SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549

                                                  Form 10-QSBA-2

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

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

                                    (For the Quarter ended September 30, 1998)

                                          Commission File Number 1-12689

                            Genisys Reservation Systems, Inc. And Subsidiaries
                                              _______________________ 
                         (Exact Name of registrant as specified in its charter) 

                                               New Jersey 22-2719541 
                            (State or other jurisdiction of (I.R.S. employer 
                            incorporation or organization) Identification no.) 

                                2401 Morris Avenue, Union, New Jersey 07083 
                            (Address of principal executive offices) (Zip Code) 

                                                  (908) 810-8767 
                                  Issuer's Telephone Number including Area Code 


Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter periods that the registrant was required to file such reports),
and
                      (2) has been subject to such filing  requirements  for the
past 90 days.

                                                     Yes X No 

                              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY 
                                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS 

Check          whether the registrant  filed all documents and reports  required
               to be filed by Section 12, 13 or 15(d) of the  Exchange Act after
               the distribution of securities under a plan confirmed by a court.

                                                      Yes No 

                                       APPLICABLE ONLY TO CORPORATE ISSUERS 

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: As of September 30, 1998:  5,655,594
shares of Common Stock

Transitional Small Business Disclosure Format (check one)

                                                     Yes X No 





<PAGE>
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                   GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                                                                          Development Stage Companies
                                                                             CONSOLIDATED BALANCE SHEETS




                                                                             September          September           December
                                                                              30, 1998           30, 1998           31, 1997
                                                                           ---------------    ---------------    ---------------
                                                                             (Proforma)        (unaudited)

                                                                 ASSETS

CURRENT ASSETS:
       Cash and cash equivalents                                                 $431,121           $606,121         $2,207,841
       Accounts receivable                                                         32,615             32,615              8,784
       Prepaid expenses                                                             5,029             12,448              5,127
                                                                           ---------------    ---------------    ---------------
              Total Current Assets                                                468,765            651,184          2,221,752
                                                                           ---------------    ---------------    ---------------

EQUIPMENT, NET OF ACCUMULATED
       DEPRECIATION                                                                71,708            285,918            261,643
                                                                           ---------------    ---------------    ---------------

INVESTMENT IN AND ADVANCES TO GEN02, INC.                                         982,382                  -                  -

OTHER ASSETS:
        Computer software costs, less accumulated
             amortization                                                       1,417,964          1,992,376            581,193
        Debt issue costs, less accumulated amortization                            12,521             12,521             26,609
        Deposits and Other                                                         56,555             56,555             61,669
        Licenses and Intellectual Property, less
             accumulated amortization                                             975,000            975,000                  -
                                                                           ---------------    ---------------    ---------------
                                                                                2,462,040          3,036,452            669,471
                                                                           ---------------    ---------------    ---------------
                                                                               $3,910,747         $3,973,554         $3,152,866
                                                                           ===============    ===============    ===============

                                                                               LIABILITIES AND STOCKHOLDERS EQUITY
               

CURRENT LIABILITIES:                                                                                              
        Current maturities of long-term debt                                     $103,114           $103,114           $114,957
        Accounts payable and accrued expenses                                     214,872            223,523            189,712
        Accrued interest payable - related party                                  177,006            177,006            163,296
        Accrued consulting fees - related party                                     3,000              3,000              3,000
                                                                           ---------------    ---------------    ---------------
                 Total current liabilities                                        497,992            506,643            470,965

LONG-TERM DEBT:
         Long-term debt, less current maturities                                   63,542             63,542            982,742
                                                                           ---------------    ---------------    ---------------
                  Total Liabilities                                               561,534            570,185          1,453,707
                                                                           ---------------    ---------------    ---------------

COMMITMENTS
STOCKHOLDERS EQUITY (DEFICIENCY):
     Preferred Stock, $.0001 par value: 25,000,000 shares
          authorized                                                                   -                  -                  -   
  Series A preferred stock, 706,000 shares authorized 
    381,177 issued and outstanding                                                             
                                                                                       38                 38                  -
     Common Stock, $.0001 par value; 75,000,000 shares
          authorized:;6,755,5944sharessandd4,365,5944 shares
          issued and outstanding                                                      676                676                436
      Additional paid in capital                                                8,281,073          8,281,073          4,933,851
      Deficit Accumulated During the Development Stage                         (4,878,418)        (4,878,418)        (3,235,128)
                                                                           ---------------    ---------------    ---------------

Total Stockholders Equity                                                       3,403,369          3,403,369          1,699,159
                                                                           ---------------    ---------------    ---------------

                                                                               $3,964,903         $3,973,554         $3,152,866
                                                                           ===============    ===============    ===============

                                                               See Accompanying Notes to Financial Statements

                                                                    2

<PAGE>
                                                                   GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                                                                          Development Stage Companies
                                                                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                         DURING THE DEVELOPMENT STAGE
     
                                                                                                                          



                                                                                                                     From Inception
                                                     Nine Months     Nine Months     Three Months     Three Months    March 7, 1994
                                                        Ended           Ended            Ended           Ended           Through
                                                    Sept. 30,1998   Sept. 30,1997    Sept. 30,1998   Sept. 30,1997    Sept. 30,1998


            SERVICE REVENUE                              $ 52,002          $ 2,225        $ 22,128          $ 2,225          $77,865


            EXPENSES:
                       Cost of Service                     111,490            6,800          64,276            6,800         136,482
                       General and Administrative                         1,927,670         421,330          454,432       3,881,071
                       Depreciation and Amortization                        128,230         201,014           64,174         730,985
                       Interest Expense (Income), net                        52,648         (15,461)          (2,102)        207,745
                                                         1,695,292        1,115,348         671,159          523,304       4,956,283

            NET (LOSS) INCURRED DURING
                 THE DEVELOPMENT STAGE                 ($1,643,290)     ($1,113,123)      ($649,031)       ($521,079)   ($4,878,418)


            WEIGHTED AVERAGE NUMBER OF
                 COMMON SHARES OUTSTANDING               4,961,089         4,042,041       5,655,594        4,355,594      3,091,315


            BASIC AND DILUTED LOSS PER
                 COMMON SHARE                              ($0.33)          ($0.28)         ($0.11)          ($0.12)         ($1.58)



                                                                 See Accompanying Notes to Financial Statements

                                                                                   3

<PAGE>
                                                                   GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                                                                          Development Stage Companies
                                                               CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
                                                                             (Unaudited)





                                                                                                             Deficit
                                                                                                           Accumulated
                                                                                            Additional      During the
                                       Common Stock         Series A Preferred Stock         Paid-in        Development
                                    Shares       Par Value      Shares       Par Value       Capital           Stage          Total


BALANCE - DECEMBER 31, 1997        4,355,594        $436              -             -       $4,933,851     ($3,235,128)   $1,699,159

CONVERSION OF LONG-TERM
DEBT INTO SERIES A PREFERRED
STOCK AT $2.125 PER SHARE 
 IN MARCH 1998                           -              -        381,177         38          809,962               -      810,000

CONVERSION OF NOTES PAYABLE
INTO COMMON STOCK AT
$0.09375 PER SHARE                  400,000          40              -             -           37,460                 -      37,500

ISSUANCE OF COMMON STOCK
AT $1.25 PER SHARE        
FOR ACQUISITION OF UNITED
LEISURE INTERACTIVE'S ASSETS
AS OF JUNE 30, 1998               2,000,000*         200             -             -        2,499,800                 -   2,500,000

NET LOSS                                  -           -              -             -                -       (1,643,290) ($1,643,290)

BALANCE AT SEPTEMBER 30, 1998      6,755,594        $676        381,177           $38       $8,281,073      ($4,878,418)  $3,403,369

*2,000,000 SHARES ISSUED ARE SUBJECT TO SHAREHOLDER APPROVAL (NOTE 4).
                                                           See Accompanying Notes to Financial Statements

                                                                                4

<PAGE>
                                                            GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                                                                               Development Stage Companies
                                                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                  (UNAUDITED)
                                                                                                   Period From
                                                                                                 March 7, 1994
                                                                                                (Commencement of
                                                                                                Development Stage
                                                        Nine Months Ended   Nine Months Ended   Activities to)
                                                          Sept. 30,1998       Sept. 30,1997       Sept. 30,1998
                                                        ------------------  ------------------  -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                    (1,643,290)         (1,113,123)          (4,878,418)
   Adjustments to reconcile net loss to net
    cash flows from operating activities:
      Depreciation and amoritization                              397,091             128,230              730,985
      Contribution to capital of services rendered                   -                 -                    49,600
      Changes in operating assets and liabilities
        Accounts receivable                                       (23,831)                  0              (32,615)
        Prepaid expenses                                           (7,321)             (1,729)             (12,448)
        Deposits and other                                          4,934                 -                (58,703)
        Accounts payable and accrued expenses                      47,521            (256,069)             403,529
                                                        ------------------  ------------------  -------------------
          Net cash flows from operating acctivities            (1,224,896)         (1,242,691)          (3,798,070)
                                                        ------------------  ------------------  -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of equipment and software                           (293,281)           (333,232)          (1,611,207)
   Acquisition of Prosoft, Inc.                                         0             (34,602)             (34,602)
                                                        ------------------   ------------------  -------------------
           Net cash flows from investing activities              (293,281)           (367,834)          (1,645,809)
                                                        ------------------  ------------------  -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt                                     9,652              70,000               14,652
   Payments on long-term debt                                         -               (65,000)            (925,840)
   Proceeds from public offering of common stock
       and warrants net of deferred offering costs                    -             4,661,124            4,705,915
   Conversion of convertible notes payable
       to common stock                                                 -                 -                  67,500
   Conversion of long-term debt to Series A
       Preferred Stock                                            810,000                -                 810,000
   Issuance of common stock upon exercise of option                    -               15,000               15,000
   Loans and advances from related parties                             -              (14,518)                -      
   Proceeds from issuance of notes payable                             -                  -                955,000
   Payments under computer equipment leases                       (93,195)            (71,260)            (156,271)
   Proceeds from sale and lease-back                                   -                  -                294,644
   Proceeds from issuance of common stock                              -                  -                110,000
   Contribution to capital - stockholder/officer                       -              128,700              205,400
   Proceeds from issuance of 10% promissory notes
      and related warrants, less related costs                         -             (563,500)             517,500
   Payments on 10% promissory notes and related
      warrants                                                          -            -                    (563,500)
                                                        ------------------  ------------------  -------------------
          Net cash flows from financing activities                (83,543)          4,160,546            6,050,000
                                                        ------------------  ------------------  -------------------

