U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

/ X /       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
            EXCHANGE ACT OF 1934


                For the quarterly period ended February 28, 1999


/  /        TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

            For the transition period from __________ to _______________

            Commission file number:             1-13360



                     CORNERSTONE INTERNET SOLUTIONS COMPANY
        (Exact name of small business issuer as specified in its charter)


            DELAWARE                                          22-3272662
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)


                             584 Broadway Suite 509
                    (Address of Principal Executive Offices)

                                 (212) 343-3920
                (Issuer's Telephone Number, Including Area Code)


            Check whether the issuer: (1) filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

YES / X /   NO  /  /

            State  the  number  of shares  outstanding  of each of the  issuer's
classes of common equity, as of the latest practicable date:

                                                         Number Outstanding
         Title of Class                                  as of February 28, 1999
         --------------                                  -----------------------
      Common Stock, $.01 Par Value                           12,831,620

Transitional Small Business Disclosure Format: Yes / /      No /X/


<PAGE>
                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

                                                                           Page
Item 1    Financial Statements

          Consolidated Balance Sheets at February 28, 1999 and
          May 31, 1998.                                                       3

          Consolidated Statements of  Operations for the three month
          and nine-month periods ended February 28, 1999
          and February 28, 1998.                                            4,5

          Consolidated Statements of Cash Flows for the nine-month
          periods ended February 28, 1999 and February 28, 1998.              6

          Notes to Financial Statements                                       7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations.                                9


PART II - OTHER INFORMATION
                                                                           Page

Item 1.   Legal Proceedings                                                  12

Item 2.   Change in Securities and Use of Proceeds                           12

Item 3.   Defaults upon Senior Securities                                    12

Item 4.   Submissions of Matters to a Vote by Security Holders               12

Item 5.   Other Information                                                  12

Item 6.   Exhibits and Reports on Form 8-K                                   12


SIGNATURES                                                                   13


                                       2

<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                                February 28                            May 31
                                                                                   1999                                 1998
ASSETS                                                                          (unaudited)
                                                                             -------------------------------------------------------
Current Assets
<S>                                                                             <C>                              <C>             
  Cash and cash equivalents                                                     $ 1,182,805                        $      392,200
  Investments                                                                       607,285                               167,400
  Accounts receivable, net                                                        1,144,418                               343,700
  Other receivables                                                                  20,587                               100,000
  Prepaid expenses and other                                                        107,277                               269,300
                                                                             -------------------------------------------------------
    Total current assets                                                         3,062,372                              1,272,600
Affiliation rights, net                                                            198,542                                219,200
Property and equipment, net                                                        347,131                                485,900
Other                                                                              105,920                                 69,200
                                                                             --------------------            -----------------------
                                                                                $3,713,965                      $       2,046,900
                                                                             --------------------            -----------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable                                                              $  509,243                      $         538,100
  Accrued restructuring expenses                                                    27,535                                 95,400
  Accrued payroll and related expenses                                             130,289                                202,800
  Other accrued expenses                                                           329,769                                410,300
  Deferred revenue                                                                       -                                  9,300
  Current maturities of long-term debt                                              81,779                                 99,500
                                                                             --------------------            -----------------------
     Total current liabilities                                                    1,078,615                             1,355,400
Long-term debt                                                                       50,298                               106,400
                                                                             --------------------           ------------------------
     Total liabilities                                                            1,128,913                             1,461,800
Stockholders' Equity
  Preferred Stock $.01 par value, 2,000,000 shares
  authorized;
  Class A  0 and 340 shares issued and outstanding at
  February 28, 1999 and May 31, 1998.                                                     -                                     -
    

     Class B   0 and 2,000 shares issued and outstanding at
  February 28, 1999, and May 31, 1998.                                                    -                                    20
    

     Class C 540 and 6,260 shares issued and outstanding at
  February 28, 1999, and May 31, 1998.                                                    5                                   100

     Class D 8,120 and 0 shares issued and outstanding at                                81                                     -
  February 28, 1999, and May 31, 1998 with a liquidating
  preference of $1,375 per share.
                                                                                    
  Common Stock $.01 par value, 50,000,000 shares authorized;
  12,831,620 and 9,441,117 issued and outstanding at February 28,
  1999, and May 31, 1998 respectively.                                              128,316                                94,400
  Additional paid-in capital                                                     34,363,478                            30,222,480
  Unrealized gain on marketable equity securities                                   607,285                               167,400
  Accumulated deficit                                                           (32,514,113)                          (29,899,300)
                                                                             --------------------               --------------------
     Total stockholders' equity                                                   2,585,052                               585,100
                                                                             --------------------               --------------------

