FORM 10-QSB - Quarterly Report Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB-A

        [X] Quarterly Report pursuant to Section 13 or 15(d) of the
            Securities Exchange Act of 1934. 

                       For the period ended MAY 31, 1998

                                            or

        [ ] Transition Report Pursuance to Section 13 or 15(d) of the
            Securities Exchange act of 1934. 

            For the transition period from ______________ to ______________


                         Commission File Number 0-24256

                         ENHANCED SERVICES COMPANY, INC.
             (Exact name of registrant as specified in its charter)

                 COLORADO                              84-1075908 
        (State or other jurisdiction                (I.R.S. Employer   
       of incorporation or organization            Identification No.)
                                                  

              3415 S. SEPULVEDA BLVD., SUITE 500 LOS ANGELES CA 90034
                   (Address of principal executive offices) (Zip Code)

                                  (310) 397-3003
               (Registrant's telephone number, including area code)

              2361 ROSECRANS AVE. , SUITE 275, EL SEGUNDO, CA 90245
         (Former name, former address and former fiscal year, if changed
                               since last report.)

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

                             [X] Yes     [ ] No

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

      Indicated by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                               [ ] Yes      [ ] No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 15, 1998, Registrant had 2,996,324 shares of common stock, $.001 Par
Value, outstanding.
<PAGE>
                                      INDEX
                                      -----
                                                                           PAGE
                                                                          NUMBER
                                                                          ------

Part I.     Financial Information

      Item I.     Financial Statements

                  Consolidated Balance Sheets as of May 31,
                    1998 (Unaudited) and November 30, 1997.............2

                  Consolidated Statements of Operations Three
                    Months Ended May 31, 1998 and
                    May 31, 1997 (Unaudited)...........................3

                  Consolidated Statements of Operations, Six
                    Months Ended May 31, 1998 and
                    May 31, 1997 (Unaudited)...........................4

                  Consolidated Statements of Cash Flows,
                    Six Months Ended May 31, 1998 and
                    May 31, 1997 (Unaudited)...........................5

                  Notes to Consolidated Financial Statements...........6

      Item 2.     Management's Discussion and Analysis of
                    Financial Conditions and Results of
                    Operations.........................................8

Part II.  Other Information...........................................11
<PAGE>
          ENHANCED SERVICES COMPANY, INC. AND CONSOLIDATED SUBSIDIARIES

                                      BALANCE SHEETS
                                        (Unaudited)
<TABLE>
<CAPTION>
                                                                      May 31      November 30
                                                                       1998          1997
                                                                  -----------    -----------
<S>                                                               <C>            <C>        
Current Assets
      Cash in bank ............................................   $   119,479    $   262,510
      Inventory ...............................................       249,462        499,814
      Accounts receivable, net of allowance
        for doubtful accounts .................................       364,999        624,671
      Accounts receivable, NB Engineering .....................        63,884
      Other current assets ....................................       203,359        145,173
                                                                  -----------    -----------
        Total Current Assets ..................................     1,001,183      1,532,168

Accounts receivable, Zulu-tek, Inc. ...........................     1,410,556           --
Property and equipment, net of accumulated
  depreciation ................................................       125,652        355,868
Goodwill, net of accumulated amortization .....................          --          710,304
Investment in Zulu-Tek, Inc. ..................................     4,045,000           --
Other assets ..................................................        20,201         92,079
                                                                  -----------    -----------

Total Assets ..................................................   $ 6,602,592    $ 2,690,419
                                                                  ===========    ===========

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
      Accounts payable and accrued expenses ...................   $   854,540    $   669,326
      Accounts payable - NB Engineering .......................       237,487
      Notes payable, current portion ..........................       754,500        517,261
      Other current liabilities ...............................        65,921          7,782
                                                                  -----------    -----------
        Total Current Liabilities .............................     1,674,961      1,194,369

Long Term Notes payable .......................................   $ 1,045,556           --

        Total Liabilities .....................................     2,720,517      1,194,369
                                                                  -----------    -----------

