GENESISINTERMEDIA COM INC, SB-2/A, 1998-12-04

GENESISINTERMEDIA COM INC
SB-2/A, 1998-12-04
MISCELLANEOUS BUSINESS SERVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 4, 1998

REGISTRATION NO. 333-66281

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO

FORM SB-2/A

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
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GENESISINTERMEDIA.COM, INC.

(Exact Name of Registrant as Specified in its Charter)

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<S> <C> <C>
DELAWARE 7311 95-4710370
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
Incorporation or Organization) Number)
</TABLE>

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13063 VENTURA BOULEVARD
STUDIO CITY, CALIFORNIA 91604-2238
(818) 464-7270
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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RAMY EL-BATRAWI
13063 VENTURA BOULEVARD
STUDIO CITY, CALIFORNIA 91604-2238

(818) 464-7270
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)

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COPIES TO:

THEODORE R. MALONEY ASHER M. LEIDS
NIDA & MALONEY, P.C. DONAHUE, MESEREAU & LEIDS LLP
800 Anacapa Street 1900 Avenue of the Stars, Suite 2700
Santa Barbara, California 93101 Los Angeles, California 90067
(805) 568-1151 (310) 277-1441

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CALCULATION OF REGISTRATION FEE

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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value............. 2,300,000(1) $10.00 $23,000,000 $6,394(3)
</TABLE>

(1) Includes an aggregate of 300,000 shares that the underwriters have the
option to purchase to cover over-allotments, if any.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.

(3) The Registrant previously paid $7,034.

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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SUBJECT TO COMPLETION, DATED DECEMBER 4, 1998

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>

PROSPECTUS
, 1998

[LOGO]

GENESISINTERMEDIA.COM, INC.

2,000,000 SHARES OF COMMON STOCK

GenesisIntermedia.com, Inc. is an integrated marketing and business solution
provider utilizing conventional, emerging and interactive multimedia
technologies. The common stock we are offering is initially being offered in the
United States and internationally by the underwriters named in this prospectus.
All of the common stock being offered is being sold by Genesis.

This is our initial public offering and no public market currently exists
for our common stock. We currently estimate that the initial public offering
price of the common stock will be between $7 and $10 per share.

We will apply to have the common stock listed on the Nasdaq National Market
System (NMS) under the symbol GENI.

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK AND COULD RESULT IN A LOSS OF
YOUR INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 7.

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<CAPTION>
PER SHARE TOTAL
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- - Price to the Public................................................................... $ $

- - Underwriting Discounts and Commissions................................................ $ $

- - Proceeds to the Company............................................................... $ $
</TABLE>

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The table does not include a three percent (3%) non-accountable expense
allowance payable to the underwriters. The underwriters may purchase an
additional 300,000 shares of common stock solely to cover over-allotments.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

MILLENNIUM FINANCIAL GROUP, INC.

HD BROUS & CO. INC.

AMERICAN FRONTEER FINANCIAL CORP.

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GenesisIntermedia.com, Genesis Intermedia, Genesis Media, Genesis Media
Group, the Genesis Media logo and the Genesis Intermedia logo are trademarks of
GenesisIntermedia.com, Inc. Other trademarks referenced herein are trademarks of
their respective legal owners.

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PROSPECTUS SUMMARY

THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. GENESIS'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
THE FOLLOWING SUMMARY IS NOT COMPLETE AND YOU SHOULD REFER TO THE MORE DETAILED
INFORMATION AND THE FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE
IN THIS PROSPECTUS.

THE COMPANY

Genesis markets and sells products which it owns or has licensed through
numerous communication channels, including network television, cable television,
newspapers, magazines, radio, the Internet, freestanding information systems
which allow customer access to specified information ("interactive kiosks"),
read only memory compact discs ("CD-ROM") and read only memory digital video
discs with random access memory capability ("DVD-ROM/RAM").

Genesis develops and utilizes conventional media, interactive technologies,
which allow the display of marketing messages continuously through customer
interaction and on demand, and emerging "multimedia technologies" to deliver
integrated solutions for the marketing and business needs of Genesis and its
clients. Interactive multimedia technologies permit the marketing of information
containing or using text, graphics, sound, video, animation and tangible effects
to be delivered to customers or accessed by customers on demand. With Genesis's
integrated multimedia solutions, Genesis or a client may select from numerous
media or "marketing channels" to tailor marketing to the particular product or
customer profile and concurrently market their product or service in separate
marketing channels.

Genesis believes these technology capabilities combined with Genesis's
marketing skills will enable Genesis to successfully participate in the emerging
market for the sale of goods and services electronically ("eCommerce"),
including through the Internet, because these capabilities provide features such
as audio and video downloading and streaming on the Internet, as well as
interactive websites.

GenesisIntermedia.com was incorporated on October 28, 1993 under the name
Genesis Media Group, Inc. Genesis changed its name to GenesisIntermedia.com,
Inc. on December 3, 1998. Genesis's principal executive offices are located at
13063 Ventura Boulevard, Studio City, California 91604-2238. Its telephone
number at that location is (818) 464-7270.

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THE OFFERING

EXCEPT AS OTHERWISE INDICATED, THE INFORMATION IN THIS PROSPECTUS: (1)
ASSUMES AN INITIAL PUBLIC OFFERING PRICE OF $8.50 PER SHARE OF COMMON STOCK; (2)
REFLECTS A 38,834.95-FOR-ONE STOCK SPLIT, EFFECTIVE ON OCTOBER 27, 1998 (THE
"STOCK SPLIT"); (3) REFLECTS THE SURRENDER OF AN AGGREGATE OF 1,000,000 SHARES
OF COMMON STOCK BY GENESIS'S TWO PRINCIPAL STOCKHOLDERS ON NOVEMBER 1, 1998; (4)
ASSUMES THE REINCORPORATION OF GENESIS FROM FLORIDA TO DELAWARE TO BE EFFECTED
PRIOR TO THE OFFERING; (5) ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION
IS NOT EXERCISED; AND (6) ASSUMES THAT NO OTHER OUTSTANDING OPTIONS OR WARRANTS
ARE EXERCISED.

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Total common stock offered.......... 2,000,000 shares

Outstanding common stock (1)

Before offering................. 3,060,000 shares

After offering.................. 5,060,000 shares

Use of proceeds..................... The net proceeds to be received by Genesis from the
offering are estimated to be approximately
$14,630,000. Genesis intends to use approximately
$500,000 of such proceeds for the repayment of
outstanding debt and to distribute approximately $2
million to existing stockholders for the purpose of
paying income taxes on S corporation ownership
earnings. Genesis intends to use the balance of the
proceeds for expansion of operations, acquisitions
and for general corporate purposes including using $2
million of the proceeds over 18 months to develop and
deploy interactive multimedia kiosks in regional
shopping malls across the United States and other
entertainment centers. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and
Capital Resources."

Proposed Nasdaq symbol:............. GENI
</TABLE>

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(1) The number of shares of common stock outstanding excludes an aggregate of
350,000 shares reserved for issuance upon the exercise of outstanding
options granted under the GenesisIntermedia.com, Inc. 1998 Stock Incentive
Program and 50,000 options issued outside the Stock Incentive Program, with
a weighted average exercise price of $8.63 per share. See "Shares Eligible
for Future Sale."

RISK FACTORS

Prior to making an investment in the common stock, prospective purchasers of
the common stock should take into account the specific risks set forth under
"Risk Factors" as well as the other information set forth in this prospectus.

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SUMMARY FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following tables set forth certain summary financial data to aid
investors in their analysis of this potential investment. The summary financial
data should be read in conjunction with Genesis's complete financial statements
and notes included elsewhere in this prospectus.

STATEMENT OF OPERATIONS DATA

Genesis is currently taxed as an S corporation. As an S corporation,
Genesis's taxable income is passed through to its individual stockholders who
are responsible for paying federal and state income taxes on their portion of
Genesis's taxable income. Shortly before the closing of the initial public
offering, Genesis will terminate its status as an S corporation and will be
subject to federal and additional state income taxes thereafter. The pro forma
information reflects Genesis's net income (loss) and earnings per share as if
Genesis were taxed as a C corporation. The income tax rate used is 40% which
approximates the federal and state income tax rates for the respective periods.
See Note 8 to the financial statements.

The basis for the determination of stock used in computing net earnings
(loss) per share in the following table is described in Note 1 to the financial
statements.

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YEARS ENDED DECEMBER 31, NINE MONTHS ENDED
---------------------------------------------------- SEPTEMBER 30,
1995 1996 1997 --------------------------
------------- ----------- --------- 1997 1998
(UNAUDITED) ----------- -------------
1994 (UNAUDITED) (UNAUDITED)
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(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Total net revenue..................... $ 332 $ 8,665 $ 14,342 $ 18,164 $ 11,724 $ 9,378
Income (loss) from operations......... (149) 111 386 2,435 797 877
Net income (loss)..................... $ (151) $ 93 $ 386 $ 2,367 $ 763 $ 795
Basic earnings (loss) per share....... $ (0.04) $ 0.02 $ 0.10 $ 0.61 $ 0.20 $ 0.20
Diluted earnings (loss) per share..... $ (0.04) $ 0.02 $ 0.10 $ 0.61 $ 0.20 $ 0.20
Shares used in computing earnings
(loss) per share.................... 3,883 3,883 3,883 3,884 3,883 4,000
Pro forma net income (loss)........... $ (151) $ 93 $ 232 $ 1,441 $ 470 $ 483
Pro forma basic earnings (loss) per
share............................... $ (0.04) $ 0.02 $ 0.06 $ 0.37 $ 0.12 $ 0.12
Pro forma diluted earnings (loss) per
share............................... $ (0.04) $ 0.02 $ 0.06 $ 0.37 $ 0.12 $ 0.12
</TABLE>

BALANCE SHEET DATA

The following pro forma balance sheet data are adjusted to give effect to
the acquisition of certain assets of Vision Digital Communications, Inc. Genesis
purchased current assets, equipment and intangible assets of $210,000, $750,000
and $10,000, respectively, in exchange for 60,000 shares of common stock valued
at $600,000 plus the assumption of short-term obligations and long-term debt of
$170,000 and $200,000, respectively. Genesis has also granted the seller options
to purchase up to an additional 50,000 shares of common stock at a weighted
average exercise price of $9.57 per share. These options will be exercisable
only if the acquired division meets certain targeted levels of total revenue
over a three-year period. The options will expire at the end of such three-year
period. The pro forma balance sheet data are also adjusted to give effect to the
surrender of an aggregate of 1,000,000 shares of common stock by Genesis's two
principal stockholders on November 1, 1998.

The pro forma adjusted balance sheet data are also adjusted to give effect
to (a) the pro forma adjustments described in the preceding paragraph; and (b)
the sale of 2,000,000 shares of common stock in this offering at an assumed
initial public offering price of $8.50 per share, after deducting underwriting
discounts and commissions and estimated offering expenses payable by Genesis and
the

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application of the estimated net proceeds, including the use of $500,000 to
repay amounts owed under two notes payable agreements and a $2,000,000
distribution of undistributed S corporation earnings to be used to pay federal
and state income taxes on income that was passed through to the individual
stockholders. See "Use of Proceeds" and "Capitalization."