                                                                                $ 3,713,965                      $      2,046,900
                                                                             --------------------               --------------------
</TABLE>

See notes to consolidated financial statements

                                       3
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                             Three months ended February 28
                                                                           1999                          1998
                                                           ------------------------- ---------------------------

<S>                                                                    <C>                           <C>     
Internet services revenues                                             $835,839                      $426,200
Software licensing and royalty revenue                                        -                        74,000
                                                           ------------------------- ---------------------------
       Total revenues                                                   835,839                       500,200


Cost of internet services revenues                                      891,337                       617,000
Cost of licensing and royalty revenue                                         -                         6,100
Marketing and selling expenses                                          124,731                       610,100
General and administrative expenses                                     414,304                       494,700
                                                           ------------------------- ---------------------------
       Total costs and expenses                                       1,430,372                     1,727,900
                                                           ------------------------- ---------------------------


Operating loss                                                         (594,533)                   (1,227,700)
                                                           ------------------------- ---------------------------

Other income (expense):
      Interest expense                                                   (1,676)                       (4,600)
      Other                                                                 392                          (900)
      Interest income                                                         -                        11,300
                                                           ------------------------- ---------------------------
Net Loss                                                               (595,817)                 $( 1,221,900)
                                                           ------------------------- ---------------------------

Preferred stock dividends and preferences                              (844,250)                   (3,596,900)

                                                           ------------------------- ---------------------------
Net loss  to common shareholders                                    $(1,440,067)                  $(4,818,800)
                                                           ------------------------- ---------------------------


            Basic and diluted loss per share               $              (0.12)          $              (.57)
                                                           ------------------------- ---------------------------

            Weighted average shares of common stock                  12,106,040                     8,380,656
                                                           ------------------------- ---------------------------
</TABLE>

See notes to consolidated financial statements

                                       4
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Operations
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                               Nine months ended February 28
                                                                            1999                          1998
                                                            ------------------------- ---------------------------

<S>                                                                   <C>                             <C>
Internet services revenues                                            $2,369,339                      $944,500
Software licensing and royalty revenue                                    38,000                       206,400
                                                            ------------------------- ---------------------------
       Total revenues                                                  2,407,339                     1,150,900
                                                            ------------------------- ---------------------------


Cost of internet services revenues                                     3,129,354                     1,919,400
Cost of licensing and royalty revenue                                          -                        28,300
Marketing and selling expenses                                           383,260                     2,362,600
General and administrative expenses                                    1,493,208                     1,553,500
Restructuring expenses                                                         -                       427,700
                                                            ------------------------- ---------------------------
       Total costs and expenses                                        5,005,822                     6,291,500
                                                            ------------------------- ---------------------------


Operating loss                                                        (2,598,483)                   (5,140,600)
                                                            ------------------------- ---------------------------

Other income (expense):
      Interest expense                                                    (9,800)
                                                                                                        (8,000)
      Other                                                               (7,395)
                                                                                                          (900)
      Interest income                                                        865                        90,200
                                                            ------------------------- ---------------------------
Net Loss                                                             $(2,614,813)                  $(5,059,300)
                                                            ------------------------- ---------------------------

Preferred stock dividends and preferences                             (1,830,700)                   (8,157,700)

                                                            ------------------------- ---------------------------
Net loss to common shareholders                                       (4,445,513)                 $(13,217,000)
                                                            ------------------------- ---------------------------


            Basic and diluted loss per share                     $         (0.38)                   $    (1.66)
                                                            ------------------------- ---------------------------

            Weighted average shares of common stock                   11,556,781                     7,965,846
                                                            ------------------------- ---------------------------
</TABLE>

See notes to consolidated financial statements

                                       5
<PAGE>
             Cornerstone Internet Solutions Company and Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                                       Nine Months Ended February 28
                                                                                         1999                       1998
                                                                                      ------------------------------------

Cash flows from Operating Activities
<S>                                                                                    <C>                        <C>         
Net loss                                                                                $(2,614,813)             $(5,059,300)
Adjustments to reconcile net loss to net cash used in operating activities
     Depreciation and amortization                                                          199,500                  134,000
     Non-cash consulting expense                                                             19,200                        -
Changes in assets and liabilities
     Accounts receivable                                                                   (800,718)                 (55,700)
     Other receivables                                                                       79,413                   43,900
     Prepaid expenses and other                                                             162,023                  (91,600)
     Other assets                                                                           (36,720)                 (64,000)
     Accounts payable                                                                                                152,100
                                                                                            (28,857)
     Accrued expenses                                                                      (142,667)                 171,000
     Deferred revenue                                                                        (9,300)                 (69,500)
                                                                                      ------------------------------------------
           Net cash used in operating activities                                         (3,172,939)              (4,839,100)