NET CHANGE IN CASH AND EQUIVALENTS                             (1,601,720)          2,550,021              606,121
CASH AND EQUIVALENTS, BEGINNING OF YEAR                         2,207,841              91,548                 -
                                                        ------------------  ------------------  -------------------
CASH AND EQUIVALENTS, END OF PERIOD                             $ 606,121         $ 2,641,569            $ 606,121
                                                        ------------------  ------------------  -------------------
SUPPLEMENTAL CASH FLOW INFORMATION
   Interest paid                                                 $ 29,000            $ 65,699            $ 169,498
                                                        ------------------  ------------------  -------------------
   Net liabilities assumed in reverse acquisition        $          -        $      -                     $ 14,087
                                                        ------------------  ------------------  -------------------
   Conversion of related party debt to common stock      $          -        $      -                     $ 20,109
                                                        ------------------  ------------------  -------------------
   Conversion of long-term debt to Series A Preferred
       Stock                                                    $ 847,500    $      -                    $ 847,500
                                                        ------------------  ------------------  -------------------
   Conversion of notes payable to common stock                   $ 37,500    $        30,000              $ 67,500
                                                        ------------------  ------------------  -------------------
    Issuance of common stock and preferred stock
        to acquire travel related assets                      $ 2,500,000    $      -                   $2,500,000
                                                        ------------------  ------------------  -------------------

                                                                        See Accompanying Notes to Financial Statements

                                                        5

<PAGE>




                            GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
                                            DEVELOPMENT STAGE COMPANIES
                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                    (unaudited)



Note 1 Basis of Presentation

                  The  consolidated  balance  sheet at the end of the  preceding
fiscal  year has  been  derived  from the  audited  consolidated  balance  sheet
contained  in the  Company's  Form  10-KSB  and  is  presented  for  comparative
purposes.  All other  financial  statements  are  unaudited.  In the  opinion of
management,  all  adjustments  which include only normal  recurring  adjustments
necessary to present  fairly the financial  position,  results of operations and
cash flows of all periods  presented  have been made.  The results of operations
for interim periods are not necessarily  indicative of the operating results for
the full year.

                  Footnote disclosures normally included in financial statements
prepared in accordance with the generally  accepted  accounting  principles have
been omitted in  accordance  with the  published  rules and  regulations  of the
Securities and Exchange  Commission.  These  consolidated  financial  statements
should be read in  conjunction  with the financial  statements and notes thereto
included in the Company's Form 10-KSB for the most recent fiscal year.

                  In  accordance  with AICPA  Statement  of Position  98-1,  the
Company capitalizes the direct cost of materials, services and interest consumed
in the  development  of computer  software.  Such costs,  as well as the cost of
acquired  technology  licenses and related assets, are being amortized over five
years, subject to periodic evaluation for impairment.


Note 2            Activities of the Company


   
                  Through June,  1998 the principal  activity of the Company has
been the development of a computerized  limousine reservation and payment system
for the business traveler.  The Company's  proprietary software enables a system
of limousine  reservations  to be completely  computerized  and operate  without
human  intervention,  except for the initial  inputting  of travel  information.
Although planned  operation of this system has commenced,  revenues to date have
not been significant;  accordingly, the Company and its subsidiaries continue to
be in development stage.

                  Pursuant to an Asset Purchase  Agreement  dated as of June 30,
1998, NetCruise  Interactive,  Inc. (" NetCruise") (a wholly owned subsidiary of
the Company  formed on July 21, 1998 for the  purpose of  operating  an internet
travel  agency)  acquired a technology  license and certain  related assets from
United Leisure  Interactive Inc. ("UIT") in consideration of 2,000,000 shares of
the Company's  Common Stock and two warrants  ("Warrants"),  each  entitling the
holder to purchase  800,000  shares of the Common Stock of the Company (the "UIT
Transaction").  One warrant is exercisable for 800,000 shares at $2.50 per share
and may be  exercised  between  April 1,  2002 and  June 30,  2002,  but only if
NetCruise achieves profits equal to or exceeding  $5,000,000 for the years 1999,
2000 and 2001. The other Warrant is exercisable  for 800,000 shares at $6.00 per
share and may be exercised  between April 1, 2002 and June 30, 2002, but only if
NetCruise achieves profits equal to or exceeding $10,000,000 for the years 1999,
2000 and 2001.  No value has been placed on the warrants  since the warrants are
each contingent upon future earnings.

                  As a result  of the  transaction,  the  Company  acquired  the
internet  travel  web  site  called  "Netcruise"  and  a  perpetual,  world-wide
technology  license for "Parallel  Addressing  Video  Technology" for all travel
related applications,  along with all of the related software,  computer systems
and intellectual properties.
    



                                                         6

<PAGE>



   
No royalty payments are required under the licensing agreement for the "Parallel
Addressing  Video  Technology" and the license is exclusive as it relates to the
technology as applied to the travel industry.  UIT has retained the right to the
technology for all other uses outside of the travel  industry.  The intellectual
property  acquired  consists of a license  for the  "Parallel  Addressing  Video
Technology"   which  includes  the  Netcruise   name,   logo,   trade-marks  and
service-marks.  The  Company  did  not  acquire  the  patent  to  the  "Parallel
Addressing Video Technology." Also included as part of the intellectual property
was an agreement between UIT and Internet Travel Network (ITN), of Palo Alto, CA
which UIT  transferred to the Company.  This  agreement  provides for a "private
label" site on the ITN "booking  engine".  The agreement  expires in April, 1999
and  automatically  renews for  successive  one year periods unless either party
gives  notice,  no later  than 30 days  prior to the end of the  period,  of its
intent not to renew.  The ITN "booking  engine" is  essentially a world wide web
based  graphical  user  interface  to  the  airline  owned  Apollo  computerized
reservation  system.  This  technology  allows a  layperson  with  access to the
internet to access the  databases  and pricing  systems used by travel agents to
research  and  procure  air,  car rental  and hotel  reservations.  By  "private
labeling"  this  functionality,   the  Company  is  able  to  offer  its  travel
consultants  access to a leading travel  system,  while not having to expend the
Company's  capital  resources  which would be required to create its own access.
The custom software  acquired by the Company  consists of a video player program
(called a ULI player) that  permits the end user to view video  files,  a cruise
database, a CD-ROM video disc database containing video images of travel-related
information and miscellaneous commercially purchased software. The technological
feasibility  of  the  custom  software  was  established  at  the  time  of  the
acquisition,  as a working  model had been  completed at that time.  The Company
formed  NetCruise as a wholly owned  subsidiary  for the purpose of operating an
internet  travel  business  featuring  the  technology   obtained  through  this
acquisition.
    

The purchase of these assets has been recorded as of the date of purchase at the
total purchase price of $2,500,000,  which includes:  (i) $1,450,000 of computer
software;  (ii)  $1,000,000  for the license to the "Parallel  Addressing  Video
Technology";  (iii)  $10,000  for the  agreement  between  ITN and UIT and  (iv)
   
$40,000 for computer equipment.  The amounts allocated to the assets acquired by
the  Company  from UIT were  determined  by the  Company  and  were  based  upon
discussions  with the  Company's  auditors.  The  purchase  price  consisted  of
2,000,000  shares  of the  Company's  Common  Stock,  which  at the  time of the
purchase  was trading at  approximately  $2.50 per share on The Nasdaq  SmallCap
Market. For accounting purposes the Company valued the transaction at $2,500,000
since the shares were restricted. No goodwill resulted from this transaction, as
no business was acquired.
    
