U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

               For the quarterly period ended November 30, 1997

                        Commission file number: 0-22057


                          GK INTELLIGENT SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

      DELAWARE                                         84-1079784
(State or other jurisdiction of                       (IRS Employer
Incorporation or organization)                      Identification No.)

                           5555 SAN FELIPE, SUITE 625
                                HOUSTON, TX 77056
                         (Address of principal offices)


                                (713) 840-7722
                         (Registrant's telephone number)


Securities registered pursuant to Section 12(b) of the Exchange Act: 

                                      None

Securities  registered  pursuant to Section 12(g) of the Exchange Act:  

                                  Common Stock

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 past 90 days.

Yes     [X]       No  [ ]

Issuer had no revenues for the quarter ended November 30, 1997.

As of January 14, 1998  registrant  had  16,472,519  shares of Common Stock
outstanding.
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.

                            FORM 10-QSB REPORT INDEX

10-QSB PART AND ITEM NO.                                                PAGE NO.

PART I-FINANCIAL INFORMATION


      ITEM 1.     FINANCIAL STATEMENTS (UNAUDITED)

                  Balance Sheet as of November 30, 1997......................3

                  Statements of loss for the three and six months ended
                    November 30, 1997 and 1996...............................4

                  Statements of cash flows for the six months ended
                    November 30, 1997 and 1996...............................5

                  Notes to financial statements..............................6

      ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS..............7


PART II-OTHER INFORMATION

      ITEM 1.     LEGAL PROCEEDINGS..........................................9

      ITEM 2.     CHANGES IN SECURITIES......................................9

      ITEM 3.     DEFAULTS UPON SENIOR SECURITIES............................9

      ITEM 4.     SUBMISSION OF MATTERS TO A VOTE
                    OF SECURITY HOLDERS......................................9

      ITEM 5.     OTHER INFORMATION..........................................9

      ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K...........................9

                                       2
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                                  BALANCE SHEET
                                   (Unaudited)

                                                                   November 30,
                                                                       1997
                                                                   ------------
                                     ASSETS
Current:
  Cash .........................................................   $      6,564
  Prepaid expenses .............................................         28,501
                                                                   ------------
Total Current Assets ...........................................         35,065
                                                                   ------------
Computer software costs, net ...................................      2,518,581
Other equipment, net ...........................................        173,483
Organization costs, net ........................................         31,498
Other ..........................................................          7,006
                                                                   ------------
Total Assets ...................................................   $  2,765,633
                                                                   ============

            LIABILITIES AND STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)

Current Liabilities:
  Accounts payable and accrued liabilities .....................   $    254,769
  Note payable to bank .........................................        115,000
  Due to majority stockholder ..................................        155,851
  Capital lease obligations, current portion
                                                                         17,607

Total Current Liabilities ......................................        543,227
                                                                   ------------
Capital lease obligations, less current portion ................         84,417

Commitments and Contingencies

Stockholders' Equity (Capital Deficit):
  Series A preferred stock; redeemable and convertible
    with liquidation preference of $6.00 per share .............      3,389,432
  Common stock .................................................         16,077
  Additional paid-in capital ...................................     13,014,097
  Deficit accumulated during the development stage .............    (14,281,617)
                                                                   ------------
Total Stockholders' Equity (Capital Deficit) ...................      2,137,989
                                                                   ------------
Total Liabilities and Stockholders' Equity .....................   $  2,765,633
                                                                   ============

                See accompanying notes to financial statements.
                                       2
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                               STATEMENTS OF LOSS
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED                       SIX MONTHS ENDED
                                                                     NOVEMBER 30,                             NOVEMBER 30,
                                                            --------------------------------        -------------------------------
                                                                1997                1996                 1997                1996
                                                            ------------        ------------        ------------        -----------
<S>                                                         <C>                 <C>                 <C>                 <C>      
Revenues ............................................       $       --          $       --          $       --          $      --

Expenses:
   Depreciation and amortization ....................            215,718             206,702             430,808
                                                                                                                            405,890
   President's compensation .........................             60,000              60,000             120,000            120,000
   Employee compensation ............................            314,012              75,425             700,738             75,425
   Professional services ............................            262,162             488,245             576,266            550,423
   Other general and administrative .................            123,763              91,982             252,426            115,354
                                                            ------------        ------------        ------------        -----------

Net loss ............................................       $   (975,655)       $   (922,354)       $ (2,080,238)       $(1,267,092)
                                                            ============        ============        ============        ===========
Net Loss Per Share of Common Stock ..................       $       (.06)       $       (.09)       $       (.14)       $      (.13)
                                                            ============        ============        ============        ===========


Weighted Average Number of Shares of
   Common Stock Outstanding .........................         15,981,846          10,125,057          14,370,061          9,701,724
                                                            ============        ============        ============        ===========
</TABLE>
                See accompanying notes to financial statements.
                                       4
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                           INCREASE (DECREASE) IN CASH

