feature films. SMA's principal activities include studio videotape recording,
film to videotape transfer, computer generated visual effects and the coloring,
creation of customized virtual studio sets, editing and dubbing of various form
of emerging media, including film and video. Most of SMA's services are
performed at its headquarters in lower Manhattan, New York.

The agreement also calls for us to place into an escrow account an additional
2,000,000 shares of our common stock to secure the payment of $5,000,000 due
October 4, 2000.

Our cash and cash equivalents and marketable securities approximated $7.2
million and $1.0 million, respectively, as of March 31, 2000. We will require
additional funding in order to accomplish our growth objectives and marketing of
our products and services. There is no assurance that we will be able to secure
any or all funding necessary for our future growth and expansion. There is also
no assurance that even if we manage to obtain adequate funding to complete any
contemplated acquisition, such acquisition will succeed in enhancing our
business and will not ultimately have an adverse effect on our business and
operations. We are exploring other financing alternatives, including private
placements and public offerings.



<PAGE>

                          PART II -- OTHER INFORMATION.


Item 1.  Legal Proceedings.

There have been no material developments in our legal proceedings during the
quarter ended March 31, 2000.


Item 2.  Changes in Securities.

(a)  Not applicable.

(b)  Not applicable.

(c)  On October 1, 1999, pursuant to Rule 902 of Regulation S of the Securities
     Act of 1933, as amended, the Company offered to sell a maximum of
     $20,000,000 of shares of common stock of the Company at the purchase price
     per share of 90% of the closing bid as quoted on the NASD OTC Bulletin
     Board on the date of purchase or $2.00 per share, whichever was greater, to
     selected institutional and individual investors. The minimum purchase was
     $25,000, subject to the Company's right to accept less. During the period
     January 1, 2000 through March 31, 2000, 2,808,678 shares have been sold
     yielding $8,793,144 in proceeds, net of commissions. Per share price varied
     from $2.00 to $7.15.

Item 3.  Defaults Upon Senior Securities.

Not applicable.

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

Not applicable.

Item 5.  Other Information.

None.

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

(a)  Not applicable.

(b)  Reports on Form 8-K.  Form 8-K reflecting the Plan of Reorganization and
     Acquisition was filed February 18, 2000 and a Form 8-K reflecting
     the sale of Pacific States Airline Services, Inc. and the acquisition
     of Royal International Tours, Inc. was filed on March 24, 2000
     (File no. 0-26413).

Item 27.  Financial Data Schedule (2)

<PAGE>



         Pursuant to the requirements 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.




Dated:    May 18, 2000


                                           PSA, INC.
                                           (Registrant)





                                           /S/ David E. Walsh
                                           ---------------------------------
                                           David E. Walsh
                                           President and Chief Executive Officer


(2) Filed herewith