   
                  Although  the  internet  web-site is still in the  development
stage  and the  Company  only  has a  limited  number  of  individuals  who have
subscribed to be independent  travel consultants (280) and does not yet have any
internet travel  customers,  the Company intends to launch,  through  television
advertising, an aggressive marketing campaign inviting the general public, along
with existing travel agents,  to become NetCruise travel  consultants. The goal
of the Company's  marketing  campaign is to encourage  individuals  to enroll as
independent travel  consultants by paying a fee to the Company.  The independent
travel  consultants  will then be able to make  reservations  either through the
password   protected  section  of  the  Netcruise  web  site  or  via  telephone
conversations  with travel agents who work directly for  Netcruise.  Non-members
who visit the  non-password  protected  section of the  Netcruise  web-site (the
"Visitor's  Section")  shall have access to a portion of the site which contains
general  information  about  the  Company,   describes  the  independent  travel
consultant program and allows the public to request  information or enroll as an
independent travel consultant. To date, the Visitor's Section of the web-site is
being used for  demonstration  to  potential  travel  consultants.  The password
protected section will allow independent  travel consultants to see destinations
in full motion video and stereo  audio and to make hotel,  air, car and vacation
package  as well as  research  cruise  itineraries  reservations.  The  password
protected section is only accessible by company personnel and independent travel
consultants using a password.  The Company expects that the web-site will not be
fully integrated to support the independent travel consultants until mid - 1999.
See Note 4.
    




                                                         7

<PAGE>
   


                  The Company has  budgeted  approximately  $198,000 to complete
the  web-site.  Additional  costs  of  bringing  the  internet  travel  business
operational  are  expected  to  be  approximately  $1,144,000,   which  includes
producing a television video  infomercial and purchasing media time. The Company
believes it will be able to finance such development substantially from proceeds
of a recent  private  placement,  but there can be no assurance  that such funds
will be sufficient. In the event the Company decides to purchase significant
amounts of media time for the television infomercial, it will need to raise
additional funds. No assurance can be made that the Company will be able to 
raise such funds. 
    
   
                  In order to  concentrate  its  resources  and  efforts  on its
NetCruise internet travel business, in November, 1998 the Company agreed to sell
the assets of its computerized  limousine  reservation and payment system to Gen
O2, Inc., a company newly formed by a management  group lead by Mark A. Kenny, a
former director and founder of the Company. The Company owns a minority interest
in the new company and will receive  royalties on transactions  processed by the
new company for a period of five years. See Note 6.
    

                  The  Company  is  conducting  a  comprehensive  review  of its
computer  systems to identify  the  systems  that could be affected by the "Year
2000" issue and has developed an  implementation  plan to resolve the issue. The
Year 2000 problem is the result of computer  programs  being  written  using two
digits  rather than four to define the  applicable  year.  Any of the  Company's
programs  that have  time-sensitive  software may recognize a date using "00" as
the year 1900 rather  than the year 2000 which  could cause a system  failure or
other  computer  errors,  leading  to  a  disruption  in  operations.   No  easy
technological  "quick fix" has yet been  developed for this  problem.  This Year
2000 problem  creates risk for the Company from  unforeseen  problems in its own
computer systems and from third parties with whom the Company deals on financial
transactions.  Such  failures of the  Company's  and/or third  parties  computer
systems  could have a material  impact on the  Company's  ability to conduct its
business,  and  especially  to process  and  account  for the  transfer of funds
electronically.

   
         With the goal of making the Company  Year 2000  compliant,  the Company
has developed a four phase implementation plan as follows:
    
         Inventory phase
         Vendor contact phase
         Reintegration phase
         Testing phase

         The Company has budgeted  approximately  $15,000 to implement this plan
and has assigned overall  responsibility for the project to its Systems Manager.
All software  currently  being  developed by the Company or through  third party
contractors is being written to be Year 2000  compliant.  The Company,  with the
assistance of outside  software  contractors,  is in the process of changing its
accounting  system from  non-compliant  MAS-90 software to a compliant  software
system. Final implementation of fully tested and operational Year 2000 compliant
systems is projected  to be completed by the end of the second  quarter of 1999.
The Company's  banks and lenders have  communicated  that they will be Year 2000
compliant by the end of 1999.  No other third  party's Year 2000  compliance  is
expected to have a material impact on the operations of the Company.


Note 3            Stockholders Equity

Preferred  Stock - The Company's  Certificate  of  Incorporation  authorizes the
issuance of up to 25,000,000  shares of Preferred  Stock. On March 10, 1998, the
Board of Directors  designated  706,000 shares of Series A Preferred Stock which
are convertible,  in whole or in part, into fully paid and nonassessable  Common
Shares on a one-for-one  basis at the option of the respective  holders thereof.
Holders of Series A Preferred Stock are entitled to receive  dividends on a pari
passu basis with the holders of the Company's Common Stock. The Company,  at its
sole  option,  has the right to redeem all or, from time to time,  any number of
the then outstanding shares of Series A Preferred Stock at a redemption price of
$2.125 per share plus a 10% per year increase in the redemption rate.

In March  1998,  the  holder  of two Term  Promissory  Convertible  Notes in the
principal amounts



                                                         8

<PAGE>



of $475,000  and  $237,500  converted  $400,000 of the  principal  amount of the
former note and $200,000 of the principal amount of the latter note into 188,235
shares and 94,118  shares  respectively  of the Series A Preferred  Stock of the
Company at a price of $2.125 per share.

                  In March 1998, the holder of four eighteen  month  Convertible
Promissory Notes aggregating  $210,000,  converted the total principal amount of
the four notes  ($210,000) into 98,824 shares of the Series A Preferred Stock of
the Company at a price of $2.125 per share.



Note 4            Asset Acquisition

   
                  Pursuant to an Asset Purchase  Agreement  dated as of June 30,
1998, NetCruise  Interactive,  Inc.  ("Netcruise") (a wholly owned subsidiary of
the Company  formed on July 21, 1998 for the  purpose of  operating  an internet
travel agency) acquired a technology license and certain related assets from UIT
in  consideration  of  2,000,000  shares of the  Company's  Common Stock and two
warrants  ("Warrants"),  each entitling the holder to purchase 800,000 shares of
the  Common  Stock of the  Company  (the  "UIT  Transaction").  One  warrant  is
exercisable  for 800,000 shares at $2.50 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding  $5,000,000 for the years 1999, 2000 and 2001. The other Warrant is
exercisable  for 800,000 shares at $6.00 per share and may be exercised  between
April 1, 2002 and June 30, 2002, but only if NetCruise achieves profits equal to
or exceeding  $10,000,000  for the years 1999,  2000 and 2001. No value has been
placed on the  warrants  since the  warrants  are each  contingent  upon  future
earnings.

                  As a result  of the  transaction,  the  Company  acquired  the
internet  travel  web  site  called  "Netcruise"  and  a  perpetual,  world-wide
technology  license for "Parallel  Addressing  Video  Technology" for all travel
related applications,  along with all of the related software,  computer systems
and  intellectual  properties.  No  royalty  payments  are  required  under  the
licensing  agreement  for the "Parallel  Addressing  Video  Technology"  and the
license is  exclusive as it relates to the  technology  as applied to the travel
industry.  UIT has  retained  the right to the  technology  for all  other  uses
outside of the travel industry. The intellectual property acquired consists of a
license for the  "Parallel  Addressing  Video  Technology"  which  includes  the
Netcruise name, logo, trade-marks and service-marks. The Company did not acquire
the patent to the "Parallel  Addressing Video Technology." Also included as part
of the  intellectual  property was an agreement  between UIT and Internet Travel
Network  (ITN),  of Palo Alto,  CA which UIT  transferred  to the Company.  This
agreement  provides for a "private label" site on the ITN "booking engine".  The
agreement  expires in April,  1999 and  automatically  renews for successive one
year periods  unless either party gives  notice,  no later than 30 days prior to
the end of the period,  of its intent not to renew.  The ITN "booking engine" is
essentially a world wide web based graphical user interface to the airline owned
Apollo computerized  reservation system. This technology allows a layperson with
access to the  internet  to access the  databases  and pricing  systems  used by
travel agents to research and procure air, car rental and hotel reservations. By
"private labeling" this  functionality,  the Company is able to offer its travel
consultants  access to a leading travel  system,  while not having to expend the
Company's  capital  resources  which would be required to create its own access.
The custom software  acquired by the Company  consists of a video player program
(called a ULI player) that  permits the end user to view video  files,  a cruise
database, a CD-ROM video disc database containing video images of travel-related
information and miscellaneous commercially purchased software. The technological
feasibility  of  the  custom  software  was  established  at  the  time  of  the
acquisition,  as a working  model had been  completed at that time.  The Company
formed  NetCruise as a wholly owned  subsidiary  for the purpose of operating an
internet  travel  business  featuring  the  technology   obtained  through  this
acquisition.

                  Although  the  internet  web-site is still in the  development
stage  and the  Company  only  has a  limited  number  of  individuals  who have
subscribed to be independent travel consultants
    



                                                         9

<PAGE>



   
(280) and does not yet have any internet travel  customers,  the Company intends
to launch,  through  television  advertising,  an aggressive  marketing campaign
inviting  the general  public,  along with  existing  travel  agents,  to become
NetCruise travel consultants,  . The goal of the Company's marketing campaign is
to encourage individuals to enroll as independent travel consultants by paying a
fee to the Company. The independent travel consultants will then be able to make
reservations  either through the password protected section of the Netcruise web
site or via  telephone  conversations  with travel  agents who work directly for
Netcruise.  Non-members  who visit the  non-password  protected  section  of the
Netcruise  web-site (the "Visitor's  Section") shall have access to a portion of
the site which contains  general  information  about the Company,  describes the
independent   travel  consultant  program  and  allows  the  public  to  request
information  or  enroll  as an  independent  travel  consultant.  To  date,  the
Visitor's  Section of the web-site is being used for  demonstration to potential
travel consultants. The password protected section will allow independent travel
consultants to see destinations in full motion vide and stereo audio and to make
hotel,  air, car and vacation  package  reservations  as well as research cruise
itineraries.  However,  since it is presently  the policy of cruise lines not to
accept cruise  reservations  over the internet from third  parties,  in order to
make a cruise  reservation,  the  independent  travel  consultant  must  contact
Sammy's  Travel  World,  Inc., a wholly  owned  subsidiary  of the Company,  via
telephone,  fax or e-mail, whereby a live travel agent will then make the cruise
reservation.  The  password  protected  section  is only  accessible  by company
personnel  and  independent  travel  consultants  using a password.  The Company
expects  that  the  web-site  will  not  be  fully  integrated  to  support  the
independent travel consultants until mid-1999.

