SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             -----------------------

                                   FORM 10-QSB

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

               For Quarterly period Ended: September 30, 2001; or

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

                For the transition period _________ to __________

                         Commission File Number: 0-22057
                             -----------------------

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

         Delaware                                               76-0513297
 ------------------------------                             ------------------
(State or other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                             Identification No.)

                    2602 Yorktown Place, Houston, Texas 77056
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (713) 626-1504
               -------------------------------------------------
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that a
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

     The number of shares outstanding of the registrant's common stock, $0.001
par value, as of September 30, 2001, was 8,223,059 (post reverse split
adjusted).

     Transitional Small Business Disclosure Format. Yes [ ] No [X]

                                       1
<PAGE>

                          GK INTELLIGENT SYSTEMS, INC.

                              Report on Form 10-QSB

                    For the Quarter Ended September 30, 2001

                                      INDEX

                                                                         Page
                                                                         ----
Part I.  Financial Information

     Item 1.   Financial Statements (unaudited)........................... 3

               Balance Sheets ............................................ 3
               Statements of Operations .................................. 4
               Statements of Cash Flows................................... 5
               Notes to the Financial Statements ......................... 7

     Item 2.   Management's Discussion and Analysis or
                    Plan of Operation .................................... 12

     Item 3.   Controls and Procedures ................................... 14

Part II. Other Information

     Item 1.   Legal Proceedings ......................................... 15

     Item 2.   Changes in Securities ..................................... 16

     Item 3.   Defaults Upon Senior Securities ........................... 16

     Item 4.   Submission of Matters to a Vote of Security Holders ....... 16

     Item 5.   Other Information ......................................... 16

     Item 6.   Exhibits and Reports on Form 8-K .......................... 16

                                       2
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                                  Balance Sheet

<TABLE>
<CAPTION>
                                     ASSETS

                                                                 September 30,
                                                                    2001
                                                                 ------------
                                                                (Unaudited)
<S>                                                              <C>
CURRENT ASSETS

   Cash                                                          $          -
                                                                 --------------

     Total Current Assets                                                   -
                                                                 --------------

   COMPUTER SOFTWARE, NET                                                   -

   PROPERTY AND EQUIPMENT, NET                                              -
                                                                 --------------

     TOTAL ASSETS                                                $          -
                                                                 ==============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

   Accounts payable                                              $   1,343,263
   Accrued liabilities                                               1,958,829
   Accrued liabilities - related parties                               787,178
   Notes payable                                                       382,500
   Notes payable - related parties                                     250,000
                                                                 --------------

     Total Current Liabilities                                       4,721,770
                                                                 --------------

     TOTAL LIABILITIES                                               4,721,770
                                                                 --------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock authorized: 10,000,000 preferred
     shares at $0.001 par value; -0- issued and outstanding                  -
   Common stock authorized: 275,000,000 common shares at $0.001 par
    value; 8,223,059 shares issued and outstanding                       8,223
   Additional paid-in capital                                       37,523,622
   Unearned compensation                                                (6,000)
   Accumulated deficit                                             (42,247,615)
                                                                 --------------

     Total Stockholders' Equity (Deficit)                           (4,721,770)
                                                                 --------------

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)            $           -
                                                                 ==============
</TABLE>


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

                                       3
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                            Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                                                                           From
                                                                                                                         Inception
                                                        For the Three                      For the Nine              on October 4,
                                                        Months Ended                       Months Ended                1993 through
                                                        September 30,                      September 30,             September 30,
                                               -------------------------------   ----------------------------------
                                                    2001             2000               2001             2000              2001
                                               --------------  ---------------   ---------------  -----------------  --------------
<S>                                            <C>             <C>               <C>              <C>                <C>
REVENUES                                       $            -  $             -   $             -  $               -  $      100,156

Cost of sales                                               -                -                 -                  -          29,961
                                               --------------  ---------------   ---------------  -----------------  --------------

   Gross margin                                             -                -                 -                  -          70,195
                                               --------------  ---------------   ---------------  -----------------  --------------