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<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30, 1998
-------------------------------------------------------- ----------------------------
1995 1996 1997 ACTUAL PRO FORMA
------------- ------------- --------- ------------- -------------
1994 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------
(UNAUDITED)
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BALANCE SHEET DATA:
Working capital (deficit)..... $ 58 $ (53) $ 334 $ 3,037 $ 3,312 $ 3,352
Current assets................ 176 390 708 5,523 6,585 6,795
Total assets.................. 226 409 726 6,714 8,197 9,167
Current liabilities........... 118 443 374 2,486 3,273 3,443
Long-term debt................ 237 -- -- 609 885 1,085
Stockholders' equity
(deficit)................... (129) (34) 352 3,619 4,039 4,639

AS ADJUSTED
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(UNAUDITED)

<S> <C>
BALANCE SHEET DATA:
Working capital (deficit)..... $ 15,982
Current assets................ 18,925
Total assets.................. 21,297
Current liabilities........... 2,943
Long-term debt................ 1,085
Stockholders' equity
(deficit)................... 17,269
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RISK FACTORS

THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. GENESIS'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS
PROSPECTUS. IN EVALUATING GENESIS'S BUSINESS, PROSPECTIVE INVESTORS SHOULD
CONSIDER CAREFULLY THE FOLLOWING FACTORS IN ADDITION TO THE OTHER INFORMATION
SET FORTH IN THIS PROSPECTUS.

LIMITED OPERATING HISTORY; EXPANSION INTO NEW MARKETS

Genesis has only a limited operating history on which to base an evaluation
of its business and prospects. In addition, virtually all of Genesis's revenues
to date have been derived from conventional media solutions, including the
placement of print advertisements, the development and production of
infomercials and the delivery of telemarketing services.

In 1998, Genesis commenced expansion of its media offerings into interactive
multimedia technologies, including the Internet, interactive kiosks, CD-ROM and
DVD-ROM/RAM to businesses seeking to conduct electronic commerce. The expansion
included the formation of Genesis's Genesis Intermedia, Inc. subsidiary.
However, to date, revenue generated by this subsidiary has not been significant.
Nor has Genesis generated revenue from its audio and video download and
streaming capabilities. Genesis expects that conventional media solutions will
continue to account for a significant percentage of its revenues in the
foreseeable future. As a result, if there is a decline in demand for traditional
media solutions as a result of technological changes, competition or otherwise,
then Genesis's business, operating results and financial condition will be
materially adversely affected. The market for such solutions may not continue to
grow and Genesis may not continue to be successful in marketing them. In
addition, Genesis's expansion into interactive multimedia technologies has been
accomplished through recent acquisitions of assets and personnel. Genesis may
not be able to integrate such acquisitions successfully.

Genesis and its prospects must be considered in light of the risks, expenses
and difficulties frequently encountered by companies in an early stage of
development, particularly companies in new and rapidly evolving markets such as
the eCommerce market. Such risks for Genesis include, but are not limited to, an
evolving business model and the management of both internal and
acquisition-based growth. To address these risks, Genesis must continue to
develop the strength and quality of its operations, maximize the value delivered
to clients, respond to competitive developments and continue to attract, retain
and motivate qualified employees. Genesis may not be successful in meeting these
challenges and addressing such risks. If Genesis fails to do so, then Genesis's
business, results of operations and financial condition will be materially
adversely affected.

RISKS RELATED TO ACQUISITIONS

A key component of Genesis's growth strategy is the acquisition of other
professional service firms and products or companies with products that meet
Genesis's criteria for strategic fit, geographic presence, revenues,
profitability, growth potential and operating strategy. The successful
implementation of this strategy depends on Genesis's ability to identify
suitable acquisition candidates, acquire such companies on acceptable terms and
integrate their operations successfully with those of Genesis.

As of November 30, 1998, Genesis had acquired substantially all of the
assets of Vision Digital Communications, Inc. and entered into a letter of
intent to acquire the assets of AniMagic Corporation, which is in bankruptcy
proceedings. The acquisition of the assets of AniMagic is still subject to court
approval and possible overbid. Genesis has in addition hired two of the
principal employees of AniMagic. These companies were identified as suitable
acquisition candidates because they provide product distribution and marketing
capabilities through interactive kiosks (Vision Digital) and audio and video
downloading and streaming technology (AniMagic). However, to date, revenue
generated from these new operations has been minimal and Genesis has experienced
operating losses in these start-up

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areas. Development and integration of these different marketing channels is a
significant part of Genesis's strategy to be an integrated multimedia marketing
and business solutions provider.

Genesis may not be able to continue to identify additional suitable
acquisition candidates in the service (distribution channel) or product areas or
Genesis may not be able to acquire such candidates on acceptable terms.
Moreover, in pursuing acquisition opportunities Genesis will likely compete with
other companies, certain of whom may be larger and have greater financial and
other resources than Genesis. Competition for these acquisition targets likely
could also result in increased prices of acquisition targets and a diminished
pool of companies available for acquisition.

Acquisitions also involve a number of other risks, including adverse effects
on Genesis's reported operating results from increases in goodwill amortization,
the risks of acquiring undisclosed or undesired liabilities, acquired in-process
technology, stock compensation expense and increased compensation expense
resulting from newly hired employees, the diversion of management attention,
potential disputes with the sellers of one or more acquired entities and the
possible failure to retain key acquired personnel. With the Vision Digital
acquisition, Genesis is still undertaking such integration and a complete
evaluation of the success of such integration is not yet possible. The AniMagic
acquisition is still subject to bankruptcy court approval and possible overbid,
and Genesis could be faced with the result of hiring key former employees of
AniMagic without acquiring the assets of AniMagic. Genesis does not believe that
such an outcome will materially adversely affect Genesis or its audio and video
download and streaming capability, but it would likely result in additional
equipment expense. Client satisfaction or performance problems with an acquired
firm could also have a material adverse impact on the reputation of Genesis as a
whole, and any acquired entity or assets could significantly under-perform
relative to Genesis's expectations. Genesis's ability to meet these challenges
in the Vision Digital and AniMagic transactions specifically and generally over
the long term has not been established.

To the extent Genesis chooses to use cash consideration for acquisitions in
the future, Genesis may be required to obtain financing. Such financing may not
be available on favorable terms, if at all. If Genesis issues stock to complete
future acquisitions, existing stockholders will experience further ownership
dilution.

MANAGEMENT OF GROWTH

Genesis's future growth may place a significant strain on Genesis's
managerial, operational, financial and other resources. Genesis's success will
depend upon its ability to manage its internal and acquisition growth
effectively. This will require that Genesis continue to implement and improve
its operational, administrative and financial and accounting systems and
controls and continue to expand, train and manage its employee base. Genesis has
recently hired a number of new employees and anticipates that it will continue
to do so for some time. Integration of the employees and employee loss in the
process will require significant management attention and resources. Genesis's
systems, procedures and controls may not be adequate to support Genesis's
operations and Genesis's management may not be able to achieve the rapid
execution necessary to exploit the market for Genesis's business model of a
fully integrated multimedia marketing and business solutions provider. If
Genesis is unable to manage internal or acquisition-based growth effectively,
Genesis's business, results of operations and financial condition will be
materially adversely affected.

DEPENDENCE ON KEY PERSONNEL

Genesis's ability to maintain its competitive position is dependent on the
services of its senior management, in particular Ramy El-Batrawi. Genesis has a
$4 million key-man life insurance policy covering Mr. El-Batrawi, $900,000 of
which is allocated to payment of the mortgage on Genesis's headquarters. Genesis
has a written employment agreement with Mr. El-Batrawi, as well as with two
other employees who were recently hired in connection with Genesis's acquisition
of certain assets of Vision

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Digital Communications, Inc. See "Management--Employment agreements and
termination of employment arrangements." Genesis does not presently have written
employment agreements with any other of its key employees. The loss of the
services of one or more members of senior management could have a material
adverse effect on Genesis.

RECRUITMENT AND RETENTION OF SOLUTIONS PROFESSIONALS

Genesis's success depends in part on its ability to identify, hire, train
and retain consulting professionals who can provide the technological expertise,
marketing experience, and creative skills required by clients. Because of the
intense interest in and demand for talented persons experienced in multimedia
business, including eCommerce, it is currently difficult to hire such personnel
at reasonable cost, if at all. This shortage is likely to continue for the
foreseeable future. Genesis competes intensely for qualified personnel with
other companies, and there can be no assurance that Genesis will be able to
attract, assimilate or retain highly qualified technical, marketing and
managerial personnel in the future. A number of Genesis's current personnel have
been hired recently and Genesis may not be successful in retaining and
assimilating all such personnel. Employees generally are not subject to
contracts of employment and are, therefore, typically able to move within the
industry with relative ease. If Genesis is unable to continue to attract and
retain additional key personnel, or if it is unable to retain and motivate its
existing key personnel, then its business, results of operations and financial
condition would be materially adversely affected.

COMPETITION

The market for fully integrated multimedia marketing and business solutions
is relatively new, intensely competitive and subject to rapid technological
change. Genesis expects competition to persist, intensify and increase in the
future. Genesis's current competitors can be divided into several groups:

- advertising and media agencies, such as Foote, Cone & Belding, Young &
Roubicam, Inc. and Ogilvy & Mather;

- direct marketing companies, such as National Media Corporation, Guthy-
Renker Corporation and Xoom.com, Inc.;

- Internet integrators and Web content presence providers, such as iXL
Holding, Inc., Organic Online, Inc., Poppe Tyson, Proxicom, Inc.,
audiohighway.com and US Web, Inc;

- large information technology consulting service providers, such as
Andersen Consulting, Cambridge Technology Partners and Electronic Data
Systems Corporation; and

- Internet and online service providers, such as America Online
Incorporated, NETCOM On-Line Communications Services Inc. and UUNet
Technologies, Inc.

Although only a few of these competitors have to date offered a full range of
integrated marketing and business solutions to companies, several have announced
their intention to do so. Microsoft Corporation also recently announced its
acquisition of an Internet advertising concern.

Furthermore, most of Genesis's current and potential competitors have longer
operating histories, larger installed customer bases, longer relationships with
clients and significantly greater financial, technical, marketing and public
relations resources than Genesis. These competitors could decide at any time to
increase their resource commitments to Genesis's market. In addition, the market
for eCommerce generally and intranet, extranet and web site development in
particular is relatively new and subject to continuing definition, and, as a
result, may better position Genesis's competitors to compete in this market as
it matures. Competition of this type could materially adversely affect Genesis's
business, results of operations and financial condition.

LOW BARRIERS TO ENTRY

There are relatively low barriers to entry into the integrated multimedia
marketing and business solutions market. Genesis relies heavily on the skill of
its personnel and the quality of its client service, and has no patented
technology that would preclude or inhibit competitors from entering its market.
Genesis expects that it will

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face additional competition from new entrants into the market in the future.
Principal competitive factors include a company's creative reputation, knowledge
of media, financial controls, geographical coverage and diversity, relationships
with clients, technological capability and quality and breadth of services. If
existing or future competitors develop or offer services that provide
significant performance, price, creative or other advantages over those offered
by Genesis, then Genesis's business, results of operations and financial
condition would be materially adversely affected.

CONFLICTS POLICIES

In many cases, a conflicts policy or an industry practice prohibits one
media company from serving all aspects of a client's marketing needs or from
performing similar services for competing products or companies. Genesis's
ability to compete in various segments of the marketing and communications
business may also be limited by various self-regulatory or governmental
restrictions. Genesis's ability to acquire new clients or additional assignments
from existing clients may be limited by such policies, practices or regulations.

CONCENTRATION OF REVENUES; RELIANCE ON RELATED PARTY FOR REVENUE

A relatively small number of clients and products contribute significantly
to Genesis's revenues. In 1997, the two largest products, "Men are From Mars,
Women are From Venus" and "Trade Your Way to Riches," constituted approximately
89% of Genesis's total revenues. Selling media time to Trade Your Way to Riches,
Inc. and the "Trade Your Way to Riches" line of products constituted
approximately 45% of Genesis's revenue. Genesis's majority stockholder owns
Trade Your Way To Riches, Inc.

Because Genesis intends to continue to rely on products such as these, it is
possible that Genesis's dependence on revenues from a limited number of products
will continue in the future. Genesis frequently markets products on the basis of
oral agreements which may be terminated by either party at any time and Genesis
has no written contracts relating to its sale of media time to clients,
including Trade Your Way to Riches, Inc. Any of Genesis's clients may
discontinue utilizing Genesis and its services at any time in the future. If
there is a significant reduction in product sales or in a large client's
marketing expenditures or the loss of one or more of Genesis's largest products
or clients, and this is not replaced by new products or client accounts or an
increase in business from existing products or clients, then there would be a
material adverse effect on Genesis's business, results of operations and
financial condition.