The purchase of these assets has been recorded as of the date of purchase at the
total purchase price of $2,500,000,  which includes:  (i) $1,450,000 of computer
software ; (ii)  $1,000,000  for the license to the "Parallel  Addressing  Video
Technology";  (iii) $10,000 for the agreement  between ITN and UIT; (iv) $40,000
for computer  equipment.  The amounts  allocated  to the assets  acquired by the
Company from UIT were determined by the Company and were based upon  discussions
with the Company's auditors. The purchase price consisted of 2,000,000 shares of
the  Company's  Common  Stock,  which at the time of the purchase was trading at
approximately  $2.50 per share on The Nasdaq  SmallCap  Market.  For  accounting
purposes the Company valued the transaction at $2,500,000  since the shares were
restricted.
    

   
                  The Company has  budgeted  approximately  $198,000 to complete
the  web-site.  Additional  costs  of  bringing  the  internet  travel  business
operational  are  expected  to  be  approximately  $1,144,000,   which  includes
producing a television video  infomercial and purchasing media time. The Company
believes it will be able to finance such development substantially from a recent
private  placement,  but  there can be no  assurance  that  such  funds  will be
sufficient. In the event the Company decides to purchase significant
amounts of media time for the television infomercial, it will need to raise
additional funds. No assurance can be made that the Company will be able to 
raise such funds. 
    
                  Harry  Shuster has been  appointed  Chairman and Brian Shuster
the President of NetCruise.  Pursuant to the  acquisition  agreement,  Mr. Brian
Shuster  will receive  $5,000 per month for his services as a consultant  to the
Company. In addition,  Messrs. Harry Shuster and Brian Shuster have been serving
as  directors  of the Company  since the  transaction  closed and both have been
nominated  for  election as directors  of the  Company.  Brian  Shuster has been
issued  two  warrants  to  purchase  restricted  common  shares of the  Company,
exercisable  between  April 2, 2002 and June 30,  2002,  if  NetCruise  achieves
certain  profit levels,  as defined in the warrants.  One warrant is exercisable
for 200,000 shares at $2.50 per share and the other warrant is  exercisable  for
200,000  shares at $6.00 per  share.  The  Company's  wholly  owned  subsidiary,
NetCruise  Interactive,  has assumed UIT's lease of  approximately  1,617 square
feet (including  tenant's pro rata share of common area) at 1990 Westwood Blvd.,
Penthouse,  Los  Angeles,  CA  90025.  The  term  of this  lease  is for 5 years
commencing  on March 1, 1996 and ending on February 28,  2001.  During the first
through  2nd year of the term of the  lease,  the rent is  $2,587  per month and
during the 3rd  through 5th year of the term of the lease the rent is $2,846 per
month.


Note 5            Contingencies

   
                  On April 17, 1997, a former officer of the Company
    



                                                        10

<PAGE>




   
filed an action in the United  States  District  Court,  District of New jersey,
against the Company,  Travel Link,  the officers of both  companies  and various
related and  unrelated  parties  seeking,  among  other  things,  a  declaratory
judgment that the former  officer is the owner of 333,216 shares of Common Stock
of the Company  which had been issued to him at the inception of Travel Link for
services he was to have provided and for unspecified  compensatory  and punitive
damages.  The Company believes that the plaintiff's claims are without merit and
intends to  vigorously  defend the action and to assert  numerous  defenses  and
counterclaims in its answer .

         On December 23,  1997,  an  individual  filed an action in the Superior
Court of New Jersey against the Company and the former President of the Company,
alleging that the former  President of the Company  induced such person to leave
her place of employment to assume  employment with the Company.  The claim seeks
monetary damages based upon an oral promise of employment  allegedly made by the
same officer of the Company.  The Company believes that the plaintiff's claim is
without merit and intends to vigorously defend the action and to assert numerous
defenses  in its  answer . The  same  officer  has  agreed  to hold the  Company
harmless and indemnify the Company from any and all claims . Management believes
that  there  will be no  material  effects  on the  Company  as a result of this
action.
    

Note 6                     Subsequent  Events

   
                  At the beginning of the third quarter 1998,  Management of the
Company set revenue objectives for the limousine  reservation  business and made
the  decision  to  review  the  operation  at the end of the  third  quarter  to
determine the best approach to maximize  utilization of the Company's resources.
The limousine  reservation  business did not meet its revenue  objectives and in
early  September  1998,  the  Company  decided to seek a buyer or joint  venture
partner for its limousine reservation business.

                  On November 6, 1998 the Company  entered  into an  Acquisition
Agreement  (the "Sales  Agreement")  by and  between  the Company and  Corporate
Travel Link, Inc. ("Travel Link"), a wholly owned subsidiary of the Company (the
sellers in the transaction) and TranspoNet (a non-affiliated  company),  Mark A.
Kenny, Paul Murray and Gen02, Inc. ("Purchaser"),  a newly organized corporation
formed by Mark A. Kenny, a former director and founder of the Company. This sale
will allow the Company to concentrate its resources and efforts on the continued
build-up of its internet travel business.

                  Under the terms of the Sale  Agreement,  the sellers  sold and
transfered certain contractual rights and obligations of the Company, all of the
assets of Travel  Link which are  utilized  in  connection  with the  ownership,
operation and marketing of Genisys Reservation System and its entire
    



                                                        11

<PAGE>



   
ownership interest in ProSoft to the purchaser in the transaction,  constituting
approximately  20% of the total assets of the  Company.  ProSoft is an 80% owned
subsidiary  of the Company  which was  acquired  by the  Company in June,  1997.
ProSoft is a software  development  company which developed the software for the
Company's  computerized limousine reservation and payment system. Paul Murray, a
former employee of the Company and President and Shareholder of ProSoft, is also
a shareholder of Gen O2, Inc.

The Company sold these assets, which had a book value of $744,122 at November 6,
1998, net of $83,000 of indebtedness assumed by GEN02, Inc. for (i) 2,450 shares
of Series A Convertible  Preferred Stock of Gen O2, Inc.,  constituting a 32.66%
interest in Gen O2, Inc. ; and (ii) certain  contingent  payments  payable until
December  10,  2003,  totaling  $1,080,000  if all  payments  to the Company are
realized,  however,  since  there  are no  minimum  contingent  payments,  it is
possible that the Company will receive no significant  contingent  payments from
GEN 02, Inc. The terms are as follows:
    

         a.       For each completed  limousine  transaction through the current
                  system  from   corporate   users,   a  payment  of  $0.20  per
                  transaction with a $100,000 maximum payment per year.
         b.       For each completed  limousine  transaction  through the Almost
                  Real  Time   System  (the  "ART   System")   which  was  under
                  development  by the sellers prior to the execution of the sale
                  agreement  and is to be completed by GEN02,  Inc. that will be
                  directed  toward  leisure  customers,  a payment  of $0.20 per
                  transaction  with a $100,000 maximum payment in the first year
                  and a $0.30 payment per  transaction  with a $120,000  maximum
                  payment per year thereafter.
         c.       If the system and the ART System are merged at any time in the
                  future,  the  sellers  shall  receive a  payment  of $0.25 per
                  completed  transaction  with a $200,000 maximum payment in the
                  first year and a $220,000 maximum payment per year thereafter.
         d.       If the  payments  are not reached in a  particular  year,  the
                  payments  defined in letters a-c above will have a  carry-over
                  to the following year.
         e.       In no event shall any payments defined in letters a-c above be
                  due to the sellers for  transactions  completed after December
                  10, 2003.
   
         f.       For the transfer of the assets by the sellers and the
                  assumption  of certain liabilities  of the sellers by the
                  purchaser as described  above along with the agreement by the
                  sellers to provide the purchaser with a series of loans,  the
                  purchaser granted an equity interest to the sellers in Gen O2,
                  Inc.  equal to 32.66% of the equity of Gen O2, Inc. The loans 
                  provided  by the  sellers  will include a ninety day  secured
                  bridge  loan in the amount of $40,000 secured by 22,857 shares
                  of Common Stock of the Company owned by Mr. Kenny,  a secured
                  loan of $135,000  payable  commencing in the second year and
                  secured by 77,143 shares of Common Stock of the Company owned
                  by Mr.  Kenny.  Mr. Kenny has also pledged 23,428 shares of 
                  the Company's Common Stock owned by him to secure the return 
                  of a security  deposit to the Company  and 68,000  shares of
                  the  Company's  Common Stock to secure minimum payments which 
                  are required to be made by the Company under certain contracts
                  which were  transferred to the purchaser in connection with 
                  the sale.
    
         g.       A second 32.66%  shareholder  of Gen O2, Inc.,  TranspoNet has
                  committed  to  provide  funding  for  the  purchaser  of up to
                  $240,000  in the form of a series of loans.  TranspoNet  has a
                  right to convert the unpaid principal of the loans at any time
                  into a  maximum  number  of  shares  of  common  stock  of the
                  purchaser not to exceed an  additional  6% equity  interest in
                  the purchaser.