Stockholders' Equity:
      Preferred stock - $.001 par value
       5,000,000 shares authorized 8,000 issued
       and outstanding, 8.6% cumulative
       preferred (liquidation
       preference of $800,000) ................................             8              8
      Preferred stock - $3.00 par value,
       1998 issue, 1,000,000 authorized
       and outstanding ........................................     3,000,000           --
      Common stock - $.001 par value,
        15,000,000 shares authorized;
        2,996,324 shares issued and  outstanding ..............         2,996          1,126
      Additional paid-in capital ..............................     4,807,353      3,229,957
      Accumulated (deficit) ...................................    (3,928,282)    (1,735,041)
        Total Stockholders' Equity ............................     3,882,075      1,496,050
                                                                  -----------    -----------

Total Liabilities and Stockholders' Equity ....................   $ 6,602,592    $ 2,690,419
                                                                  ===========    ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.
<PAGE>
            ENHANCED SERVICES COMPANY, INC. AND CONSOLIDATED SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                  Three Months      Three Months
                                                     Ended              Ended
                                                     May 31,            May 31,
                                                      1998               1997
                                                   -----------      -----------
Revenue:
    Sales ....................................     $   903,017      $ 1,136,261
    Cost of sales (exclusive
      of depreciation and salaries
      shown separately below) ................         510,528          570,943
                                                   -----------      -----------
       Gross Profit ..........................         392,489          565,318
                                                   -----------      -----------

Operating Expenses
    Salaries .................................         463,792          350,074
    Advertising and promotion ................           6,170           61,194
    Contract services ........................         186,848           47,269
    Rent .....................................         103,641           63,934
    Travel and entertainment .................          17,900           18,630
    Depreciation .............................          16,500           16,500
    Other operating expenses .................         343,119          251,424
                                                   -----------      -----------
      Total Operating Expenses ...............       1,137,970          809,025
                                                   -----------      -----------

Net Operating (Loss) .........................        (745,481)        (243,707)

Interest expense .............................          (6,531)          (6,784)

Other income .................................          24,731           29,369
                                                   -----------      -----------

Net (Loss) from continuing operations ........     $  (727,281)     $  (221,122)

Net (Loss) from discontinued operations ......        (996,337)        (116,876)
                                                   -----------      -----------

Net (Loss) ...................................     $(1,723,618)     $  (337,998)

Provision for preferred dividends ............         (17,200)         (17,200)
                                                   -----------      -----------

Net (Loss) to Common Shareholders ............     $(1,740,818)     $  (355,198)
                                                   ===========      ===========

Net (Loss) per Common Share ..................     $      (.58)     $      (.16)
                                                   ===========      ===========

Weighted Average Shares Outstanding ..........       2,996,324        2,246,348
                                                   ===========      ===========

The accompanying notes are an integral part of the financial statements.
<PAGE>
           ENHANCED SERVICES COMPANY, INC. AND CONSOLIDATED SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                    Six Months        Six Months
                                                      Ended             Ended
                                                      May 31            May 31
                                                       1998              1997
                                                   -----------      -----------
Revenue:
    Sales ....................................     $ 1,805,990      $ 2,349,326
    Cost of sales (exclusive
      of depreciation and salaries
      shown separately below) ................         875,936        1,119,661
                                                   -----------      -----------
       Gross Profit ..........................         930,054        1,229,665
                                                   -----------      -----------

Operating Expenses
    Salaries .................................         841,514          708,600
    Advertising and promotion ................          17,122           96,818
    Contract services ........................         214,607           61,718
    Rent .....................................         186,393          120,062
    Travel and entertainment .................          31,116           37,093
    Depreciation .............................          39,300           28,945
    Other operating expenses .................         559,585          474,847
                                                   -----------      -----------
      Total Operating Expenses ...............       1,889,637        1,528,083
                                                   -----------      -----------

Net Operating (Loss) .........................        (959,583)        (298,418)

Interest expense .............................         (13,810)         (17,338)

Other income .................................          30,426           82,096
                                                   -----------      -----------

Net (Loss) from continuing operations ........     $  (942,967)     $  (233,660)
                                                   ===========      ===========

Net (Loss) from discontinued operations ......      (1,195,092)        (217,717)

Net (Loss) ...................................     $(2,138,059)     $  (451,377)

Provision for Preferred Dividends ............         (34,400)         (28,666)
                                                   -----------      -----------

Net (Loss) to Common Shareholders ............     $(2,172,459)      $ (480,043)
                                                   ===========      ===========
                                                                       

