<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1997

                                       OR

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

For the transition period from ________ to ________

                       Commission file number 33-28809-A

                               ONE UP CORPORATION
       (Exact name of small business issuer as specified in its charter)

             FLORIDA                                   65-0125664
  (State or other jurisdiction of                   (I.R.S. Employer
   incorporation or organization)                   Identification No.)


      12801 NORTH STEMMONS FREEWAY, SUITE 710, FARMERS BRANCH, TEXAS 75234
                    (Address of principal executive offices)

                                (972) 969-0300
                (Issuer's telephone number, including area code)

Check whether the issuer (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 [ ] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of May 20, 1997, the
issuer had 27,452,251 shares of common stock, no par value, outstanding.





<PAGE>   2


                                     INDEX


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         Balance Sheets at March 31, 1997, and December 31, 1996

         Statements of Operations for the three months ended
                  March 31, 1997 and 1996

         Statements of Cash Flows for the three months ended
                  March 31, 1997 and 1996

         Notes to Financial Statements


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

         Overview:  Introduction, Background and Sales Strategy

         Results of Operations:
                  Comparison of the Three Months Ended March 31, 1997 and 1996

         Liquidity and Capital Resources


                          PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  (11)     A Statement of Computations of Per Share Earnings


SIGNATURES








                                     - 2 -


<PAGE>   3


                       ONE UP CORPORATION AND SUBSIDIARY
                          Consolidated Balance Sheets
                     March 31, 1997, and December 31, 1996

<TABLE>
<CAPTION>
                                                                                   (Unaudited)      (Audited)
                                    ASSETS                                          03/31/97        12/31/96
                                                                                 ---------------- -------------
<S>                                                                              <C>            <C>
CURRENT ASSETS
     Cash                                                                        $    96,009    $    36,939
     Accounts receivable - billed, net of allowance for
          doubtful accounts of $76,200 and $0, respectively                          155,025        116,157
     Accounts receivable - unbilled, net of allowance for
          doubtful accounts of $47,520 and $0, respectively                           66,350        203,070
     Shareholder advance                                                               3,766          3,766
     Income tax refund receivable                                                       --          507,733
     Other receivable                                                                  8,200           --
     Other current assets                                                              5,532          4,827
                                                                                 -----------    -----------
          Total current assets                                                       334,882        872,492

PROPERTY AND EQUIPMENT, NET                                                          466,132        843,226

OTHER ASSETS
     Financing fees                                                                     --           68,250
     Deferred tax asset                                                               97,765         97,765
     Other assets                                                                       --            1,300
                                                                                 -----------    -----------
          Total other assets                                                          97,735        167,315
                                                                                 -----------    -----------

          Total Assets                                                           $   898,779    $ 1,883,033
                                                                                 ===========    ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
     Notes payable                                                               $      --      $     2,053
     Accounts payable                                                                961,111        870,359
     Accrued expenses                                                                342,287        303,003
     Customer deposits in excess of unbilled receivables                             301,750        678,450
     Shareholder advances                                                             68,682         68,682
     Deferred tax liability                                                           97,765         97,765
                                                                                 -----------    -----------
          Total current liabilities                                                1,771,595      2,020,312

LONG-TERM LIABILITIES
     Convertible debentures                                                             --          525,000

MINORITY INTEREST                                                                     (3,752)         5,632

COMMITMENTS AND CONTINGENCIES                                                           --             --

STOCKHOLDERS' EQUITY (DEFICIT)
     Common stock; no par value; 200,000,000 shares authorized; 28,307,154 and
          18,002,253 shares issued at March 31, 1997,
          and December 31, 1996, respectively                                      1,697,040      1,166,960
     Additional paid-in capital                                                      712,186        712,186
     Treasury stock, at cost (854,903 shares)                                     (1,068,629)    (1,068,629)
     Retained earnings (accumulated deficit)                                      (2,209,661)    (1,478,428)
                                                                                 -----------    -----------
          Total stockholders' equity (deficit)                                      (869,064)      (667,911)
                                                                                 -----------    -----------

          Total Liabilities and Stockholders' Equity (Deficit)                   $   898,779    $ 1,883,033
                                                                                 ===========    ===========
</TABLE>









      The accompanying notes are an integral part of these consolidated
                            financial statements.

                                     - 3 -


<PAGE>   4

                       ONE UP CORPORATION AND SUBSIDIARY
                     Consolidated Statements of Operations
                   Three Months Ended March 31, 1997 and 1996
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                        1997           1996
                                                   ------------    ------------
<S>                                                <C>             <C>
REVENUES
     Sales                                         $    688,842    $    459,974
     Gain on sale of assets                                 892            --
                                                   ------------    ------------
     Total revenues                                     689,734         459,974

COSTS AND EXPENSES
     Salaries and benefits                              600,323         643,615
     General and administrative                          50,857          63,154
     Advertising and marketing                              411           6,006
     Product costs                                         --             1,028
     Travel                                              14,788          59,040
     Contract labor                                      59,218         110,279
     Rent                                                21,201          87,830
     Depreciation and amortization                       72,280          71,185
     Loss on release of assets                          284,573            --
     Insurance                                            3,715           3,644
     Bad debt expense                                   123,720            --
     Legal and professional fees                         91,342         124,345
     Merger, acquisition and consulting expenses           --           114,997
                                                   ------------    ------------
          Total operating expenses                    1,322,428       1,285,123
                                                   ------------    ------------

     Income (loss) from operations                     (632,694)       (825,149)

OTHER INCOME (EXPENSES)
     Interest income                                        496          21,710
     Interest expense                                   (16,987)           (184)
     Financing fees                                     (68,250)           --
                                                   ------------    ------------
          Total other income (expenses)                 (84,741)         21,526

     Minority interest in income (loss) of
          consolidated subsidiary                        (9,384)           (805)
                                                   ------------    ------------

     Income (loss) before income taxes                 (726,819)       (804,428)

     Provision for income tax expense (benefit)          23,182        (256,608)
                                                   ------------    ------------

     Net income (loss)                             $   (750,001)   $   (547,820)
                                                   ============    ============

Net income (loss) per common share                 $     (0.031)   $     (0.043)
                                                   ============    ============

Weighted average common shares and common
     equivalents outstanding                         24,436,316      12,786,853
                                                   ============    ============

</TABLE>











       The accompanying notes are an integral part of these consolidated
                             financial statements.