EXPENSES

   Loss on disposal of fixed assets                         -                -                 -                  -       1,385,199
   Depreciation and amortization                            -                -                 -                  -       3,458,369
   Impairment loss on software                              -                -                 -                  -       1,308,520
   General and administrative                          64,001          119,056           292,830            419,385      35,116,344
                                               --------------  ---------------   ---------------  -----------------  --------------

     Total Costs and Expenses                          64,001          119,056           292,830            419,385      41,268,432
                                               --------------  ---------------   ---------------  -----------------  --------------

LOSS BEFORE OTHER INCOME
 (EXPENSE)                                            (64,001)        (119,056)         (292,830)          (419,385)    (41,198,237)
                                               --------------  ---------------   ---------------  -----------------  --------------

OTHER INCOME (EXPENSE)

   Interest income                                          -                -                 -                  -           7,663
   Gain on release of debt                                  -                -                 -                  -          73,003
   Interest expense                                  (106,309)         (98,113)         (314,175)          (278,409)       (942,729)
                                               --------------  ---------------   ---------------  -----------------  --------------

     Total Other Income (Expense)                    (106,309)         (98,113)         (314,175)          (278,409)       (862,063)
                                               --------------  ---------------   ---------------  -----------------  --------------

LOSS BEFORE INCOME TAXES                             (170,310)        (217,169)         (607,005)          (697,794)    (42,060,300)

INCOME TAXES                                                -                -                 -                  -               -
                                               --------------  ---------------   ---------------  -----------------  --------------

NET LOSS                                             (170,310)        (217,169)         (607,005)          (697,794)    (42,060,300)

DIVIDENDS ON PREFFERED STOCK                                -                -                 -                  -        (187,315)
                                               --------------  ---------------   ---------------  -----------------  --------------

NET LOSS APPLICABLE TO COMMON
 SHAREHOLDERS                                  $     (170,310) $      (217,169)  $      (607,005) $        (697,794) $  (42,247,615)
                                               ==============  ===============   ===============  =================  ==============

BASIC LOSS PER SHARE                           $        (0.02) $         (0.03)  $         (0.08) $           (0.10)
                                               ==============  ===============   ===============  =================

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                               7,805,477        7,023,059         7,805,476          7,023,059
                                               ==============  ===============   ===============  =================
</TABLE>

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


                                       4
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                                Since
                                                                                                              Inception
                                                                           For the Nine Months              on October 4,
                                                                              Months Ended                  1993 through
                                                                              September 30,                 September 30,
                                                                 --------------------------------------
                                                                         2001                2000               2001
                                                                 ------------------  ------------------  -----------------
   <S>                                                           <C>                 <C>                 <C>
   CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                                                      $         (607,005) $         (697,794) $    (42,060,300)
   Adjustments to reconcile net loss to net cash
     used by operating activities:
       Depreciation and amortization                                              -                   -         3,458,369
       Loss on disposal of fixed assets                                           -                   -         1,385,199
       Impairment loss on software                                                -                   -         1,308,520
       Gain on release of debt                                                    -                   -            73,003
       Beneficial conversion on issuance of debt                                  -                   -           103,068
       Amortization of unearned compensation                                  6,000                   -         5,490,531
       Common stock and warrants                                                  -                   -        12,920,806
   Changes in operating assets and liabilities:
     (Increase) decrease other assets                                        28,622              54,250                 -
     Increase (decrease) in accounts payable and accrued
      expenses                                                              364,946             363,016         3,687,926
     Increase in accrued liabilities - related party                        157,437             280,528           787,178
                                                                 ------------------  ------------------  ----------------

       Net Cash Used by Operating Activities                                (50,000)                  -       (12,845,700)
                                                                 ------------------  ------------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Purchase of software                                                         -                   -          (915,742)
     Other capital expenditures                                                   -                   -        (1,651,988)
     Organization costs                                                           -                   -           (78,745)
                                                                 ------------------  ------------------  ----------------