NEED TO DEVELOP NEW PRODUCTS

Genesis's marketing operations are dependent on its continuing ability to
develop or obtain rights to new products to supplement or replace existing
products as they mature through their product life cycles. For instance, in the
third quarter of 1998, Genesis added 13 new products to its product line. One or
more or all of such products may fail to achieve profitability or result in net
loss to Genesis. Even if Genesis is able to introduce other new products, such
new products may not be successful. Genesis's future results of operations
depend on its ability to spread its revenue (sales) stream over a larger number
of products in a given period and to more effectively exploit the full revenue
potential of each product it introduces through all levels of consumer
marketing, whether directly or through third parties.

The future revenues of the business will depend substantially on Genesis's
ability to, among other things:

- create and maintain an effective, integrated organization that develops,
introduces and markets products that address changing consumer needs on a
timely basis;

- establish and maintain effective delivery platforms for its products; and

- develop new and expand established geographic markets.

Genesis may not be able to achieve these goals. While Genesis maintains an
internal product development group responsible for seeking out new products from
third parties, there can be no assurance that present and potential third-party
product providers will choose to market products

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through Genesis in the future. If Genesis experiences any significant delays or
reductions in product introductions in future periods, then Genesis's business,
results of operations and financial condition could be materially adversely
affected.

UNPREDICTABLE PRODUCT LIFE; INVENTORY MANAGEMENT AND PRODUCT RETURNS

Product sales and results of operations for a given period depend upon,
among other things, a positive customer response to Genesis's direct marketing
efforts, Genesis's effective management of product inventory and each product's
life cycle. Genesis's marketing operations are dependent on its continuing
ability to develop or obtain rights to new products to supplement or replace
existing products as they mature through their product life cycles. Genesis's
future results of operations will also be dependent upon its ability to
proactively manage its products through their life cycles. Genesis's two most
successful products in fiscal 1997 accounted for approximately 89% of Genesis's
total net revenues for such period. Customer response to direct marketing
depends on many variables, including the appeal of the products being marketed,
the effectiveness of the marketing script or infomercials, the availability of
competing products and the timing and frequency of phone contacts and air-time.
One or more of Genesis's new products may not receive market acceptance.

It is possible that, during a product's life, unanticipated obsolescence may
occur or problems may arise regarding regulatory, intellectual property, product
liability or other issues which may affect the continued viability of the
product for sale. Genesis may still hold a sizable inventory position in such a
product. Although Genesis attempts to develop products with extended product
lives, Genesis's products will have a limited market life. It is, therefore,
extremely important that Genesis rapidly realize the potential of each
successful product.

Historically, most products in the direct marketing industry generate their
most significant revenue in their introductory year. A product that has produced
significant sales may not continue to produce significant, or any, sales in the
future. As a result, Genesis is dependent on its ability to adapt to market
conditions and competition as well as other factors which affect the life cycles
of its products and its ability to continue to identify and successfully market
new products. Genesis introduced its "Men Are From Mars, Women Are From Venus"
product in 1994 and its "Trade Your Way to Riches" product in 1996. While
Genesis has experienced continuing revenue from these products, it may not in
the future and other products Genesis introduces may experience much shorter
revenue lives. If sales from these products diminish significantly or if newly
introduced products fail or there are significant delays or failures in the
introduction of new products, then this would adversely impact Genesis's results
of operations in terms of both lost opportunity cost and actual loss of dollars
invested.

Even when market acceptance for Genesis's new products occurs, Genesis's
results of operations may be adversely impacted by returns of such products,
either pursuant to Genesis's product satisfaction guaranties or otherwise. If
returns are higher than expected, then Genesis's business, results of operations
and financial condition would be materially adversely affected.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS

As a result of Genesis's limited operating history, rapid growth and
transition from conventional marketing media to delivery of new multimedia
solutions, and because of the emerging nature of the markets in which it
competes, Genesis's historical financial data are of limited value in planning
future operating expenses. Genesis's expense levels will be based in part on its
expectations concerning future revenues. Genesis's revenues are derived
primarily from media and product sales, which are difficult to forecast
accurately, particularly because Genesis has only recently entered interactive
multimedia markets.

Because Genesis's revenues generally reflect the media buying patterns of
advertisers and are concentrated in the second and fourth quarters of the year,
Genesis may be unable to adjust spending in a timely manner to compensate for
any unexpected shortfall in revenues. Accordingly, a significant shortfall in
demand for

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Genesis's services could have an immediate and material adverse effect on
Genesis's business, results of operations and financial condition. Further,
business development and marketing expenses may increase significantly as
Genesis expands its operations. To the extent that such expenses precede or are
not rapidly followed by increased revenues, Genesis's business, results of
operations and financial condition may be materially adversely affected.

Genesis's quarterly operating results may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside Genesis's
control. These factors include:

- the level of demand for Genesis's products or services;

- the level of demand for conventional media and the Internet;

- intranet and extranet development and marketing;

- Genesis's success in finding and acquiring suitable acquisition
candidates;

- Genesis's ability to attract and retain personnel with the necessary
strategic, technical and creative skills required to service clients
effectively;

- the cost of media time;

- the amount and timing of expenditures by clients on the development of
integrated business solutions;

- client budgetary cycles;

- the amount and timing of capital expenditures and other costs relating to
the expansion of Genesis's operations;

- the introduction of new products or services by Genesis or its
competitors;

- pricing changes in the industry;

- technical difficulties with respect to the use of the Internet;

- economic conditions specific to Internet technology usage;

- government regulation and legal developments regarding the use of the
Internet; and

- general economic conditions.

As a strategic response to changes in the competitive environment, Genesis may
from time to time make certain pricing, service, technology or marketing
decisions or business or technology acquisitions that could have a material
adverse effect on Genesis's quarterly results. Genesis may also experience
seasonality in its business in the future, resulting in diminished revenues to
Genesis as a consequence of decreased demand for marketing and business
solutions during certain periods of the year. Due to all of these factors, in
some future quarter Genesis's operating results may fall below the expectations
of securities analysts and investors. In such event, the trading price of
Genesis's common stock will likely be materially and adversely affected.

Genesis's future results of operations will also be dependent upon its
ability to proactively manage its products through their life cycles. If Genesis
fails to maintain existing products and clients or develop or attract new
products or clients, then this could have a material adverse effect on Genesis's
business, results of operations and financial condition.

UNCERTAIN ADOPTION OF INTEGRATED MULTIMEDIA SOLUTIONS; DEPENDENCE ON CLIENT
OUTSOURCING

Genesis's existing client base is largely composed of companies that have
primarily or exclusively used conventional marketing and advertising media.
Genesis's success will be dependent on the willingness of these clients and
other companies to use existing and yet to be developed multimedia solutions
offered by Genesis. Companies utilizing traditional media solutions may elect
not to adopt multimedia solutions to improve their business processes or to
enter into the eCommerce market.

Even if companies adopt multimedia solutions, businesses may elect not to
outsource the design, development and maintenance of their intranets, extranets,
web sites and other multimedia solutions to third parties such as Genesis.
Companies may decide to assign the design, development and implementation of
multimedia solutions to their internal information technology divisions, which
have ready access to the information and technology required to prepare
proposals for such solutions. If independent providers of multimedia solutions
prove to be

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unreliable, ineffective or too expensive, or if software companies develop tools
that are sufficiently user-friendly and cost-effective, then enterprises may
choose to design, develop or maintain all or part of their intranets, extranets,
web sites and other multimedia solutions in-house. If the market for Genesis's
solutions does not continue to develop or develops more slowly than expected, or
if Genesis's solutions do not achieve market acceptance, then Genesis's
business, results of operations and financial condition will be materially
adversely affected.

UNCERTAIN ACCEPTANCE OF THE INTERNET AS A MARKETING AND ADVERTISING MEDIUM

THE NEW MARKET FOR INTERNET MARKETING AND ADVERTISING. The market for
Internet advertising has recently begun to develop, is rapidly evolving and is
characterized by an increasing number of market entrants, although Internet
advertising continues to be dominated by the larger web sites. Non-advertising
marketing solutions utilizing the Internet as a base have also only recently
been developed. Genesis is seeking to enter this market through its
acquisition-based expansion, development or acquisition of new technological
capability and the hiring of additional personnel. As is typical in the case of
a new and rapidly evolving industry, demand and market acceptance for recently
introduced products and services are subject to a high level of uncertainty.

Genesis's ability to generate revenue will depend on, among other factors:

- the continued development of the Internet as an advertising medium;

- pricing of marketing and advertising services by other Internet
participants;

- the ability of Genesis to develop marketing solutions that use the
Internet and that appeal to both Genesis's clients and their customers;

- Genesis's ability to achieve and demonstrate user demographic
characteristics that are attractive to clients;

- the development and expansion of Genesis's marketing and advertising sales
forces; and

- the establishment and maintenance of desirable marketing and advertising
sales agency relationships.

LIMITED CLIENT EXPERIENCE. Most potential clients and their marketing
advisors and advertising agencies have only limited experience with the Internet
as a marketing or advertising medium and have not historically devoted a
significant portion of their marketing or advertising expenditures to Internet
solutions. Companies and their marketing or advertising agencies may not be
persuaded to allocate or continue to allocate portions of their budgets to
Internet solutions or, if they are so persuaded, they may not find such
marketing and advertising to be effective for promoting their products and
services relative to conventional print and broadcast media. Acceptance of the
Internet for eCommerce will also depend, to a large extent, on the level of use
of the Internet by consumers.

LACK OF STANDARD MEASURES OF EFFECTIVENESS. No standards have yet been
widely accepted for the measurement of the effectiveness of Internet-based
marketing or advertising, and there can be no assurance that such standards will
develop sufficiently to enable the Internet to become a significant marketing or
advertising medium. Despite the lack of this type of empirical evidence that
typically is necessary to justify marketing or advertising expenditures in other
media, Genesis believes that the marked increases in advertising volume on the
Internet indicate that the Internet is increasingly being accepted by
advertisers as an advertising medium. However, Genesis believes that in the long
term acceptance of the Internet as an advertising medium will require
demonstrable effectiveness of the medium.

If widespread commercial use of the Internet does not develop, or if the
Internet does not develop as an effective and measurable medium for marketing
and advertising, then Genesis's business, results of operations and financial
condition would be materially adversely affected.

TECHNICAL CONCERNS. The Internet may not prove to be a viable commercial
marketplace because of inadequate development of the necessary infrastructure,
lack of development of complementary products, such as high-speed modems

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and high-speed communication lines, implementation of competing technology,
delays in the development or adoption of new standards and protocols required to
handle increased levels of Internet activity, governmental regulation, or other
reasons. The Internet has experienced, and is expected to continue to
experience, significant growth in the number of users and volume of traffic. The
Internet infrastructure may not continue to be able to support the demands
placed on it by this continued growth. Moreover, critical issues concerning the
use of Internet solutions (including security, reliability, cost, ease of
deployment and administration and quality of service) remain unresolved and may
affect the growth of the use of such technologies to solve business problems. If
critical issues concerning the viability of the Internet as a commercial
marketplace are not resolved or if the necessary infrastructure is not
developed, then Genesis's business, results of operations and financial
condition will be materially adversely affected.

RAPID TECHNOLOGICAL CHANGE IN GENESIS'S MARKETS

The market for integrated multimedia marketing and business solutions is
characterized by rapid technological change, changes in user and client
requirements and preferences, frequent new product and service introductions and
evolving industry standards and practices. One or more of these could render
Genesis's existing services and methodologies obsolete. Genesis's success will
depend in part on its ability to keep pace with technological developments and
emerging industry standards and to respond to its clients' requirements by
enhancing its current products and services and developing and introducing new
products and services. If Genesis fails to anticipate or respond rapidly to
advances in technology and to adapt Genesis's future products and services
appropriately, then its business, results of operations and financial condition
could be materially adversely affected.