                                     - 4 -


<PAGE>   5


                       ONE UP CORPORATION AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                   Three Months Ended March 31, 1997 and 1996
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                            1997         1996
                                                         ---------    ---------
<S>                                                      <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                     $(750,001)   $(547,820)
   Adjustments to reconcile net income (loss) to net
      cash provided (used) by operating activities:
      Depreciation and amortization                         72,280       71,185
      Gain on sale of assets                                  (892)        --
      Loss on release of assets                            284,573         --
      Assets given in lieu of wages                         14,233         --
      Bad debt expense                                     123,720         --
      Financing fees                                        68,250         --
      Deferred income tax expense (benefit)                   --       (259,951)
      Stock compensation expense                              --         67,000
      Minority interest                                      9,384          805
     Change in assets and liabilities:
         (Increase) decrease in accounts receivable       (115,068)     236,001
         Decrease in unbilled revenue                       89,200         --
         Increase in shareholder advance                      --        (20,145)
         Increase in subscription receivable                  --        (10,000)
         Decrease in income tax refund receivable          507,733         --
         Increase in other receivable                       (8,200)    (109,365)
         Increase in other current assets                     (705)     (11,318)
         Decrease in other assets                             --         24,000
         Increase (decrease) in accounts payable            90,752      (72,203)
         Increase in accrued expenses                       39,284      151,275
         Decrease in income taxes payable                     --        (52,252)
         Increase (decrease) in customer deposits         (376,700)      17,200
         Decrease in other long-term liabilities              --         (1,840)
                                                         ---------    ---------
      Total adjustments                                    797,844       30,392
                                                         ---------    ---------
      Net cash provided (used) by operating activities      47,843     (517,428)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment                        --         (2,989)
   Sales of property and equipment                           8,200         --
   Rebate from lessor for leasehold improvements              --        109,365
                                                         ---------    ---------
      Net cash provided (used) in investing activities       8,200      106,376

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of common stock                    5,080      279,000
   Proceeds from short-term notes                          200,000         --
   Repayment of notes payable                             (202,053)      (2,510)
                                                         ---------    ---------
      Net cash provided (used) in financing activities       3,027      276,490
                                                         ---------    ---------

      Net increase (decrease) in cash                       59,070     (134,562)

Cash - beginning                                            36,939      713,421
                                                         ---------    ---------

Cash - ending                                            $  96,009    $ 578,859
                                                         =========    =========

SUPPLEMENTAL DISCLOSURES:
      Interest paid                                      $   8,085    $     184
                                                         =========    =========
      Income taxes paid                                  $    --      $  55,594
                                                         =========    =========
</TABLE>





      The accompanying notes are an integral part of these consolidated
                            financial statements.


                                     - 5 -


<PAGE>   6

                       ONE UP CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997
                                  (Unaudited)


NOTE 1.  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
by One Up Corporation pursuant to the rules and regulations of the Securities
and Exchange Commission and reflect all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair presentation of the financial position as of March 31, 1997, and the
results of operations and cash flows for the three months ended March 31, 1997
and 1996. The unaudited consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the year
ended December 31, 1996, including the accompanying notes. The results of
operations for the interim period shown are not necessarily indicative of the
results for the entire fiscal year ending December 31, 1997.


NOTE 2.  BUSINESS ACTIVITY

On February 29, 1996, One Up Corporation ("One Up"), a Texas corporation,
entered into a reverse acquisition agreement with New York Acquisitions, Inc.,
a publicly held "shell" Florida corporation. One Up became a wholly-owned
subsidiary of the public company through the exchange of 11,337,432 shares on a
post-split basis of the public company's common stock for all of the
outstanding stock of One Up. The name New York Acquisitions, Inc., was changed
to One Up Corporation.


NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported periods.
Actual results could differ from those estimates.

Principles of Consolidation

The financial statements include the accounts of One Up, the public company,
and its majority owned foreign subsidiary, collectively referred to as the
Company. Intercompany transactions and balances have been eliminated in
consolidation.

Reclassifications

Certain amounts recorded in prior periods have been reclassified to conform to
the current classification.




                                     - 6 -


<PAGE>   7


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income (Loss) Per Share

Income (loss) per share has been computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the
respective periods.


NOTE 4.  GOING CONCERN UNCERTAINTY

As reflected in the accompanying consolidated financial statements, the Company
incurred losses from continuing operations of $632,694 during the quarter ended
March 31, 1997, and the Company's current liabilities exceed current assets in
the amount of $1,436,713. If the Company does not obtain funding in the near
term, the Company will be unable to continue as a going concern. The Company's
new management (headed up by a new President and CEO) is in the process of
implementing its new business plan with a highly focused sales strategy, and
believes that the growing opportunity for the Company to sell its automated
migration products and services, based on rapid growth and changes in the
marketplace and increasing market demand for conversion services, will yield
increased revenues and earnings for 1997, although no assurances can be given
regarding such increase.

Management believes that the Company is now positioned to move toward
profitability during the year ended December 31, 1997. The Company's continued
existence and plans for future growth are dependent in part upon its ability to
obtain the capital necessary to operate, primarily through the issuance of
additional debt or equity, and in part on its ability to effectively penetrate
the market for migration services by way of successful implementation of the
new business plan and sales strategy.