       Net Cash Used by Investing Activities                                      -                   -        (2,646,475)
                                                                 ------------------  ------------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from issuance of note payable                                         -                   -         1,098,769
   Common stock issued for cash                                                   -                   -        13,624,829
   Payments on notes payable                                                      -                   -          (306,637)
   Proceeds from issuance of notes payable - related party                   50,000                   -           250,000
   Receipt of subscription receivable                                             -                   -           779,900
   Capital contributed by the Company's president                                 -                   -            45,314
                                                                 ------------------  ------------------  ----------------

       Net Cash Provided by Financing Activities                             50,000                   -        15,492,175
                                                                 ------------------  ------------------  ----------------

NET DECREASE IN CASH                                                              -                   -                 -

CASH AT BEGINNING OF PERIOD                                                       -                   -                 -
                                                                 ------------------  ------------------  ----------------

CASH AT END OF PERIOD                                            $                -  $                -  $              -
                                                                 ==================  ==================  ================
</TABLE>


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

                                       5
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                      Statements of Cash Flows (Continued)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                              Since
                                                                                                             Inception
                                                                           For the Nine Months              on October 4,
                                                                              Months Ended                  1993 through
                                                                              September 30,                 September 30,
                                                                 --------------------------------------
                                                                         2001                2000               2001
                                                                 ------------------  ------------------  -----------------
<S>                                                              <C>                 <C>                 <C>
SUPPLEMENTAL SCHEDULE OF CASH FLOW
   ACTIVITIES:

Cash Paid For:

   Income taxes                                                  $                -  $                -  $              -
   Interest                                                      $                -  $                -  $              -

Schedule of Non-Cash Financing Activities:

   Common stock issued for debt                                  $                -  $                -  $        111,341
   Common stock issued for services - related party              $                -  $                -  $      4,549,123
   Options and warrants issued for services                      $                -  $                -  $      2,441,986
   Common stock issued for services                              $                -  $                -  $      5,929,697
   Fixed assets distributed for debt                             $                -  $                -  $         42,738
   Common stock issued for services deferred services            $           12,000  $                -  $         12,000

</TABLE>

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

                                       6
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 1 -      BASIS OF FINANCIAL STATEMENT PRESENTATION

              The accompanying unaudited condensed financial statements have
              been prepared by the Company pursuant to the rules and regulations
              of the Securities and Exchange Commission. Certain information and
              footnote disclosures normally included in financial statements
              prepared in accordance with accounting principles generally
              accepted in the United States of America have been condensed or
              omitted in accordance with such rules and regulations. The
              information furnished in the interim condensed financial
              statements include normal recurring adjustments and reflects all
              adjustments, which, in the opinion of management, are necessary
              for a fair presentation of such financial statements. Operating
              results for the nine months ended September 30, 2001 are not
              necessarily indicative of the results that may be expected for the
              year ending December 31, 2001.

NOTE 2 -      GOING CONCERN

              The Company's financial statements are prepared using accounting
              principles generally accepted in the United States of America
              applicable to a going concern which contemplates the realization
              of assets and liquidation of liabilities in the normal course of
              business. However, the Company does not have cash or other
              material assets, nor does it have an established source of revenue
              to cover its operating costs and to allow it to continue as a
              going concern. The financial statements do not reflect any
              adjustments that might result from the outcome of this
              uncertainty. It is the intent of the Company to obtain additional
              financing through equity offerings or other feasible financing
              alternatives to fund its ongoing operations. The Company also
              continues to pursue the development and marketing of its software
              to generate sales to cover the Company's working capital needs and
              software development expenditures. There is no assurance that the
              Company will be successful in raising the needed capital or that
              there will be sales of its software.

NOTE 3 -      SIGNIFICANT AND SUBSEQUENT EVENTS

              Due to the increase in costs and the lack of financial funding,
              the Company suspended operations in June 1999.

              In June 2002, the Company, which had been dormant for 3 years,
              commenced the process of reestablishing business operations. The
              Company is pursuing the further development of its software
              technology and adapting the software to current market needs.

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

              In June 1999, the Company's assets were seized by landlords and
              sold to off set amounts owing for rent. The Company realized a
              loss on disposal of the fixed assets of $1,385,199.

