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

FORM 10-QSB

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

For Quarterly period Ended: September 30, 2002; or

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

For the transition period _________ to __________

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

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

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

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

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

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

The number of shares outstanding of the registrant's common stock, $0.001
par value, as of September 30, 2002, was 19,723,059 (post reverse split
adjusted).

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

GK INTELLIGENT SYSTEMS, INC.

Report on Form 10-QSB

For the Quarter Ended September 30, 2002

INDEX

Page
Part I. Financial Information

Item 1. Financial Statements (unaudited)......................... 3
Balance Sheets (unaudited)............................... 3
Statements of Operations (unaudited)..................... 4
Statements of Cash Flows (unaudited) .................... 5
Notes to the Financial Statements ....................... 7

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

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

Part II. Other Information

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

Item 2. Changes in Securities .................................... 15

Item 3. Defaults Upon Senior Securities .......................... 15

Item 4. Submission of Matters to a Vote of Security Holders ...... 15

Item 5. Other Information ........................................ 15

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

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

ASSETS

September 30,
2002
----------------
(Unaudited)

CURRENT ASSETS

Cash $ 45,000
----------------

Total Current Assets 45,000
----------------

COMPUTER SOFTWARE, NET -
----------------

TOTAL ASSETS $ 45,000
================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable $ 1,341,064
Stock subscription payable 50,000
Accrued liabilities 2,174,963
Accrued liabilities - related parties 155,482
Notes payable 382,500
Notes payable - related parties 370,041
----------------

Total Current Liabilities 4,474,050
----------------

TOTAL LIABILITIES 4,474,050
----------------

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock authorized: 10,000,000 preferred shares
at $0.001 par value; -0- issued and outstanding -
Common stock authorized: 275,000,000 common shares
at $0.001 par value; 19,723,059 shares issued and outstanding 19,723
Additional paid-in capital 38,807,767
Unearned compensation (172,220)
Accumulated deficit (43,084,320)
----------------

Total Stockholders' Equity (Deficit) (4,429,050)
----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 45,000
================

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)

From
Inception
For the Three For the Nine on October 4,
Months Ended Months Ended 1993 through
September 30, September 30, September 30,
------------------------------- ----------------------------------
2002 2001 2002 2001 2002
-------------- --------------- --------------- ----------------- --------------

REVENUES $ - $ - $ - $ - $ 100,156

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

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

EXPENSES

Loss on disposal of fixed assets - - - - 1,385,199
Depreciation and amortization - - - - 3,458,369
Impairment loss on software - - - - 1,308,520
General and administrative 206,900 64,001 406,297 292,830 35,585,639
-------------- --------------- --------------- ----------------- --------------

Total Costs and Expenses 206,900 64,001 406,297 292,830 41,737,727
-------------- --------------- --------------- ----------------- --------------

LOSS BEFORE OTHER INCOME
(EXPENSE) (206,900) (64,001) (406,297) (292,830) (41,667,532)
-------------- --------------- --------------- ----------------- --------------

OTHER INCOME (EXPENSE)

Interest income - - - - 7,663
Gain on release of debt - - 2,250 - 75,253
Interest expense (84,616) (106,309) (261,853) (314,175) (1,312,389)
-------------- --------------- --------------- ----------------- --------------

Total Other Income (Expense) (84,616) (106,309) (259,603) (314,175) (1,229,473)
-------------- --------------- --------------- ----------------- --------------

LOSS BEFORE INCOME TAXES (291,516) (170,310) (665,900) (607,005) (42,897,005)

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

NET LOSS (291,516) (170,310) (665,900) (607,005) (42,897,005)

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

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS $ (291,516) $ (170,310) $ (665,900) $ (607,005) $ (43,084,320)
============== =============== =============== ================= ==============

BASIC LOSS PER SHARE $ (0.02) $ (0.02) $ (0.04) $ (0.08)
============== =============== =============== =================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 15,222,952 7,805,477 19,723,059 7,805,476
============== =============== =============== =================