To continue to fund its operations for the year ended December 31, 1997, the
Company is actively discussing and negotiating with various outside sources for
bank financing, private placement, venture capital, investment capital and
other financing alternatives. Negotiations with an investment banking firm,
that has previously raised capital for the Company, to raise $1,000,000 in the
form of Senior Secured Promissory Notes and Common Stock Purchase Warrants are
being finalized, pending filing of this quarterly report. Both the Company and
the placement agent believe that prospects for successful completion of this
fund raising venture are highly probable. Negotiations with a firm, that has
previously made short-term loans to the Company, should prove favorable in
terms of lending the Company an amount sufficient to cover continuing
operations until such time that more permanent financing can be finalized.
However, ultimately no assurance can be given that such financing can be
arranged or that the terms and conditions of such financing will be acceptable
to the Company.





                                     - 7 -


<PAGE>   8


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 4.  GOING CONCERN UNCERTAINTY (CONTINUED)

The financial statements do not include any adjustments to reflect the possible
effects on recoverability and classification of assets or classification of
liabilities which may result from the inability of the Company to continue as a
going concern.


NOTE 5.  CONVERTIBLE DEBENTURES

On October 30, 1996, the Company entered into a Regulation S Offering
Memorandum (the "Offering"). As of the closing date, December 31, 1996, the
Offering yielded net proceeds to the Company of $456,750.

In connection with the Offering, on November 12, 1996, the Company entered into
a financial consulting agreement (the "Agreement") with the Placement Agent.
The Agreement provides for a monthly fee of $10,000 to be paid by the Company
to the Placement Agent for a duration of 24 months for financial consulting
services to be provided by the Placement Agent. (To date, the Company has
remitted no monthly fee amounts due under the Agreement, the entire balance of
which is included in the Company's outstanding accounts payable.)

As a condition to the Placement Agent entering into the Agreement, on November
12, 1996, Richard G. Dews, the Company and an outside investment group (the
"Group") entered into an option agreement (the "Option Agreement") whereby Mr.
Dews granted to the Group certain rights with respect to 6,000,000 shares of
the Company's common stock owned by Mr. Dews. The Option Agreement provided
that the Company shall file a shelf registration statement with the SEC within
45 days of November 12, 1996, in order to register the 6,000,000 shares
underlying the option. To date, the Company has not completed the registration
of these shares.

During the first quarter of 1997, all of the Debentures (with an aggregate
principal face value of $525,000) were converted to a combined total of
10,291,534 common shares on January 30, 1997, and February 4, 1997, at
effective per share prices of $0.09125 and $0.04875, respectively.


NOTE 6.  INCOME TAXES

Deferred tax assets and liabilities at March 31, 1997, and December 31, 1996,
consist of the following:

<TABLE>
<CAPTION>
                                              03/31/97    12/31/96
                                              --------    --------
<S>                                           <C>         <C>   
Current deferred tax asset                    $   --      $   --
Current deferred tax liability                 (97,765)    (97,765)
                                              --------    --------
Net current deferred tax liability            $(97,765)   $(97,765)
                                              ========    ========
</TABLE>



                                     - 8 -


<PAGE>   9


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 6.  INCOME TAXES (CONTINUED)

<TABLE>
<S>                                        <C>           <C>       
Noncurrent deferred tax asset              $  800,986    $  545,986
Noncurrent deferred tax liability                --            --
Valuation allowance                          (703,221)     (448,221)
                                           ----------    ----------
Net noncurrent deferred tax asset          $  (97,765)   $  (97,765)
                                           ==========    ==========
</TABLE>

The noncurrent deferred tax asset results primarily from merger and acquisition
costs capitalized for federal income tax purposes and the benefit of net
operating losses. The net operating loss has a 100% valuation allowance
recorded against it due to the uncertainty of generating future taxable income.
The current deferred tax liability results from the cash basis of accounting
for federal income tax purposes versus the accrual basis for financial
accounting purposes.

At December 31, 1996, the Company recorded an income tax refund receivable in
the amount of $507,733 relating to the net operating loss of approximately
$4,155,000 incurred during the year then ended. The refund (net of penalties
and interest due) was received during the first quarter of 1997. The portion of
the 1996 net operating loss eligible to be carried forward to future years in
the amount of approximately $725,000 will expire in 2011.

The net operating loss incurred during the quarter ended March 31, 1997, was
approximately $750,000. Any net operating loss incurred for the year ended
December 31, 1997, eligible to be carried forward to future years will expire
in 2012.


NOTE 7.  STOCKHOLDERS EQUITY (DEFICIT) AND STOCK OPTIONS

Effective July 1, 1996, the Company adopted a stock purchase plan ("Plan")
designed to provide its employees with a proprietary interest in the Company.
During the first quarter of 1997, pursuant to the Plan, employees purchased
13,367 shares of the Company's common stock valued at $5,080 based on the March
31, 1997, closing bid price of $0.35 per share. 5,499 shares of common stock
(representing the Company's 50% match due to participants who, to date, remain
employed by the Company) will be issued effective July 1, 1997, subject to
vesting requirements as described in the Plan documents.

During 1997, management announced plans to terminate the Employee Stock
Purchase Plan. As a result, employees who were participating in the Plan
terminated their participation effective April 1, 1997, and all amounts
previously withheld for the second quarter 1997 were refunded to the
participants. The Board is in the process of reviewing a replacement plan, the
details of which are not yet available, and anticipates adoption of the new
plan by June 30, 1997.






                                     - 9 -


<PAGE>   10


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 7.  STOCKHOLDERS EQUITY (DEFICIT) AND STOCK OPTIONS (CONTINUED)

Effective May 1, 1997, the Company granted stock options to 20 existing
employees to purchase 344,000 shares of the Company's common stock at $0.35 per
share. The options are vested 25% at the option date, and will vest an
additional 25% each succeeding year. The options are exercisable upon vesting
and expire one year after 100% vested. To date, no options have been exercised.

During May 1997, the Company granted stock options to three new employees to
purchase 9,000 shares of the Company's common stock at an exercise price equal
to that of the closing bid price per share 90 days after their date of hire.
The options vest 25% after each year beginning at the date of hire and may be
exercised upon vesting. Any unexercised options will expire one year after 100%
vested.