                  This  transaction  is being  reported as an exchange of assets
for a  non-controlling  interest in a new  company;  accordingly  for  financial
reporting  purposes it is being treated as a change from being  consolidated  to
being  reported  on the  equity  method  requiring  restatement  of prior  years
statements of operations. No gain or loss was recognized since the investment is
in an equity method investment in a non-public entity. The accompanying proforma
balance  sheet at September  30, 1998 assumes that the exchange of the Company's
assets in exchange  for common  stock of Gen O2, Inc. had occurred on that date,
and  reflects an  anticipated  $175,000  loan by the Company to Gen O2, Inc. The
effects on the  historical  consolidated  statement  of  operations  would be to
reclassify all service



                                                        12

<PAGE>



revenue and cost of  service,  as well as a  significant  portion of general and
administrative  expenses and  depreciation  and  amortization to a separate line
item, as the Company will report Gen O2, Inc. on the equity  basis.  There would
be no impact on net income,  as the Company will absorb all losses to the extent
of assets  transferred  since the only other  capitalization of Gen O2, Inc. was
$50.00. (See proforma Statement of Operations elsewhere herein.)
                  The  Series  A  Preferred  Stock  issued  to the  Company  and
TranspoNet in accordance  with the  transaction are part of a class of preferred
stock of Gen O2, Inc.  designated as "Series A Preferred  Convertible Stock" and
the number of shares of preferred stock  constituting  such class is 4,900.  The
shares of Series A  Preferred  Stock  issued to the  Company  together  with the
shares of Series A Preferred  Stock issued to TranspoNet  constitute  all of the
authorized shares of the Series A Preferred Stock of Gen O2, Inc. So long as any
share of Series A Preferred  Stock remains  outstanding,  Gen O2, Inc. shall not
authorize  the  issuance  or issue any  additional  shares of Series A Preferred
Stock or any shares of any series or class of stock  ranking  senior to, or on a
parity  with,  the  Series A  Preferred  Stock as to  rights  upon  liquidation,
dissolution or winding up of Gen O2, Inc.  without the prior written  consent of
at least a majority of the holders of the Series A Preferred Stock.

   
                  The par value of the Series A  Preferred  Stock is $0.0001 per
share and no  dividends  shall be  declared  or paid on the  Series A  Preferred
Stock.  In the event of a voluntary or involuntary  liquidation,  dissolution or
winding up of Gen O2, Inc., the holders of the Series A Preferred Stock shall be
entitled to receive out of the assets of Gen O2, Inc. available for distribution
to stockholders, before any distribution of assets is made to the holders of any
other  series  or class of stock of Gen O2,  Inc.,  a  liquidating  preferential
distribution  in an amount  equal to  $400.00  per  share of Series A  Preferred
Stock.  The holders of the Series A Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the shareholders of Gen O2, Inc. and shall be
entitled to one vote for each share of Series A Preferred  Stock. The holders of
the Series A Preferred  Stock shall not have  cumulative  voting rights.  At any
time and from time to time,  upon  notice to Gen O2,  Inc.,  the  holders of the
Series A Preferred  Stock  shall be  entitled to convert  each share of Series A
Preferred Stock into one fully paid and non-assessable  share of common stock of
Gen O2, Inc.  subject to  adjustments  for any stock  splits,  stock  dividends,
reverse stock splits or recapitalization.
    

                  Upon  conversion  of the Series A Preferred  Stock into common
stock of Gen O2, Inc., the Company and TranspoNet  will each own 2,450 shares or
32.66%  of the  issued  and  outstanding  common  stock  of Gen O2,  Inc.  It is
anticipated  that the Purchaser will issue an additional  2,500 shares of common
stock in the near future, thereby diluting the ownership interest of the Company
and TranspoNet in Gen O2, Inc. to 24.5%. The Company's influence in Gen O2, Inc.
is  limited  to the right to elect  one  member  of a five (5)  member  Board of
Directors.

                  The primary  capitalization  of Gen 02, Inc. is being provided
by the loans from the Company and TranspoNet. In addition, the sole asset of Gen
02, Inc. is the limousine  reservation  business.  As a result, the Company will
absorb all losses to the extent of the assets  transferred.  Since  there are no
minimum  contingent  payments,  it is possible  that the Company will receive no
significant contingent payments from Gen O2, Inc.

   
                  On November 5 , 1998, in order to augment the Company's  entry
into the internet  travel  business,  the Company entered into an Asset Purchase
Agreement with Sterling AKG Corp. d/b/a Sterling Travel  ("Sterling") , in which
the  Company  purchased  all  the  assets  relating  to  Sterling's  network  of
independent  travel  consultants  ("Sterling  Travel  Consultants")  for a total
purchase  price of 25,000  shares  of the  Company's  Common  Stock  which,  for
accounting purposes, is being valued at $1.50 per share for an aggregate of
    



                                                        13

<PAGE>



   
$37,500. An additional 17,500 shares ("Escrow Shares") will be held in escrow by
counsel to the  Company.  If the Company  does not achieve  $3,000,000  of gross
sales  from  the sale of  travel  services,  including  renewal  fees,  from the
Sterling Travel  Consultants  over the initial twelve month period  beginning on
November  1, 1998 and ending on  October  31,  1999,  the  Escrow  Shares  shall
immediately be returned to the Company.  If the Company  achieves  $3,000,000 of
gross sales from  Sterling  Travel  Consultants  over the initial  twelve  month
period as described herein, the Escrow Shares will be released by the Company.
    
   
             Included in the assets purchased by the Company was a list of
Sterling  Travel  Consultants  (both active and inactive)  that had done or were
doing  business  with  Sterling.  Also  included  in the assets  purchased  were
contracts,  files,  correspondence,  earning records,  a data base of former and
current  customers  of  Sterling  estimated  at  approximately  20,000  entries,
property and equipment,  including desks, chairs, fax and copy machines,  filing
cabinets,  computers and miscellaneous office supplies.  The data base of former
and current  customers also included the Sterling  Travel  Consultants,  as they
were  considered  customers,  not  employees of Sterling and the names of travel
agents who had done business with Sterling as Sterling  Travel  Consultants.  In
addition, included were agreements with such Sterling Travel Consultants setting
forth the commissions they could earn and operational  matters relating to their
position as an independent travel consultant.
    
                  The Company's current  independent  travel consultants are all
former Sterling Travel  Consultants whose contracts were assigned to the Company
from Sterling as part of the acquisition and who paid their  subscription fee to
Sterling. In the event the independent travel consultants (formerly the Sterling
Travel Consultants) desire to renew their contracts,  a renewal subscription fee
will be paid to the Company.




                                                        14

<PAGE>
   


                 PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

The following statements are based upon the historical  statements of operations
appearing  elsewhere  herein and in the Company's Form 10-KSB for the year ended
December 31, 1997 to show the effect on the Company's statement of operations as
if the sale of the limousine  reservation  business occurred as of the beginning
of the periods indicated (reference should be made to Note 6 appearing elsewhere
herein).  These  statements  should be read in  conjunction  with the  Company's
financial  statements  and notes thereto  appearing,  or referred to,  elsewhere
herein.



                                                    Nine Months Ended                                   Year Ended
                                                        September 30, 1998                             December 31, 1997  
                                      ================================================------------------------------------

                                         Historical   Reclassifications        Pro         Historical    Reclassifications      Pro
                                                                            Forma                                             Forma

                                                          (Note A)                                              (Note A)

SERVICE REVENUE                          $     52,002      $  (52,002)  $        -          $     25,863   $    (25,863)   $       -
                                         ------------      -----------  ---------------     ------------   -------------   ---------

EXPENSES:
   Cost of service                            111,490        (111,490)           -                24,992        (24,992)          -
                                                             =========           ======           ======        ========          =
   General and administrative               1,205,173        (607,285)          597,888        1,318,203       (736,858)     581,345
                                                             =========          =======        =========       =========      ======
   Depreciation and amortization              397,091        (287,589)          109,502          217,386       (195,700)      21,686
                                                             =========          =======          =======       =========      ======
   Interest expense (income), net            (18,462)              -           (18,462)           55,407              -      55,407 
                                             -------  =============----- ======-------     =======------ =============----- =======
                                            1,695,292      (1,006,364)          688,928        1,615,988       (957,550)     658,438
                                            ---------     =-----------     =====-------       =---------   ====---------     =====

   LOSS BEFORE EQUITY IN GEN O2,
   INC.                                   (1,643,290)        (954,362)        (688,928)      (1,590,125)       (931,687)   (658,438)
                                                             =========        =========      ===========       =========   =========

EQUITY IN LOSS OF GEN O2, INC.                   -             954,362        (954,362)            -             931,687   (931,687)
                                        -------------------    ====--------  ===========-----    =====-------    ====---
  NET LOSS INCURRED DURING
   THE DEVELOPMENT STAGE                 $(1,643,290) $           -        $(1,643,290)     $(1,590,125)         $ -    $(1,590,125)
                                        ==================   ============     ============ ============== ============

   WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES                            4,961,089                         4,961,089        4,121,000                  4,121,000
   OUTSTANDING

   BASIC AND DILUTED LOSS PER
   COMMON SHARE                                $(.33)                            $(.33)           $(.39)                      $(.39)
                                                                                 ======           ======                     ======
</TABLE>


Note A - The  proforma  statements  reflect  the  reclassification  of  balances
applicable to the operations of the limousine  reservation  business and ProSoft
to reflect the change from majority ownership to minority ownership.  There will
be a change from  consolidation  to equity basis  reporting.  There will be no
impact on net income, as the Company will absorb all losses to the extent of the
carrying  amount of the assets  transferred  since the only other  capital being
contributed to Gen O2, Inc. is $50.