UNCERTAIN STRENGTH OF GENESIS BRAND

Genesis believes that developing GenesisIntermedia.com brand recognition
among businesses seeking marketing and business solutions in any of the media
channels served by Genesis will be an important aspect of its efforts to attract
clients. The importance of brand recognition will increase due to the increasing
number of companies purporting to offer integrated multimedia marketing and
business solutions to companies, including companies solely conducting
eCommerce.

Promoting and positioning the GenesisIntermedia.com brand will depend
largely on the success of Genesis's marketing efforts and Genesis's ability to
provide high-quality, reliable and cost-effective marketing and business
solutions strategy consulting, analysis and design, technology development,
implementation and integration, audience development and maintenance services.
This will be particularly dependent on Genesis's ability to develop Internet and
eCommerce solutions. If clients do not perceive Genesis's services as meeting
their needs, or if Genesis fails to market those services effectively, then
Genesis will be unsuccessful in maintaining and strengthening its brand.

Furthermore, to promote the GenesisIntermedia.com brand in response to
competitive pressures, Genesis may need to increase its marketing budget or to
otherwise increase its financial commitment to creating and maintaining brand
loyalty among clients. If Genesis fails to promote and maintain its brands, or
incurs excessive expenses in an attempt to promote and maintain its brands, then
Genesis's business, results of operations and financial condition will be
materially adversely affected.

NATURE OF THE MARKETING INDUSTRY

COMPETITIVE FACTORS. The worldwide marketing industry is characterized by
extreme competition for products, customers and media access. Genesis's future
in this industry will depend in part on, among other things:

- its access to, and efficient management of, media time;

- the introduction of successful products and the full exploitation of such
products through not only direct marketing but also traditional retail
marketing and other channels of distribution;

- its ability to enhance its product lines and support product marketing and
sales with

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efficient order fulfillment and customer services; and

- its ability to successfully integrate the entities or businesses Genesis
has acquired or may acquire into an efficient enterprise.

CYCLICAL NATURE OF THE INDUSTRY. The marketing industry generally follows
general economic conditions and changes in client business and marketing
budgets. The United States economy has been consistently expanding for a number
of years, but there is no guaranty that this will continue and global economic
developments may lead to a slowing or end of such expansion. Genesis's business,
financial condition and results of operations may be materially adversely
affected by a downturn in general economic conditions in one or more markets or
by changes in client business and marketing budgets.

DEPENDENCE ON THIRD-PARTY MANUFACTURERS AND SERVICE PROVIDERS

Genesis has historically been dependent on third-party sources, both foreign
and domestic, to manufacture all of its own products that it markets and to
provide certain telemarketing services. Genesis also relies on third parties for
physical fulfillment of its and its client's product orders.

If Genesis is unable, either temporarily or permanently, to obtain a timely
supply of product to fulfill sales orders for one of its own products or to
satisfy orders for such products, then this would have a material adverse effect
on Genesis's results of operations. Moreover, because the time from the initial
approval of a product by Genesis's product development personnel to the first
sale of such product is relatively short, Genesis's ability to cause its
manufacturing sources to meet its production and order fulfillment deadlines at
reasonable costs and produce a high-quality product or render quality service is
important to its business. Genesis may not be able to successfully manage this
process in such a way to maximize its sales of its products.

In addition, Genesis retains title to its products while they are at
third-party warehouses, or fulfillment centers, that process orders and ship
product to fill these orders. Although Genesis maintains business interruption
insurance and other insurance for its business, the termination of or adverse
change in Genesis's relationship with any such fulfillment center or the partial
or total loss to any of these facilities or Genesis's inventories stored there
may have a material adverse effect upon Genesis's business, results of
operations and financial condition.

DEPENDENCE ON MEDIA ACCESS

MEDIA PURCHASE COMMITMENTS. Genesis has historically been dependent on
having access to media time to televise its infomercials on cable networks,
network affiliates and local stations. Media time is unavailable on an as-needed
basis and must be purchased in advance. Genesis typically takes advantage of
single time or spot purchases, but intends to consider long-term purchases when
prudent. However, to date, Genesis's media purchases have been limited by its
capital resources. For numerous reasons, including those outside Genesis's
control, Genesis may not be able to purchase or renew media time on a desired
basis or at favorable price levels.

DEMANDS FOR AIR TIME AND CHANGES IN THE MARKETPLACE. Genesis purchases a
significant amount of its media time from cable television and satellite
networks. These cable television and satellite networks assemble programming for
transmission to multiple and local cable system operators. These cable system
operators may not be required to carry all of the network's programming. Genesis
currently does not pay and is not paid for the "privilege" of being broadcast by
these operators. It is possible that, if demand for air time grows, these
operators will begin to charge Genesis to continue broadcasting Genesis's
infomercials or limit the amount of time available for broadcast. Recently,
larger multiple system operators have elected to change their operations by
selling "dark" time (i.e., the hours during which a station does not broadcast
its own programming).

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Significant increases in the cost of media time or significant decreases in
Genesis's access to media time could have a material adverse effect on its
results of operations. Even if Genesis secures media access, it may not be able
to sell such time for Genesis's products or sell it to third parties on
favorable terms, if at all. Genesis's programming may also not attract viewers
and its products may not be accepted by consumers as anticipated by Genesis.

EFFECTIVE MANAGEMENT OF MEDIA TIME

Genesis's ability to manage its media time is vitally important to its
success in media sales. This media management function must also include a
meaningful coordination between available marketing and available media time.
Whenever Genesis makes advance purchases and commitments to purchase media time,
any failure by Genesis to manage such media time effectively could have a
material adverse effect on Genesis's results of operations. If Genesis is unable
to utilize all of the media time it has acquired, it attempts to arrange to sell
a portion of its media time to others. However, Genesis may not be able to use
all of its media time or sell it to others and, if Genesis enters into long-term
media contracts, Genesis may not be able to successfully negotiate extensions on
terms favorable to Genesis. If Genesis is unable to extend one or more of such
contracts on reasonable terms as they expire, then Genesis's business, results
of operations and financial condition would be materially adversely affected.

DEPENDENCE ON INTELLECTUAL PROPERTY

Genesis's success will depend in part on its ability to protect its
proprietary rights and to operate without infringing on the proprietary rights
of third parties. Genesis licenses the rights to John M. Gray, Ph.D.'s book Men
Are From Mars, Women Are From Venus for creation and marketing of the video and
audio products directly marketed by Genesis. Genesis also licenses the rights to
produce and market other products, such as "Hawaiian Tropic" swimwear. Genesis
is dependent upon the protection of these intellectual properties by their
licensors and is responsible for protecting them as well.

For the development of its marketing channel capabilities and technologies
Genesis intends to rely upon unpatented trade secrets and know-how and on the
expertise of its employees. Although Genesis believes that it has taken
appropriate steps to protect its unpatented proprietary rights, including
requiring that its employees and third parties who are granted access to its
proprietary technology enter into confidentiality agreements with Genesis, these
measures may not be sufficient to protect its rights against third parties.
Likewise, others may independently develop or otherwise acquire unpatented
technologies or products similar or superior to those of Genesis.

Genesis may in the future be required to defend its intellectual property
rights against infringement, duplication, discovery and misappropriation by
third parties or to defend itself against third-party claims of infringement.
These risks are increased by the fact that Genesis does not have any registered
copyrights, trademarks or patents covering any of its proprietary technology and
that Genesis generally licenses intellectual property from third parties.
Likewise, disputes may arise in the future with respect to ownership of
technology developed by employees who were previously employed by other
companies. Any such litigation or disputes could result in substantial costs to,
and a diversion of effort by, Genesis. An adverse determination could subject
Genesis to significant liabilities to third parties, require Genesis to seek
licenses from or pay royalties to third parties or require Genesis to develop
appropriate alternative technology. Licenses may not be available on acceptable
terms, or at all, and Genesis may not be able to develop alternate technology or
products at an acceptable price, if at all. Any of these events could have a
material adverse effect on Genesis's business, results of operations and
financial condition.

LIMITED EXPERIENCE OF MANAGING UNDERWRITER

The managing underwriter has had limited experience in acting as an
underwriter in public offerings of securities. Commencing in September 1996, the
managing underwriter has acted as an underwriter or a member of the selling
group

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in seven public offerings. It acted as co-managing underwriter in four of such
offerings and has participated in five private offerings. The managing
underwriter has never previously acted as the managing underwriter of a public
offering. This may adversely affect the proposed public offering of the common
stock and the subsequent development of a trading market, if any, for Genesis's
common stock.

CONTINUING INFLUENCE OF MILLENNIUM FINANCIAL OVER GENESIS

Millennium Financial Group, Inc., the managing underwriter, will continue to
have influence over Genesis following the offering. This influence results from
the following factors:

- Millennium will be able to appoint a member of the Board of Directors of
Genesis for a five-year period.

- Millennium has the right to have an observer present at all meetings of
the Board of Directors of Genesis.

- Millennium will receive warrants to purchase 200,000 shares of common
stock, for a nominal consideration, exclusive of the over-allotment
option.

- Millennium can refuse to allow Genesis to sell or offer any securities
over a 12-month period after the date of the prospectus.

- Millennium has demand and "piggyback" registration rights with respect to
its Genesis securities.

- Millennium has a right of first refusal on offerings of securities by
Genesis.

- Millennium may refuse to allow Genesis to amend any material employment
agreement, option agreement, or other agreement providing compensation to
any officer, director, or principal shareholder over a 12-month period
after the date of the prospectus.

These contractual arrangements and restrictions may have a significant adverse
effect on Genesis's ability to obtain financing for the continuation of its
business.

CONTROL BY PRINCIPAL STOCKHOLDER

Substantially all of Genesis's common stock is owned by Ramy El-Batrawi.
Upon consummation of the offering, Mr. El-Batrawi will own 57.56% of the
outstanding shares of common stock. As a result, Mr. El-Batrawi will be able to
exercise control over any matters requiring the vote of stockholders, including
the election of Directors. This could delay or prevent a change in control of
Genesis. In addition, Genesis's Certificate of Incorporation and Bylaws provide
that Mr. El-Batrawi will not be deemed an "interested stockholder" under the
Delaware General Corporation Law. As a result, unlike other stockholders whose
attempts to obtain control of Genesis may be delayed or prevented by such law,
Mr. El-Batrawi could increase his ownership and control over Genesis without
such delay. This may have the effect of precluding or delaying the opportunity
of minority stockholders to sell their common stock to interested purchasers
other than Mr. El-Batrawi or may significantly reduce the offering price in any
such transaction to compensate for the restrictions on such purchase and the
uncertainty of Mr. El-Batrawi increasing his control.

FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FINANCING

Genesis currently anticipates that its available cash resources and credit
facilities, combined with the net proceeds to Genesis from this offering, will
be sufficient to meet its presently anticipated working capital and capital
expenditure requirements through 1999. However, Genesis may need to raise
additional funds in order to support more rapid expansion, develop new and
enhanced services and products, respond to competitive pressures, acquire
complementary businesses or technologies or take advantage of unanticipated
opportunities, in which event additional cash might be required earlier.
Genesis's future liquidity and capital requirements will depend upon numerous
factors, including the success of Genesis's existing and new product and service
offerings and competing technological and market developments.