NOTE 8.  COMMITMENTS AND CONTINGENCIES

In May 1995, One Up leased its former office facility located in Westlake,
Texas, from IBM under a noncancelable operating lease, which was to expire
April 2000. In March 1997, however, due to the forthcoming increase in rental
rates per square foot to more than double the current rates coupled with the
Company's need to reduce overhead and monthly expenses, the Company's new
management successfully negotiated a settlement for early cancellation of the
lease. The terms of the agreement reached between One Up and IBM included
cancellation of the lease effective March 31, 1997, in turn for One Up's
payment of $20,000 to IBM in settlement of approximately $110,000 owed to IBM
and the property management company for past due rent, utilities and other
related expenses. In addition, One Up released to the landlord leasehold
improvements that it had previously made to the facility with a net book value
of $284,573 at March 31, 1997.

On April 7, 1997, the Company leased its present office facility under a
noncancelable operating lease, which expires April 30, 2000. Future minimum
commitments under this lease are as follows:

<TABLE>
<CAPTION>
         Period ending March 31,
                  <S>                           <C>
                  1998                          $   127,800
                  1999                              127,800
                  2000                              127,800
                  Thereafter                         10,650
                                                -----------
                  Total                         $   394,050
                                                ===========
</TABLE>






                                     - 10 -


<PAGE>   11


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 8.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

In May 1995, One Up leased two copiers from Danka under a noncancelable
operating lease, which was to expire April 2000. However, due to the Company's
need to reduce overhead and monthly expenses, in March 1997, at which time One
Up was four months in arrears on payments ($9,766) for the leased copiers, the
Company contacted Danka in an attempt to negotiate return of one or both of the
copiers. The Company was not successful in negotiating a change to the lease
and was, therefore, forced to abandon the copiers effective March 31, 1997. At
that time, the copiers were repossessed by Danka to be refurbished and sold
with any difference between the proceeds and the remaining total payments on
One Up's lease ($90,679) to be charged back and billed to the Company at that
time. Any such difference to be charged back would relate to periods after the
quarter ended March 31, 1997, and will be recorded by the Company accordingly.

Beginning in April 1996, the Company entered into a series of one year lease
agreements with AT&T for various computer equipment at an average monthly cost
of approximately $12,000 for the first year. Under terms of the agreement, for
each year thereafter that the Company renews its lease for the equipment, the
monthly cost will be reduced by one-half the cost of the first year, to
approximately $6,000 from May 1997 forward.

In April 1997, the Company leased a refurbished copier under a thirty-six
month, noncancelable operating lease. The lease calls for monthly payments in
the amount of $124.

Pursuant to October 1996 amendments to employment agreements, two employees
were granted options to purchase 250,000 and 100,000 shares of the Company's
common stock at per share prices of $1.00 and $2.00, respectively, exercisable
from March 2, 1997, to March 1, 1998, and from June 2, 1997, to June 1, 1998,
respectively. Although one of the employees was laid-off during the first
quarter of 1997, pursuant to terms of the Amendment, those options remain
exercisable due to circumstances stipulated in the Amendment. To date, no
options have been exercised.

During the first quarter of 1997, a key employee, who had entered into a one
year employment agreement with the Company during 1996, was laid-off. Pursuant
to terms of an amendment to the employment agreement, the Company believes it
may be liable to the employee for severance pay equal to the employee's annual
salary of approximately $70,000. This potential liability has been accrued by
the Company effective March 31, 1997.

On December 11, 1996, a former employee filed suit against the Company, for
Breach of Employment Agreement, in Fairfax County, Virginia, in connection with
the Company's decision to terminate employment of the former employee effective
July 31, 1996, upon closing





                                     - 11 -


<PAGE>   12


                       ONE UP CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 8.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

of the Company's remote sales office located in Virginia. Due to defective
service of process, the Company was not aware that this suit had been filed
until March 1997 when the Company's counsel received notice that the Virginia
courts had awarded a default judgment against the Company in the amount of
$110,139 effective February 21, 1997. On March 27, 1997, the Company filed for
a motion of continuance on the evidentiary hearing on damages, which had been
set for March 28, 1997, and for a motion to set aside the default judgment. At
the hearing held on April 11, 1997, the Virginia courts again ruled against the
Company upholding the previously awarded default judgment. On April 18, 1997,
the former employee offered to settle the matter for 75% of the judgment plus
an agreement from the Company to register the 21,000 restricted shares of the
Company's common stock that he purchased in April 1996. On April 29, 1997, the
Company proposed a counter offer to settle in the amount of $25,000, of which
$12,500 would be payable by May 20, 1997, with the balance payable in ten equal
installments of $1,250 on the 15th of each month until fully paid. The Company
believes that it has substantial defenses and remedies available and it will
pursue all available avenues to vigorously defend its position. The Company
believes it has no liability resulting from termination of the former employee
and that the default judgment awarded by the Virginia courts would not be
upheld in the Texas courts where the former employee will be forced to
domesticate his award. However, the Company has accrued $50,000 at March 31,
1997 (of which $31,250 relates to 1996), in connection with this suit.
Ultimately, the settlement amount, if any, may differ from the Company's
expected settlement amount as discussed above.

On March 7, 1997, Boynton Beach Financial Corp. (a former consultant to the
Company) filed suit against the Company, for Fraud in the amount of $15,000 and
Tortious Interference in the amount of $15,000, in Circuit Court, Palm Beach,
Florida. Subsequent to filing the suit, the plaintiff's principal shareholder
and officer died. The Company believes this is sufficient cause for the suit to
be withdrawn. Additionally, the Company believes that the case has no merit,
the Company has no liability resulting from its relationship with the
plaintiff, the Company has substantial defenses and remedies available, and the
Company will pursue all available avenues to vigorously defend its position.
The Company has not accrued any amounts in connection with this suit as it
believes no amounts are due or will be paid.