The proforma  amounts reflect the Company's  corporate  expenses  (officers' and
office compensation,  professional fees, rent and similar costs) and, since June
30, 1998,  the  operations  of its Internet  travel  business.  Such general and
administrative expenses were incurred during the periods indicated and relate to
all of its  business  activities.  Common  expenses  have been  allocated to the
limousine reservation and ProSoft business on an incremental basis and all other
ongoing corporate expenses are reflected in proforma amounts.  In the opinion of
management, this allocation approximates costs which would have been incurred on
a stand alone basis.  However,  proforma  operating  results are not necessarily
indicative of results  which would have  occurred had the  Company's  operations
been conducted as a separate and independent company.



                                                            15

<PAGE>





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


                Results of Operations

                           Through September 30, 1998, the principal activity of
                the Company has been the development of a computerized limousine
                reservation  and  payment  system  for  the  business  traveler.
                Although  planned  operation of this system  commenced in August
                1997,  revenues to date have not been significant;  accordingly,
                the  Company  and  its  subsidiaries   continue  to  be  in  the
                development  stage.  The  Company  has been  unprofitable  since
                inception and expects to incur additional operational losses. As
                reflected in the accompanying financial statements,  the Company
                has incurred losses totaling  $4,878,418  since inception and at
                September 30, 1998, had working capital of $144,541.


                           Revenues for the three and nine month  periods  ended
                September 30, 1998, for the limousine  reservation business were
                $22,128  and  $52,002,  as compared to $2,225 and $2,225 for the
                1997 periods.  The  corresponding  cost of service for the three
                and nine month  periods  ending  September 30, 1998 were $64,276
                and  $111,490  as  compared  to $6,800  and  $6,800 for the 1997
                periods.  To date the Company has not yet  commenced  generating
                revenues  from its  internet  travel  business,  however,  as of
                November 1998,  the Company has begun to generate  revenues from
                shared  commissions  earned by the network of Sterling  Travel
                Consultants recently acquired.
    

                           General and  administrative  expenses were $1,205,173
                for the nine months ended  September  30,  1998,  as compared to
                $927,670  during the nine months ended  September 30, 1997. Cost
                increases  during the 1998 period consist of payroll and payroll
                related costs ($175,000),  professional  fees ($57,200),  travel
                costs  ($5,600),   insurance  costs  ($8,200),  marketing  costs
                ($28,300) and other administrative  costs ($72,100).  Consulting
                costs decreased $68,900 during the 1998 period.  The increase of
                approximately $175,000 in payroll cost for the nine months ended
                September  30,  1998 was due in large  part to the fact that the
                three highest paid employees of the Company,  Thomas Gregory and
                Paul  Murray,  President  and  Vice  President  respectively  of
                Prosoft and Lawrence E. Burk the Company's President were on the
                payroll  for the full nine months of the 1998  period,  but were
                only on the  payroll  for  less  than  four  months  of the 1997
                period.   The  $28,300  increase  in  marketing   activities  is
                primarily  due to sales  and  marketing  costs  incurred  by the
                limousine reservation business in an attempt to meet its revenue
                objectives.

                           General and administrative expenses were $421,330 for
                the  three  months  ended  September  30,1998,  as  compared  to
                $454,432  during the three months ended September 30, 1997. Cost
                increases  during the 1998  period  consist of  marketing  costs
                ($3,600)  and  other   administrative   costs  ($25,700).   Cost
                decreases  during the 1998 period consist of payroll and payroll
                related costs ($16,200), consulting fees ($10,000), professional
                fees  ($27,000),  travel  costs  ($8,700)  and  insurance  costs
                ($500).

   
                           On  November  6,  1998 the  Company  entered  into an
                Acquisition Agreement (the "Sales Agreement") by and between the
                Company and  Corporate  Travel Link,  Inc.  ("Travel  Link"),  a
                wholly  owned  subsidiary  of the  Company  (the  sellers in the
                transaction) and TranspoNet (a non-affiliated  company), Mark A.
                Kenny,  Paul  Murray  and  Gen02,  Inc.  (the  purchaser  in the
                transaction),  a newly organized  corporation  formed by Mark A.
                Kenny, a former  director and founder of the Company.  This sale
                will allow the Company to concentrate
    



                                                        16

<PAGE>



   
                its  resources  and  efforts on the  continued  build-up  of its
                internet travel business. Under the terms of the Sale Agreement,
                the sellers sold and transfered  certain  contractual rights and
                obligations  of the  Company,  all of the assets of Travel  Link
                which are utilized in connection  with the ownership,  operation
                and  marketing  of  Genisys  Reservation  System  and its entire
                ownership   interest  in  ProSoft  to  the   purchaser   in  the
                transaction,  constituting approximately 20% of the total assets
                of the  Company.  ProSoft  is an  80%  owned  subsidiary  of the
                Company which was acquired by the Company in June, 1997. ProSoft
                is a software  development  company which developed the software
                for the Company's computerized limousine reservation and payment
                system.  Paul  Murray,  a former  employee  of the  Company  and
                President and  Shareholder of ProSoft,  is also a shareholder of
                Gen O2, Inc.


The Company sold these assets, which had a book value of $744,122 at November 6,
1998, net of $83,000 of indebtedness assumed by GEN02, Inc. for (i) 2,450 shares
of Series A Convertible  Preferred Stock of Gen O2, Inc.,  constituting a 32.66%
interest  in Gen O2,  Inc.  ; and (ii)  certain  contingent  payments,  totaling
$1,080,000 if all payments  payable  until  December 10, 2003 to the Company are
realized,  however,  since  there  are no  minimum  contingent  payments,  it is
possible that the Company will not receive significant  contingent payments from
GEN 02, Inc. The terms are as follows:
    

                  a.       For each completed limousine  transaction through the
                           current  system from  corporate  users,  a payment of
                           $0.20 per transaction with a $100,000 maximum payment
                           per year.
                  b.       For each completed limousine  transaction through the
                           Almost Real Time System (the "ART System")  which was
                           under   development  by  the  sellers  prior  to  the
                           execution  of  the  Sale   Agreement  and  is  to  be
                           completed by GEN02, Inc. that will be directed toward
                           leisure customers, a payment of $0.20 per transaction
                           with a $100,000 maximum payment in the first year and
                           a  $0.30  payment  per  transaction  with a  $120,000
                           maximum payment per year thereafter.
                  c.       If the  system  and the ART  System are merged at any
                           time in the  future,  the  sellers  shall  receive  a
                           payment  of $0.25 per  completed  transaction  with a
                           $200,000  maximum  payment  in the  first  year and a
                           $220,000 maximum payment per year thereafter.
                  d.       If the payments are not reached in a particular year,
                           the payments defined in letters a-c above will have a
                           carry-over to the following year.
                  e.       In no event shall any payments defined in letters a-c
                           above  be  due  to  the  sellers   for   transactions
                           completed after December 10, 2003.
   
f. For the transfer of the assets by the sellers and the  assumption  of certain
liabilities  of the sellers by the  purchaser as described  above along with the
agreement by the sellers to provide the  purchaser  with a series of loans,  the
purchaser  granted an equity  interest to the  sellers in Gen O2, Inc.  equal to
32.66% of the equity of Gen O2, Inc.  The loans  provided  by the  sellers  will
include a ninety day  secured  bridge  loan in the amount of $40,000  secured by
22,857 shares of Common Stock of the Company owned by Mr. Kenny,  a secured loan
of $135,000  payable  commencing in the second year and secured by 77,143 shares
of Common Stock of the Company  owned by Mr.  Kenny.  Mr. Kenny has also pledged
23,428 shares of the Company's Common Stock owned by him to secure the return of
a security  deposit to the Company  and 68,000  shares of the  Company's  Common
Stock to secure  minimum  payments  which are required to be made by the Company
under certain  contracts  which were  transferred to the purchaser in connection
with the sale.
    