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Genesis may be required to raise additional funds through public or private
financing, strategic relationships or other arrangements. Such additional
funding, if needed, may not be available on terms acceptable to Genesis, or at
all. Furthermore, any additional equity financing may be dilutive to
stockholders, and debt financing may involve restrictive covenants, which may
limit Genesis's operating flexibility with respect to certain business matters.
Strategic arrangements, if necessary to raise additional funds, may require
Genesis to relinquish its rights to certain of its intellectual property. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the stockholders of Genesis will be reduced,
stockholders may experience additional dilution in net book value per share, and
such equity securities may have rights, preferences or privileges senior to
those of the holders of Genesis's common stock. If adequate funds are not
available on acceptable terms, Genesis may be unable to develop or enhance its
services and products, take advantage of future opportunities or respond to
competitive pressures, any of which could have a material adverse effect on
Genesis's business, results of operations and financial condition.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES

Due to the increasing popularity and use of the Internet, it is likely that
a number of laws and regulations may be adopted at the local, state, national or
international levels with respect to the Internet covering issues such as user
privacy, freedom of expression, pricing of products and services, taxation,
advertising, intellectual property rights, information security or the
convergence of traditional communications services with Internet communications.
Congress has already held hearings on whether to regulate providers of services
and transactions in the eCommerce market. The adoption of such laws and
regulations could curtail the growth of the Internet and negatively affect
client demand for Internet solutions that facilitate eCommerce. In addition, the
applicability to the Internet of existing laws governing issues such as property
ownership, copyrights and other intellectual property issues, taxation, libel
and personal privacy is uncertain. The vast majority of such laws were adopted
prior to the advent of the Internet and related technologies and, as a result,
do not contemplate or address the unique issues of the Internet and related
technologies. Legal and regulatory changes to such laws intended to address
these issues may reduce demand for Genesis's services, increase the cost of
doing business, or in some other manner have a material adverse effect on
Genesis's business, results of operations and financial condition.

CFTC INVESTIGATION

Genesis may also be subject to regulation by the Commodity Futures Trading
Commission (the "CFTC"), which regulates commodities trading. On November 14,
1997, the CFTC issued an Order authorizing certain persons to issue subpoenas
and take depositions in a private investigation involving Jake Bernstein and MBH
Commodity Advisors. Although the Order does not reference Genesis, its employees
or affiliates, the CFTC has nonetheless requested that Genesis provide various
documents arising out of Genesis's involvement in the production and marketing
of an infomercial titled "Success and You" which promotes and markets a video
series titled "Trade Your Way To Riches." The infomercial "Success and You"
involves the marketing of videos which provide instruction regarding trading
strategies. The CFTC has contended that, by virtue of its activities in
producing and marketing the video, Genesis may be required to be registered in
some capacity with the CFTC. In the event that the CFTC brings an enforcement
action against Genesis by virtue of its failure to register, or against Trade
Your Way to Riches, Inc. with whom Genesis does significant business and which
is owned by Genesis's majority stockholder, any adverse determination or
settlement in such action could materially adversely affect Genesis through,
among other things, the imposition of fines and/or restrictions on business
activities. The CFTC may still bring an enforcement action against Genesis. See
"Business--Legal proceedings."

THIRD-PARTY LIABILITY

Genesis from time to time may be, or may be joined as, a defendant in
litigation brought against its clients by third parties, including,

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without limitation, claims brought by such clients' competitors, regulatory
bodies or consumers, alleging that advertising claims made with respect to such
client's products or services are false, deceptive or misleading, that such
clients' products are defective or injurious or that marketing and
communications materials created for such clients infringe on the proprietary
rights of third parties. If, in such circumstances, Genesis is not insured under
the terms of the insurance policies with its insurers or is not indemnified
under the terms of its agreements with such clients (or such indemnification is
unavailable) with respect to such claims, then the damages, costs, expenses or
attorneys' fees arising from any such claims could have a material adverse
effect on Genesis's, business, results of operations and financial condition. In
addition, Genesis's contracts with clients sometimes require it to indemnify
clients for claims brought by competitors or others claiming that advertisements
or other communications infringe on intellectual property rights. Although
Genesis maintains business insurance it believes is adequate for its operations,
adequate insurance coverage in the future, or the insurance held by Genesis may
not be sufficient if a significant adverse claim is made. Genesis does not
maintain insurance designed specifically for advertising agency liability.

POTENTIAL LIABILITY TO CLIENTS

Many of Genesis's consulting engagements involve the development,
implementation and maintenance of applications that are critical to the
operations of its clients' businesses. Genesis's failure or inability to meet a
client's expectations in the performance of its services could injure Genesis's
business reputation or result in a claim for substantial damages against
Genesis, regardless of Genesis's responsibility for such failure. Genesis
attempts to contractually limit its damages arising from negligent acts, errors,
mistakes or omissions in rendering integrated multimedia solutions; however,
there can be no assurance that these contractual protections will be enforceable
in all instances or would otherwise protect Genesis from liability for damages.
The successful assertion of one or more large claims against Genesis that are
uninsured, exceed available insurance coverage or result in changes to Genesis's
insurance policies, including premium increases or the imposition of a large
deductible or co-insurance requirements, could materially adversely affect
Genesis's business, results of operations and financial condition.

YEAR 2000 RISK

Genesis has completed a comprehensive review of its computer systems to
identify all software applications that could be affected by the inability of
many existing computer systems to process time-sensitive data accurately beyond
the year 1999 (referred to as the "Year 2000" issue). Genesis is also continuing
to monitor its computer systems and monitoring the adequacy of the processes and
progress of third-party vendors of systems that may be affected by the Year 2000
issue. Genesis is dependent on third-party computer systems and applications,
particularly with respect to such critical tasks as accounting, billing and
buying, planning and paying for media. It also relies on its own computer
systems. Genesis expects to complete its Year 2000 compliance program by
mid-1999 and anticipates that its total expenditures on such program will not
exceed $20,000. However, Genesis may experience cost overruns or delays in the
future, which could have a material adverse effect on Genesis's business,
results of operations and financial condition. While Genesis believes its
procedures are designed to be successful, because of the complexity of the Year
2000 issue and the interdependence of organizations using computer systems, its
efforts, or those of third parties with whom Genesis interacts, may not be
satisfactorily completed in a timely fashion or may cost substantially more to
remedy than the amount Genesis anticipates. Failure to satisfactorily address
the Year 2000 issue could have a material adverse effect on Genesis's business,
results of operations and financial condition.

NO DIVIDENDS

19
<PAGE>

Genesis currently anticipates that it will retain any future earnings for use in
its business and, therefore, does not anticipate paying any cash dividends in
the foreseeable future.

IMMEDIATE AND SUBSTANTIAL DILUTION

The initial public offering price of the common stock is substantially in
excess of the net tangible book value per share. As a result, purchasers of
common stock in this offering will experience immediate and substantial dilution
of $5.10 per share. There are also a number of outstanding stock options to
purchase common stock with exercise prices at the initial public offering price.
To the extent such options are exercised, there will be further ownership
dilution. Additionally, Genesis may issue additional shares, stock options and
stock bonuses to the stockholders and employees of the companies it acquires in
the future pursuant to its acquisition program, resulting in further substantial
ownership dilution to investors participating in this offering.

MANAGEMENT'S DISCRETION OVER USE OF PROCEEDS

Genesis's management will have broad discretion over the use of the proceeds
from this offering. Management will be able to use the proceeds as it best sees
fit to promote the growth and future business of Genesis. In the event that
Genesis's management's determinations as to the proper use of the proceeds are
unwise or do not bring the intended results, this may materially adversely
affect Genesis's business, results of operations and financial condition.

BENEFIT TO EXISTING STOCKHOLDERS

This offering is expected to create a public market for the common stock.
The establishment of this public market and the substantial unrealized gain to
such stockholders will benefit existing stockholders of Genesis. In addition,
the existing stockholders will receive a $2 million dividend related to
undistributed S corporation earnings.

ABSENCE OF PRIOR MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the common
stock, and an active trading market for the common stock may not develop or may
not continue even if it develops. The initial public offering price of the
common stock will be determined by negotiations between Genesis and the
underwriters' representative and may not be indicative of the market price of
the common stock following the offering. The market price of the common stock
could be subject to significant fluctuations in response to various factors and
events, including the liquidity of the market for the common stock, differences
between Genesis's actual financial or operating results and those expected by
investors and analysts, changes in analysts' recommendations or projections,
marketing and communications budgets of clients, new statutes or regulations or
changes in interpretations of existing statutes and regulations affecting
Genesis's business, changes in general economic or market conditions and broad
market fluctuations.

POSSIBLE ADVERSE IMPACT ON SHARE PRICE OF SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of common stock after the offering
or the perception that such sales could occur could adversely affect the market
price of the common stock and could impair Genesis's ability to raise capital
through the equity markets. Following this offering, Genesis will have 5,060,000
shares of common stock outstanding (5,360,000 if the underwriters'
over-allotment option is exercised in full). Of these, the 2,000,000 shares
offered in this offering will be freely transferable without restriction or
further registration under the Securities Act unless held by "affiliates" of
Genesis. The remaining 3,060,000 outstanding shares of common stock will be
"restricted securities" within the meaning of Rule 144 under the Securities Act
and subject to transfer restrictions. The directors, executive officers and
certain other stockholders of Genesis holding 3,000,000 outstanding shares of
common stock and options to purchase 350,000 shares of common stock, have agreed
pursuant to Lock-Up Agreements that,

20
<PAGE>

for a period of one-year from the date of this prospectus, they will not,
without the prior written consent of the underwriters' representative, offer,
sell, contract to sell, or otherwise dispose of, any shares of common stock or
any securities convertible into, or exercisable or exchangeable for common
stock, or grant any options or warrants to purchase common stock, except in
certain circumstances. The underwriters' representative has informed Genesis
that it has no current intention to release shares from the Lock-Up Agreements
prior to expiration of the one-year term of such agreements. Any request for
release would be evaluated by the underwriters' representative, and the decision
whether or not to permit early release of stock would be made dependent upon the
facts and circumstances existing at the time of the request. Beginning upon
expiration of the Lock-Up Agreements, such shares will be eligible for sale
pursuant to Rule 144 or Rule 701 under the Securities Act subject to the
provisions of such rules and continued vesting. The remaining 60,000 restricted
securities will be eligible for resale pursuant to Rule 144 in October 1999,
subject to the volume, manner of sale and notice restrictions of Rule 144.
Shares underlying an additional 50,000 outstanding options will be "restricted
securities" upon issuance.

POSSIBLE ANTI-TAKEOVER EFFECTS

Genesis's Board of Directors has the authority to issue up to 5,000,000
shares of preferred stock of Genesis and to determine the price, rights,
preferences, privileges and restrictions, including voting rights, of those
shares without any further vote or action by the stockholders. The preferred
stock could be issued with voting, liquidation, dividend and other rights
superior to those of the common stock. Immediately following this offering, no
shares of preferred stock will be outstanding, and Genesis has no present
intention to issue any shares of preferred stock. However, the rights of the
holders of common stock will be subject to, and may be adversely affected by,
the rights of holders of any preferred stock that may be issued in the future.
The issuance of preferred stock, while providing desirable flexibility in
connection with possible acquisitions and other corporate purposes, could have
the effect of making it more difficult for a third party to acquire a majority
of the outstanding voting stock of Genesis, which may depress the market value
of the common stock.

ELIMINATION OF CUMULATIVE VOTING

Section 2115 of the California Corporations Code requires that Genesis have
cumulative voting in the election of directors. Cumulative voting is a voting
scheme which allows minority stockholders a greater opportunity to have Board
representation by allowing such stockholders to have a number of votes equal to
the number of directors to be elected multiplied by the number of votes to which
the stockholder's shares are entitled and to "cumulate" those votes for one or
more director nominees. Generally, cumulative voting allows minority
stockholders the possibility of Board representation on a percentage basis equal
to their stock holding, where under straight voting such stockholders may
receive less or no Board representation. Upon the first annual meeting of
stockholders at which Genesis has 800 or more holders of its common stock, the
cumulative voting rights of stockholders granted under California law will
cease. The termination of this right will have the effect of making it more
difficult for minority stockholders to obtain representation on the Board of
Directors.