On March 6, 1996, the Company entered into an agreement to pay $100,000 over a
12 month period to a former employee in exchange for services rendered. An
acceleration clause requires any remaining balance to be paid in full upon the
Company raising $500,000 of capital. The March 31, 1997, balance sheet reflects
the remaining unpaid balance of $25,000 as an accrued liability. On March 7,
1997, the former employee filed suit against the Company, for Breach of
Contract, in County Court, Dallas County, Texas, seeking payment for the unpaid
balance in the amount of $25,000, plus attorneys' fees (estimated by the former
employee at $20,000), court





                                     - 12 -


<PAGE>   13


                       ONE UP CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 8.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

costs and interest. On March 25, 1997, the Company filed its response generally
denying each and every material allegation and demanding strict proof of the
allegations. The case is presently awaiting trial, which has been set for June
23, 1997, as the Company continues negotiations for a settlement.

On January 21, 1997, Integrated Documentation, Inc., filed suit against the
Company, for Breach of Contract, in County Court, Dallas County, Texas, seeking
payment for unpaid fees relating to the Company's trade accounts payable in the
amount of $24,854, plus attorney fees (estimated by Integrated to be $19,925),
court costs and interest. On January 28, 1997, Integrated filed a motion for
summary judgment. On February 14, 1997, the Company filed its response
generally denying each and every material allegation and demanding strict proof
of the allegations. On April 18, 1997, Integrated was awarded a judgment
against the Company in the amount of $24,854. On April 25, 1997, the Company
received plaintiff's first set of interrogatories. On May 6, 1997, the Company
offered to settle for payout arrangements of $1,000 payable upon settlement
with the balance payable monthly in $1,000 equal installments until fully paid.
The case is presently awaiting trial, which has been set for June 24, 1997, as
the Company continues its efforts to settle the suit.

On February 4, 1997, Romac International, Inc., filed suit against the Company,
for Breach of Contract, in District Court, Dallas County, Texas, seeking
payment for unpaid fees relating to the Company's trade accounts payable in the
amount of $137,448, plus attorney's fees and interest. On March 25, 1997, the
Company filed its response generally denying each and every material allegation
and demanding strict proof of the allegations. At present, the Company is
awaiting a response from Romac while continuing to negotiate a settlement.

On April 16, 1997, Business Aircraft Leasing, Inc., filed suit against the
Company, for Default, in Tennessee Judicial District Chancery Court, Nashville,
Tennessee, seeking payment for unpaid fees relating to the Company's trade
accounts payable in the amount of $22,764, plus attorney fees, litigation
expenses and interest. The case is presently in negotiations. The expected
outcome is settlement of the suit for approximately $15,000, 50% of which would
be payable upon settlement with the remainder to be paid out over time.

On April 24, 1997, Ciber, Inc., filed suit against the Company in District
Court, Dallas County, Texas, seeking payment for unpaid fees relating to the
Company's trade accounts payable in the amount of $55,650, plus attorney fees,
costs of suit and interest. On May 12, 1997, the Company filed its response
generally denying each and every material allegation and demanding strict proof
of the allegations. At present, the Company is awaiting a response from Ciber
while continuing to negotiate a settlement.





                                     - 13 -


<PAGE>   14


                       ONE UP CORPORATION AND SUBSIDIARY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                 March 31, 1997
                                  (Unaudited)


NOTE 8.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

On April 28, 1997, Interactive Software, Inc., filed suit against the Company
in District Court, Dallas County, Texas, seeking payment for unpaid fees
relating to the Company's trade accounts payable in the amount of $71,000, plus
attorney fees, court costs and interest. The case is presently in negotiations.
The expected outcome is settlement of the suit for approximately $50,000, 50%
of which would be payable upon settlement with the remainder to be paid out
over time.

On May 19, 1997, Innova Solutions, Inc., filed suit against the Company in
District Court, Dallas County, Texas, seeking payment for unpaid fees relating
to the Company's trade accounts payable in the amount of $100,227, plus
attorney fees, court costs and interest. The case is presently in negotiations.
The expected outcome is settlement of the suit for approximately $70,000, 50%
of which would be payable upon settlement with the remainder to be paid out
over time.

Of the seven immediately aforementioned lawsuits (six of which are for unpaid
trade accounts payable and one is for unpaid amounts relating to an agreement
for services), the entire $436,943 is included in the Company's outstanding
accounts payable balances at March 31, 1997. $38,062 of this amount relates to
services provided to the Company during the first quarter of 1997, and the
$398,881 remaining is for services provided during 1996.

From January 17, 1997, to March 14, 1997, the Company failed to pay earned but
unused vacation pay to terminated employees totaling $48,271 that was due and
payable at the dates of termination. Due to a lack of funds, the Company did
not timely pay these amounts, and, to date, these amounts remain unpaid. If any
former employees file against the Company for these unpaid wages, the Company's
failure to timely pay earned but unused vacation pay to its former employees
could result in fines being imposed by the Texas Workforce Commission. The
liability for the unpaid wages is recorded in the accompanying consolidated
financial statements as part of accrued liabilities.
















                                     - 14 -


<PAGE>   15





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

                        1ST QUARTER ENDED MARCH 31, 1997

OVERVIEW

INTRODUCTION

One Up Corporation ("One Up") was incorporated in 1991. On February 29, 1996,
One Up entered into a reverse acquisition agreement with New York Acquisitions,
Inc., a publicly held "shell." One Up became a wholly-owned subsidiary of the
public company through the exchange of 11,337,432 shares on a post-split basis
of the public company's common stock for all of the outstanding stock of One
Up. The name New York Acquisitions, Inc., was changed to One Up Corporation.

One Up is the parent of a majority owned foreign subsidiary, One Up Computer
Services, Ltd. ("the Subsidiary"). The Subsidiary was incorporated under the
laws of the Province of Ontario, Canada, in October 1992. Its operations
primarily consist of contract computer programming education that compliments
the curriculum of One Up. The operations of the Subsidiary in the past have not
been significant to the operations of One Up. During the first quarter of 1997,
the Subsidiary ceased operations.