Cash flows from investing activities
      Purchases of property and equipment                                                   (40,073)                (482,700)
                                                                                      ------------------------------------------
           Net cash (used in) investing activities                                          (40,073)                (482,700)

Cash flows from financing activities
       Proceeds from issuances of common and preferred stock                              3,457,800                2,000,000
       Proceeds from exercise of stock options                                               41,305                  225,100
       Proceeds from exercise of warrants                                                   578,335
       Proceeds from sale and leaseback of equipment                                              -                  250,100
       Principal payments of long-term debt                                                 (73,823)                 (20,000)
                                                                                      ------------------------------------------
            Net cash provided by financing activities                                     4,003,617                2,454,600
                                                                                      ------------------------------------------
            Net increase (decrease) in cash and cash equivalents                            790,605               (2,867,200)

Cash and cash equivalents
      Beginning of period                                                                   392,200                4,952,900
                                                                                      ------------------------------------------
      End of period                                                                      $1,182,805               $2,085,700
                                                                                      ------------------------------------------
</TABLE>

See notes to consolidated financial statements

                                       6
<PAGE>
                     CORNERSTONE INTERNET SOLUTIONS COMPANY
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

            General

            The accompanying  unaudited financial  statements have been prepared
            in  accordance  with the  instructions  to Form  10-QSB,  and in the
            opinion of management  contain all  adjustments  (consisting of only
            normal recurring  entries) necessary to present fairly the financial
            position of Cornerstone  Internet Solutions Company (the "Company"),
            as of February  28, 1999 and the results of its  operations  and its
            cash flows for the three and nine month periods  ended  February 28,
            1999 and February 28, 1998. Certain information and note disclosures
            normally  included in financial  statements  prepared in  accordance
            with generally accepted accounting principles have been omitted. The
            interim financial  statements should be read in conjunction with the
            Company's financial statements and related notes in the May 31, 1998
            Annual  Report on Form  10-KSB.  The  results for the three and nine
            month periods ended February 28, 1999 are not necessarily indicative
            of the results to be obtained for the full year.

2.          Business

            On July 2, 1998, the Company's  shareholders  ratified a proposal to
            change the  Company's  name from  Enteractive,  Inc. to  Cornerstone
            Internet Solutions Company. Headquartered in New York, New York, the
            Company  is a  provider  of  business  solutions  based on  Internet
            technologies.  The Company's address is 584 Broadway, Suite 509, New
            York, NY 10012 and its Internet address is www.crstone.com

            In August 1997, the Company sold its domestic  distribution  rights,
            inventory  and  certain  accounts  receivable  from its  interactive
            multimedia publishing business to a third party. On August 14, 1998,
            the Company  entered  into a new  agreement  with the same party and
            terminated the August 15, 1997 agreement, except with respect to the
            sale of inventory and accounts  receivable and the assignment of the
            distribution contracts (the "1998 contract"). Under the terms of the
            1998  contract,  the Company  sold all its rights to its  multimedia
            titles  to  the  acquirer  for  $100,000.   The  balance  in  "Other
            receivables"  at February  28, 1999 and May 31,  1998  reflects  the
            amounts due under the 1998 contract.

            On December 4, 1996 the Company  signed  multiple  market  affiliate
            agreements  with  USWeb/CKS   Corporation   ("USWeb/CKS")  and  paid
            $625,000 for the right to operate USWeb/CKS affiliate offices in New
            York City, and certain other markets in the Northeast portion of the
            United States, for a ten-year period. The operation,  which has been
            conducting business as USWeb/CKS Cornerstone,  provides a full range
            of Internet and  Intranet-based  business  solutions,  including Web
            site design,  hosting and management,  design and  implementation of
            database  and  e-commerce   solutions,   educational   programs  and
            Web-related strategic consulting.

            The Company is obligated to pay USWeb/CKS  monthly fees equal in the
            aggregate  to 7% of  adjusted  gross  revenues,  as  defined  in its
            various  agreements  with  USWeb/CKS,  but  not  less  than  certain
            contractual  minimum fees.  During fiscal 1998, the Company  reduced
            operating  expenses by concentrating  its development  activities in
            New  York  City  and its  marketing  activities  in the  surrounding
            tri-state  area. As a result,  in the second quarter of fiscal 1998,
            the Company  incurred  restructuring  expenses  of $427,700  for the
            estimated  losses  from  subleasing  the closed  offices and related
            severance costs. In addition,  in the fourth quarter of fiscal 1998,
            the  Company,   with  the  approval  of  USWeb/CKS  surrendered  its
            affiliation  rights in certain  geographic  regions  and  recorded a
            write off of $315,000  representing  the unamortized  portion of the
            related affiliation rights.

