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, 1999; 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, 1999, was 3,273,059 (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, 1999

                                      INDEX

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 ..................................... 17

     Item 3.   Defaults Upon Senior Securities ........................... 17

     Item 4.   Submission of Matters to a Vote of Security Holders ....... 17

     Item 5.   Other Information ......................................... 17

     Item 6.   Exhibits and Reports on Form 8-K .......................... 18


                                       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,
                                                                    1999
                                                                 ------------
                                                                (Unaudited)
<S>                                                              <C>
CURRENT ASSETS

   Cash                                                          $     20,244
   Prepaid expenses                                                   119,038
                                                                 -------------

     Total Current Assets                                             139,282
                                                                 -------------

   COMPUTER SOFTWARE, NET                                                   -

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

     TOTAL ASSETS                                                $    139,282
                                                                 =============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

   Accounts payable                                              $  1,358,217
   Accrued liabilities                                              1,009,969
   Accrued liabilities - related parties                              203,050
   Notes payable                                                      252,500
   Notes payable - related parties                                    200,000
                                                                 -------------

     Total Current Liabilities                                      3,023,736
                                                                 -------------

     TOTAL LIABILITIES                                              3,023,736
                                                                 -------------

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; 3,273,059 shares issued and outstanding       3,273
   Additional paid-in capital                                      37,017,241
   Accumulated deficit                                            (39,904,968)
                                                                 --------------

     Total Stockholders' Equity (Deficit)                          (2,884,454)
                                                                 --------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)        $    139,282
                                                                 ==============
</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,
                                               -------------------------------   ----------------------------------
                                                    1999             1998               1999             1998              1999
                                               --------------  ---------------   ---------------  -----------------  --------------
<S>                                            <C>             <C>               <C>              <C>                <C>
REVENUES                                       $            -  $             -   $        41,901  $               -  $      100,156

Cost of sales                                               -                -            10,612                  -          29,961
                                               --------------  ---------------   ---------------  -----------------  --------------

   Gross margin                                             -                -            31,289                  -          70,195
                                               --------------  ---------------   ---------------  -----------------  --------------

EXPENSES

   Loss on disposal of fixed assets                         -                -         1,385,199                  -       1,385,199
   Depreciation and amortization                            -          282,694           429,110          1,324,871       3,458,369
   Impairment loss on software                              -                -         1,308,520                  -       1,308,520
   General and administrative                         258,647        4,524,965        10,630,991          9,925,249      33,649,815
                                               --------------  ---------------   ---------------  -----------------  --------------

     Total Costs and Expenses                         258,647        4,807,659        13,753,820         11,250,120      39,801,903
                                               --------------  ---------------   ---------------  -----------------  --------------

LOSS BEFORE OTHER EXPENSE                            (258,647)      (4,807,659)      (13,722,531)       (11,250,120)    (39,731,708)
                                               --------------  ---------------   ---------------  -----------------  --------------

OTHER INCOME (EXPENSE)

   Gain on release of debt                                  -                -            73,003                  -          73,003
   Interest expense                                   (35,344)               -           (58,948)                 -         (58,948)
                                               --------------  ---------------   ---------------  -----------------  --------------

     Total Other Income (Expense)                     (35,344)               -            14,055                  -          14,055
                                               --------------  ---------------   ---------------  -----------------  --------------

LOSS BEFORE TAX                                      (293,991)      (4,807,659)      (13,708,476)       (11,250,120)    (39,717,653)

INCOME TAX EXPENSE                                          -                -                 -                  -               -
                                               --------------  ---------------   ---------------  -----------------  --------------

NET LOSS                                             (293,991)      (4,807,659)      (13,708,476)       (11,250,120)    (39,717,653)

DIVIDENDS ON PREFERRED STOCK                                -          (28,315)                -           (187,315)       (187,315)
                                               --------------  ---------------   ---------------  -----------------  --------------

NET LOSS APPLICABLE TO COMMON
 SHAREHOLDERS                                  $     (293,991) $    (4,835,974)  $   (13,708,476) $     (11,437,435) $  (39,904,968)
                                               ==============  ===============   ===============  =================  ==============

BASIC LOSS PER SHARE                           $        (0.09) $         (1.65)  $         (4.20) $           (3.93)
                                               ==============  ===============   ===============  =================