                                                        SIX MONTHS ENDED
                                                            NOVEMBER 30,
                                                     --------------------------
                                                        1997           1996
                                                     -----------    -----------
Operating activities:
  Net loss ......................................... $(2,080,238)   $(1,267,092)
  Adjustments to reconcile net loss to net cash used
    in operating activities:
      Depreciation and amortization ................     430,808        405,890
      Issuance of common stock and warrants
        for various expenses .......................     688,627        394,946
      Changes in assets and liabilities:
        Other current assets .......................      30,022           --
        Accounts payable and accrued liabilities ...     103,054       (104,248)
                                                     -----------    -----------
          Net cash used in operating activities ....    (827,727)      (570,504)
                                                     -----------    -----------
Investing activities:
  Purchased software ...............................    (162,538)       (11,028)
  Other capital expenditures .......................     (17,123)        (4,084)
                                                     -----------    -----------
          Net cash used in investing activities ....    (179,661)       (15,112)
                                                     -----------    -----------

Financing activities:
  Proceeds from private placements .................     563,964      1,238,951
  Proceeds from borrowings .........................     115,000           --
  Repayment of borrowings ..........................     (13,477)       (44,185)
                                                     -----------    -----------
          Net cash provided by financing activities      665,487      1,194,766
                                                     -----------    -----------
Net increase (decrease) in cash ....................    (341,901)       609,150

Cash at beginning of period ........................     348,465         19,283
                                                     -----------    -----------
Cash at end of period .............................. $     6,564    $   628,433
                                                     ===========    ===========

                See accompanying notes to financial statements.
                                       5
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.  ACCOUNTING POLICIES

The accompanying unaudited financial statements have been prepared in accordance
with the instructions to interim financial reporting as prescribed by the
Securities and Exchange Commission. All adjustments, which, in the opinion of
management, are necessary for a fair presentation of the results for the interim
periods have been reflected in the accompanying unaudited financial statements.
For further information regarding accounting policies, refer to the Company's
audited financial statements for the years ended May 31, 1997 and 1996 and for
the period from inception (October 4, 1993) through May 31, 1997 included in the
Company's 1997 Annual Report on Form 10-KSB.

2.  GOING CONCERN UNCERTAINTY AND MANAGEMENT PLANS

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
operating losses since its inception that raise substantial doubt about its
ability to meet future expected expenditures necessary to fully develop its
software products and applications and to continue as a going concern. The
financial statements do not reflect any adjustments that might result from the
outcome of this uncertainty. In this regard, the Company is currently seeking
short and long term debt or equity financing sufficient to fund projected
working capital and software product development needs and is anticipating the
general release of several software products into the market during 1998.
However, there can be no assurance that the amount and terms of such debt or
equity financing, or that the profits from the sale of software products in 1998
will be sufficient to fund the Company's software development expenditure
requirements. Accordingly, the Company will continue to seek additional sources
of financing as may be necessary.

3.  PRIVATE PLACEMENT

During the six months ended November 30, 1997, the Company issued 611,590 shares
of its common stock to accredited investors for net proceeds of approximately
$563,964.

4.  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

During the six months ended November 30, 1997, the Company recorded non-cash
compensation expense as a result of the (i) issuance of 225,000 shares of common
stock to key employees valued at $324,495, (ii) recognition of $76,889 of
employee compensation associated with common stock warrants and options granted
in 1997and 1998, (iii) issuance of 50,000 shares of common stock to key
professionals valued at $106,250 and (iv) recognition of $180,993 of
compensation to key professionals associated with common stock warrants granted
in 1997. Non-cash compensation expense recorded during the six months ended
November 30, 1997 was determined using the estimated fair market value of the
Company's common stock or common stock warrants on the date such instruments
were granted.

In 1997, the Company's board of directors approved the issuance of a total of
2,900,000 shares of the Company's common stock to (i) the president and majority
stockholder, (ii) a director, (iii) a consultant and (iv) certain key employees
for services performed in 1997 valued at $2.00 per share, or $5,800,000. The
Company's May 31, 1997 financial statements included an accrual for the issuance
of such shares. During the six months ended November 30, 1997, the Company
formally issued the shares described above and accordingly, the $5,800,000
compensation accrual was reclassified to common stock and additional paid-in
capital in the accompanying financial statements.

                                       6
<PAGE>
PART I.  FINANCIAL INFORMATION - ITEM 2

MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

The following discussion should be read in conjunction with the attached
condensed financial statements and notes thereto.

OVERVIEW

The Company is a development stage enterprise engaged in the acquisition,
development and marketing of sophisticated software products and applications.
From inception (October 4, 1993) to date, the Company has realized no revenues
and its activities have been limited to the acquisition of software assets used
to develop its planned line of intelligent products and applications, product
development, research and development of software products and initial marketing
activities.