21
<PAGE>
USE OF PROCEEDS

The net proceeds to Genesis from this offering, assuming an initial public
offering price of $8.50 per share (after deducting applicable underwriting
discounts and commissions, the non-accountable expense allowance and estimated
offering expenses payable by Genesis), are estimated to be approximately $14.63
million. Genesis intends to use the proceeds as set forth in the following
table. All amounts in the table are approximate and the actual uses may vary,
depending on a number of factors, including management determinations and
business developments.

<TABLE>
<CAPTION>
NET PERCENTAGE OF
USE PROCEEDS NET PROCEEDS
- ------------------------------------------------------------------------------------ ------------- -------------
<S> <C> <C>
Repayment of debt................................................................... $ 500,000 3.42%
S corporation distribution.......................................................... 2,000,000 13.67
Kiosk development/deployment........................................................ 2,000,000 13.67
Expansion of operations............................................................. 2,000,000 13.67
Development and acquisition of new products......................................... 1,000,000 6.84
AniMagic asset acquisition.......................................................... 150,000 1.03
Acquisitions........................................................................ 4,980,000 34.04
General corporate purposes.......................................................... 2,000,000 13.67
------------- ------
------------- ------
Total........................................................................... $ 14,630,000 100.00%
</TABLE>

As of September 30, 1998, there was an aggregate of $322,399 outstanding
under Genesis's credit facilities, which bore interest at the lender's "prime
rate" plus 2.90% per annum. The approximately $2 million distribution to
existing stockholders is to pay income taxes on undistributed S corporation
earnings. Genesis anticipates using the approximately $2 million for kiosk
development/deployment over 18 months to develop and deploy interactive
multimedia kiosks in regional shopping malls across the United States and other
entertainment centers. Genesis intends to expand its operations in 1998 through
the lease or acquisition of additional space for telephone service
representatives and supporting infrastructure. Other expenditures for expansion
of operations are expected to include expenses associated with technology
enhancement and development and new employee hirings. Except for the AniMagic
Corporation acquisition, Genesis has not identified any other specific
acquisition targets. Genesis intends to invest the proceeds of the offering in
short-term U.S. government obligations pending their ultimate use.

DIVIDEND POLICY

Genesis has no current intention following its conversion to C corporation
status to declare or pay dividends on its common stock, other than the
approximately $2 million distribution out of the proceeds of the offering to its
existing stockholders for the purpose of paying income taxes on undistributed S
corporation earnings. Genesis currently anticipates that it will retain any
future earnings for use in its business and, therefore, does not anticipate
paying any cash dividends in the foreseeable future. Any determination to pay
dividends in the future will be at the discretion of Genesis's Board and will
depend upon, among other factors, Genesis's results of operations, financial
condition, capital requirements and contractual restrictions pursuant to
Genesis's credit facilities.

22
<PAGE>
CAPITALIZATION

The following table sets forth our capitalization (1) as of September 30,
1998; (2) on a pro forma basis to give effect to the acquisition of certain
assets of Vision Digital Communications, Inc. and the surrender of 1,000,000
shares of common stock; and (3) on a pro forma basis as adjusted to give effect
to the receipt of net proceeds from the sale of 2,000,000 shares of common stock
after deducting underwriting discounts and commissions and estimated offering
expenses. The adjustments for the pro forma presentation and for the adjusted
pro forma presentation are described in detail in the introductory narrative to
the Summary Financial Data on pages 5 and 6.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
------------------------------------------
ACTUAL PRO FORMA AS ADJUSTED
------------ ------------ --------------
<S> <C> <C> <C>

Long term debt.................................... $ 884,572 $1,084,572 $ 1,084,572
------------ ------------ --------------

Stockholders' equity

Common stock, $.001 par value 25,000,000 shares
authorized 4,000,000, 3,060,000 and 5,060,000,
respectively, shares issued and outstanding... 4,000 3,060 5,060

Additional paid-in capital........................ 920,582 1,521,522 17,263,776

Retained earnings(1).............................. 3,114,254 3,114,254 --
------------ ------------ --------------

Total stockholders' equity...................... 4,038,836 4,638,836 17,268,836
------------ ------------ --------------

Total capitalization............................ $ 4,923,408 $5,723,408 $ 18,353,408
------------ ------------ --------------
------------ ------------ --------------
</TABLE>

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

(1) In accordance with Staff Accounting Bulletin Topic 4B, any undistributed
earnings remaining in the S corporation at the time the S corporation
election is revoked are treated as additional paid-in capital by the
stockholders of the S corporation.

23
<PAGE>
DILUTION

On a pro forma basis at September 30, 1998, there were 3,060,000 shares of
our common stock outstanding, having a net tangible book value per share of
$1.49. Net tangible book value per share represents the amount of Genesis's
total tangible assets less total liabilities, divided by the number of shares of
common stock outstanding.

After giving effect to the sale of the 2,000,000 shares of our common stock
under this offering at an assumed price of $8.50 per share and the application
of the net proceeds, there would be a total of 5,060,000 shares of common stock
outstanding with a net tangible book value of $3.40 per share. This would
represent an immediate increase in net tangible book value of $1.91 per share to
existing stockholders and an immediate dilution of $5.10 per share to new
investors. Dilution is determined by subtracting net tangible book value per
share after the offering (after taking into account the $2,000,000 distribution
of undistributed S corporation earnings) from the amount paid by new investors
per share of common stock. The following table illustrates the per share
dilution:

<TABLE>
<S> <C> <C>
Initial public offering price per share...................... $ 8.50
Net tangible book value per share as of September 30,
1998..................................................... $ 1.49
Increase attributable to new investors..................... 1.91
---------

Pro forma net tangible book value per share after this
offering................................................... 3.40
---------

Dilution per share to new investors.......................... $ 5.10
---------
---------
</TABLE>

The following table summarizes on a pro forma basis as of September 30, 1998
the difference between the existing stockholders and the new investors with
respect to the number of shares of common stock purchased in this offering, the
total consideration paid and the average price per share:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ------------------------ AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders....... 3,060,000 60.47% $ 1,524,582 8.23% $ 0.50
New investors............... 2,000,000 39.53% 17,000,000 91.77% $ 8.50
---------- --------- ------------- ---------

Total..................... 5,060,000 100.00% $ 18,524,582 100.00%
---------- --------- ------------- ---------
---------- --------- ------------- ---------
</TABLE>

The preceding table assumes no exercise of any stock options outstanding as
of November 30, 1998. As of November 30, 1998, there were options outstanding to
purchase a total of 400,000 shares of common stock, with a weighted average
exercise price of $8.63 per share. If all options outstanding as of November 30,
1998 had been exercised as of such date, the dilution per share to new investors
in the offering would be $4.72. On October 1, 1998, Genesis adopted the Genesis
Intermedia.com, Inc. 1998 Stock Incentive Program pursuant to which 500,000
shares of common stock were reserved for issuance. Options with respect to
350,000 of such shares have been granted and are currently outstanding. To the
extent that options are granted and subsequently exercised or shares are issued
under the Program, new investors may experience further dilution.

24
<PAGE>
SELECTED FINANCIAL DATA

Genesis is providing the following selected financial data to aid investors
in their analysis of this potential investment. This information was derived
from (1) our 1997 and 1996 historical financial statements and (2) our
internally prepared unaudited financial statements for the years ended December
31, 1995 and 1994, and the nine-month periods ended September 30, 1998 and 1997.
Our financial statements as of December 31, 1997 and 1996 with the notes thereto
and the related reports of Singer Lewak Greenbaum & Goldstein LLP, independent
certified public accountants, together with our internally prepared unaudited
financial statements for the nine-month periods ended September 30, 1998 and
1997 are included elsewhere in the prospectus. Our unaudited financial
statements, in the opinion of management, include all adjustments (consisting of
normal recurring adjustments) necessary for a fair presentation of our financial
position and results of operations for the unaudited interim periods. The
selected financial data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" at page 27 and our financial statements and related notes included
elsewhere in the prospectus.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER
-------------------------------------------------- 30,
1995 1996 1997 -----------
------------- --------- --------- 1997
1994 (UNAUDITED) -----------
------------- (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENTS OF OPERATIONS DATA:
Net revenue
Media sales--affiliate.............................. $ -- $ -- $ -- $ 7,412 $ 5,643
Product sales....................................... 149 8,268 13,152 8,252 4,854
Commissions and royalties........................... 183 325 79 2,480 1,203
Other............................................... -- 72 1,111 20 24
------ ------ --------- --------- -----------
Total net revenue................................. 332 8,665 14,342 18,164 11,724
Operating costs and expenses
Media purchases..................................... -- -- -- 6,445 4,796
Direct costs........................................ 53 1,264 1,842 713 504
Selling, general and administrative................. 428 7,290 12,114 8,571 5,627
------ ------ --------- --------- -----------
Total operating costs and expenses................ 481 8,554 13,956 15,729 10,927
------ ------ --------- --------- -----------
Income (loss) from operations......................... (149) 111 386 2,435 797
Interest expense...................................... 2 18 -- 33 14
------ ------ --------- --------- -----------
Income before taxes................................... (151) 93 386 2,402 783
Income taxes.......................................... -- -- -- 35 20
------ ------ --------- --------- -----------
Net income (loss)..................................... $ (151) $ 93 $ 386 $ 2,367 $ 763
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
Basic earnings (loss) per share....................... $ (0.04) $ 0.02 $ 0.10 $ 0.61 $ 0.20
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
Diluted earnings (loss) per share..................... $ (0.04) $ 0.02 $ 0.10 $ 0.61 $ 0.20
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
Weighted average shares outstanding................... 3,883 3,883 3,883 3,884 3,883
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
PRO FORMA
Income before taxes................................... $ (151) $ 93 $ 386 $ 2,402 $ 783
Pro forma income taxes(3)............................. -- -- 154 961 313
------ ------ --------- --------- -----------
Pro forma net income (loss)........................... $ (151) $ 93 $ 232 $ 1,441 $ 470
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
Pro forma basic earnings (loss) per share............. $ (0.04) $ 0.02 $ 0.06 $ 0.37 $ 0.12
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------
Pro forma diluted earnings (loss) per share........... $ (0.04) $ 0.02 $ 0.06 $ 0.37 $ 0.12
------ ------ --------- --------- -----------
------ ------ --------- --------- -----------

1998

<S> <C>

STATEMENTS OF OPERATIONS DATA:
Net revenue
Media sales--affiliate.............................. $ 3,043
Product sales....................................... 3,566
Commissions and royalties........................... 2,755
Other............................................... 14
------
Total net revenue................................. 9,378
Operating costs and expenses
Media purchases..................................... 2,583
Direct costs........................................ 300
Selling, general and administrative................. 5,618
------
Total operating costs and expenses................ 8,501
------
Income (loss) from operations......................... 877
Interest expense...................................... 72
------
Income before taxes................................... 805
Income taxes.......................................... 10
------
Net income (loss)..................................... $ 795
------
------
Basic earnings (loss) per share....................... $ 0.20
------
------
Diluted earnings (loss) per share..................... $ 0.20
------
------
Weighted average shares outstanding................... 4,000
------
------
PRO FORMA
Income before taxes................................... $ 805
Pro forma income taxes(3)............................. 322
------
Pro forma net income (loss)........................... $ 483
------
------
Pro forma basic earnings (loss) per share............. $ 0.12
------
------
Pro forma diluted earnings (loss) per share........... $ 0.12
------
------
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------------------
1997
--------- AS OF SEPTEMBER 30, 1998
------------------------------
1994 1995 1996 ACTUAL PRO FORMA(1)
------------- --------------- --------------- ------------- ---------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
BALANCE SHEET DATA:
Working capital (deficit).............. $ 58 $ (53) $ 334 $ 3,037 $ 3,312 $ 3,352
Current assets......................... 176 390 708 5,523 6,585 6,795
Total assets........................... 226 409 726 6,714 8,197 9,167
Current liabilities.................... 118 443 374 2,486 3,273 3,443
Long-term debt......................... 237 -- -- 609 885 1,085
Stockholders' equity (deficit)......... (129) (34) 352 3,619 4,039 4,639

PRO FORMA
AS ADJUSTED(2)

<S> <C>

BALANCE SHEET DATA:
Working capital (deficit).............. $ 15,982
Current assets......................... 18,925
Total assets........................... 21,297
Current liabilities.................... 2,943
Long-term debt......................... 1,085
Stockholders' equity (deficit)......... 17,269
</TABLE>

25
<PAGE>
- ------------------------------

(1) Adjusted to give effect to the acquisition of certain assets of Vision
Digital Communications, Inc. Genesis purchased current assets, equipment and
intangible assets of $210,000, $750,000 and $10,000, respectively, in
exchange for 60,000 shares of common stock valued at $600,000 plus the
assumption of short-term obligations and long-term debt of $170,000 and
$200,000, respectively. Genesis has granted the seller options to purchase
up to an additional 50,000 shares of common stock at a weighted average
exercise price of $9.57 per share. Such options are exercisable if the
acquired division meets certain targeted levels of total revenue over a
three-year period. The options will expire at the end of such three-year
period. Also adjusted to give effect to the surrender of an aggregate of
1,000,000 shares of common stock by the two principal stockholders on
November 1, 1998.