The financial statements include the accounts of One Up, the public company,
and it majority owned foreign subsidiary, collectively referred to as the
Company. Intercompany transactions and balances have been eliminated in
consolidation.

The Company is engaged in the development and sales of strategic applications
software migration (movement between operating systems such as OS/2 and
Windows) technology. Migration is a computer industry term for converting
software applications such as billing, manufacturing control and consumer
applications from their current operating system to a new target operating
system. The Company believes that there is a large potential market for these
services resulting from the competition between, and widespread business use
of, several different operating systems including IBM's OS/2, Microsoft's
Windows, and the various UNIX vendors.

The Company has been involved in several successful migration projects
including such well-known companies as Group 1 Software, Policy Management
Systems Corporation, AutoTester, Inc., Caterpillar Inc., Ameritech Library
Services and USAA. The Company's expertise, technologies and refined methods
allow it to perform migration projects for customers in months rather than in
years. The Company's technology and methodology result in both time and cost
savings for companies in need of migration services.





                                     - 15 -


<PAGE>   16





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


BACKGROUND

In December 1993, the Company released version 1.0 of SMART(TM) (Source
Migration Analysis Reporting Toolset), its first proof-of-concept migration
expert system. SMART(TM) was revolutionary. It analyzed, in minutes instead of
months, an entire application source base and reported every change required to
move the application from Windows to OS/2. Moreover, SMART(TM) could perform
many of these changes automatically, while inserting in-line comments to assist
the programmer with those changes not easily automated. SMART(TM) created a
road map report for migration projects in the first hour of the first day, and
it could automatically migrate up to 50% of applications by simply "pushing a
button." By September 1994, the Company created SMART(TM) 2.0 (programmable
extensible). In late 1994, the Company began to develop its next-generation
migration expert systems and methodology - Commander Technology(SM) and the
Conversion Factory(SM), respectively. Unlike other software conversion products
of which the Company is aware, Commander Technology(SM) is programmable, 
allowing the developer to rearchitect source code, text, data and graphics. In
addition, Commander Technology(SM) allows the migration of source code in any
direction, between several platforms, rather than being limited to only Windows
to OS/2 migrations.

Throughout the last half of 1995 and all of 1996, the Company attempted to
launch a services-based business model with a highly-evolved, revolutionary
technology and methodology. During 1996, the Company formalized, documented and
staffed its Conversion Factory(SM). This Conversion Factory(SM) methodology is 
the key to the Company's migration strategy, allowing the Company to manage
large scale migrations with minimal investment in direct labor costs. This
methodology also allows the Company to track project progress and quickly
determine the need for change orders, assuring the opportunity to maintain
acceptable profit margins.

The Company has spent the first quarter of 1997 refining these processes so as
to ultimately be able to deliver its products and services through industry
partners. The Company enters 1997 with the belief that, through the development
of several significant assets, including i) an experienced technical team
employing state-of-the-art proprietary technology, ii) an extensive list of
prospective clients, and iii) an aggressive sales team employing an effective
sales strategy, it is well positioned to aggressively pursue its business
purpose of being an industry leader in computer platform migration.

The Company now offers customers a complete end-to-end migration service
through a turnkey, seven step process, Conversion Factory(SM). A portion of the
process incorporates the use of the Company's proprietary Commander
Technology(SM) migration expert system. The Commander





                                     - 16 -


<PAGE>   17





ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS (Continued)


Technology(SM) migration expert system provides a high degree of automation to
the analysis and migration of application code. The Company's systems approach
also includes the use of SizeUp(SM), a tool used to determine the number of 
hours a particular migration project will take to complete.

SALES STRATEGY

Based on the experiences gained during 1996, the Company now attempts to
develop relationships with the decision makers of potential migration customers
before the potential customer is ready to start the migration process. This
change in sales approach will streamline the sales and marketing process.

Management believes the Company currently offers an efficient and effective
solution for the analysis and performance of migration project business cases.
With the rapid changes occurring in today's marketplace, such as the move to
WindowsNT, the development of 64 bit processors and year 2000 issues, the
opportunity for the Company to sell its migration products and services is
growing at a rapid rate. The market for migrations from OS/2 to Windows was
approximately $600 million in 1996 (a growth of 600% over 1995's $100 million),
with expectations for the same level of growth over the next three years as
major corporations react to IBM's reduced development and support for OS/2.

During 1997, the Company's new management will implement a highly focused sales
strategy that will (1) initially limit the type of projects to the Company's
area of expertise (conversions from OS/2 to Windows), (2) limit the duration
and value of projects to keep work levels manageable, (3) price and deliver all
projects at a profit, (4) seek out strategic alliances and partnerships with
large systems reengineering firms, (5) follow up and qualify all current sales
leads, (6) concentrate on retention of current customers by exploring
additional services to offer the current customer base, (7) expand the current
customer base, and (8) reestablish an R&D team to complete development of
Commander 4.0, which will enable the development of additional platform
technology, thereby greatly expanding the Company's market potential making the
Company more valuable, and help assure the Company of maintaining a strong
market position well into the next decade.

Management believes this will position the Company to take advantage of the
endless market for its technology and methodology by aggressively promoting the
fact that the Company's products (migration technology and methodology) allow
customers to migrate critical software applications in much less the time at
greatly reduced costs by automating the necessary, time consuming and expensive
migration process.





                                     - 17 -


<PAGE>   18





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations
of the Company should be read in conjunction with the consolidated financial
statements of the Company included elsewhere herein.

Although the Company experienced a significant net loss for the three months
ended March 31, 1997, management believes it is important to note the growing
opportunity for the Company to sell its automated migration products and
services based on (1) the rapid growth and changes occurring in today's
marketplace, (2) increasing market demand for conversion services, especially
in the area of OS/2 to Windows migration as major corporations react to IBM's
reduced development and support for OS/2, and (3) implementation of a highly
focused sales strategy. Management believes, that by capitalizing on this
opportunity, revenues and earnings will increase throughout 1997, although no
assurances can be given regarding such increase.