                                       7
<PAGE>
NOTE 3 -      SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

              Computer Software
              -----------------

              Because of minimal sales in 1999 and no sales through January 2003
              the Company determined that the software value has been fully
              impaired. The impairment loss recognized was $1,308,520.

              Commitments and Contingencies
              -----------------------------

              On February 10, 2000, the Texas Workforce Commission placed an
              administrative lien on the Company in the amount of $109,024. As
              of the date of this filing the Company has no evidence to show
              that this lien has been released.

              In May 2001, the Company entered into a Consulting and Finder's
              Fee Agreement with The Herman Group pursuant to which the Herman
              Group was to provide services to the Company in connection with
              the clean-up, strategic planning, location and procurement of
              investors and financing for the Company and identification of
              potential buyer's and/or merger candidates for the Company.
              Despite not having rendered any substantive services to the
              Company, nor procuring any investment or identification of any
              buyer or strategic alliances, on May 14, 2002 the Company received
              a letter threatening a lawsuit for the Company's breach of
              contract and demanding payment of $180,000 as fees due under the
              contract for services performed by the Herman Group. The Company
              believes The Herman Group's claim is without merit as no
              substantive services were provided and has responded to the demand
              letter. The Company has not accrued any amounts as it cannot
              estimate the amount of potential loss, if any, relating to this
              agreement.

              On February 1, 2002, a default judgment was entered on behalf of
              Imperial Business Credit, Inc. for $23,200. The Company has
              accrued the judgment and applicable costs in accrued expenses.

              On March 3, 2002, a judgment was filed in the matter of Fidelity
              Leasing, Inc. v. GK Intelligent Systems, Inc. The judgment was in
              favor of Fidelity Leasing in the amount of $29,854 in damages,
              fees and costs and subject to interest at various rates. The
              Company has accrued the judgment and applicable costs in accrued
              expenses.

              On June 14, 2002, an agreed judgment was entered on behalf of Lyon
              Financial Services d.b.a. The Manifest Group. It was ordered that
              GK Intelligent Systems, Inc. and Gary Kimmons, individually as
              guarantor, pay to Lyon Financial Services d.b.a. The Manifest
              Group the sum of $20,000 with interest at eight percent per annum
              from September 20, 2001 to the above date of judgment, as well as
              $1,500 in attorney's fees. Subsequent to the judgment for $21,500,
              the two parties agreed to settle for $12,750.

              The Company has paid $5,750 subsequently. The Company has accrued
              the judgment and applicable costs in accrued expenses.

                                       8
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000

NOTE 3 -      SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

              Commitments and Contingencies (Continued)
              -----------------------------------------

              On October 10, 2002, the Company and its President, Gary F.
              Kimmons entered in a Settlement Agreement with an unrelated
              individual. In this action, the individual alleged violations of
              the securities laws, common law fraud, conspiracy, negligence, and
              negligent misrepresentation and was seeking unspecified damages.
              The individual also alleged that certain officers and/or directors
              may have engaged in insider trading. The parties to this matter
              have released each other from any and all claims or actions they
              may have against each other.

              Stock Split
              -----------

              On March 19, 2002, the Company reverse split its common stock on a
              1 for 10 basis. All references to common stock have been restated
              to show the effect of the reverse split. On the same date the
              Company approved the filing of Amended Articles of Incorporation
              to increase the number of authorized shares of common stock from
              250,000,000 shares to 275,000,000 shares with a par value of
              $0.001 per share.

              Common Stock
              -------------

              During 2002, the Company issued 121,980 common shares to various
              vendors valued at $0.18 to $2.00 per share for the conversion of
              debt.

              During 2002, the Company issued 4,055,000 common shares to various
              consultants valued at $0.10 per share for services performed.

              During 2002, the Company issued 775,000 common shares to the
              Company's President/CEO and director valued at $0.10 per share for
              services performed.

              During 2002, the Company issued 7,100,000 common shares to the
              Company's President/CEO and director valued at $0.10 per share for
              the conversion of related party debt.