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

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

Since
Inception
For the Nine Months on October 4,
Months Ended 1993 through
September 30, September 30,
--------------------------------------
2002 2001 2002
------------------ ------------------ -----------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss $ (665,900) $ (607,005) $ (42,897,005)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization - - 3,458,369
Loss on disposal of fixed assets - - 1,385,199
Impairment loss on software - - 1,308,520
Gain on release of debt (2,250) - (75,253)
Beneficial conversion on issuance of debt - - 103,068
Amortization of unearned compensation 263,280 6,000 5,756,811
Issuance of common stock, options and warrants
for services 60,500 - 12,981,306
Changes in operating assets and liabilities:
(Increase) decrease other assets - 28,622 -
Increase (decrease) in accounts payable and accrued
expenses 261,470 364,946 4,061,449
Increase (decrease) in accrued liabilities - related party 77,900 157,437 1,066,836
------------------ ------------------ ----------------

Net Cash Used by Operating Activities (5,000) (50,000) (12,850,700)
------------------ ------------------ ----------------

CASH FLOWS FROM INVESTING ACTIVITIES

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

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

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of note payable 50,000 - 1,148,769
Common stock issued for cash - - 13,624,829
Payments on notes payable - - (306,637)
Proceeds from issuance of notes payable - related party - 50,000 250,000
Receipt of subscription receivable - - 779,900
Capital contributed by the Company's president - - 45,314
------------------ ------------------ ----------------

Net Cash Provided by Financing Activities 50,000 50,000 15,542,175
------------------ ------------------ ----------------

NET DECREASE IN CASH 45,000 - 45,000

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

CASH AT END OF PERIOD $ 45,000 $ - $ 45,000
================== ================== ================

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

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

SUPPLEMENTAL SCHEDULE OF CASH FLOW
ACTIVITIES:

Cash Paid For:

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

Schedule of Non-Cash Financing Activities:

Common stock issued for debt $ 13,583 $ - $ 624,256
Common stock issued for debt - related party $ 789,062 $ - $ 789,062
Common stock issued for services - related party $ 60,000 $ - $ 4,609,123
Options and warrants issued for services $ - $ - $ 2,441,986
Common stock issued for services $ 500 $ - $ 5,930,197
Fixed assets distributed for debt $ - $ - $ 42,738

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002 and 2001

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United
States of America have been condensed or omitted in accordance with such
rules and regulations. The information furnished in the interim condensed
financial statements include normal recurring adjustments and reflects all
adjustments, which, in the opinion of management, are necessary for a fair
presentation of such financial statements. Operating results for the nine
months ended September 30, 2002 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2002.

NOTE 2 - GOING CONCERN

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

NOTE 3 - SIGNIFICANT AND SUBSEQUENT EVENTS

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

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

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

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002 and 2001

NOTE 3 - SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

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

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

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

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

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

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

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

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

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002 and 2001

NOTE 3 - SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

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

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

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

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

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

During 2002, the Company issued 221,980 common shares to various vendors
valued at $0.18 to $2.00 per share for the conversion of debt.

During 2002, the Company issued 4,050,000 common shares to various
consultants valued at $0.10 per share for services performed.

During 2002, the Company issued 1,208,695 common shares to the Company's
President/CEO and director valued at $0.10 per share for services
performed.

During 2002, the Company issued 6,391,305 common shares to the Company's
President/CEO and director valued at $0.10 per share for the conversion of
related party debt.

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

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

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002 and 2001

NOTE 3 - SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

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

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

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

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

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

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

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

GK INTELLIGENT SYSTEMS, INC.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002 and 2001

NOTE 3 - SIGNIFICANT AND SUBSEQUENT EVENTS (Continued)

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

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

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

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

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

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

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

- the volatile and competitive nature of the software business,

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

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

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

- the success of marketing efforts by third parties,

- the changing demands of customers and

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

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

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

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

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

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

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

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

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

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

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

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

The Company had no net revenues for the three months and nine months ended
September 30, 2002 and 2001. The Company had operating expenses of $206,900 for
the three months ending September 30, 2002 compared to $64,001 for the
comparative period of 2001. The Company had operating expenses of $406,297 for
the nine months ended September 30, 2002 compared to $292,830 for the same
period in 2001. The increase is due primarily to the value of the shares of the
Company's common stock issued to consultants who are assisting in the its
efforts to reactive its operations.

The Company unsuccessfully launched its product sales in the first six
months of 1999. The Company was unable to raise sufficient capital to sustain
its marketing effort and closed its offices and terminated most of the personnel
in June of 1999. The Company's expenses are accruals of officer compensation and
interest on its liabilities. The Company was inactive until the second quarter
of 2002.