In order to minimize expenses, the Company's previous management instituted a
comprehensive cost control program early in the third quarter of 1996 and
instituted a series of layoffs in January 1997 in order to further reduce
overhead. In March 1997, after assessing the Company's precarious situation,
new management began implementation of its new business plan. The first step
involved a 30 day emergency plan which included (1) employee stabilization, (2)
immediate cash collection, (3) minimizing cash outflow by negotiating accounts
payables, (4) significantly reducing overhead by negotiating early termination
of the lease for existing facilities (which included forgiveness of
approximately $90,000 for past due rent, utilities and other related expenses)
and moving the Company to its present, less costly, location, (5) liquidation
of available assets to raise cash, and (6) closing an immediate sales
opportunity. Additional aspects of the new business plan include (1) hiring new
personnel to fill several vacancies, but keeping the total number of employees
to a manageable level of not more than 35, (2) efforts to raise new capital,
and (3) a highly focused sales strategy. It is expected that implementation of
the new business plan coupled with the anticipated growth in revenues will
contribute to improved earnings for 1997, although no assurances can be given
regarding such improvement.

THREE MONTHS ENDED MARCH 31, 1997, COMPARED TO THREE MONTHS ENDED MARCH 31,
1996

Revenues

During the first quarter of 1997, the Company's sales revenues increased by
approximately 50% to $688,842, compared to $459,974 for the first quarter of
1996, primarily due to the Company's successful implementation of sales and
marketing strategies leading to closing several contracts in December 1996,
resulting in increased revenues for the three months ended March 31, 1997.




                                     - 18 -


<PAGE>   19





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


Operating Expenses

The Company's total operating expenses increased by approximately 3% to
$1,332,428 during the first quarter of 1997, compared to $1,285,123 for the
first quarter of 1996, resulting primarily from (1) the loss on assets released
back to the landlord effective March 31, 1997, upon a successful negotiation of
early cancellation of the lease for those facilities and (2) bad debt expense
relating to doubtful collection of trade accounts receivables. As a percentage
of revenues, total operating expenses decreased to 192% for the first quarter
of 1997, compared to 279% for the first quarter of 1996, primarily attributable
to the increase in revenues (as previously discussed) coupled with the decrease
in various operating expenses (as discussed below) for the three months ended
March 31, 1997.

Labor costs, including benefits and employee-related insurance, decreased by
approximately 13% to $659,541 compared to $753,894, for the three months ended
March 31, 1997 and 1996, respectively, primarily due to decreased labor costs
resulting from the layoffs and resignations during the first quarter of 1997.
General and administrative expenses decreased to $50,857 from $63,154,
attributable primarily to the write-off of utilities and repairs related to
leased office facilities which were forgiven upon a successful negotiation of
early cancellation of the lease for those facilities. Advertising, marketing
and product costs decreased to $411 from $7,034, primarily due to a lack of
expenditures in the area of public relations. Travel decreased to $14,788 from
$59,040, resulting primarily from decreased expenditures for travel due to
layoffs in the sales and marketing area. Rent expense decreased to $21,201 from
$87,830, attributable primarily to decreased rent expense due to the
forgiveness of approximately $90,000 in amounts billed to the Company for rent
and related expenses upon successful negotiation of early cancellation of the
Company's lease for its facilities in Westlake, Texas. Depreciation and
amortization remained relatively flat. Loss on release of assets of $284,573
relates to the write-off of the net book value of the Company's leasehold
improvements on their Westlake offices which were released back to the landlord
effective March 31, 1997, upon a successful negotiation of early cancellation
of the lease for those facilities. (In April 1997, the Company moved from its
facilities located in Westlake, Texas, to a smaller and less costly location in
Farmers Branch, Texas). Bad debt expense increased to $123,720 from $0, due to
doubtful collection of trade accounts receivables. Legal and professional fees
decreased to $91,342 from $124,345, primarily due to decreased costs for
professional fees, specifically relating to professional consulting and non
recurrence of the March 1996 settlement with a former employee for $100,000.
Merger, acquisition and consulting expenses (which relate to other expenses
incurred as a result of the reverse merger in February 1996 and becoming a
public company, including the increased management consulting, and additional
accounting and legal work made necessary as a result of the reverse merger and
the various SEC filings related thereto) decreased to $0 from $114,997,
amounting to 0% and approximately 9% of total operating expenses for the three
months ended March 31, 1997 and 1996, respectively.



                                     - 19 -


<PAGE>   20





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


Other Income and Expenses

Interest income decreased approximately 98% to $496 during the first quarter of
1997, compared to $21,710 for the first quarter of 1996, primarily due to the
steady depletion of cash balances resulting from declining sales revenues
during 1996 coupled with increased operating expenses and costs and
expenditures relating to the reverse merger, the Reg S Offering and other fund
raising activities. Interest expense (which includes loan origination fees)
increased to $17,136 from only $184, primarily due to (i) interest and loan
fees connected with obtaining short-term financing, (ii) interest on
convertible debentures and shareholder loans, and (iii) finance charges
assessed by trade creditors for late payment of accounts payable. Financing
fees of $68,250 relate to the write-off of fees paid in 1996 to the placement
agent in connection with the issuance of the convertible debentures.

Income Taxes

The net operating loss incurred during the quarter ended March 31, 1997, was
approximately $750,000. Any net operating loss incurred for the year ended
December 31, 1997, eligible to be carried forward to future years will expire
in 2012.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $47,843 for the quarter ended
March 31, 1997, which resulted primarily from receipt of the income tax refund,
partially offset by the operating loss and the decrease in customer deposits.
This compares to net cash used by operating activities of $517,428 for three
months ended March 31, 1996, attributable primarily to the operating loss. At
March 31, 1997, the Company had a net working capital deficit of $1,436,713, an
increase of $288,893 for the three months then ended.