Net Income (Loss) per Common Share ...........     $      (.73)     $      (.20)
                                                   ===========      ===========

Weighted Average Shares Outstanding ..........       2,996,324        2,246,348
                                                   ===========      ===========


The accompanying notes are an integral part of the financial statements.
<PAGE>
             ENHANCED SERVICES COMPANY, INC. AND CONSOLIDATED SUBSIDIARY

                                  OF CASH FLOWS
                                   (Unaudited)

                                                      Six Months      Six Months
                                                        Ended           Ended
                                                        May 31          May 31
                                                         1998            1997
                                                     -----------    -----------
Cash Flows from Operating Activities:
    Net (loss) ...................................   $(2,172,459)   $  (480,043)
    Adjustments to reconcile net loss to
     net cash used in operating activities
      Write down of goodwill .....................       710,304           --
       Depreciation and amortization .............       128,733        187,467
       (Decrease) in accounts payable
        and accrued expenses .....................       185,214        (62,765)
       (Increase) decrease in accounts receivable     (1,214,768)       226,921
   (Increase) decrease in inventory ..............       250,352       (223,318)
   Other, net ....................................        51,049        (29,655)
                                                     -----------    -----------
Net Cash (Used in) Operating
 Activities ......................................    (2,061,575)      (381,393)
                                                     -----------    -----------

Cash Flows from Investing Activities:
    Investment in Zulu-tek, Inc. .................    (4,045,000)          --
    Purchases of property and Equipment and other        101,483       (130,148)
                                                     -----------    -----------
    Net Cash (Used in) Investing Activities ......    (3,943,517)      (130,148)
                                                     -----------    -----------
Cash Flows from Financing Activities:
    Increase(Repayment of) notes payable .........     1,282,795       (164,579)
    Preferred stock issued .......................     3,000,000        767,546
Common stock issued ..............................     1,579,266         60,000
                                                     -----------    -----------
    Net Cash Provided by Financing
     Activities ..................................     5,862,061        662,967
                                                     -----------    -----------
Increase (decrease) in cash ......................      (143,031)       151,426

Cash, Beginning of Period ........................       262,510        156,432
                                                     -----------    -----------
Cash, End of Period ..............................   $   119,479    $   307,858
                                                     ===========    ===========
Interest Paid ....................................   $    12,280    $    38,534
                                                     ===========    ===========
Income Taxes Paid ................................   $      --      $      --
                                                     ===========    ===========

The accompanying notes are an integral part of the financial statements.
<PAGE>
         ENHANCED SERVICES COMPANY, INC. AND CONSOLIDATED SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              May 31, 1998 and 1997

(1)   ORGANIZATION

      Enhanced Services Company, Inc. (the Company) a Colorado corporation, was
      incorporated in 1987.

      The Company began, in May 1998, consolidating its facilities in North
      Bergan, New Jersey and Houston, Texas into the Irvine, California
      facility. The move is expected to be completed by the end of July, 1998.
      The Company is closing it's NB Engineering, Inc. subsidiary in Crofton,
      Maryland.

      The Company's administrative offices also were relocated from Houston,
      Texas to El Segundo, California in May 1998.

      The consolidated financial statements include the accounts of ESC and
      subsidiaries since acquisition or formation. All intercompany accounts and
      transactions have been eliminated.

      Effective May 31, 1998, the Company discontinued the operations of NB
      Engineering, Inc. (NBE). NBE was in the business of providing application
      development and digital video compression services as well as Digital
      Versatile Disk (DVD-ROM) title authoring and development. After write down
      of assets resulting in a loss at approximately $802,323, the only
      remaining assets were accounts receivable of $63,884. The only remaining
      liabilities were accounts payable of $237,487. Losses from operations of
      NBE were $194,014 and $116,876 during the three-month periods ended May
      31, 1998 and 1997, respectively. Losses from operations of NBE were
      $392,769 and $217,717 during the six-month periods May 31,1998 and 1997,
      respectively.

(2)   UNAUDITED STATEMENTS

      The balance sheet as of May 31, 1998, the statements of income for the
      three and six month periods ended May 31, 1998 and May 31, 1997 and the
      statement of cash flow for the six month period ended May 31, 1998 and May
      31, 1997 have been prepared by the Registrant without audit. 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 at May 31, 1998, and for all periods
      presented, have been made.