(2) Adjusted to give effect to (a) the items discussed in Note (1) above; and
(b) the sale of 2,000,000 shares of common stock offered by Genesis in the
offering at an assumed initial public offering price of $8.50 per share,
after deducting underwriting discounts and commissions and estimated
offering expenses payable by Genesis and the application of the estimated
net proceeds, including the use of $500,000 to repay amounts owed under two
notes payable agreements and a $2,000,000 distribution of undistributed S
corporation earnings to be used to pay federal and state income taxes on
income that was passed through to the individual stockholders. See "Use of
Proceeds" and "Capitalization."

(3) Genesis is currently taxed as an S corporation whereby Genesis's taxable
income is passed through to its individual stockholders who are responsible
for paying federal and state income taxes on their portion of Genesis's
taxable income. Shortly before the closing of the initial public offering,
Genesis will terminate its status as an S corporation and will be subject to
federal and additional state income taxes thereafter. The pro forma
information reflects Genesis's net income (loss) and earnings per share as
if Genesis were taxed as a C corporation. The income tax rate used is 40%
which approximates the federal and state income tax rates for the respective
periods. See Note 8 to the financial statements.

26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
FINANCIAL STATEMENTS AND RELATED NOTES CONTAINED ELSEWHERE IN THIS PROSPECTUS.
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. GENESIS'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE
SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK
FACTORS" BEGINNING AT PAGE 7.

OVERVIEW

We are an integrated marketing and business solutions provider that utilizes
conventional media and interactive and emerging multimedia technologies.
Incorporated on October 28, 1993, we did not commence substantial operations
until 1994. From inception until June 1997, we devoted substantially all our
resources to selling products we owned or had purchased rights to sell through
conventional marketing methods. We sold these products to the general public
through the use of infomercials, radio advertisements, print media and retail
outlets. A substantial portion of our product revenue has come from our "Men Are
From Mars, Women Are From Venus" product series authored by John Gray, Ph.D.
Prior to June 1997, we contracted with an unrelated third party to administer
our product sales, including buying media time, managing inventory levels and
contracting order fulfillment. For these services, we paid the third party an
administrative fee and a share of the profits generated from the product sales.

In June 1997, we brought the operations of our product sales in-house, which
resulted in the hiring of additional personnel and buying an office building.
This allowed us to better manage the profitability of our product sales and also
gave us the resources to expand our products and services. Since moving into our
corporate office building in July 1997, we have increased the number of products
we sell, established outbound telemarketing services to sell our products, as
well as products of other companies, and established a media sales department
that sells media time to other companies as well as buys media time for our own
products at a 10-15% discount. We were also able to focus our advertising on
markets that yielded higher responses, which significantly reduced advertising
costs.

During the later part of 1997, after creating a strong infrastructure, we
began contracting with other companies to sell their products via our outbound
telemarketing capabilities. We are given a database of customer names and
telephone numbers from the contracting company and receive a sales commission
ranging from 35% to 70%. To date, a significant portion of the commission
revenue generated from selling other companies' products has come from selling
products based on Jake Bernstein's "Trade Your Way to Riches" program. A company
owned by our majority stockholder owns the rights to this program.

In addition, we keep a database of customers who have purchased our products
and then sell additional related products to these customers through our
outbound telemarketing capabilities. We have also been able to generate revenue
from the sale of customer names in our database to unrelated third parties.

In July 1998, we formed our Genesis Intermedia, Inc. subsidiary and hired
key personnel experienced in creating interactive multimedia business solutions
for companies. This subsidiary uses existing non-proprietary technologies,
proprietary interactive multimedia technologies and its expertise in marketing
to develop and deploy creative multimedia solutions tailored to each of its
client's marketing needs. Genesis Intermedia uses a variety of interactive
delivery platforms including intranets, extranets, web sites, interactive
publicly accessible kiosks, CD-ROM and DVD-ROM/RAM. We design such solutions to
provide targeted consumers with an innovative introduction to our client's
products or services. Such solutions are intended to attract and hold the
attention of our client's target audience while conforming to or strengthening
our client's brand image. Each multimedia solution enables our client

27
<PAGE>
to improve its business processes and to promote and sell its products or
services to large target markets more efficiently and effectively than is
possible through conventional media. To date, revenue generated by the Genesis
Intermedia subsidiary has not been significant.

Historically, our sales have generally been seasonal, reflecting the media
buying patterns of advertisers and are concentrated in the second and fourth
quarters. The third quarter has historically been the slowest quarter of the
year. During the third quarter of 1998, we took advantage of this slow period by
focusing our efforts on identifying and acquiring additional products we can
sell during the fourth quarter of 1998 and during all of 1999. We were
successful in adding four new telemarketing campaigns and a total of 13 new
products to our existing product line. While our revenues in the first nine
months in 1998 were below the same period in 1997, as a result of decreased
media purchases in the period, net income for the nine months increased over the
same period in 1997.

We recently completed the acquisition of certain assets of Vision Digital
Communications, Inc., a company that places interactive kiosks in shopping
malls. In addition, we have signed a letter of intent to acquire AniMagic
Corporation, an interactive technology company. AniMagic is currently in
bankruptcy and the ultimate acquisition is dependent upon bankruptcy court
approval, which we anticipate receiving by the end of the first quarter of 1999.
We will continue to evaluate acquisition opportunities that will enable us to
expand our core multimedia marketing capabilities, our product offerings and the
geographic scope of our operations. We plan to acquire well-regarded niche
companies or leaders in specific marketing and communications disciplines as
well as products which we believe have strong earnings potential. We will also
review joint venture and strategic alliance possibilities.

Genesis has four primary revenue generating sources:

1. INTEGRATED MARKETING AND BUSINESS SOLUTIONS. We will expand the types of
business and marketing solutions offered to our clients. We have
historically utilized conventional media to fulfill our clients' marketing
needs. More recently, we have focused on providing innovative multimedia
solutions to our clients who conduct business through eCommerce such as the
Internet, interactive kiosks, CD-ROM and DVD-ROM/RAM.

2. PROPRIETARY PRODUCTS. We will continue to expand the products we sell
through infomercials, radio, print media and retail outlets. We also plan to
expand our outbound telemarketing capabilities to sell our products and
products of other companies.

3. PUBLIC ACCESS COMMUNICATIONS NETWORKS. We plan to place interactive kiosks
in regional shopping malls throughout the United States and other
entertainment centers. These kiosks will enable merchants to communicate
directly with their customers, to learn more about their customers and to
deliver consistent marketing messages in a variety of locations. In
addition, these kiosks will expose retail shoppers to eCommerce and
integrate the physical shopping experience with interactive options. We will
earn revenue from the sale of advertising space and a percentage of the
merchandise sales made through the kiosks. Based upon our negotiations with
management companies managing regional shopping malls in various regions in
the United States and the prospect for deploying a network of kiosks that
may attract national advertising revenue, we expect these kiosks to generate
significant revenue in the future.

4. AUDIO AND VISUAL STREAMING AND DOWNLOAD TECHNOLOGY. We have technology that
provides the structure for direct application on the Internet of interactive
multimedia technologies, such as music, movies and combined audio and visual
special effects. We will sell advertising space and will also receive
transactional fees from customers downloading the various products offered
by us. To date, we have not generated any such revenue from this streaming
and downloading technology.

28
<PAGE>
RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998 VS. NINE MONTHS ENDED SEPTEMBER 30,
1997

<TABLE>
<CAPTION>
NINE MONTHS ENDED
PERCENTAGE OF NET
REVENUE
SEPTEMBER 30, --------------------
-------------------------- 1997 1998
1998 --------- ---------
-------------
(UNAUDITED)
1997
-----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
NET REVENUE
Media sales--affiliate................................................ $ 5,643 $ 3,043 48.1% 32.4%
Product sales......................................................... 4,854 3,566 41.4% 38.0%
Commissions and royalties............................................. 1,203 2,755 10.3% 29.4%
Other................................................................. 24 14 0.2% 0.2%
----------- ------ --------- ---------
Total net revenue................................................... 11,724 9,378 100.0% 100.0%
OPERATING COSTS AND EXPENSES
Media purchases....................................................... 4,796 2,583 40.9% 27.5%
Direct costs.......................................................... 504 300 4.3% 3.2%
Selling, general and administrative................................... 5,627 5,618 48.0% 59.9%
----------- ------ --------- ---------
Total operating costs and expenses.................................. 10,927 8,501 93.2% 90.6%
----------- ------ --------- ---------
INCOME FROM OPERATIONS.................................................. 797 877 6.8% 9.4%
Interest expense........................................................ 14 72 0.1% 0.8%
----------- ------ --------- ---------
Income before taxes..................................................... 783 805 6.7% 8.6%
Income taxes............................................................ 20 10 0.2% 0.1%
----------- ------ --------- ---------
Net Income.............................................................. $ 763 $ 795 6.5% 8.5%
----------- ------ --------- ---------
----------- ------ --------- ---------
</TABLE>

Revenues for the nine months ended September 30, 1998 decreased by
$2,346,000 or 20.0% from $11,724,000 for the nine months ended September 30,
1997 to $9,378,000 for the same period in 1998. The decrease in revenue was due
to the following:

- Commissions and royalties increased $1,552,000 principally from
commissions received from the sale of mentoring programs where clients of
the "Trade Your Way to Riches" products have unlimited access during
business hours for periods ranging from three to 12 months to "mentors"
who can help the clients understand and utilize the audio and video tapes
and materials;

- Media sales to a company owed by our majority stockholder decreased
$2,600,000 as a result of this company purchasing less media time and
focusing more on outbound telemarketing sales; and

- Product sales decreased $1,288,000 principally as a result of focusing our
efforts during the third quarter of 1998 to expand our product line by
identifying and acquiring new products to sell.

Media purchases for the nine months ended September 30, 1998 decreased by
$2,213,000 or 46.1% from $4,796,000 for the nine months ended September 30, 1997
to $2,583,000 for the same period in 1998. The decrease was due to less media
time sold to a company owned by our majority stockholder. We sold media at a
mark-up of approximately 15%, the standard industry mark-up, for both periods.

Direct costs for the nine months ended September 30, 1998 decreased by
$204,000 or 40.5% from $504,000 for the nine months ended September 30, 1997 to
$300,000 for the same period in 1998. The decrease was due to direct costs being
approximately 8% of product sales for the nine months ended September 30, 1998
compared to 10% for the same period in 1997. Prior to June 1997, we contracted
the marketing, promotion, media purchases and administration of our products
with an unrelated third party. Beginning in June 1997, we brought these
functions in-house and we were able to reduce direct costs, among other things,
by better management of inventory, reducing the cost of the third-party
fulfillment houses, and taking advantage of quantity purchases.