                                                        17

<PAGE>


g. A second  32.66%  shareholder  of Gen O2, Inc.,  TranspoNet  has committed to
provide  funding for the  purchaser of up to $240,000 in the form of a series of
loans.  TranspoNet  has a right to convert the unpaid  principal of the loans at
any time into a maximum number of shares of common stock of the purchaser not to
exceed an additional 6% equity interest in the purchaser. The Series A Preferred
Stock issued to the Company and  TranspoNet in accordance  with the  transaction
are part of a class of preferred  stock of Gen O2, Inc.  designated as "Series A
Preferred  Convertible  Stock"  and the  number  of shares  of  preferred  stock
constituting  such class is 4,900. The shares of Series A Preferred Stock issued
to the Company  together  with the shares of Series A Preferred  Stock issued to
TranspoNet  constitute  all of the  authorized  shares of the Series A Preferred
Stock of Gen O2, Inc. So long as any share of Series A Preferred  Stock  remains
outstanding,  Gen O2,  Inc.  shall  not  authorize  the  issuance  or issue  any
additional  shares of Series A  Preferred  Stock or any  shares of any series or
class of stock  ranking  senior to, or on a parity with,  the Series A Preferred
Stock as to rights upon  liquidation,  dissolution or winding up of Gen O2, Inc.
without the prior  written  consent of at least a majority of the holders of the
Series A Preferred Stock.

   
                           The par  value  of the  Series A  Preferred  Stock is
                $0.0001 per share and no dividends  shall be declared or paid on
                the Series A Preferred  Stock.  In the event of a  voluntary  or
                involuntary  liquidation,  dissolution  or winding up of Gen O2,
                Inc.,  the  holders of the  Series A  Preferred  Stock  shall be
                entitled to receive out of the assets of Gen O2, Inc.  available
                for  distribution to  stockholders,  before any  distribution of
                assets is made to the  holders  of any other  series or class of
                stock of Gen O2, Inc., a liquidating  preferential  distribution
                in an amount  equal to $400.00  per share of Series A  Preferred
                Stock.  The  holders of the Series A  Preferred  Stock  shall be
                entitled  to  vote  on all  matters  submitted  to a vote of the
                shareholders  of Gen O2, Inc.  and shall be entitled to one vote
                for each share of Series A Preferred  Stock.  The holders of the
                Series  A  Preferred  Stock  shall  not have  cumulative  voting
                rights.  At any time and from time to time,  upon  notice to Gen
                O2, Inc.,  the holders of the Series A Preferred  Stock shall be
                entitled to convert each share of Series A Preferred  Stock into
                one fully paid and  non-assessable  share of common stock of Gen
                O2, Inc.  subject to  adjustments  for any stock  splits,  stock
                dividends, reverse stock splits or recapitalization.
    

                           Upon  conversion of the Series A Preferred Stock into
                common  stock of Gen O2 , Inc. the Company and  TranspoNet  will
                each own 2,450  shares or 32.66% of the issued  and  outstanding
                common  stock  of  Gen  O2,  Inc.  It is  anticipated  that  the
                Purchaser will issue an additional  2,500 shares of common stock
                in the near future,  thereby diluting the ownership  interest of
                the  Company  and  TranspoNet  in Gen O2,  Inc.  to  24.5%.  The
                Company's  influence  in Gen O2, Inc. is limited to the right to
                elect one member of a five (5) member Board of Directors.

   
Although the internet web-site is still in the development stage and the Company
only has a limited number of individuals  who have  subscribed to be independent
travel  consultants  (280),  the Company intends to launch,  through  television
advertising, an aggressive marketing campaign inviting the general public, along
with existing travel agents, to become NetCruise travel consultants, The goal of
the  Company's  marketing  campaign  is to  encourage  individuals  to enroll as
independent travel  consultants by paying a fee to the Company.  The independent
travel  consultants  will then be able to make  reservations  either through the
password   protected  section  of  the  Netcruise  web  site  or  via  telephone
conversations  with travel agents who work directly for  Netcruise.  Non-members
who visit the  non-password  protected  section of the  Netcruise  web-site (the
"Visitor's  Section")  shall have access to a portion of the site which contains
general  information  about  the  Company,   describes  the  independent  travel
consultant program and allows the public to request  information or enroll as an
independent travel consultant. To date, the Visitor's Section of the web-site is
being used for  demonstration  to  potential  travel  consultants.  The password
<PAGE>

protected section will allow independent  travel consultants to see destinations
in full motion video and stereo  audio and to make hotel,  air, car and vacation
package reservations as well as research cruise itineraries.  However,  since it
is presently the policy of cruise lines not to accept cruise  reservations  over
the internet  from third  parties,  in order to make a cruise  reservation,  the
independent  travel consultant must contact Sammy's Travel World, Inc., a wholly
owned subsidiary of the Company,  via telephone,  fax or e-mail,  whereby a live
travel  agent  will then make the cruise  reservation.  The  password  protected
section  is  only  accessible  by  company  personnel  and  independent   travel
consultants using a password.  The Company expects that the web-site will not be
fully integrated to support the independent  travel  consultants until mid-1999.
See Note 4.
    

                Liquidity and Capital Resources

   
                           The Company's  funds have  principally  been provided
                from Loeb Holding Corp. as escrow agent, Loeb Holding Corp., LTI
                Ventures Leasing Corporation, two private offerings and a public
                offering.

                           In March 1998,  Loeb Holding  Corp.,  as escrow agent
                for Warren D.  Bagatelle,  Managing  Director of Loeb  Partners,
                Corp.,  HSB  Capital,  trusts for the benefit of families of two
                principals of Loeb Holding  Corporation  and three  unaffiliated
                individuals  of two  Term  Promissory  Convertible  Notes in the
                principal amounts of $475,000 and $237,500 converted $400,000 of
                the  principal  amount of the former  note and  $200,000  of the
                principal  amount of the  latter  note into  188,235  shares and
                94,118 shares  respectively  of the Series A Preferred  Stock of
                the Company at a price of $2.125 per share.

                           In March 1998,  Loeb Holding  Corp.,  as escrow agent
                for Warren D.  Bagatelle,  Managing  Director of Loeb  Partners,
                Corp.,  HSB  Capital,  trusts for the benefit of families of two
                principals of Loeb Holding  Corporation  and three  unaffiliated
                individuals of four eighteen month Convertible  Promissory Notes
                aggregating  $210,000,  converted the total principal  amount of
                the four notes  ($210,000)  into  98,824  shares of the Series A
                Preferred Stock of the Company at a price of $2.125 per share.

                           In March 1998,  Loeb Holding  Corp.,  as escrow agent
                for Warren D.  Bagatelle,  Managing  Director of Loeb  Partners,
                Corp.,  HSB  Capital,  trusts for the benefit of families of two
                principals of Loeb Holding  Corporation  and three  unaffiliated
                individuals of two Term Promissory Convertible Notes aggregating
                $37,500,  converted  the  total  principal  amount  of the notes
                ($37,500) into 400,000 shares of the Common Stock of the Company
                at a price of $0.09375 per share.
    

                           In September  1995,  January 1996 and December  1996,
                the  Company  entered  into  sale  and  lease-back  arrangements
                whereby the Company sold the bulk of its  computer  hardware and
                commercially purchased software to a lessor for amounts totaling
                $295,000  and agreed to lease back such  equipment  for  initial
                terms  ranging  from 24 to 30 months.  Pursuant to the  November
                1998 Sales  Agreement,  GEN02 has assumed all obligations  under
                these sale and lease-back arragements.

The financing of Loeb Holding  Corp.  and the sale and  lease-back  arrangements
entered into by the Company  contributed to the original  capitalization  of the
Company.

                           Pursuant to an Asset Purchase Agreement, NetCruise (a
                wholly owned  subsidiary of the Company  formed on July 21, 1998
                for the purpose of operating an internet travel agency) acquired
                a  technology  license  and certain  related  assets from UIT in
                consideration  of 2,000,000 shares of the Company's Common Stock
                and two  warrants  ("Warrants"),  each  entitling  the holder to
                purchase  800,000 shares of the Common Stock of the Company (the
                "UIT  Transaction").  One  warrant is  exercisable  for  800,000
                shares at $2.50 per share and may be exercised  between April 1,
                2002 and June 30, 2002, but only if NetCruise  achieves  profits
                equal to or exceeding  $5,000,000  for the years 1999,  2000 and
                2001.  The other Warrant is  exercisable  for 800,000  shares at
                $6.00 per share and may be exercised  between  April 1, 2002 and
                June 30, 2002, but only if NetCruise  achieves  profits equal to
                or exceeding  $10,000,000  for the years 1999, 2000 and 2001. No
                value has been placed on the  warrants  since the  warrants  are
                each contingent upon future earnings.
<PAGE>

   
                           The Company has since been  advised that the issuance
                of such securities has caused the Company to inadvertently be in
                violation of a Nasdaq  MarketPlace  Rule because the issuance of
                the 2,000,000  shares and Warrants  amounted to more than 20% of
                the issued and  outstanding  shares of the  Company and were not
                approved  by  Shareholders  as  required  by such  Rule.  Nasdaq
                advised the Company  that the  Company's  Common  Stock would be
                delisted as a result of such violation.  The Company requested a
                hearing on the  delisting  which was held on November  20, 1998.
                Nasdaq issued its written  determination  on January 12, 1999 to
                continue listing the Company's securities on The Nasdaq SmallCap
                Market  pursuant  to  the  following  conditions:  (i)  the  UIT
                Transaction  must be  unwound in the event  shareholders  do not
                ratify the  acquisition  of the  technology  license and certain
                related  assets from UIT and  approve  the  issuance of 1,100,00
                shares of Common Stock and two Stock  Purchase  Warrants to UIT;
                (ii) the Company must file a Definitive Proxy Statement with the
                Securities  and  Exchange  Commission  and  Nasdaq  on or before
                February   15,   1999;   and  (iii)  the  Company   must  submit
                documentation  to Nasdaq on or before April 15, 1999  evidencing
                either the receipt of  shareholder  approval of the  issuance of
                additional  shares to UIT or the  unwinding  of the  issuance of
                additional  shares to UIT and purchase of a  technology  license
                and certain  related  assets from UIT.  The Company  received an
                extension  to April 15,  1999 for  filing the  Definitive  Proxy
                Statement. The Company has requested a further extension to July
                31, 1999 and is awaiting a response from Nasdaq.