              Private Placement Memorandum
              ----------------------------

              On October 18, 2002, the Company issued a Private Placement
              Memorandum (PPM) to accredited investors as defined in Rule 501 of
              Regulation 1 of the Securities Act of 1933. This PPM was for 40
              units with each unit consisting of 100,000 shares of common stock
              and a warrant to purchase up to 200,000 shares of common stock.
              Each warrant vests immediately and will be exercisable for a
              period of two years from the date of issuance. Each unit is being
              offered for $25,000 or $0.25 per share. Each warrant is
              exercisable at $0.35 per share.

              The Company has sold 7 units or 700,000 shares of common stock and
              1,400,000 warrants for stock subscription receivable for $175,000.

                                       9
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 3 -      SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

              Notes Payable - Related Party
              -----------------------------

              On October 1, 2001, the Company entered into a promissory note for
              $50,000 with a director of the Company. The note bears an interest
              rate of 8% per annum. This note was converted into 100,000
              post-reverse shares of common stock on April 1, 2002.

              On September 26, 2002, the Company entered into a promissory note
              for $170,041 with the Company's president and CEO. The note bears
              an interest rate of 6% per annum. This note is unsecured. This
              note payable formalized the repayment of expenses paid by the
              Company president and CEO on behalf of the Company.

              Consulting Agreements
              ---------------------

              On April 24, 2001, GK Intelligent Systems and Berkshire Capital
              Management Co., Inc. ("Berkshire Capital") entered into a
              Consulting Agreement. Under the terms of the Agreement, Berkshire
              Capital was to provide assistance in the development of the
              corporate strategy and recommend an effective growth strategy.
              This includes mentoring and assistance in forming the structure of
              the functional components of the Company as well as providing
              technical guidance in the establishing of business alliances and
              relationships. Further, Berkshire Capital would aid in the
              acquisition of administrative personnel for the Company. In
              consideration for their efforts the Company issued 1,000,000
              unregistered and restricted shares of its common stock on the
              effective date of the agreement. These shares were fully earned
              and non-cancelable at time of issuance. Under the terms of the
              Agreement, Berkshire Capital will be entitled to receive
              additional shares, pro rata, in the event of a reverse stock split
              within 3 years from the effective date. The amount of pro rata
              shares to be issued will be proportional to the shares exchanged
              in the reverse stock split.

              On March 6, 2002, GK Intelligent Systems and Petty International
              Development, Corp. signed an Engagement Letter memorializing an
              Agreement under which Petty International will act as the
              Company's non-exclusive U.S. consulting, marketing, public
              offering, mergers and acquisition agent, for the purpose of
              rendering financial advice and other such services. The engagement
              is effective as of April 5, 2001. In consideration for the
              services provided by Petty International the Company issued
              1,200,000 post reverse split shares of its unregistered and
              restricted stock. The term of this Agreement is for two years from
              the effective date. In the event that the Company determines not
              to proceed with any transactions after such has been accepted in
              writing, then there is a $50,000 dollar "break-up" fee, which is
              also payable in Company common stock.

              On June 1, 2002, GK Intelligent Systems entered into a Marketing
              Agreement with BTH2, Inc. The terms of the Agreement state that
              BTH2 is to provide its services as a marketing agency for the
              Company's products for a period of 12 months commencing June 1,
              2002. In consideration for BTH2's efforts, the Company shall
              compensate BTH2 in the form of a non-refundable monthly retainer
              of $25,000 per month, with the first payment starting 60 days from
              the execution of the Agreement. Additionally as compensation, the
              Company issued 500,000 post-reverse split adjusted shares of its
              unregistered and restricted common stock.

                                       10
<PAGE>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 2001 and 2000


NOTE 3 -      SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

              Consulting Agreements (Continued)
              ---------------------------------

              On September 13, 2002 GK Intelligent Systems and Alan S. Litvak
              ("Litvak") entered into a Consulting Agreement. The terms of the
              Agreement set forth that Litvak will assist in the identification
              and procurement of qualified investors for the Company. As
              compensation for the services rendered under this Agreement the
              Company will pay a commission amounting to 10% of the total
              dollars raised in the private placement. Payment to Litvak shall
              be made according to the following formula: 50% of the total
              amount shall be in cash and the remaining 50% shall be in the form
              of unregistered and restricted Common Stock of the Company.