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                               3,273,059        2,936,732         3,266,100          2,908,238
                                               ==============  ===============   ===============  =================
</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,
                                                                 --------------------------------------
                                                                         1999                1998               1999
                                                                 ------------------  ------------------  -----------------
   <S>                                                           <C>                 <C>                 <C>
   CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                                                      $      (13,708,476) $      (11,250,120) $    (39,717,653)
   Adjustments to reconcile net loss to net cash provided
     (used) by operating activities:
       Depreciation and amortization                                        429,110           1,324,871         3,458,369
       Loss on disposal of fixed assets                                   1,385,199                   -         1,385,199
       Impairment loss on software                                        1,308,520                   -         1,308,520
       Gain on release of debt                                               73,003                   -            73,003
       Beneficial conversion on issuance of debt                            103,068                   -           103,068
       Amortization of unearned compensation                              5,484,531                   -         5,484,531
       Common stock and warrants                                            217,124          10,757,558        12,920,806
   Changes in operating assets and liabilities:
     (Increase) decrease other assets                                       470,452            (419,481)         (119,038)
     Increase (decrease) in accounts payable and accrued
      expenses                                                            1,181,244             215,346         2,254,690
     Increase in accrued liabilities - related party                        203,049                   -           203,049
                                                                 ------------------  ------------------  ----------------

       Net Cash Provided (Used) by Operating Activities                  (2,853,176)            628,174       (12,645,456)
                                                                 ------------------  ------------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Purchase of software                                                         -                   -          (915,742)
     Other capital expenditures                                            (115,718)         (1,515,915)       (1,651,988)
     Organization costs                                                           -                   -           (78,745)
                                                                 ------------------  ------------------  ----------------

       Net Cash Used by Investing Activities                               (115,718)         (1,515,915)       (2,646,475)
                                                                 ------------------  ------------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from issuance of note payable                                   252,500                   -           968,769
   Common stock issued for cash                                             270,602           2,549,907        13,624,829
   Payments on notes payable                                                      -             (15,642)         (306,637)
   Proceeds from issuance of notes payable - related party                  200,000                   -           200,000
   Receipt of subscription receivable                                       779,900                   -           779,900
   Capital contributed by the Company's president                            45,314                   -            45,314
                                                                 ------------------  ------------------  ----------------

       Net Cash Provided by Financing Activities                          1,548,316           2,534,265        15,312,175
                                                                 ------------------  ------------------  ----------------

NET INCREASE (DECREASE) IN CASH                                          (1,420,578)          1,646,524            20,244

CASH AT BEGINNING OF PERIOD                                               1,440,822              32,910                 -
                                                                 ------------------  ------------------  ----------------

CASH AT END OF PERIOD                                            $           20,244  $        1,679,434  $         20,244
                                                                 ==================  ==================  ================

</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,
                                                                 --------------------------------------
                                                                         1999                1998               1999
                                                                 ------------------  ------------------  -----------------
<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                      $          217,124  $                -  $      2,441,986
   Common stock issued for services                              $                -  $                -  $      5,929,697
   Fixed assets distributed for debt                             $           42,738  $                -  $         42,738

</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, 1999 and 1998


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, 1999 are not
         necessarily indicative of the results that may be expected for the year
         ending December 31, 1999.

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>
                          GK INTELLIGENT SYSTEMS, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                           September 30, 1999 and 1998

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, 1999 and 1998

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, 1999 and 1998

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, 1999 and 1998

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
     ---------------------

     Net revenues for the nine months and three months ended September 30, 1999
were $41,901 and $-0-, respectively, compared to no revenues in the same periods
of 1998. The Company had a operating expenses of $13,753,820 and $258,647 for
the nine and three months ending September 30, 1999, compared to $11,250,120 and
$4,807,659 for the comparative periods of 1998.

     The Company unsuccessfully launched its product sales in the first six
months of 1999. The increase in expenses was the result of the Company's efforts
to market its products by opening offices through out the eastern United States
and the hiring of consultants, software programmers and management personnel.
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 had a net loss of $13,708,476 and $293,911 for the nine months
and three months ended September 30, 1999 compared to $11,437,435 and $4,835,974
for the same periods of 1998. The increase is due to the start up and shut down
of the product sales effort described above.