Selling, general and administrative expenses for the nine months ended
September 30, 1998 decreased by $9,000 or 0.1% from $5,627,000 for the nine
months ended September 30, 1997 to $5,618,000 for the same period in 1998. The
decrease was due principally to an increase in payroll and

29
<PAGE>

travel and entertainment of $1,321,000 and $70,000, respectively, offset by a
decrease of $1,169,000 and $320,000 in advertising and telemarketing expenses,
respectively. As a result of bringing the operation of the product sales
in-house, payroll costs increased significantly, not only to staff the
operations previously administered by the third party, but also to staff our
expanding operations. Travel and entertainment increased as a result of our
personnel attending more trade shows. In June 1997, we began purchasing media
and other advertising for third parties, which allowed us to purchase media for
our own products at a 10-15% discount. In addition, in 1998, after evaluating
the expected future benefit of our capitalized direct-response advertising
costs, we extended the amortization period from seven to 12 months for all costs
capitalized in 1998. This change resulted in a reduction of advertising expense
of approximately $143,000 for the nine months ended September 30, 1998. In
addition, because we brought the operations in-house in June 1997, we were also
able to reduce our telemarketing costs by negotiating better long-distance phone
rates.

Interest expense for the nine months ended September 30, 1998 increased by
$58,000 or 414.3% from $14,000 for the nine months ended September 30, 1997 to
$72,000 for the same period in 1998. The increase in interest expense was due to
the issuance of three notes payable for the purchase of an automobile and the
corporate office building, the line of credit and capitalized lease obligations.

Income taxes for the nine months ended September 30, 1998 decreased by
$10,000 or 50% from $20,000 for the nine months ended September 30, 1997 to
$10,000 for the same period in 1998. We are an S corporation resulting in the
income being reported on the personal income tax returns of our stockholders.
The income tax expense represents a state franchise tax charged to S
corporations in the State of California.

Net income for the nine months ended September 30, 1998 increased by $32,000
or 4.2% from $763,000 for the nine months ended September 30, 1997 to $795,000
for the same period in 1998. Net income for the nine months ended September 30,
1998 increased only slightly from the same period in 1997. However, the decrease
in media sales which have a low margin was offset by an increase in commissions
and royalties which have a higher margin. Product sales also decreased, but this
decrease was offset by lower advertising and telemarketing costs.

YEAR ENDED DECEMBER 31, 1997 VS. YEAR ENDED DECEMBER 31, 1996

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER PERCENTAGE OF NET
31, REVENUE
-------------------- --------------------
1996 1997 1996 1997
--------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
NET REVENUE
Media sales--affiliate...................................................... $ -- $ 7,412 0.0% 40.8%
Product sales............................................................... 13,152 8,252 91.7% 45.4%
Commissions and royalties................................................... 79 2,480 0.6% 13.7%
Other....................................................................... 1,111 20 7.7% 0.1%
--------- --------- --------- ---------
Total net revenue......................................................... 14,342 18,164 100.0% 100.0%
OPERATING COSTS AND EXPENSES
Media purchases............................................................. -- 6,445 0.0% 35.5%
Direct costs................................................................ 1,842 713 12.8% 3.9%
Selling, general and administrative......................................... 12,114 8,571 84.5% 47.2%
--------- --------- --------- ---------
Total operating costs and expenses........................................ 13,956 15,729 97.3% 86.6%
--------- --------- --------- ---------
INCOME FROM OPERATIONS........................................................ 386 2,435 2.7% 13.4%
Interest expense.............................................................. -- 33 0.0% 0.2%
--------- --------- --------- ---------
Income before taxes........................................................... 386 2,402 2.7% 13.2%
Income taxes.................................................................. -- 35 0.0% 0.2%
--------- --------- --------- ---------
Net Income.................................................................... $ 386 $ 2,367 2.7% 13.0%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

30
<PAGE>
Revenues for the year ended December 31, 1997 increased by $3,822,000 or
26.7% from $14,342,000 for the year ended December 31, 1996 to $18,164,000 for
the same period in 1997. The increase in revenue was due to the following:

- Media sales increased by $7,412,000 as a result of our beginning to resell
media purchased at a standardized industry mark-up to a company owned by
our majority stockholder. There were no such media sales for the year
ended December 31, 1996;

- Commissions and royalties increased $2,401,000 principally from increased
commissions received from the sale of mentoring services for a company
owned by our majority stockholder totaling $742,000 and the sales of
customer names to an unrelated third party totaling $689,000;

- Product sales decreased by $4,900,000 or 37% due to the expansion of our
operations, including outbound telemarketing for and the sale of media to
third parties. The expansion of our operations caused us to focus more on
providing business solutions for other companies; and

- Other revenue decreased by $1,091,000 due to the discontinuance of joint
venture agreements that resulted in $1,111,000 of revenue for the year
ended December 31, 1996. We had entered into joint venture agreements
where we received a percentage of the operating profits from the sale of
certain products. These agreements were discontinued in early 1997.

Media purchases for the year ended December 31, 1997 increased by $6,445,000
from $0 for the year ended December 31, 1996 to $6,445,000 for the same period
in 1997. The increase was due to our beginning to sell media time to a company
owned by our majority stockholder in 1997. We sold media at a mark-up of
approximately 15%, the standard industry mark-up, for the year ended December
31, 1997.

Direct costs for the year ended December 31, 1997 decreased by $1,129,000 or
61.3% from $1,842,000 for the year ended December 31, 1996 to $713,000 for the
same period in 1997. The decrease was due to product sales decreasing by
approximately 37% as discussed above. Direct costs as a percentage of product
sales was approximately 14% for the year ended December 31, 1996 compared to
approximately 9% for the same period in 1997. Prior to June 1997, we contracted
the marketing, promotion, media purchases and administration of our product
sales with an unrelated third party. Beginning in June 1997, we brought these
functions in-house and we were able to reduce direct costs, among other things,
by better management of inventory, reducing the cost of the third-party
fulfillment houses and taking advantage of quantity purchases.

Selling, general and administrative expenses for the year ended December 31,
1997 decreased by $3,543,000 or 29.3% from $12,114,000 for the year ended
December 31, 1996 to $8,571,000 for the same period in 1997. The decrease was
due principally to a decrease in advertising costs of $3,283,000. In June 1997,
we began purchasing media and other advertising for third parties, which allowed
us to purchase media for our own products at a 10-15% discount. In addition, we
were better able to focus our media purchases on those markets and time slots
that yielded the maximum benefit. As a result of being able to purchase media at
a discount and purchasing media only in those markets that produce maximum
results, we were able to significantly reduce advertising costs.

Interest expense for the year ended December 31, 1997 increased by $33,000
from $0 for the year ended December 31, 1996 to $33,000 for the same period in
1997. The increase in interest expense was due to the issuance of two notes
payable in the third quarter of 1997 for the purchase of an automobile and our
corporate office building.

Income taxes for the year ended December 31, 1997 increased by $35,000 from
$0 for the year ended December 31, 1996 to $35,000 for the same period in 1997.
We are an S corporation resulting in the income being reported on the personal
income tax returns of our stockholders. The income tax expense represents a
state franchise tax charged to S corporations in the State of California. We did
not have any operations in the State of California in 1996, and accordingly, we
were not subject to this franchise tax.

31
<PAGE>
Net income for the year ended December 31, 1997 increased by $1,981,000 or
513.2% from $386,000 for the year ended December 31, 1996 to $2,367,000 for the
same period in 1997. The increase in net income was principally due to the
increased revenue, increased margins on the sale of our products and a decrease
in advertising expense.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations initially from cash generated from
operations. More recently, we have financed operations through the sale of
common stock, a long-term mortgage and a line of credit. In July 1997, we
purchased an office building in Studio City, California with cash and a Small
Business Administration loan in the amount of $583,000. This loan is being
repaid with monthly payments of $5,823 over 25 years. In December 1997, we sold
116,504 shares of common stock to Dr. Gray for $900,000. In January 1998 and
April 1998, we obtained two short-term loans from an unrelated third party for
$300,000 and $200,000, respectively. These loans bear interest at the rate of 8%
per annum and are due on January 30, 1999. In addition, in June 1997, we
obtained a $750,000 line of credit from a major financial institution that is
collateralized by substantially all the Company's assets, except our office
building, and the loan is guaranteed by our majority stockholder. As of
September 30, 1998, we had $427,601 available to borrow under our line of credit
agreement. In August 1998, we obtained a working capital loan in the amount of
$300,000 collateralized by a second trust deed on our land and office building.

During the nine months ended September 30, 1998 and the year ended December
31, 1997, we spent $266,759 and $1,210,846, respectively, on capital
expenditures and provided (used) $172,508 and $(310,168), respectively, in
operations. In addition to capital expenditures, we spent a significant amount
of capital on the purchase of media. The purchase of media time is capital
intensive because media time, unavailable on an as-needed basis, must be
purchased in advance. We believe that media sales will become more profitable
when we have more capital available to purchase larger blocks of time.

We expect to use a portion of the proceeds from this offering to expand our
product lines, expand our telemarketing division, make strategic acquisitions,
and repay certain short-term obligations, as well as for working capital and
general corporate purposes. We anticipate spending $2 million over the next 18
months to develop and deploy interactive multimedia kiosks in regional shopping
malls across the United States and in other entertainment centers. See "Use of
Proceeds." Pursuant to our employment agreements with Mr. El-Batrawi, as well as
two employees retained as a result of the acquisition of certain of the assets
of Vision Digital Communications, Inc., we are committed to paying annual
salaries totalling $418,000 in each of the next three years and $250,000 in the
year 2002 and for the nine months ended September 30, 2003.

We believe that the net proceeds of this offering, together with available
funds, existing credit facilities and the cash flow expected to be generated
from operations, will be adequate to satisfy our current and planned operations
through the end of 1999.

SEASONALITY

Our revenues generally reflect the media buying patterns of advertisers and
are concentrated in the second and fourth quarters of the year.

YEAR 2000 COMPLIANCE

We have completed a comprehensive review of our computer systems to identify
all software applications that could be affected by the inability of many
existing computer systems to process time-sensitive data accurately beyond the
year 1999 (referred to as the "Year 2000" issue). We are also continuing to
monitor our computer systems and we are monitoring the adequacy of the processes
and progress of third-party vendors of systems that may be affected by the Year
2000 issue. We are dependent on third-party computer systems and applications,
particularly with respect to such critical tasks as accounting, billing and
buying, planning and paying for media. We also rely on our own computer

32
<PAGE>

systems. Genesis expects to complete its Year 2000 compliance program by
mid-1999 and anticipates that its total expenditures on such program will not
exceed $20,000. However, we may experience cost overruns or delays in the
future, which could have a material adverse effect on our business, results of
operations and financial condition. While we believe our procedures are designed
to be successful, because of the complexity of the Year 2000 issue and the
interdependence of organizations using computer systems, our efforts, or those
of third parties with whom we interact, may not be satisfactorily completed in a
timely fashion. If we fail to satisfactorily address the Year 2000 issue, then
our business, results of operations and financial condition could be materially
adversely affected.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement requires companies to classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of a statement of
financial position. SFAS No. 130 is effective for financial statements issued
for fiscal years beginning after December 15, 1997. Management believes that
SFAS No. 130 will not have a material effect on our financial statements.

In June 1997, the FASB issued SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information." This statement establishes additional
standards for segment reporting in the financial statements and is effective for
fiscal years beginning after December 15, 1997. Management believes that SFAS
No. 131 will not have an effect on our financial statements.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits." This statement is not
applicable to us.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement established accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities and is
effective for fiscal years beginning after June 15, 1999. