UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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
            September 30, 1996

      [ ]   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:  0-27418

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

            DELAWARE                                 76-0478045
            (State or other jurisdiction of          (IRS Employer
            incorporation or organization)           Identification No.)

            700 Rockmead, Suite 240, Kingwood, Texas        77339
            (Address of principal executive offices)
            (Zip Code)

                                 (713) 359-7638
                           (Issuer's telephone number)

            Check whether the issuer (1) 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 issuer
            was required to file such reports), and (2) has been subject to such
            filing requirements for the past 90 days.

                                YES [X]   NO [ ]

            As of September 30, 1996 there were 5,387,924 shares of Common
            Stock, par value $0.001 per share, outstanding.

            Transitional Small Business Disclosure Format
            (Check One):

            YES [ ]   NO [X]
<PAGE>
                               KINETIKS.COM, INC.

                              INDEX TO FORM 10-QSB
                              For the Quarter Ended
                               September 30, 1996


            Part I      Financial Information

                  Item 1. Financial Statements (unaudited)
                                                                        PAGE
                                                                        ----
                      Balance Sheet.....................................  3

                      Statements of Operations..........................  4

                      Statements of Cash Flows..........................  5

                      Notes to Financial Statements.....................  6

                  Item 2. Management's Discussion
                          and Analysis or
                          Plan of Operation.............................  8

            Part II  Other Information

            Signatures.................................................. 13

            Exhibit 11.01:  Statement of Computation of
                              earning per share......................... 14

                                       2
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                               KINETIKS.COM, INC.

                                  BALANCE SHEET
                                   (UNAUDITED)

                                                        September 30, 1996
                                                        ------------------
ASSETS
Current assets:

  Cash and cash equivalents ...........................   $    10,435
  Accounts receivable .................................        63,058
  Notes and advances due from
  officers and employees ..............................        26,535
  Prepaid expenses and other current
  assets ..............................................        64,849
                                                          -----------
Total current assets ..................................       164,877

Property and equipment, net ...........................       450,547
Prepaid stock offering cost ...........................        25,000
License agreement, net ................................       188,368
                                                          ===========
Total assets ..........................................   $   828,792
                                                          ===========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Notes payable .......................................   $     3,042
  Note payable to shareholder .........................        30,000
  Accounts payable ....................................       532,327
  Accrued compensation ................................        87,917
  Other accrued expenses ..............................       169,543
  Deferred revenue ....................................         5,871
                                                          -----------
Total current liabilities .............................       828,700

Note payable to shareholder officer ...................       224,853

Stockholders' equity:
   Preferred stock, $.001 par value,
    500,000 shares authorized; none
    issued ............................................          --
  Common stock, $.001 par value,
  20,000,000 shares ...................................         5,388
    authorized;  5,387,924 issued and
    outstanding at  September 30, 1996
  Additional paid-in capital ..........................     5,162,354
  Accumulated deficit .................................    (5,392,503)
                                                          -----------
Total stockholders' equity ............................      (224,761)
                                                          -----------
Total liabilities and stockholders' equity ............   $   828,792
                                                          ===========

See accompanying notes.

                                       3
<PAGE>
                               KINETIKS.COM, INC.

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                                    Period from
                                                                      January
                                        Three                        18, 1995
                       Three months     months       Nine months    (inception)
                          ended         ended          ended             to
                        September      September      September      September
                         30, 1996      30, 1995       30, 1996        30, 1995
                       -----------    -----------    -----------    -----------
Revenue ............   $   369,397    $      --      $ 1,011,805    $      --
Operating
 expenses:
  Cost of
   revenue .........       248,877           --          761,958           --
  Research and
   development .....       117,827        137,699        219,952        164,004
  Sales and
   marketing .......       660,887        139,171      2,363,832        165,530
  General and
   administrative ..       482,822        268,471      1,339,358        319,279
                       -----------    -----------    -----------    -----------
                         1,510,413        545,341      4,685,100        648,813
                       -----------    -----------    -----------    -----------
Operating loss .....    (1,141,016)      (545,341)    (3,673,295)      (648,813)

Other income
(expense):
 Interest
  income ...........         2,108           --           44,928           --
 Other income ......         3,313           --            6,625           --
 Interest
  expense ..........       (11,837)        (9,340)       (36,491)        (9,394)
                       -----------    -----------    -----------    -----------
Net loss ...........   $(1,147,432)   $  (554,681)   $(3,658,233)   $  (658,207)
                       ===========    ===========    ===========    ===========
Net loss per
 common and
 common
 equivalent
 share .............   $     (0.21)   $     (0.10)   $     (0.68)   $     (0.12)
                       ===========    ===========    ===========    ===========
Shares used in
 computing net
 loss per
 common and
 common
 equivalent
 share .............     5,387,924      5,337,193      5,383,962      5,313,541
                       ===========    ===========    ===========    ===========

See accompanying notes.