RESULTS OF OPERATIONS

REVENUES. There were no revenues for the six month periods ended November 30,
1997 and 1996. Although the Company is in the final stages of completing its
initial internet training product, no significant revenues from this or other
products is expected until at least the fourth quarter of the fiscal year ending
May 31, 1998.

EXPENSES. Expenses for the six months ended November 30, 1997 increased by
$813,146 to $2,080,238 from $1,267,092 in the same period in 1996, a 64%
increase. The increase is due primarily to increases in employee compensation
and other general and administrative expenses as described below.

Employee compensation for the six months ended November 30, 1997 increased to
$700,738 from $75,425 in the same period in 1996 due to the hiring of product
management, research and development, and administrative employees, primarily
during fiscal 1997, in order to carry out the development and marketing of the
Company's planned software products and applications. In addition, employee
compensation for the six months ended November 30, 1997 includes $401,384 of
non-cash compensation resulting from (i) the issuance of 225,000 shares of
common stock to key employees in recognition of their services and loyalty to
the Company valued at $324,495 and (ii) the recognition of $76,889 of
compensation associated with common stock warrants and options granted to key
employees in recognition of their services and loyalty to the Company during the
1997 and 1998 fiscal years.

Other general and administrative expenses for the six months ended November 30,
1997 increased by $137,072 to $252,426 from $115,354 in the same period in 1996
due primarily to the general increase in the Company's business activities
described above as well as the increased level of employees and other
professionals needed to support such activities.

                                       7
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLANS. The Company has suffered
recurring operating losses since its inception that raise substantial doubt
about its ability to meet future expected expenditures necessary to fully
develop its planned software products and applications and to continue as a
going concern. The accompanying unaudited financial statements do not reflect
any adjustments that might result from the outcome of these uncertainties. The
current cash forecast indicates that there will be negative cash flow from
operations for at least the first three quarters of the fiscal year ending May
31, 1998. The Company is currently seeking short and long term debt or equity
financing sufficient to fund projected working capital and software product and
application development needs. However, there is no assurance that sufficient
proceeds will be obtained or that the Company will reach a positive cash flow
position in the future.

CASH USED IN OPERATING ACTIVITIES. The Company's net cash flow from operating
activities resulted in deficits of $827,727 and $570,504 for the six month
periods ended November 30, 1997 and 1996, respectively. The $257,223 increase is
due primarily to the increase in business activity undertaken by the Company
relating to the development of its software products and applications and its
continuing efforts to seek short and long term financing to fund such
development.

CASH USED IN INVESTING ACTIVITIES. The Company's net cash used in investing
activities during the six months ended November 30, 1997 increased by $164,549
to $179,661 from $15,112 in the same period in 1996 due primarily to the
increased development activities associated with its planned software products
and applications.

CASH FLOW FROM FINANCING ACTIVITIES. The Company's net cash flows from financing
activities during the six months ended November 30, 1997 decreased by $529,279
to $665,487 from $1,194,766 in the same period in 1996 due to a reduction of
approximately $675,000 in the amount of equity funds raised during the six
months ended November 30, 1997 which was partially offset by an increase in bank
borrowings of $115,000 during the same period.

It is anticipated that its current cash balance will provide sufficient working
capital for approximately two months. The Company will need additional financing
thereafter to continue development and marketing of its products and
applications. Additionally, the Company may require significant additional
financing to complete any acquisition in furtherance of product or application
development. If such financing is required, management believes it could be
raised through additional equity offerings, joint ventures or other
collaborative relationships, borrowings or other sources. In this regard, the
Company continues to negotiate with several potential investors to obtain both
short term and long term capital. To date however, the Company has no firm
commitment for any such additional financing and there can be no assurance that
any such financing will be available or, if it is available, that it will be
available on acceptable terms to the Company. If adequate funds are not
available to satisfy either short or long-term capital requirements, the Company
may be required to limit its operations significantly.

                                       8
<PAGE>
PART II.  OTHER INFORMATION

      ITEM 1.     LEGAL PROCEEDINGS-

                  Subsequent to November 30, 1997, the Company and its majority
                  shareholder were named as defendants in a lawsuit filed by a
                  former consultant alleging breach of contract and related
                  claims, and seeking economic and exemplary damages in excess
                  of $ 500,000.00. The Company believes the suit is completely
                  without merit and intends to vigorously defend its position.

      ITEM 2.     CHANGES IN SECURITIES - None

      ITEM 3.     DEFAULTS UPON SENIOR SECURITIES - None

      ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

      ITEM 5.     OTHER INFORMATION - None

      ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

                  (a)   EXHIBITS - None

                  (b) REPORTS ON FORM 8-K - None

                                       9
<PAGE>
                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                                GK Intelligent Systems, Inc.

Date:  January 14,1998                          By /s/ ROD NORVILLE
                                                       Rod Norville, Director, 
                                                       Chief Financial Officer,
                                                       Chief Accounting Officer

                                       10