                           The Company and UIT have restructured the transaction
                so that UIT will return to the Company 1,100,000  shares of the
                Company's Common Stock (retaining 900,000 shares that are not in
                violation of the Nasdaq MarketPlace Rule) and the Warrants.  The
              Company will issue to UIT 1,100,000 shares of Convertible Series B
                Preferred Stock (the "Series B Preferred Stock"), which Series B
                Preferred  Stock is  automatically  convertible  into  1,100,000
                shares of the Company's Common Stock upon  Shareholder  approval
                of the issuance of the 1,100,000  shares of Common Stock and the
                Warrants.  The Series B Preferred Stock is non-voting  stock and
                carries a mandatory  dividend of $275,000,  payable on September
                30,  1999  and a  mandatory  quarterly  dividend  at the rate of
                $68,750  commencing with the quarter ended December 31, 1999. No
                dividend  will  be  payable  if  the  Shareholders  approve  the
                issuance of the 1,100,000 shares Common Stock and Warrants prior
                to the time that the dividend is payable.  Therefore,  the total
                purchase  price in the UIT  Transaction is 900,000 shares of the
                Company's  Common Stock and  1,100,000  shares of the  Company's
                Series B Convertible Preferred Stock. If shareholders ratify the
                acquisition,  the Series B Preferred Stock will automatically be
                converted  into 1,100,000  shares of the Company's  Common Stock
                and the  Company  will  issue  two  warrants,  each to  purchase
                800,000 shares of Common Stock, as outlined above.
    

                           In  the  event   shareholders   do  not   ratify  the
                acquisition  of  the  assets  and  approve  the  issuance,   the
                transaction will be unwound. In such event the Company estimates
                that the cost to undo the  transaction  will not exceed $50,000.
                This estimate  includes  accounting fees, legal fees,  recording
                fees and employee  termination  fees.  In the event that the UIT
                Transaction  must be undone,  the following shall occur: (i) the
                Company  shall  reassign the  technology  license and return the
                related  assets to UIT;  (ii) UIT will return to the Company all
                stock certificates  received pursuant to the UIT Transaction and
                (iii) Mr. Brian  Shuster will return the warrants  issued to him
                by the Company;  and (iv) Messrs.  Brian and Harry  Shuster will
                resign from any officer or director  position  held by them.  In
                addition,  Mr. Brian Shuster's consulting fee shall be pro-rated
                to the date of his  resignation and shall cease as of such date.
                Reference  should  be made to Pro Forma  Condensed  Consolidated
                Financial  Statements  as of September 30, 1998 and for the nine
                months then ended for the effect of undoing the UIT Transaction.

<PAGE>

   
As a result of the  transaction,  the Company  acquired the internet  travel web
site called  "Netcruise"  and a  perpetual,  world-wide  technology  license for
"Parallel  Addressing  Video  Technology"  for all travel related  applications,
along  with all of the  related  software,  computer  systems  and  intellectual
properties.  No royalty payments are required under the licensing  agreement for
the "Parallel Addressing Video Technology" and the license is
    
exclusive as it relates to the technology as applied to the travel industry. UIT
has  retained  the right to the  technology  for all other  uses  outside of the
travel industry.  The intellectual  property  acquired consists of a license for
the "Parallel  Addressing Video  Technology"  which includes the Netcruise name,
logo,  trade-marks and service-marks.  The Company did not acquire the patent to
the  "Parallel  Addressing  Video  Technology."  Also  included  as  part of the
intellectual  property was an agreement  between UIT and Internet Travel Network
(ITN),  of Palo Alto, CA which UIT  transferred  to the Company.  This agreement
provides for a "private label" site on the ITN "booking  engine".  The agreement
expires in April, 1999 and automatically  renews for successive one year periods
unless either party gives notice,  no later than 30 days prior to the end of the
period,  of its intent not to renew.  The ITN "booking  engine" is essentially a
world wide web based  graphical  user  interface  to the  airline  owned  Apollo
computerized reservation system . This technology allows a layperson with access
to the  internet  to access the  databases  and pricing  systems  used by travel
agents to  research  and  procure  air,  car rental and hotel  reservations.  By
"private labeling" this  functionality,  the Company is able to offer its travel
consultants  access to a leading travel  system,  while not having to expend the
Company's  capital  resources  which would be required to create its own access.
The custom software  acquired by the Company  consists of a video player program
(called a ULI player) that  permits the end user to view video  files,  a cruise
database,   a  CD-  ROM  video  disc   database   containing   video  images  of
travel-related  information and miscellaneous  commercially  purchased software.
The technological feasibility of the custom software was established at the time
of the  acquisition,  as a working  model had been  completed at that time.  The
Company  formed  NetCruise  as a wholly  owned  subsidiary  for the  purpose  of
operating an internet travel business featuring the technology  obtained through
this acquisition.

   
Although the internet web-site is still in the development stage and the Company
only has a limited number of individuals  who have  subscribed to be independent
travel  consultants  (280) and does not yet have any internet travel  customers,
the Company intends to launch,  through  television  advertising,  an aggressive
marketing  campaign  inviting the general  public,  along with  existing  travel
agents,  to  become  NetCruise  travel  consultants.  The goal of the  Company's
marketing  campaign is to encourage  individuals to enroll as independent travel
consultants by paying a fee to the Company.  The independent  travel consultants
will then be able to make  reservations  either  through the password  protected
section of the  Netcruise web site or via  telephone  conversations  with travel
agents who work directly for Netcruise.  Non-members who visit the  non-password
protected section of the Netcruise web-site (the "Visitor's Section") shall have
access to a portion of the site which  contains  general  information  about the
Company,  describes the  independent  travel  consultant  program and allows the
public to request information or enroll as an independent travel consultant.  To
date, the Visitor's  Section of the web-site is being used for  demonstration to
potential  travel  consultants.   The  password  protected  section  will  allow
independent  travel  consultants  to see  destinations  in full motion video and
stereo audio and to make hotel,  air, car and vacation  package  reservations as
well as research cruise itineraries reservations. However, since it is presently
the policy of cruise lines not to accept cruise  reservations  over the internet
from  third  parties,  in order to make a cruise  reservation,  the  independent
travel  consultant  must  contact  Sammy's  Travel  World,  Inc., a wholly owned
subsidiary of the Company, via telephone,  fax or e-mail,  whereby a live travel
agent will then make the cruise  reservation.The  password  protected section is
only accessible by company personnel and independent  travel consultants using a
password.  The Company expects that the web-site will not be fully integrated to
support the independent travel consultants until mid -1999. See Note 4.


<PAGE>

The budgeted cost of the  internet  travel  business  becoming  operational  is
expected to be approximately $1,342,000. Of such amount,  approximately $198,000
is needed to complete  the  web-site.  The  remainder  will be used to produce a
television  video  infomercial and purchase media time. The Company  believes it
will be able to finance such development substantially from proceeds of a recent
private  placement,  but  there can be no  assurance  that  such  funds  will be
sufficient.  In the event the Company decides to purchase significant amounts of
media  time for the  television  infomercial,  it will need to raise  additional
funds.  No  assurance  can be made that the  Company  will be able to raise such
funds.
    

                  On September  30,  1998,  the Company had cash of $606,121 and
                working capital of $144,541. As of November 1, 1998, the Company
                has begun to generate revenues from shared commissions earned by
                the network of Sterling Travel  Consultants  recently  acquired,
                although these  revenues are not expected to be significant  for
                the balance of the fourth  fiscal  quarter  ending  December 31,
                1998.  Management  of the Company  expects the  internet  travel
                business to be fully  operational in mid 1999 and is planning to
                begin  television  marketing  of the  Company's  products in mid
                1999.  These  efforts  are  expected to  significantly  increase
                revenues. The Company plans to continue the aggressive marketing
                campaign  as well as expand its  network  of travel  consultants
                throughout 1999. The Company expects its
   
                operations to achieve  break-even by the end of fiscal 1999. The
                Company completed a private placement of common stock in January
                1999 whereby it sold 1,000,000 shares of
    
                common stock for an aggregate of $1,500,000. Therefore including
                anticipated  cash to be  received  from  revenues,  the  Company
                estimates that it will have sufficient  resources to provide for
                its  planned  operations  for the  next  twelve  months.  At the
                present time the Company does not have any alternative  plans to
                raise additional funds needed to market or complete  development
                of the web site.




                                                        18

<PAGE>



                PART II             OTHER INFORMATION


                ITEM 6.    Exhibits and Reports on Form 8-K

                           (a) Report on Form 8-K dated October 29, 1998




                                               SIGNATURES

                           Pursuant to requirements  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.


                                               GENISYS RESERVATION SYSTEMS, INC.


   
                Date:  April 14, 1999       /s/  Lawrence E. Burk
                                         President and Chief Executive Officer

                Date:  April 14, 1999      /s/   John H. Wasko
                                         Secretary, Treasurer and
                                           Chief Financial Officer