                                       4
<PAGE>
                               KINETIKS.COM, INC.

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                                         Period from
                                                                                                                           January
                                                          Three                Three                  Nine                18, 1995
                                                          months               months                months              (inception)
                                                           ended                ended                 ended                  to
                                                         September            September            September              September
                                                          30, 1996             30, 1995              30, 1996              30,1995
                                                         ---------            ---------            -----------            ---------
<S>                                                      <C>                  <C>                  <C>                    <C>       
OPERATING ACTIVITIES

Net cash used in operating
 activities ..................................           $(364,234)           $(453,197)           $(2,929,662)           $(513,752)

INVESTING ACTIVITIES
Purchase of property and
 equipment ...................................                --                (81,560)              (377,072)             (97,006)
Maturity of short term
 investments .................................             245,560                 --                1,500,843                 --
                                                         ---------            ---------            -----------            ---------
Net cash provided by
 investing activities ........................             245,560              (81,560)             1,123,771              (97,006)

FINANCING ACTIVITIES
Proceeds from notes
 payable .....................................                --                 76,196                270,000              153,625
Repayment of note payable
 to shareholder ..............................             (13,679)                --                 (106,506)                --
Repayment of loan from bank ..................            (244,131)            (244,131)                  --
Proceeds from issuance of
 common stock, net ...........................                --                462,314                   --                462,314
                                                         ---------            ---------            -----------            ---------
Net cash provided by (used
 by) financing activities ....................            (257,810)             538,510                (80,637)             615,939
                                                         ---------            ---------            -----------            ---------
Net (decrease) increase in
 cash ........................................            (376,484)               3,753             (1,886,528)               5,181

Cash and cash equivalents
 at beginning
 of period ...................................             386,920                1,428              1,896,964                 --
                                                         ---------            ---------            -----------            ---------
Cash and cash equivalents
 at end
 of period ...................................           $  10,436            $   5,181            $    10,436            $   5,181
                                                         =========            =========            ===========            =========
SUPPLEMENTAL DISCLOSURE OF
NONCASH INVESTING AND
FINANCING TRANSACTIONS

Cash paid during the
 period for interest .........................               5,668                  437                 13,679                  437

Property and equipment
 acquired from ...............................                --                   --                     --                 73,422
 shareholder in exchange
 for a note payable
</TABLE>

See accompanying notes.

                                       5
<PAGE>
                               KINETIKS.COM, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

            1.  BASIS OF PRESENTATION

            The accompanying unaudited financial statements have been prepared
            in accordance with generally accepted accounting principles for
            interim financial information and with the instructions to Form
            10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not
            include all of the information and footnotes required by generally
            accepted accounting principles for complete financial statements. In
            the opinion of management, all adjustments (consisting of normal
            recurring accruals) considered necessary for a fair presentation
            have been included. For further information, refer to the
            consolidated financial statements and footnotes thereto included in
            the Company's Form 10-KSB for the period ended December 31, 1995.

            The Company began substantial initial operations during the first
            quarter of 1996. Prior to January 1, 1996, the Company had been
            considered to be in the development stage. While the Company is
            operational, sales volumes have not yet achieved the level necessary
            to sustain the Company's continuing operations. Cumulative losses
            since inception have caused the Company's total assets and equity to
            fall below the mandatory requirements of the Nasdaq, which resulted
            in the Company's common stock being removed from registration and
            trading by the Nasdaq Small Cap Market effective October 28, 1996.
            The cumulative losses, removal of its listing from the Nasdaq
            Market, along with the Company's inability to fund it's current
            liabilities of approximately $830,000 at September 30, 1996 raises
            substantial doubt as to the Company's ability to continue as a going
            concern.

            The Company has begun to implement an action plan to restructure its
            operations in order to attempt to reduce expenses to approximate the
            monthly cash flow from sales. This plan specifically addresses
            reductions in payroll cost through layoffs, salary reductions for
            the highest paid officers and employees, placing sales staff on
            commission only, and termination of certain leased office space
            which is not required under the new staffing.