            The accompanying  financial  statements have been prepared  assuming
            the  Company  will  continue  as  a  going  concern.  The  Company's
            continuing losses from operations could impact the Company's ability
            to meet its  obligations as they become due. As part of its business
            plan to enhance  liquidity,  the Company  has reduced its  operating
            expenses, secured approximately $1,969,900 in November 1998 from the
            sale of preferred  stock in a private  placement,  and $1,487,900 in
            July 1998 from the sale of common stock in a private  placement  and
            is in the process of attempting to increase its revenues, and secure
            a  line  of  credit.   However,   the  Company  has  no  agreements,
            commitments or  understandings  with respect to a line of credit and
            there can be no assurance that the Company will enter into a line of
            credit or be able to increase its revenues.

3.          Affiliation Rights

            Fees for affiliation  rights were paid to USWeb/CKS for the right to
            join the USWeb/CKS  network and operate as an affiliate.  The fee is
            being  amortized  over  the  10-year  life  of  the  agreement  with
            USWeb/CKS.  Affiliation  rights  at  February  28,  1999 were net of
            accumulated amortization of $111,458.

                                       7
<PAGE>
4.          Use of Estimates

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

5.           Convertible Preferred Stock Class D

            On November 10, 1998 the Company  raised  $2,000,000  (approximately
            $1,970,000,  net of related expenses) through a private placement of
            1,600  shares  of  Class D  Convertible  Preferred  Stock  (Class  D
            Preferred  Stock) at a  purchase  price of  $1,250  per  share.  The
            holders  of Class D  Preferred  Stock  have the  right,  at any time
            commencing  after the  earlier  of (I) June 30,  2000 or (II) if the
            closing price of the Common Stock shall have been at least $1.50 per
            share on 15 trading  days  during  any  20-consecutive  trading  day
            period,  to convert each share of Class D Preferred  Stock into such
            whole number of shares of Common Stock equal to the aggregate stated
            value of the Class D  Preferred  Stock to be  converted  divided  by
            $1.00, subject to adjustment.  Each share of Class D Preferred Stock
            has a liquidation  preference (subject to the liquidation preference
            of the Class C  Preferred  Stock) of $1,375 per  share.  The Class D
            Preferred Stock is entitled to vote on all matters  submitted to the
            holders of the  Company's  Common  Stock,  at 1,250 votes per share,
            pays  no  dividends  and  is not  redeemable.In  the  quarter  ended
            February 28, 1999,  the closing price of the Company's  Common Stock
            was at least $1.50 per share on 15 trading days during a consecutive
            20 day  trading  period  and  accordingly  the  holders  of  Class D
            Preferred Stock have the unrestricted right to convert each share of
            Class D  Preferred  Stock as  described  above.  During  the  fiscal
            quarter  ended  February 28,  1999,  800 shares of Class D Preferred
            Stock were converted into  1,000,000  shares of Common Stock.  As of
            February 28, 1999 there were 8,120 shares of Class D Preferred Stock
            issued and outstanding  convertible into 10,150,000 shares of Common
            Stock.

6.          Convertible Preferred Stock  Class A and C

            On December 12, 1996 the Company completed a private placement of 84
            units, each unit consisting of 80 shares of Class A Convertible
            Preferred Stock (Class A Preferred) and 50,000 common stock purchase
            warrants to purchase in the aggregate 4,200,000 shares of Common
            Stock at an exercise price of $4.00 per share and expiring December
            13, 2001(the "Warrants"). Proceeds from the private placement were
            approximately $7,869,100, net of related expenses of $531,000. The
            Class A Preferred Stock has a stated value of $1,250 per share.

            On November 19, 1997, the Company offered to exchange the 4,200,000
            Warrants for common stock (the "Exchange Offer"), whereby for each
            2.8 warrants exchanged, the Company issued one share of its Common
            Stock. In connection with the Exchange Offer, the Company received
            the written consent of the participating preferred shareholders to
            amend the terms of the Class A Preferred Stock to delay the date
            when the Class A Preferred Stock can first be converted into Common
            Stock from May 1, 1998 to July 1, 1999 and modify certain redemption
            features of the Class A Preferred Stock. Holders of 6,260 shares of
            the Class A Preferred Stock agreed to the terms of the Exchange
            Offer. As a result, on February 6, 1998, the Company issued
            1,397,323 shares of Common Stock in exchange for the cancellation of
            3,912,500 Warrants. The fair value of the Common Stock issued
            approximated the fair value of the canceled Warrants. Subsequently,
            the Company redesignated the 6,260 shares of Class A Preferred held
            by the shareholders who approved the Exchange Offer as Class C
            Convertible Preferred Stock (Class C Preferred). Such preferred
            shareholders will receive a dividend at 12% per year of the stated
            value of the Preferred Stock for the period from April 30, 1998 and
            ending the earlier of June 30, 1999 or a redemption date, if any. In
            accordance with the terms of the Preferred Stock exchange offer
            discussed below, all dividends associated with Class C Preferred
            Stock exchanged were relinquished. Dividends are payable in Common
            Stock and for those Class C Preferred shares still outstanding after
            the exchange offer amounted to $60,750 for the nine months ended
            February 28, 1999.