     Liquidity
     ---------

     During the nine months ended September 30, 1999, the Company used cash of
$2,853,176 in its operations compared to $628,174 of cash provided in the nine
months ended September 30, 1998. The Company received $270,602 from the sale of
its common stock in the first nine months of 1999 compared to $2,549,907 in
September of 1998. The Company had cash on hand of $20,244 as of September 30,
1999. The Company ceased operations in 1999 and became 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.

     Griffin v. GK Intelligent Systems, Inc., et al. In October 1998, the
Company, its president and a former officer were named as defendants in a
class-action lawsuit; Griffin v. GK Intelligent Systems, Inc., et al.; filed in
the Texas District Court of Harris County, Texas, Houston Division, Cause
H-98-3847. The plaintiff has alleged violations of the securities laws, common
law fraud, conspiracy, negligence, and negligent misrepresentation and is
seeking unspecified damages. The plaintiff has also alleged that certain
officers and/or directors may have engaged in insider trading. The Plaintiff
seeks to have a class certified for all purchasers of the Company's stock
between February 10, 1998 and September 14, 1998, inclusive, and seeks an
unspecified amount of damages. The case was removed to Federal Court because the
causes of action that were asserted could only have been brought under federal
law. The parties have exchanged basic discovery. There is no trial setting. The
Company is in the process of evaluating the plaintiff's claims and intends to
vigorously defend the lawsuit.

     U.S. Quest, Ltd. and Jacody Financial, Inc. v. Gary Kimmons and GK
Intelligent Systems, Inc. The Company is an appellee in Cause No. 99-20361; U.S.
Quest, Ltd. and Jacody Financial, Inc. v. Gary Kimmons and GK Intelligent
Systems, Inc.; in the United States Court of Appeals for the Fifth Circuit. The
lawsuit underlying this appeal was filed in January 1998 and alleged, among
other things, that the Company is liable to the plaintiffs for violation of
state and federal securities laws, breach of contract and quantum meruit. The
case arose out of services allegedly furnished by the plaintiffs to the Company,
for which plaintiffs claim they did not receive compensation. The case was
mediated without settlement in June 1998. In January 1999, Judge Lynn N. Hughes
of the United States District Court for the Southern District of Texas granted a
summary judgment in the Company's favor. The plaintiffs appealed the district
court's summary judgment to the United States Court of Appeals for the Fifth
Circuit. The amount of the plaintiffs' demand remains unknown except for their
initial claim to 590,000 shares of the Company's Common Stock or $590,000. The
Company denies any liability to the plaintiffs, and intends to vigorously defend
the appeal. In January 1999, Judge Lynn N. Hughes of the United States District
Court for the Southern District of Texas granted a summary judgment in the
Company's favor. The plaintiffs appealed the district court's summary judgment
to the United States Court of Appeals for the Fifth Circuit.

     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.

                                       15
<PAGE>

     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.

     Tina Alexander v. GK Intelligent Systems, Inc., Gary Kimmons, and Gerald
Allen. The company was a defendant in Civil Action No. H-00-4333 filed August of
1999, Tina Alexander v. GK Intelligent Systems, Inc., Gary Kimmons, and Gerald
Allen. The Company denies any liability to the plaintiff, and intends to
vigorously defend the lawsuit.

     11500 Northwest, L.P. v. GK Intelligent Systems, Inc. The company is a
defendant in Civil Action No. 718504 filed on June 21, 1999 in the District
Court in Harris County Texas. 11500 Northwest is claiming a breach of a lease
agreement for office space. 11500 Northwest are seeking to recover past due
rent, broker fees, tenant improvement costs, and loss of future rental income in
the amount of $83,554.29. The Company denies any liability to the plaintiff, and
intends to vigorously defend the lawsuit.

                                       16
<PAGE>

     Marathon Oil Company v. GK Intelligent Systems, Inc. The company was a
defendant in Civil Action No. 1999-36464, filed July 15, 1999 in the District
Court of Harris County Texas. The claim was for past due rent and fees. The
matter was settled via default judgment on August 31, 1999.

     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.


                                       17
<PAGE>
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.


                                       18
<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.

                                        GK Intelligent Systems, Inc.


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

                                       19