(3)   STOCK DIVIDEND

      During May, 1998 the Company effected a one for one stock dividend/two for
      one stock split. All references to common stock in the financial
      statements have been retroactively adjusted.

(4)   ACQUISITION AGREEMENT

      Effective March 3, 1998, the Company entered into a securities acquisition
      agreement pursuant to which the Company issued 220,000 pre-dividend common
      shares or approximately 19% of its common shares and 1,000,000 shares of a
      new class of nonvoting preferred shares, $3.00 par value per share, in
      exchange for 12,000,000 restricted common shares of Zulu-tek, Inc., or
      approximately 21% on a fully diluted basis of its' outstanding shares and
      1,000,000 shares of series D non-convertible Preferred stock held by
      exchanging parties (the Zulu-tek transaction). The preferred shares of the
      Company are convertible into common shares at the Company's option only
      after shareholder approval at a meeting called for that purpose and have a
      liquidation preference which is junior to the previously issued preferred
      shares of the Company. The investment is being carried at the lower of
      cost or market. Since 
<PAGE>
      this was a non-monetary transaction, the cost of Zulu-tek investment was
      determined by using the value of the consideration that was more readily
      ascertainable. The consideration of 1,000,000 shares of the Company's
      convertible preferred stock was valued at its par value of $3.00.
      Additional consideration of 220,000 shares of the Company's restricted
      common stock was valued at the closing price of $4.75 on the Nasdaq Stock
      Market on the date of the transaction. In connection with the transaction,
      the holder of the Company's $500,000 accounts receivable collateralized
      loan agreed, subject to consent of the loan participants, to convert the
      loan into equity. The terms of the conversation have not been negotiated
      by the holder of the note and consequently have not been presented to the
      participants for their approval.

      Pursuant to the acquisition agreement, the business of Zulu-tek, Inc.
      increasingly has been operated by the management of the Company and has
      provided working capital in furtherance of the Company's business
      strategy. The management of the Company and Zulu-tek, Inc. anticipate that
      they will submit to a vote of the shareholders of Zulu-tek, Inc. a
      transaction pursuant to which there will be a business combination of the
      two companies.

(5)   CONSULTING AGREEMENT

      On April 1, 1998 the Company entered into an agreement with Kennedy Miles
      Creative Communication, LTD, (KMCC). Pursuant to the agreement, KMCC shall
      provide consulting services to the Company for a term of one year. As
      consideration for services rendered by KMCC, the Company issued common
      stock purchase warrants exercisable to purchase, in the aggregate 75,000
      pre-dividend shares at $2.00 per share. During the second quarter of 1998,
      75,000 pre-dividend warrants were exercised and the difference between the
      exercise price of the warrants and the market value of the shares
      amounting to $150,000 was expensed.

      On March 15, 1998 the Company entered into an agreement with Richard A.
      Fisher (RAF). Pursuant to the agreement, RAF shall provide consulting
      services to the Company for a term of one year. AS consideration for
      services rendered by RAF, the Company issued common stock purchase
      warrants exercisable to purchase, in the aggregate 50,000 pre-dividend
      shares at $4.00 per share. During the second quarter of 1998, 50,000
      pre-dividend warrants were exercised.

(6)   WORKING CAPITAL NOTE

      The Company executed a $2,000,000 subordinated working capital note with
      Netvest [HK], Ltd. Funds advanced under the note at May 31, 1998 were
      $1,045,556. The note proceeds may fund operations of both the Company and
      Zulu-tek, Inc. Funds advanced to Zulu-tek at May 31, 1998 were $1,410,556
      and are due upon demand by the Company.

(7)    SUBSEQUENT EVENTS

      As discussed above, the Company and Zulu-tek are continuing to pursue a
      joint business plan and are currently seeking private placement funding to
      meet the capital requirements of their strategic business plan.