              During 2001 and 2002, the Company entered into a number of
              additional consulting agreement with various individuals and
              companies wherein they are to provide a variety of current and
              future services to the Company in exchange for compensation in the
              form of cash payments and issuance of common stock. Under the
              provisions of these agreements, the Company is obligated to issue
              a minimum of 1,200,000 shares of common stock plus additional cash
              payments or common stock in lieu of cash as services are performed
              in accordance with terms of the various agreements.


                                       11
<PAGE>

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

     CAUTIONARY FORWARD - LOOKING STATEMENT
     --------------------------------------

     The following discussion should be read in conjunction with the Company's
financial statements and related notes.

     Certain matters discussed herein may contain forward-looking statements
that are subject to risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the following:

          -    the volatile and competitive nature of the software business,

          -    the uncertainties surrounding the rapidly evolving markets in
               which the Company competes,

          -    the uncertainties surrounding technological change and the
               Company's dependence on computer systems,

          -    the Company's dependence on its intellectual property rights,

          -    the success of marketing efforts by third parties,

          -    the changing demands of customers and

          -    the arrangements with present and future customers and third
               parties.

     Should one or more of these risks or uncertainties materialize or should
any of the underlying assumptions prove incorrect, actual results of current and
future operations may vary materially from those anticipated.

     Business Overview
     -----------------

     From inception (October 4, 1993) through March, 1999, the Company has
utilized funds obtained primarily through private placements of restricted
common stock to acquire and develop core software technologies used in the
creation of computer-based training products. The Company's first product,
Around the Web in 80 Minutes, a CD-ROM based internet training course, was
introduced at the COMDEX Fall '98 trade show in mid November 1998 and
subsequently made available to consumers solely through direct sales beginning
in late November 1998. During the first quarter of 1999, in an effort to align
itself with established product distribution companies capable of serving major
national retailers, the Company shifted emphasis from its direct sales approach
to a distributor-based approach and engaged as its marketing representatives
High Altitude Sales and Marketing, Inc. and Computer Generation. As a result,
the Company in turn signed distribution agreements with Ingram Micro, Inc. and
Tech Data Corporation in February and March 1999, respectively. Ingram Micro,
Inc. distributes products and services to more than 115,000 resellers in 120
countries. Tech Data serves more than 100,000 value-added resellers and retail
dealers in the United States, Canada, the Caribbean, Latin America, Europe, and
the Middle East.

     To fund its operations, the Company commenced a private placement in
November 1998, which was closed in early May 1999 after raising $3,373,000 for
the sale of 168,650 (post reverse split adjusted) shares of its common stock.
Due to increased marketing costs associated with product rollout the Company
needed additional capital. Unable to secure necessary capital from institutional
sources, the Company attempted a private placement in May 1999 wherein it
offered 240,000 (post reverse split adjusted) units at $2.00 per unit with each
unit consisting of one share of common stock and one warrant to purchase one
share of common stock at an exercise price of $4.00 per share. As of May 13,
1999, no funding had occurred under the new private placement.

                                       12
<PAGE>

     Thereafter, the Company continued to pursue the private placement of its
securities with accredited investors but was unsuccessful. In May 1999, Gerald
C. Allen requested that Gary F. Kimmons resign as Chief Executive Officer,
claiming that if Mr. Kimmons resigned the Company would receive financing which
would be provided through previous private placement sources. Before a
resignation agreement could be effectuated, the Company at the direction of
Gerald C. Allen announced the resignation of Mr. Kimmons and purported to
appoint Winston Van Bieutenen as Chief Executive. Despite these actions, no
financing was forthcoming as Mr. Allen represented, and on June 11, 1999, Marcus
F. Wray, Jean Paul Dejoria, and Gerald C. Allen all submitted letters of
resignation as officers and directors of the Company. Mr. Kimmons attempted to
resurrect the Company and was unable to do so, and the Company closed its doors
on June 11, 1999.