            On April 27, 1998, the Company notified the holders of the Class A
            Preferred that the Company would redeem the remaining 460 shares of
            outstanding Class A Preferred Stock as of May 28, 1998 at a price
            per share equal to 1.1 multiplied by the stated value of each share
            of Class A Preferred. Holders of 340 shares of Class A Preferred
            Stock exercised their right to convert such Class A Preferred Stock
            to Common Stock, which resulted in the issuance of 348,361 shares of
            common stock in June 1998. 120 shares of Class A Preferred were
            redeemed for $165,000 in May 1998.

            In October 1998, the Company offered to exchange one share of its
            Class D Preferred Stock for one share of Class C Preferred Stock.
            There were 6,260 shares of Class C Preferred Stock outstanding at
            the time of the offer. On November 25, 1998 the Company issued 5,720
            shares of Class D Preferred Stock in exchange for a like amount of
            Class C Preferred Stock pursuant to the exchange offer.

7.          Class B Convertible Preferred Stock

            On February 19, 1998, the Company  consummated a $2,000,000  private
            placement  resulting  in the  issuance  of 2,000  shares  of Class B
            Convertible  Preferred Stock (Class B Preferred Stock). Net proceeds
            to the Company were $1,990,800.  The

                                       8
<PAGE>

            Class B Preferred  Stock,  with a stated  value of $1,000 per share,
            was  entitled  to vote on all  matters  submitted  to holders of the
            Company's common stock, at 1,000 votes per share,  paid no dividends
            and was not redeemable.

            On  December  7, 1998 the  Company  issued  1,600  shares of Class D
            Preferred  Stock  in  exchange  for  all  the  outstanding  Class  B
            Preferred Stock. The exchange was the result of the Company's offer,
            which  provided that one share of its Class B Convertible  Preferred
            Stock with a $1,000 stated value could be exchanged for .8 shares of
            Class D Convertible Preferred Stock with a $1,250 stated value.

            Based on the market price of the Company's  Common Stock on the date
            of issuance  the Class B Preferred  Stock had a non-cash  beneficial
            conversion feature of $2,250,000.  The beneficial conversion feature
            was being  recognized  solely in the  calculation of loss per common
            share over a 14 month  period,  beginning  with the  issuance of the
            Class  B  Preferred  Stock  to  March  1999  (the  first  date  that
            conversion  could have  occurred).  Due to the  exchange  of all the
            Class B  Preferred  Stock to Class D Preferred  Stock,  in the third
            quarter of fiscal 1999, the Company reflected an expense of $824,000
            in the loss per  share  calculation.  As a  result,  the net loss to
            common shareholders includes preferred stock preferences of $824,000
            and  $1,769,950  for the three and nine months  ended  February  28,
            1999.

8.          Private Placement of Common Stock

            On July 24,  1998 the Company  consummated  a private  placement  of
            1,768,750 unregistered shares of Common Stock, for $1 per share. The
            net proceeds of the offering were approximately $1,487,900.

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operations.  The discussion and analysis  should be read in conjunction  with
the Consolidated  Financial Statements of Cornerstone Internet Solutions Company
and  Subsidiaries and Notes to the Consolidated  Financial  Statements  included
elsewhere in this Form 10-QSB.

Results of Operations - Nine Months Ended February 28, 1999 and 1998

Revenues
--------
Internet  services  revenues  Internet  services  revenues were  $2,369,339  and
$944,500 in the nine months ended February 28, 1999 and 1998, respectively.  The
increase in revenues is a result of securing new contracts with  customers.  The
Company  anticipates that revenues will be impacted in the future by its ability
to expand its services in existing  accounts and grow its client base. There was
one  customer  that  individually  comprised  more  than  10% of  revenue  which
accounted for 30% of accounts receivable and 43% of total revenues as of and for
the nine months ended  February 28, 1999. The loss of this customer would have a
material adverse effect on the results of operations of the Company.

Software  licensing and royalty revenue  Software  licensing and royalty revenue
were $38,000 and  $206,400 in the nine months ended  February 28, 1999 and 1998,
respectively. The decrease reflects the Company's decision to concentrate on the
design,  development  and  implementation  of business  systems  using  Internet
technologies and discontinue the publishing of interactive CD-Rom titles.