Liquidity
---------

During the nine months ended September 30, 2002 and 2001, the Company used
cash of $5,000 and $50,000, respectively, in its operations. The Company had
cash of $45,000 on hand as of September 30, 2002. The Company ceased operations
in 1999 and has been working to reactivate its operations since the second
quarter of 2002.

Item 3. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our principal
executive officer and principal financial officer have evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Exchange Act), as of a date within 90 days of
the filing date of this Quarterly Report on Form 10-QSB. Based on such
evaluation, they have concluded that as of such date, our disclosure controls
and procedures are effective and designed to ensure that information required to
be disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in applicable SEC rules and forms.

(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of evaluation by our principal executive officer
and principal financial officer.

PART II - OTHER INFORMATION.

Item 1. Legal Proceedings.

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

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

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

Item 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

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

No matter was submitted to a vote of our shareholders during the third
quarter of 2002.

Item 5. Other Information.

Newly Engaged Independent Accountants
- -------------------------------------

On September 6, 2002, the Company engaged HJ & Associates, LLC, as its new
independent accountant.

Consulting Agreement with Alan S. Litvak
- ----------------------------------------

On September 13, 2002, the Company entered and Alan S. Litvak entered into
a consulting agreement. The terms of the Agreement set forth that Litvak will
assist in the identification and procurement of qualified accredited investors
for the Company. As compensation for the services rendered under this Agreement
the Company will pay a commission amounting to ten percent (10%) of the total
dollars raised in the private placement. Payment to Litvak shall be made
according to the following formula: fifty percent (50%) of the total amount
shall be in cash and the remaining fifty percent (50%) shall be in the form of
restricted shares of common stock of the Company.

Promissory Note to Gary Kimmons
- -------------------------------

On September 26, 2002, the Company executed a promissory note in favor of
Gary F. Kimmons, the President and a Director of the Company, in the principal
amount of one hundred seventy thousand, forty one and 42/100 dollars
($170,041.42) representing expenses accrued on behalf of the Company paid by Mr.
Kimmons from May 5, 1999 through September 26, 2002. The terms of the note are
six percent (6%) per annum simple interest and the note is due upon demand.

Consulting Agreement with Berkshire Management Co., Inc.
- -------------------------------------------------------

On September 26, 2002, the Company issued the shares earned under the
Consulting Agreement with Berkshire Capital Management Co., Inc. dated April 24,
2001. Under the terms of the Agreement, Berkshire Capital was to provide
assistance in the development of the corporate strategy and recommend an
effective growth strategy. This includes mentoring and assistance in forming the
structure of the functional components of the Company as well as providing
technical guidance in the establishing of business alliances and relationships.
Further, Berkshire Capital would aid in the acquisition of administrative
personnel for the Company. In consideration for their efforts the Company was to
issue one million (1,000,000) restricted shares of common stock. Under the terms
of the Agreement Berkshire Capital will be entitled to receive additional
shares, pro rata in the event of a reverse stock split within three (3) years
from the effective date. The amount of pro rata shares to be issued will be
proportional to the shares exchanged in the reverse stock split.

Promissory Note in favor of Dick Meador
- ---------------------------------------

On September 26, 2002, the Company issued 100,000 restricted shares of
common stock in full satisfaction of the promissory note in favor of Dick Meador
dated October 1, 2001, which was due on April 1, 2002. The amount of the note
was fifty thousand dollars ($50,000) at an annualized interest rate of eight
percent (8%). This note was collateralized by one hundred thousand (100,000)
shares of the unregistered and restricted common stock of the Company. At the
holder's election on the due date, or for a period of up to six months
thereafter, the holder could elect to accept payment of all the principal and
interest in the form of the collateral. The Holder chose to accept the
collateral as full payment of the note.

Other Agreements and Sales of Unregistered Securities
- -----------------------------------------------------

On September 25, 2002, the Company authorized the issuance of 75,000
post-reverse split adjusted restricted shares of common stock to Dick Meador
pursuant to the terms of that Consulting Agreement dated March 20, 2002. No
underwriters were used. The securities were issued pursuant to an exemption from
registration provided under Section 4(2) of the Securities Act of 1933.

On September 25, 2002, the Company authorized the issuance of 7,000,000
post-reverse split adjusted restricted shares of common stock to Gary F.
Kimmons, as payment and full satisfaction of the accrued and unpaid salary of
$700,000 due and owing to Mr. Kimmons pursuant to the terms of the Amended and
Restated Employment Agreement dated March 13, 1988. No underwriters were used.
The securities were issued pursuant to an exemption from registration provided
under Section 4(2) of the Securities Act of 1933.