     Statements included in this Management's Discussion and Analysis of
Financial Condition and Results of Operations, and in future filings by the
Company with the Securities and Exchange Commission, in the Company's press
releases and in oral statements made with the approval of an authorized
executive officer which are not historical or current facts are "forward-looking
statements" made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the future
could affect the Company's actual results and could cause the Company's actual
financial performance to differ materially from that expressed in any
forward-looking statement: (i) the extremely competitive conditions that
currently exist in the market for "blank check" companies similar to the Company
and (ii) lack or resources to maintain the Company's good standing status and
requisite filings with the Securities and Exchange Commission. The foregoing
list should not be construed as exhaustive and the Company disclaims any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.

     Plan of Operation
     -----------------

     The Company has not engaged in any material operations or had any revenues
from operations during the last three fiscal years. The Company's plan of
operation for the next 12 months is to continue to seek the acquisition of
assets, property or business that may benefit the Company and its shareholders.
Because the Company has virtually no resources, management anticipates that to
achieve any such acquisition, the Company will be required to issue shares of
its common stock as the sole consideration for such acquisition.

     In the event that the Company contacts or is contacted by a private company
or other entity which may be considering a merger with or into the Company, it
is possible that the Company would be required to raise additional funds in
order to accomplish the transaction. Otherwise, and even though the Company only
possesses nominal funds, as the Company does not engage in any ongoing business
which requires the routine expenditure of funds, the Company would not be
required to raise additional funds during the next twelve months. The Company
does not routinely expend any funds for the ownership or lease of property, as
any routine activities are being conducted out of an office made available by
the Company's President.

                                       13
<PAGE>

     During the next 12 months, the Company's only foreseeable cash requirements
will relate to maintaining the Company in good standing and making the requisite
filings with the Securities and Exchange Commission and the payment of expenses
associated with reviewing or investigating any potential business venture, which
may be advanced by management or principal shareholders, or as loans to the
Company. Because the Company has not identified any such venture as of the date
of this Report, it is impossible to predict the amount of any such loan.
However, any such loan will not exceed $25,000 and will be on terms no less
favorable to the Company than would be available from a commercial lender in an
arm's length transaction. Management may at its discretion raise any required
funds through any private placement of "unregistered" and "restricted"
securities or any public offering of its common stock.

     Results of Operations
     ---------------------

     The Company had no net revenues for the three months and nine months ended
September 30, 2001 and 2000. The Company had operating expenses of $64,001 for
the three months ending September 30, 2001 compared to $119,056 for the
comparative period of 2000. The Company had operating expenses of $292,830 for
the nine months ended September 30, 2001 compared to $419,385 for the same
period in 2000.

     The Company unsuccessfully launched its product sales in the first six
months of 1999. The Company was unable to raise sufficient capital to sustain
its marketing effort and closed its offices and terminated most of the personnel
in June of 1999. The Company's expenses are accruals of officer compensation and
interest on its liabilities. The Company has been inactive since the first
quarter of 2000.

     Liquidity
     ---------

     During the nine months ended September 30, 2001 and 2000, the Company used
cash of $50,000 and 0-, respectively. The Company had no cash on hand as of
September 30, 2001. The Company ceased operations in 1999 and has been inactive
in 2000 and 2001.

Item 3.  Controls and Procedures

     Within the 90 days prior to the filing date of this Form 10-QSQ, an
evaluation was performed under the supervision and with the participation of
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of the disclosure controls and
procedures (as defined in Exchange Act Rules 13a - 14(c) and 15d - 14(c)). Based
on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the disclosure controls and procedures were effective. There were
no significant changes in the internal controls and procedures or in other
factors that could significantly affect internal controls subsequent to the date
of the evaluation.

                                       14
<PAGE>

PART II - OTHER INFORMATION.

Item 1. Legal Proceedings.

     From time to time, the Company is involved in certain legal actions arising
from the ordinary course of business. It is the opinion of management that such
litigation, described below, will be resolved without a material adverse effect
on the Company's financial position or results of operations.