On July 10, 1998, the Company reported that it had a letter of intent to acquire
eCommerce Corp., for cash and stock. The transaction is currently being
finalized and is expected to be implemented through definitive agreements during
the current quarter.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Conditions and results
of Operations

OVERVIEW

  Enhanced Services Company, Inc. (the "Company") historically, through it's
Laptop Solutions -Texas and California subsidiaries, provided certain services
to the portable computing community. The Company, in a move to consolidate and
eliminate duplicate facilities moved all it's operations to Irvine, California.
Because of the consolidation of Laptop Solutions -Texas and California, the
following discussion has been combined into one presentation. The Company plans
to concentrate more of its efforts in the custom engineering products and
services. The Company has offered digital video compression and DVD-Video
services through it's NB Digital Solutions subsidiary in Crofton, Maryland. NB
Digital has sustained substantial losses since it's acquisition in 1995 and in
view of the investment required to continue and the uncertainty of achieving
profitability, the Company ceased NB Digital operations in May, 1998 and the
operating results are reflected as "Discontinued" in the following discussions.

  The Company's second fiscal quarter ended May 31, 1998 and the six-month
comparable period of 1997 are referred to in the discussions below as 1998 and
1997, respectively.


      COMBINED OPERATIONS OF LAPTOP SOLUTIONS - TEXAS AND CALIFORNIA

  Laptop  Solutions  results of  operations  for six month  period ended May 31,
1998 and 1997 are  summarized and discussed  below:  The operation of NB Digital
Solutions,  Inc.  has been  presented  as  other  expense  titled  "Discontinued
operations"

                                                                         Change
                                             1998            1997           %
                                             ----            ----

Sales ...............................    $ 1,805,990     $ 2,349,326     (23) %
Cost of sales
    exclusive of depreciation
    and salaries) ...................        875,936       1,119,782     (22) %
                                         -----------     -----------

Gross Profit ........................        930,054       1,229,544     (24) %

Operating &
    Other Expenses ..................      1,901,999       1,545,303     23 %
                                         -----------     -----------

Net Operating Income ................       (971,945)       (315,759)    (208) %

Other Income ........................         31,756          69,840     (54) %
                                         -----------     -----------

Net Income (Loss) ...................    $  (940,189)    $  (245,919)    (282) %
                                         -----------     -----------

Discontinued Operation ..............    $(1,197,873)    $  (217,717)    (449) %

Net Loss ............................    $(2,138,059)    $  (205,458)    (941) %
                                         ===========     ===========

SALES: Revenue from upgrade and enhancement sales decreased $481,525 from
$1,013,764 in 1997 to $532,239 in 1998, a decrease of 48%, while the per unit
revenue and volume continue to decline as a result of competitive pressure and
technological change. Revenue from Compatibility Plus(TM) sales, the removable
hard disk pak, decreased $136,525 to $71,790 in 1998, from $208,316 in 1997 as
demand for the pak declines. Revenues 
<PAGE>
from repair and contract maintenance services decreased from $437,678 in 1997 to
$438,113 in 1998 from $875,791 in 1997, a decrease of 50%. Management believes
the decrease is a result of certain manufacturers extending the warranty period
to three years from one year. Also, certain manufacturers have begun to compete
for the repair business by opening depot repair facilities. Revenues from
engineered products that began shipping in the first quarter of 1998 amounted to
$398,188. Demand for the product, a wireless modem that was custom designed with
Panasonic Personal Computer Company is expected to remain strong through the
third and fourth quarter of 1998. Revenue from CVAR 2000(TM) increased $150,832
in 1998 to $324,781 from $173,949 in 1997 as demand for the anti-reflective film
application increased.

COST OF SALES: Cost of sales of upgrade, enhancements, and the removable hard
disk paks declined $210,178 in 1998 from $501,550 in 1997, a 42% decrease that
was primarily the result of declining demand.. Cost of sales of repair and
contract services decreased $198,595 in 1998 to $187,957 from $386,552, a
decrease of 51% as a result of declining demand and competition. Cost of sales
of CVAR 2000 increased $38,354 from $88,354 in 1997 to $126,873 in 1998 as a
result of increased sales. All other direct cost of sales, primarily freight
expense, decreased $40,264 to $11,814 in 1998 from $52,078 in 1997, primarily as
a result of the decline in the volume of shipments.