Expenses
--------
Cost of Internet  Services  Revenues  Cost of Internet  Services  Revenues  were
$3,129,354 and $1,919,400,  in the nine months ended February 28, 1999 and 1998,
respectively.  Cost of Internet  Services  revenues as a  percentage  of related
revenues  decreased  to 132% from  203% for the same  period.  Cost of  Internet
Services  Revenues in the nine months ended February 28, 1999 exceeded  Internet
services revenues as a result of the Company's need to supplement internal staff
with consultants who had specific skills necessary to fulfill customer  projects
and the  Company's  decision  to build  its  development  capability  to  secure
additional  customer  contracts  in the future.  The Company  expects that as it
secures additional  contracts,  the cost of revenues as a percentage of revenues
will further decrease.

Cost of licensing and royalty revenue Cost of licensing and royalty revenue were
$0  and  $28,300  in  the  nine  months  ended   February  28,  1999  and  1998,
respectively.  The reduction results from the Company's  decision to discontinue
the publishing of interactive CD-Rom titles.

Marketing and Selling Expenses  Marketing and Selling expenses were $383,260 and
$2,362,600,  in the nine months ended February 28, 1999 and 1998,  respectively.
The 83%  decrease  relates to the  reduction in sales force and closure of sales
offices  during the second  half of fiscal  1998,  as a result of the  Company's
decision to centralize its marketing activities in New York City.

General  and  Administrative   Expenses  General  and  administrative   expenses
decreased slightly to $1,493,208 in the nine months ended February 28, 1999 from
$1,553,500 in the nine months ended February 28, 1999.

Restructuring  expenses The Company incurred  restructuring expenses of $427,700
during the nine month period ending  February 28, 1998 for the estimated  losses
from  subleasing  the closed  sales  offices and related  severance  costs.  The
subsequent expenditures have been consistent with the original accrued amounts.


                                       9
<PAGE>
Other Income and (Expense)  Other income and (expense) was $(16,330) and $81,300
in the nine months ended February 28, 1999 and 1998,  respectively.  The Company
derived less interest  income in the nine months ended  February 28, 1999 due to
the Company's  lower average cash balances  maintained by the Company during the
period.

Income tax benefit No income tax benefit was  recorded in the nine months  ended
February  28, 1999 and  February  28,  1998.  Using the  standards  set forth in
Financial  Accounting  Standard No. 109,  management cannot currently  determine
whether the Company  will  generate  taxable  income  during the period that the
Company's net operating loss carry forward may be applied  towards the Company's
taxable  income,  if any.  Accordingly,  the Company has established a valuation
allowance against its deferred tax asset.

Quarterly results
The Company expects its quarterly  results to vary  significantly in the future.
The number of customer  contracts signed and the development  staff's ability to
readily implement solutions  significantly  influences revenues.  Further market
acceptance  of the  Company's  offerings  is  dependent  on (1) the  growth  and
utilization  of the  Internet  as a medium  for  commerce,  (2) the  success  of
USWeb/CKS in establishing and positioning its brand in the territories where the
Company operates (3) the degree of market acceptance of the Company's  offerings
and (4) the success of  offerings  by  competitors.  The Company does not expect
seasonal factors to be a significant influence on revenues.

Results of Operations -Quarter Ended February 28, 1999 and 1998

Revenues
--------
Internet   services  revenues  Internet  services  revenues  were  $835,839  and
$426,200,  in the quarters ended February 28, 1999 and 1998,  respectively.  The
increase in revenues is a result of securing new contracts with  customers.  The
Company  anticipates that revenues will be impacted in the future by its ability
to expand its services in existing  accounts and grow its client base.There were
two customers  that  individually  comprised more than 10% of revenue and in the
aggregate  amounted to 39% of accounts  receivable and 60% of total revenues for
the three months ended February 28, 1999. The loss of either of these  customers
would  have a  material  adverse  effect on the  results  of  operations  of the
Company.

Expenses
--------
Cost of Internet  Services  Revenues  Cost of Internet  Services  Revenues  were
$891,337 and  $617,000,  in the  quarters  ended  February  28, 1999,  and 1998,
respectively.  Cost of Internet  Services  revenues as a  percentage  of related
revenues  decreased to 105% from 145% of related  revenues in the quarters ended
February 28, 1999 and 1998, respectively.  Cost of Internet Services Revenues in
the quarter ended  February 28, 1999 exceeded  Internet  services  revenues as a
result of the Company's need to supplement  internal staff with  consultants who
had specific skills necessary to fulfill customer projects.  The Company expects
that as it secures additional  contracts the cost of revenues as a percentage of
revenues will continue to decrease.