     David Michael Sims v. GK Intelligent Systems, Inc. The Company is a
defendant in Cause No. 98-35985; David Michael Sims v. GK Intelligent Systems,
Inc. in the 189th Judicial District Court of Harris County, Texas. The lawsuit
was filed in July 1998, and alleges the Company is liable to the plaintiff for
breach of contract and fraudulent misrepresentation. The case arises out of
services allegedly performed by the plaintiff for which he did not receive
compensation. Although preliminary discovery has commenced, the precise amount
of plaintiff's demand is currently unknown other than his initial claim for a
commission of approximately $500,000. The Company denies any liability to the
plaintiff, and intends to vigorously defend the lawsuit.

     Claim of Union Atlantic, LC. In September 1997, the Company entered into a
consulting agreement with Union Atlantic, LC ("Union Atlantic") for performance
of services. The Company issued Union Atlantic a five year warrant to purchase
200,000 shares of Company Common Stock at an exercise price of $.9375 per share,
and a five year warrant to purchase 112,500 shares of Company Common Stock at an
exercise price of $1.25 per share as compensation for services to be rendered.
Each of the warrants contained demand registration rights. Union Atlantic
resigned as a consultant to the Company in November 1997. As no capital was
raised by Union Atlantic, the Company sent a notice to Union Atlantic in July
1998 canceling the warrants. In August 1998, the Company received notice from
Union Atlantic demanding registration of the warrants. The Company has contacted
Union Atlantic and is in the process of determining Union Atlantic's legal
rights, if any.

     Claim of SGD International Corp. In May 1997, the Company entered into a
sales purchase/asset recovery agreement with SGD International Corp. ("SGD")
pursuant to which the Company was to sell SGD certain of the Company's products
for marketing purposes. In exchange for the products, SGD agreed to furnish the
Company with merchandise, service and media credits. The period of exclusivity
of the Agreement expired in May 1998. As the Company had not released any
products, none were forwarded to SGD and the Company did not utilize any of the
SGD credits. In July 1998, the Company sent SGD a notice of termination
canceling the agreement. In August 1998, SGD sent a letter threatening a lawsuit
for the Company's alleged breach of contract. The Company contacted SGD and is
in the process of determining SGD's legal rights, if any.

     Claim of J. David Cabello. In August 1998, the Company received a letter
from J. David Cabello, the former general counsel and secretary of the Company,
in connection with Mr. Cabello's separation from employment with the Company.
The Company's contractual obligation to Mr. Cabello depends on whether he
resigned from his employment or whether he was terminated. Mr. Cabello has
demanded $190,000 in total compensation and immediate vesting of 600,000 shares
of Company Common Stock. The Company contends Mr. Cabello resigned from his
positions with the Company, and as such, Mr. Cabello is entitled to earned but
unpaid salary and vested options to purchase 25,000 shares of Company Common
Stock. In the event the parties are unable to settle this matter, it is likely
Mr. Cabello will file suit for wrongful termination.

                                       15
<PAGE>

     Texas Workforce Commission. On February 10, 2000, the Texas Workforce
Commission placed an administrative lien on the Company in the amount of
$109,024.

     The Company is not aware of pending claims or assessments, other than as
described above, which may have a material adverse impact on the Company's
financial position or results of operations.

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.

     On March 19, 2002, the Company reverse split its common stock on a 1 for 10
basis and accordingly, all references above to common stock have been restated
to show the effect of the reverse split.

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

<TABLE>
<CAPTION>

     (a) List of Exhibits attached or incorporated by referenced pursuant to
Item 601 of Regulation S-B.

         <S>      <C>
         99.1     Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
         99.2     Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
         99.3     Certification Pursuant to Section 906 of 18 U.S.C. Section 1350
</TABLE>

         (b) Reports on Form 8-K.

     There were no other reports on Form 8-K filed during the period covered by
this report.


                                       16
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the Undersigned, thereunto duly authorized.


Dated: March 25, 2003                   /S/ Gary F. Kimmons
                                        --------------------------------------
                                        By: Gary F. Kimmons
                                        Its: President, Chief Executive Office
                                              and Chief Financial Officer


                                       17