SECURITIES AND EXCHANGE COMMISSION
                                                  Washington, D.C. 20549

                                                        Form 10-QSB

                                                        (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>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
DEVELOPMENT STAGE COMPANIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                                             September          September           December
                                                                              30, 1998           30, 1998           31, 1997
                                                                           ---------------    ---------------    ---------------
                                                                             (Proforma)        (unaudited)

                                                                 ASSETS

CURRENT ASSETS:
       Cash and cash equivalents                                                 $606,121           $606,121         $2,207,841
       Accounts receivable                                                         32,615             32,615              8,784
       Prepaid expenses                                                             5,029             12,448              5,127
                                                                           ---------------    ---------------    ---------------
                                                                           ---------------
              Total Current Assets                                                643,765            651,184          2,221,752
                                                                           ---------------    ---------------    ---------------

EQUIPMENT, NET OF ACCUMULATED
       DEPRECIATION                                                                74,655            285,918            261,643
                                                                           ---------------    ---------------    ---------------

INVESTMENT IN NEWCO                                                               730,287                  -                  -

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                                      $48,958           $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                                        443,836            506,643            470,965

LONG-TERM DEBT:
         Long-term debt, less current maturities                                   63,542             63,542            982,742
                                                                           ---------------    ---------------    ---------------

                  Total Liabilities                                               507,378            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:1,481,777  shares issued and                                                          
          outstanding                                                                 148                148                  -
     Common Stock, $.0001 par value; 75,000,000 shares
          authorized; 5,655,594 shares and 4,355,594 shares
          issued and outstanding                                                      566                566                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
                                                                           ---------------    ---------------    ---------------

                                                                               $3,910,747         $3,973,554         $3,152,866
                                                                           ===============    ===============    ===============

                                                               See Accompanying Notes to Financial Statements

                                                                    2

<PAGE>
GENISYS RESERVATION SYSTEMS, INC. AND SUBSIDIARIES
DEVELOPMENT STAGE COMANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
DURING THE DEVELOPMENT STAGE
(Unaudited)
                                                                                                                     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      1,205,173          927,670         421,330          454,432       3,881,071
                       Depreciation and Amortization     397,091          128,230         201,014           64,174         730,985
                       Interest Expense (Income), net   (18,462)           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         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                 -           -        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 AND PREFERRED
STOCK FOR ACQUISITION OF UNITED
LEISURE INTERACTIVE                   900,000          90      1,100,000           110        2,499,800         -          2,500,000

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

BALANCE AT SEPTEMBER 30, 1998        5,655,594       $ 566      1,481,177         $ 148       $8,281,073  ($4,878,418)    $3,403,369


                                                           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                                    (847,500)            (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                                             37,500                 -                  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


</TABLE>

<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.


Note 2            Activities of the Company

                 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.  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.

                 As of June 30, 1998,  the Company  acquired the  exclusive  and
worldwide rights and license for "Parallel  Addressing Video Technology" for all
travel  related  applications.  In  addition,  the  Company  acquired  software,
computer  systems and  intellectual  properties  related to the travel business,
including  the Travel Web Site called  "NetCruise.com".  The Company  intends to
operate an internet travel agency featuring the technology and assets acquired.
See Note 4.

                  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 a
company  newly  formed by a  management  group lead by Mark A. Kenny,  a Company
founder  and  Director.  The  Company  will own 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.


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.


                                                              6


                  In March 1998, the holder 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, 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

                  As  of  June  30,   1998,   the  Company   through   NetCruise
Interactive, Inc. (NetCruise), a wholly owned subsidiary, acquired the exclusive
and worldwide rights and license for "Parallel  Addressing Video Technology" for
all travel related applications from United Internet Technologies, Inc. formerly
known as United Leisure Interactive,  Inc., ("UIT") a wholly owned subsidiary of
United  Leisure  Corporation.  In  addition,  the  Company  acquired  all of the
software,  computer  systems and intellectual  properties  related to the travel
business,  including  the Travel Web Site called  "NetCruise.com"  . The Company
intends to operate an internet travel agency featuring the technology and assets
acquired.

                  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  $1,450,000
of computer  software,  $1,000,000 of licenses and  intellectual  properties and
$50,000 of computer equipment.

                  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.


Note 5            Contingencies

On February 20, 1997,  two  individuals  filed an action against the Company and
Corporate  Travel  Link  ("Travel  Link") in the  Superior  Court of New  Jersey
seeking,  among  other  things,  damages  in the  amount of 8% of any  financing
secured by Travel Link  resulting from  plaintiffs  efforts and as well as 5% of
the Company's  Common Stock  allegedly  due for services  rendered in connection
with the Company's  acquisition  of Travel Link in 1995.  The claim for monetary
damages is based upon an  alleged  written  agreement  between  Travel  Link and
plaintiffs,  while the claim for the  shares of the  Company's  Common  Stock is
based upon alleged oral representations and promises made by a former officer of
Travel  Link.  On  September  28,  1998 this  matter was settled and the Company
agreed to pay the plaintiffs the sum of $20,000.