Marketing and Selling Expenses  Marketing and Selling expenses were $124,731 and
$610,100,  in the quarters ended February 28, 1999 and 1998,  respectively.  The
79%  decrease  relates  to the  reduction  in sales  force and  closure of sales
offices during the second half of fiscal 1998, a result of the Company's  fiscal
1998 decision to centralize its marketing activities in New York City.

General and  Administrative  Expenses General and  administrative  expenses were
$414,304  and  $494,700 in the  quarters  ended  February  28,  1999,  and 1998,
respectively.

Other Income and  (Expense)  Other income and (expense) was ($1,284) and $ 5,800
in the  quarters  ended  February  28, 1999 and 1998  respectively.  The Company
recorded less interest  income in the quarter ended February 28, 1999 due to the
Company's  lower average cash  balances  than in the quarter ended  February 28,
1998.

Income tax  benefit No income tax benefit was  recorded  in the  quarters  ended
February  28, 1999 and  February  28,  1998.  Using the  standards  set forth in
Financial  Accounting  Standard No. 109,  management cannot currently  determine
whether the Company  will  generate  taxable  income  during the period that the
Company's net operating loss carry forward may be applied  towards the Company's
taxable  income,  if any.  Accordingly,  the Company has established a valuation
allowance against its deferred tax asset.

Liquidity and Capital Resources
Since June 1, 1997,  the  Company's  principal  sources of capital  have been as
follows:

            (i)  On February  19,  1998,  the Company  consummated  a $2,000,000
                 private placement  resulting in the issuance of 2,000 shares of
                 Class B Preferred  Stock . Net  proceeds to the Company  were $
                 1,990,800.

            (ii) On July 24, 1998, the Company  consummated a private  placement
                 of 1,768,750  unregistered shares of Common Stock for $1.00 per
                 share.  The net  proceeds of the  offering  were  approximately
                 $1,487,900.


                                       10
<PAGE>
           (iii) On  November  10,  1998,  the  Company  consummated  a  private
                 placement  of 1,600 shares of newly  created  Class D Preferred
                 Stock for $1,250 per share.  Net  proceeds to the Company  were
                 approximately $1,970,000.

            (iv) In January and February  1999,  the Company  received  $619,614
                 from the exercise of warrants and options.

On April 27,  1998,  the Company  notified  the holders of the Class A Preferred
Stock that the Company  would  redeem the  remaining  460 shares of  outstanding
Class A  Preferred  Stock as of May 28,  1998 at a price per share  equal to 1.1
multiplied  by the stated value of each share of Class A  Preferred.  Holders of
340 shares of Class A Preferred  Stock  exercised  their  right to convert  such
Class A Preferred  Stock to Common  Stock,  which  resulted  in the  issuance of
348,361  shares of Common Stock in June 1998. One hundred twenty shares of Class
A Preferred Stock were redeemed for $165,000 in May 1998.

In the nine months ended February 28, 1999, the Company received an aggregate of
$619,640  from the  exercise of warrants  to purchase  246,100  shares of Common
Stock and options to purchase 10,625 shares of Common Stock. The warrants had an
exercise  price of $2.35 per share and the exercise  price of the options ranged
from $.813 to $1.75 per share.

The Company had cash and cash equivalents of $1,182,805 and $392,200 at February
28, 1999 and May 31,  1998,  respectively.  The  increase of $790,605  primarily
reflects the private  placements  described above which provided  $3,457,800 and
proceeds from the exercise of options and warrants of $619,640  partially offset
by the funding of operating  activities  ($3,172,939)  and payments of long term
debt of $73,823.  Accounts receivable increased from $343,700 as of May 31, 1998
to $1,144,418 as of February 28, 1999, an increase of 233%,  while sales for the
first  nine  months  of  fiscal  1999  and 1998  increased  from  $1,150,900  to
$2,407,339, an increase of 48%. The higher rate of growth of accounts receivable
is  attributable  to  extended  payment  terms,  and  longer  projects.  Capital
expenditures  were $40,073 and  $482,700 in the nine months  ended  February 28,
1999 and 1998. The Company  anticipates that capital  expenditures will increase
as revenues  increase as a result of equipping  staff or  contractors to service
customers.