At March 31, 1997, the Company had a total of $221,375 in outstanding accounts
receivable ($231,225 billed, net of $76,200 allowance for doubtful accounts,
and $113,870 unbilled, net of $47,520 allowance for doubtful accounts), all of
which is considered fully collectible.

At March 31, 1997, the Company's outstanding debt obligations included $68,682
in advances from shareholders.

During the first quarter of 1997, the Company funded its operations primarily
from the collection of $5,080 in connection with the issuance of common stock,
from the receipt of $200,000 in proceeds from a short-term loan, from the
receipt of $507,733 (net of penalties and interest)





                                     - 20 -


<PAGE>   21





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


relating to the income tax refund receivable, from the increase in trade
accounts payable of $90,752 and accrued expenses of $39,284, and from the
collection of accounts receivable outstanding and the receipt of sales revenues
and customer deposits totaling $284,566.

The Company is currently in a critical situation. Several key employees have
resigned, many others are threatening to do the same, several vendors have
filed suit for nonpayment on their accounts, there has been no R&D activity
since January 1997, and key members of prior management (including the
President/CEO and Vice President of Operations) have resigned. The ongoing
instability of the prior management and sales teams, poor cash management, and
lack of R&D activity have placed the Company at risk. In addition, since
mid-1996 the Company has been experiencing serious cash flow difficulties which
present a going concern problem that needs to be rectified in the short term.
The Company intends to continue funding its operating activities by obtaining
short-term financing, by raising additional capital, through the issuance of
stock, through the collection of outstanding accounts receivable, and through
the receipt of customer deposits as large-scale migration contracts are closed.
The Company is actively working with trade creditors to postpone the payment of
accounts payable, or offset a portion of certain payables by issuing stock to a
select group of trade creditors, as well as to postpone further action on
pending litigation.

In an effort to minimize expenses, the Company's prior management instituted a
comprehensive cost control program early in the third quarter of 1996, which
included reducing the annual salaries of the former president and two other
employees, from a combined annual total of over $395,000 to only $36,000, for
the remainder of 1996. In a second effort to further reduce overhead, prior
management implemented a series of layoffs in January 1997, effectively
eliminating annual labor costs in excess of $1,900,000. In March 1997, after
assessing the Company's precarious situation, new management began
implementation of its new business plan. The first step involved a 30 day
emergency plan which included (1) employee stabilization, (2) cash collection,
(3) minimizing cash outflow by negotiating with accounts payable vendors, (4)
negotiating early termination of the lease for existing facilities and moving
the Company to its present, less costly, location, (5) liquidation of available
assets to raise cash, and (6) closing an immediate sales opportunity for a
$115,000 migration project, one-half of which was collected upon execution of
the contract. Additional aspects of the new business plan include (1) hiring
new personnel, (2) keeping the total number of employees to a manageable level
of not more than 35, and (3) a highly focused sales strategy. It is expected
that implementation of the new business plan coupled with the anticipated
growth in revenues will contribute to improved earnings for 1997, although no
assurances can be given regarding such improvement.






                                     - 21 -


<PAGE>   22





ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS (Continued)


In addition, the Company is actively discussing and negotiating with various
outside sources for bank financing, private placement, venture capital,
investment capital and other financing alternatives. Negotiations with an
investment banking firm, that has previously raised capital for the Company, to
raise $1,000,000 in the form of Senior Secured Promissory Notes and Common
Stock Purchase Warrants are being finalized, pending filing of this quarterly
report. Both the Company and the placement agent believe that prospects for
successful completion of this fund raising venture are highly probable.
Negotiations with a firm, that has previously made short-term loans to the
Company, should prove favorable in terms of lending the Company an amount
sufficient to cover continuing operations until such time that more permanent
financing can be finalized. However, ultimately there is no assurance from any
entity that, if the Company seeks additional financing from any of these
sources, such financing would be available upon acceptable terms, if at all.

Rapid changes occurring in the marketplace enhance the opportunity for the
Company to sell its migration products and services. Although the Company
experienced a significant net loss for the first quarter of 1997, new
management (headed up by W. Curtis Overstreet, newly elected President, CEO and
Director) views the Company as being in a turnaround situation. Mr. Overstreet
has a history of successfully turning around companies in similar situations
and believes the Company has the opportunity to achieve a turnaround with the
advent of sufficient financing and accommodations by certain of its creditors.
The Company believes that successful implementation of the Company's new
business plan and sales strategy will result in increased revenues and earnings
for 1997, although no assurances can be given regarding such increase.





















                                     - 22 -


<PAGE>   23



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  (11)     A Statement of Computations of Per Share Earnings

<TABLE>
<CAPTION>
                                                             1997            1996
                                                         ------------    ------------
<S>                                                      <C>             <C>

Net income (loss)                                        $   (750,001)   $   (547,820)
                                                         ============    ============

Weighted average number of common
     shares outstanding at January 1                       18,002,253      11,337,432

Issuance of stock for services rendered                          --           797,358

Effect of reverse acquisition                                    --           583,859

Conversion of preferred stock to common stock                    --            13,017

Issuance of stock in connection with private placement           --            55,187

Issuance of stock at conversion of debentures               6,434,063            --
                                                         ------------    ------------

Shares used for computation                                24,436,316      12,786,853
                                                         ============    ============

Net income (loss) per common share                       $     (0.031)   $     (0.043)
                                                         ============    ============

</TABLE>


















           Note: Fully diluted and primary calculations are the same.



                                     - 23 -


<PAGE>   24





                                  SIGNATURES


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


                                        ONE UP CORPORATION
                                           (Registrant)



                                        BY: /s/ W. CURTIS OVERSTREET
                                            -----------------------------------
                                            W. Curtis Overstreet, President

Dated:  June 10, 1997
       ---------------------






                                     -24-

<PAGE>   25

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT 
NUMBER         DESCRIPTION
-------        -----------

<S>            <C>
 27            Financial Data Schedule

</TABLE>