            During the time the forgoing plan is being implemented the Company
            must still obtain sufficient capital to fund its operations and to
            recover the development costs incurred. The Company raised equity
            funding of $ 4,251,000 through an initial public offering ("IPO") of
            shares of its common stock to the public, which was completed on
            December 12, 1995, (See Note 2). On November 8, 1996 the Company's
            founder and Chief Executive Officer retired 400,000 of his personal
            shares of the Company's Common Stock. Those shares were immediately
            sold to an individual investor for $100,000 in order to satisfy
            certain urgent cash needs. The Company's cash flow continues to be
            negative through the date of this report and existing funds are
            inadequate to meet the Company's cash requirements. The Company is
            actively exploring various short and long term financing
            alternatives in order to meet its immediate cash needs. Such
            alternatives may include, among others, a strategic partnership or
            private issuance of debt or equity securities. The Company has
            temporarily postponed its plans to perform a second public offering
            of its stock. While the Company's management is hopeful that a
            financing or strategic partnership will succeed, there can be no
            assurance that the Company will be successful.

                                       6
<PAGE>
            2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            REVENUE AND COST OF REVENUE

            Revenues from the sale of Internet Web Services are recognized
            ratably over the period in which the web sites are produced on the
            Internet. All costs related to revenue producing activities are
            expensed as incurred. Revenues for the quarter ended September 30,
            1996 include $209,267 for which payment was received in the form of
            goods and services.

            Management believes that the majority of costs associated with an
            online web advertisement or creation of a web site are incurred in
            the set-up period and intends to develop statistical information
            regarding the advertisement cost cycle based upon experience. Once
            reliable historical experience is obtained, the revenue recognition
            and the cost of revenue policies will be enhanced to ensure that
            either web services revenue is recognized proportionately in the
            period in which costs are incurred; or that costs in excess of
            earned revenue are deferred, if such results significantly differ
            from the current method of recognizing revenue ratably over the
            online placement period and expensing cost as incurred.

            INCOME TAXES

            Income taxes are accounted for under Statement of Financial
            Accounting Standards No. 109, "Accounting for Income Taxes." Under
            this method, deferred tax assets and liabilities are determined
            based on differences between the financial reporting and tax bases
            of assets and liabilities and are measured using the enacted tax
            rates and laws that will be in effect when the differences are
            expected to reverse.

            For the period from inception through August 14, 1995, RDS and RDS,
            L.L.C.(predecessors entities to the Company) were organized as a
            sole proprietorship and a Texas Limited Liability Company,
            respectively. As a result, the income benefits from operations
            during this period passed directly to the sole proprietor and
            shareholders, respectively. The expenditures incurred prior to the
            Company's merger with RDS, L.L.C. were primarily start-up
            expenditures, which were capitalized by the owners for income tax
            purposes, creating a deferred tax asset of approximately $ 136,000.
            This asset was contributed to the Company in connection with the
            merger. Cumulative losses since inception have created additional
            deferred tax assets of approximately $ 1,697,000, resulting in a
            total deferred tax asset of $ 1,833,000 A valuation allowance was
            established for the full amount of these deferred tax assets because
            the future realization of the cumulative tax benefit is not assured.

            3.  STOCK OPTION PLAN

            In February 1996, the Board of Directors approved an amendment to
            the Plan increasing the Company's total options available under the
            Plan to 1,600,000, which was approved by the stockholders at the
            annual stockholders meeting on June 12, 1996. As of September 30,
            1996, options with respect to 1,531,050 shares were outstanding. The
            options are generally exerciseable for up to ten years following the
            date of grant (five years for 10 percent owners). As of September
            30, 1996, a total of 606,550 were exerciseable and elections to
            exercise 1,550 options had been received.

            4.  DEBT AGREEMENTS

                                       7
<PAGE>
            In September 1996, the Company repaid a $242,000 commercial bank
            loan. The Company remains liable on approximately $ 3,000 of accrued
            and unpaid interest on that loan.


            ]5.  PER SHARE AMOUNTS

            For 1996, net loss per common and common equivalent share is
            computed using the weighted average number of common shares
            outstanding. Common equivalent shares were excluded due to the fact
            that they are anti-dilutive. For 1995, net loss per common and
            common equivalent shares is computed using the weighted average
            number of common and common equivalent shares outstanding during the
            period. Pursuant to the Securities and Exchange Commission Staff
            Accounting Bulletin (SAB) No. 83, common stock and options to
            purchase common stock issued by the Company within 12 months of the
            initial public offering date have been included in the calculation
            of the weighted average number of common and common equivalent
            shares outstanding (using the treasury stock method) as if they were
            outstanding for the entire period.

            6.     SUBSEQUENT EVENT

            On November 8, 1996 the founding shareholder and Chief Executive
            Officer retired 400,000 shares of his personal holdings of the
            Company's $.001 par value Common Stock. The Company immediately sold
            those shares to an individual investor for $100,000. The sale was
            concluded in order to fund critical cash requirements related to
            operations of the Company. Additionally, in October, 1996, the
            Company entered into an asset-based financing arrangement of up to
            $200,000 with a merchant banking firm. As of the date of this report
            approximately $ 130,000 has been borrowed under that arrangement.

            ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
            OPERATION

            GENERAL

            Management's Discussion and Analysis or Plan of Operation presents
            management's view of the Company's financial performance and
            significant plans, trends or situations which may impact future
            performance. The Management's Discussion and Analysis should be read
            in conjunction with the financial statements of the Company and the
            notes related thereto.

            Effective October 28, 1996 the Company's Common Stock was removed
            from trading on the Nasdaq Small Cap Market because as of June 20,
            1996 the Company's net assets and stockholders equity fell below the
            mandatory requirement for continued listing which are $2,000,000 and
            $1,000,000 respectively. This was the result of the Company's
            cumulative losses since inception. The Company has adopted a
            restructuring plan to attempt to regain it's listing. No assurance
            can be given that the plan will be successful. See "-Factors
            Affecting Operating results" and "-Liquidity and Capital Resources."

            While the Company is restructuring to reduce it's operating cost, it
            has deferred its previously announced plan to construct other online
            service products based on its "Internet Waterway" model. Additional
            affinity market based products based on the "Waterway" model are
            under consideration; however, the Company's ability to develop such
            products is limited by its very limited financial resources. Because
            of the serious cash flow constraints the Company completed, but did
            not yet bring to market it's first software product, "E-dealer". The
            Company's plans to begin marketing "E-dealer" in the fourth quarter
            will be dependent on available funding. The Company has, instead,
            concentrated it's efforts on more efficient production of websites
            and web services where it has already created a niche.

                                       8
<PAGE>
            Comparison of the period from July 1, 1995 through September 30,
            1995 operating results to the three and nine months ended September
            30, 1996 would provide no meaningful information because during the
            period ended September 30, 1995, the Company was in the early stage
            of development and had no revenue and had incurred approximately
            $545,341 in various expenses.

            RESULTS OF OPERATIONS

            GROSS REVENUES

            For the quarter ended September 30, 1996, recognized revenue from
            advertising and web service sales was $156,823. In addition, during
            the quarter ended September 30, 1996, the Company recognized
            additional revenue from exchange of services in the amount of
            $209,267, and from merchandise sales of $3,307. Exchange of services
            revenue is derived when the Company provides on line web services in
            exchange for goods and services such as advertising. Total
            recognized operating revenue during the quarter ended September 30,
            1996, was $369,397. For the quarter ended June 30, 1996, total
            operating revenue was $397,199, including $269,482 in exchange of
            service income. The decrease in revenues from the quarter ended June
            30, 1996, was primarily attributable to the decrease in exchange of
            service contracts with industry related media companies.

            COST OF REVENUE

            Cost of Revenue during the quarter ended September 30, 1996 was
            $248,877, compared to $233,122 for the quarter ended June 30, 1996.
            This cost, in both quarters, is composed primarily of payroll cost
            of the production staff and that portion of payroll cost of the
            technical staff attributable to the online maintenance of the
            Internet Waterway.

            RESEARCH AND DEVELOPMENT

            Research and Development costs during the period ended September 30,
            1996, were $117,827, compared to $64,386 for the quarter ended June
            30, 1996. These costs consist of payroll cost incurred related to
            the development of new products or services. Payroll cost
            attributable to support and maintenance of the Internet Waterway has
            been allocated to Cost of Revenue. The increase from the quarter
            ended June 30, 1996, was primarily attributable to the completion of
            the E-Dealer software project.

            SALES AND MARKETING

            During the quarter ended September 30, 1996, Sales and Marketing
            expenses totaled $660,887, the comparable amount the for quarter
            ended June 30, 1996 was $1,024,586. This expense includes corporate
            identity advertising in major national circulation industry and
            trade magazines of $254,143. This expense represents approximately
            $73,876 in cash outlay and $209,267 of Expense in Exchange for
            Services. The marketing costs for the quarter ended June 30, 1996
            were 

                                       9
<PAGE>
            $213,000 in cash and $269,000 in exchange of service cost. In
            addition, compensation expense of $91,250 was recognized during
            quarter ended June 30, 1996 related to stock options granted to
            non-employees. The balance of Sales and Marketing expense covered
            payroll expenses, commissions, travel, and trade shows.