The  Company's  continuing  losses from  operations  could impact the  Company's
ability to meet its  obligations as they become due. The  Independent  Auditors'
report for the fiscal year ended May 31, 1998 includes an explanatory  paragraph
regarding the Company's  ability to continue as a going concern.  As part of its
business  plan to enhance  liquidity,  the Company  has  reduced  its  operating
expenses,  secured in July 1998 and November 1998  approximately  $1,487,900 and
$1,970,000,  respectively  from the sale of common stock and preferred  stock in
two separate  private  placements and is continuing  its activities  designed to
increase its  revenues.  However,  these funds may not be sufficient to meet the
Company's  longer-term cash  requirements for operations.  Based on management's
assessment of the demand for Internet based professional  services,  the Company
may significantly alter the level of expenses. Management believes that based on
funds on hand at February  28, 1999 and  anticipated  revenues,  operations  can
continue until at least through August 31, 1999.

New Accounting Pronouncement
The Company will implement the  provisions of Statement of Financial  Accounting
Standards  No.  133,   "Accounting   for  derivative   Instruments  and  Hedging
Activities"  in fiscal year 2000,  for which the Company is presently  assessing
its impact on the consolidated financial statements, if any.


Year 2000 Compliance
Many currently  installed  computer  systems and software  products are coded to
accept only  two-digit  entries in the date code  field.  These date code fields
will need to accept four digit  entries to  distinguish  21st century dates from
20th century dates.  As a result,  in less than one year,  computer  systems and
software used by many companies,  including customers and potential customers of
the  Company,  may  need  to  be  upgraded  to  comply  with  such  "Year  2000"
requirements.  The Company is closely  monitoring the progress the developers of
the  software  the  Company  utilizes  in many  of its  customer  projects  i.e.
Microsoft  Corporation,  as well as the  developers of the software  utilized in
internal  systems are making  towards  ensuring  that the  products  the Company
utilizes are Year 2000 compliant. The Company believes that its internal systems
and third party software  incorporated  into client  solutions will be Year 2000
compliant.  Failure  to  provide  Year 2000  compliant  business  solutions  and
software to its customers could have a material  adverse effect on the Company's
business,  results of operations and financial condition. The Company's costs to
ensure that internal  systems and software  acquired for integration into client
business  solutions are Year 2000  compliant has not been and is not expected to
become significant.  The Company has not implemented any contingency plans if it
fails to become year 2000 compliant.

Further,  the Company  believes  that the  purchasing  patterns of customers and
potential  customers  may be affected by Year 2000  issues as  companies  expend
significant  resources to correct or patch their  current  software  systems for
Year 2000 compliance.  These  expenditures may result in reduced funds available
to purchase products and services such as those offered by the Company.

Forward looking statements

This Form 10-QSB contains certain forward-looking  statements within the meaning
of Section 27A of the  Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   thereby.   Investors  are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,



                                       11
<PAGE>

the ability of the Company to develop its products, the success of its USWeb/CKS
Cornerstone  subsidiary as well as general market  conditions,  competition  and
pricing.  Although the Company  believes  that the  assumptions  underlying  the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form 10-QSB will prove to be
accurate. In light of significant  uncertainties inherent in the forward-looking
statements  included  herein,  the inclusion of such  information  should not be
regarded  as a  representation  by the  Company  or any  other  person  that the
objectives and plans of the Company will be achieved.

Inflation
The past and expected future impact of inflation on the financial statements is
not significant.

Item 1.     Legal Proceedings

None

Item 2.     Change in Securities and Use of Proceeds

The Company  issued  256,725  shares of Common Stock pursuant to the exercise of
warrants  to  purchase  246,100  shares of Common  Stock and options to purchase
10,625 shares of Common Stock.  The warrants had an exercise  price of $2.35 per
share and the  options  had an exercise  price  ranging  from $.813 to $1.75 per
share.  The Common  Stock was issued  pursuant  to the  exemption  contained  in
Section 4(2) of the Securities Act of 1933, as amended.

Item 3.     Defaults upon Senior Securities

None

Item 4.     Submissions of Matters to a Vote Security Holders

None

Item 5.     Other Information

On  February 5, 1999,  the Company  announced  that the Nasdaq  SmallCap  Market
advised the Company that the Company's  securities will continue to be listed on
the Nasdaq  SmallCap  Market.  The Nasdaq Listing and Hearing Review Council did
not exercise  its right,  by its own motion,  to review the  decision  within 45
days.


Item 6.     Exhibits and Reports on Form 8-K

            Form 8-K    Dated December 30, 1998      Under Item 7- Other events

            Form  8-K   Dated February 5, 1999       Under Item 7- Other events

            Exhibit 27- Financial Data Schedule

                                       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,
thereunto duly authorized.

                                          CORNERSTONE INTERNET SOLUTIONS COMPANY
                                          --------------------------------------
                                          (Registrant)


Date April 14, 1999                       /s/ Edward Schroeder
                                          ------------------------------
                                          Edward Schroeder
                                          Chief Executive Officer
                                          And Principal Financial Officer






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