On September 25, 2002, the Company authorized the issuance of 600,000
post-reverse split adjusted restricted shares of common stock to Gary F.
Kimmons, the President and a Director of the Company, as compensation pursuant
to that Interim Compensation Agreement, in lieu of cash payment of $60,000, for
the period March 15, 2002 through June 15, 2002. No underwriters were used. The
securities were issued pursuant to an exemption from registration provided under
Section 4(2) of the Securities Act of 1933.

On September 25, 2002, the Company authorized the issuance of 500,000
post-reverse split adjusted restricted shares of common stock to BTH2 Inc.
pursuant to the terms of that Marketing Agreement dated June 1, 2002. No
underwriters were used. The securities were issued pursuant to an exemption from
registration provided under Section 4(2) of the Securities Act of 1933.

On September 25, 2002, the Company authorized the issuance of 750,000
post-reverse split adjusted restricted shares of common stock to Ron Sparkman
pursuant to the terms of that Consulting Agreement dated March 7, 2001, under
which Mr. Sparkman is to provide consultative services to the Company. No
underwriters were used. The securities were issued pursuant to an exemption from
registration provided under Section 4(2) of the Securities Act of 1933.

On September 25, 2002, the Company authorized the issuance of 1,000,000
post-reverse split adjusted restricted shares of common stock to Berkshire
Capital Management Co., Inc. pursuant to the terms of that Consulting Agreement
dated April 24, 2002 under which Berkshire is to provide consultative services
to the Company. No underwriters were used. The securities were issued pursuant
to an exemption from registration provided under Section 4(2) of the Securities
Act of 1933.

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

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

Exhibit
Number Description
----------- --------------------------------------------------------

3.1(1) Certificate of Incorporation of the Company and Amendments thereto.
3.2(1) By-laws of the Company;
3.3(2) Amendment to Certificate of Incorporation
3.4(4) Certificate of Amendment to Certificate of Incorporation
10.11(3) Consulting Agreement with Berkshire Capital Management Co., Inc.
10.12(3) Consulting and Finder's Fee Agreement with The Herman Group, L.P.
10.13(3) Engagement Letter with Petty International Development Corp.
10.14(3) Consulting Agreement with Ron Sparkman.
10.15(3) Consulting Agreement with Rockne J. Horvath.
10.16(3) Consulting Agreement with Stephen K. Carper.
10.17(3) Consulting Agreement with Renee H. Ethridge.
10.18(3) Consulting Agreement with Technical Objective, Inc.
10.19(3) Debt Resolution Agreement with Gary F. Kimmons.
10.20(3) Interim Compensation Agreement with Gary F. Kimmons.
10.21(3) Amended and Restated Consulting Agreement with Dick Meador.
10.22(3) Promissory Note to BDO Seidman LLP.
10.23(3) Consulting Agreement with Alan S. Litvak.
10.24(3) Promissory Note to Gary Kimmons.
10.25(5) Marketing Agreement with BTH2
99.1** Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
99.2** Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
99.3** 906 Certification

- ------------------------
(1) Filed as an exhibit to the Company's registration statement on Form
10-SB filed on January 24, 1997, and incorporated by reference herein.

(2) Filed as an exhibit to the Company's Annual Report for fiscal year
ended May 31, 1998 on Form 10-KSB filed on September 14, 1998, and
incorporated by reference herein.

(3) Filed as an exhibit to the Company's Current Report on Form 8-K filed
November 6, 2002 and incorporated by reference herein.

(4) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB
for the Quarter Ended March 31, 2002, and incorporated by reference
herein.

(5) Filed as an exhibit to the Company's Quarterly Report on Form 10-QSB
for the Quarter Ended June 30, 2002, and incorporated by reference
herein.

** Filed herewith.

(b) Reports on Form 8-K.

On September 11, 2002 the Company filed a Current Report on Form 8-K
regarding the newly engaged independent accountants. There were no other reports
on Form 8-K filed during the period covered by this report.

SIGNATURES

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

GK Intelligent Systems, Inc.

Dated: May 5, 2003 /S/ Gary F. Kimmons
-------------------------------
By: Gary F. Kimmons
Its: President,
Chief Executive Officer
and Chief Financial Officer