            GENERAL AND ADMINISTRATIVE

            For the quarter ended September 30, 1996, General and Administrative
            expense totaled $482,822, compared to $436,951 for the quarter ended
            June 30, 1996. These expenses consisted primarily of fixed overhead
            expenses, payroll cost, fees for professional services and all other
            expenses which were not identifiable as being chargeable or
            allocable to the other areas.

            OTHER INCOME (EXPENSE)

            Other income (expense) is primarily composed of interest earned on
            Treasury Bills, fees from sharing arrangements with certain
            advertisers and interest expense associated with borrowing from
            shareholders and interest on certain loans from the Company's bank
            related to major equipment purchases.

            FACTORS AFFECTING OPERATING RESULTS

            For the quarter ended September 30, 1996, new web sites and web
            services contracts with a total contract value of $513,661 were
            placed online. Income recognition, which includes down payments
            received on new websites placed online plus collections of monthly
            installments on sites previously placed online, during the same
            period totals $369,396. Included in both the total contract value
            and the income recognized was, $209,267 which represents amounts
            related to providing web services in exchange for advertising or
            promotions. Equal amounts of advertising expenses have been recorded
            relative to these exchange of service transactions. In addition to
            the contracts mentioned above, a backlog of $121,038 in cash
            contracts have been signed, but have not yet been placed online.

            The exchange of service contracts referred to in the preceding
            paragraph primarily relate to corporate identity advertising
            coverage by fifteen industry related magazines which publicize
            Internet Waterway advertisements, or to products or services
            contributed by vendors in exchange for advertising on the Internet
            Waterway. Those products and services may be given as prizes in
            online contests designed to draw viewers to the Company's site and
            to gain demographic information to be used in advertising sales.

            The Company has recently revised its budgets in order to attempt to
            bring its expenses more nearly in line with it's expected cash flow.
            Parts of these budgeted expense levels are fixed and cannot be
            quickly adjusted. Total cash sales have fallen short of anticipated
            levels and therefore the Company has made major adjustments in its
            expense structure, including staff layoffs, salary deferrals and
            salary reductions for senior staff members. Such measures should
            reduce monthly operating expenses to approximately $75,000. There is
            no guarantee that such measures will be sufficient to enable the
            Company to continue operations through the end of 1996. See
            "-Liquidity and Capital Resources".

            LIQUIDITY AND CAPITAL RESOURCES

                                       10
<PAGE>
            To date, the Company has financed its operations through the private
            sales of equity securities, loans advanced by its Chief Executive
            Officer and others and an initial public offering of its common
            stock. In addition, on November 8, 1996, Gregory Carr, the Company's
            founder and Chief Executive Officer retired 400,000 shares of his
            personal holdings of Company common stock. The Company immediately
            sold those same 400,000 shares of Common Stock to an individual
            investor for $100,000. This sale was concluded in order to fund
            immediate essential expenditure requirements related to operations.
            In addition during October the Company entered into a asset-based
            financing arrangement of up to $200,000 with a merchant banking firm
            with whom it is exploring a broader financial relationship.

             During the nine months ended September 30, 1996, the Company spent
            $2,929,662 in its operating activities, and cash flow from
            operations continues to be negative. As of November 14, 1996, the
            Company is in severe financial distress and lacks sufficient cash to
            satisfy its current liabilities.

            Therefore, the Company is actively exploring various short and long
            term financing alternatives in order to meet its immediate cash
            requirements. Such alternatives may include, among others, strategic
            partnerships, or private issuance of debt or equity securities. Such
            measures may entail a substantial restructuring of the Company's
            present capital structure, including the substantial dilution of the
            current stockholders. There is no assurance that the Company will be
            successful in completing any of these alternatives. If the Company
            is unable to obtain sufficient capital in the short term in order to
            satisfy its sever liquidity problems it is highly unlikely that the
            Company will be able to continue operations through the end of
            December 1996.

                                       11
<PAGE>
                           PART II - OTHER INFORMATION

            a. Exhibits.

            Exhibit 11.01: Statement Re: Computation of Per Share Earnings

                                       12
<PAGE>
            SIGNATURES

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

                                                   KINETIKS.COM, INC.



            Date: November 14, 1996                By:  Gregory S. Carr
                                                   Chairman of the
                                                   Board of
                                                   Directors, Chief
                                                   Executive
                                                   Officer and President


            Date: November 14, 1996                By:  James C. Waldrop
                                                   Treasurer, Vice President -
                                                   Finance and Chief
                                                   Financial Officer