                  In August  1996,  the Company gave notice to one of its former
officers that it was canceling the 333,216  shares of Common Stock issued to him
at the  inception  of Corporate  Travel  Link,  Inc. for services he was to have
provided.  The Company  believes  that the former  officer  never  provided such
services.  Pending return of the shares, they are considered outstanding for all
periods  presented  herein. On April 17, 1997, the former officer of the Company
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 the 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.
                                                              7

                  On December 23,  1997,  an  individual  filed an action in the
Superior  Court of New Jersey  against the  Company and a former  officer of the
Company  alleging that the former officer 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  former  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 former officer of the Company
has agreed to hold the Company  harmless and to  indemnify  the Company from any
and all claims of the plaintiff in this action


Note 6            Subsequent  Event

                  In November 1998, the Company agreed to sell the assets of its
computerized  reservation  and  payment  system to a company  newly  formed by a
management  group lead by Mark A. Kenny,  a Genisys  founder and Director.  When
completed,  this transaction will allow Genisys to concentrate its resources and
efforts on its NetCruise  internet travel business,  which commenced on June 30,
1998.

                  Genisys  will  own a  minority  interest  in the  new  company
("Newco") and will receive  royalties on  transactions  processed by Newco for a
period of five  years.  A minority  interest  in Newco will also be owned by the
TranspoNet Companies,  Inc. a leading developer and owner of software technology
for the ground  transportation  industry.  Genisys and  TranspoNet  will provide
limited  working  capital to Newco.  The new entity will include the officers of
Prosoft,  Inc.,  Thomas Gregory and Paul Murray,  who  originally  developed the
proprietary software for the reservation and payment system.

                  The accompanying  proforma balance sheet at September 30, 1998
assumes  that this  contemplated  transaction  had  occurred  on that date.  The
effects on the  historical  consolidated  statement  of  operations  would be to
reclassify  all service  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  (with no impact  on net  income);  no gain or loss is
expected to be realized.



                                           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 $0 and  $2,225  for the 1997  periods.  The  corresponding  cost of
service  for the three and nine month  periods  ending  September  30, 1998 were
$62,792 and $111,490 as compared to $0 and $6,800 for the 1997 periods.  To date
the Company has not yet commenced  generating  revenues from its internet travel
business.

                  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.

                                                              8

                  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).

                  Management of the Company believes that the NetCruise internet
travel  business,  which  is  not  compatible  with  the  limousine  reservation
business, provides the shareholders of the Company a potential opportunity for a
greater return.  Therefore, 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
a company  newly formed by a management  group lead by Mark A. Kenny,  a Company
founder  and  Director.  The  Company  will own a minority  interest  in the new
company and will receive royalties on transactions  processed by the new company
for a period of five years.

                  The Company  has  launched an  aggressive  marketing  campaign
inviting  customers  to  become  NetCruise  Travel  Consultants.  An  attractive
package,  including a CD-ROM library of video  destinations,  marketing kit, and
full  service  support  from  on-line  travel  agents,  will be  marketed to the
consumer  through  a  combination  of  direct  response,  TV,  print,  radio and
web-based  advertising.  NetCruise.com  a travel  web site  designed  to support
outside travel consultants, will be launched in mid December.

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, a private offering and a public offering.

                  In March 1998, the holder 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, 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.

                  In March 1998, the holder 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.

                  As  of  June  30,   1998,   the  Company   through   NetCruise
Interactive,  Inc. (NetCruise), a wholly owned subsidiary,  acquired 100% of the
assets of a wholly owned  subsidiary of United  Leisure  Corporation,  which was
issued  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. 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. The Company has 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 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 has advised the Company that the
Company's  Common Stock will be delisted unless the Company obtains  Shareholder
approval  for these  issuances  to the extent that they  violate  the Rule.  The
Company  and UIT have  restructured  the  transaction  by UIT  returning  to the
Company  1,100,000  shares of Common stock  (retaining  900,000  shares) and the
Warrants.  The  Company  will  issue  to  UIT  1,100,000  shares  of  non-voting
Convertible Series B Preferred

                                                              9

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  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 Common  Stock and  Warrants  prior to the time that the dividend is payable.
See Note 4 to the financial statements.

                  On September  30,  1998,  the Company had cash of $606,121 and
working  capital of $144,541.  Management of the Company  estimates  that is has
resources  including  anticipated cash to be received from revenues,  to provide
for its planned operations for the next twelve months.



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: November 18, 1998                   By: /s/ Lawrence E. Burk
                                          President and Chief Executive Officer

Date: November 18, 1998                   By: /s/    John H. Wasko
                                                     Secretary, Treasurer and
                                                     Chief Financial Officer