OPERATING AND OTHER EXPENSES: Salaries and related payroll cost in 1998 amounted
to $1,035,442 as compared to $888,931 in 1997, an increase of 16%. Personnel and
related cost increases were primarily due to increased administrative personnel.
Advertising costs declined $79,696 from $96,818 in 1997 to $17,122 in 1998, a
decrease of 82%, due to cancellation of ineffective advertising. Computer
expense decreased $8,449 in 1998 to $31,471 from $39,920 in 1997 as a result of
increasing the computer network capacity and capabilities in 1997. Laptop
Solutions-Texas was charged rent for its office and warehouse space by the
Company of $51,996 for 1997 when the Company owned the building. The building
was sold in August, 1997 and Laptop leased it's existing space from the
purchasers of the building for the then market rate of $75,864, an increase of
$23,868. Also, the California facility size was increased to accommodate the
production of engineered products and CVAR 2000, resulting in additional rent of
$33,058 in 1998 to $64,614 from $31,556 in 1997. Professional fees increased
$61,952 to $114,115 in 1998 from $52,163 in 1997, primarily as a result of
increased legal and auditing cost. All other general and administrative expenses
declined $14,070 for the comparative period. Consulting fees in the amount of
$150,000 in connection with the exercise of warrant, and described in the notes
to the financial statement, were expensed in 1998.

DISCONTINUED OPERATIONS: NB Digital Solutions operations were discontinued in
May 1998. Sales declined $400,880 in 1998 to $305,921 from $706,801 in 1997 and
gross profit from such sales declined $412,158 to $202,534 for the period.
Operating expenses amounted to $596,826 in 1998, a decrease of $243,172 from
$839,998 in 1997. Goodwill in the amount of $657,688 and loss on disposition of
assets amounted to $143,112. Cost of discontinuing the operation is anticipated
to continue through the third quarter of 1998. Losses from operations of NBE
were $194,014 and $116,876 during the three-month periods ended May 31, 1998 and
1997, respectively. Losses from operations of NBE were $392,769 and $217,717
during the six-month periods May 31,1998 and 1997, respectively.

LIQUIDITY AND CAPITAL RESOURCES

At May 31, 1998, the Company had stockholders' equity totaling $3,882,075, as
compared to $1,496,050 at November 30, 1997, an increase of $2,386,025. The
increase resulted from; execution of a Securities Acquisition Agreement and
filed on Form 8-K on March 6, 1998, resulting in the issuance of 220,000
pre-dividend common shares at the then market price of $4.75, and issuance of
1,000,000 shares of preferred stock, par value of $3.00 per share. The net
increase from the transaction amounted to $4,045,000. As a result of the March
transactions involving the Company and Zulu-tek, the Company and Zulu-tek have
continued to operate as separate corporate entities but the operations have
increasingly been undertaken in a single business strategy and joint business
plan being pursued by the two entities and operated by the management of the
Company. The Company has provided working capital in furtherance of the combined
business strategy to continue to focus increasingly on interactive advertising
and marketing activities. During the quarter, 75,000 pre-dividend common stock
purchase warrants at $2.00 per share were exercised pursuant to a consulting
agreement with Kennedy Miles and Associates with gross proceeds in the amount of
$300,000 before a discount of $150,000 that was charged to current operations.
50,000 
<PAGE>
pre-dividend common stock purchase warrants were exercised pursuant to a
consulting agreement with Richard A. Fisher at $4.00 per share with net proceeds
of $200,000. Other shares were issued pursuant to consulting agreement with
Creative Business Strategies, Wall Street Financial and the Employees Stock
Option Plan and amounted to $34,265.

The Company's working capital was ($673,778) as compared to $337,799 on November
30, 1997, a decrease of $1,027,201. The decrease was primarily the result of a
decrease in receivables in the amount of $195,788, while inventory and cash
declined $393,383. Accounts payable and current notes payable increased
$468,009.

    Management plans that income generated from operations, along with working
capital and proceeds from the private placement of equity securities will be
sufficient to fund a joint business and strategic plan being undertaken by the
Company and Zulu-tek, Inc. However, there can be no assurance that such funds
will be available, or, if available, on favorable terms.
<PAGE>
                           PART II. OTHER INFORMATION



Item 1.     LEGAL PROCEEDINGS

            None.

Item 2.     CHANGES IN SECURITIES

            None.

Item 3.     DEFAULTS UPON SENIOR SECURITIES

            None.

Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None.

Item 5.     OTHER INFORMATION

            None.

Item 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a) Form 8-K filed March, 1998
<PAGE>
                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.




ENHANCED SERVICES COMPANY, INC.





By:  /s/ R.C. SMITH                Date:            7/20/98
         Treasurer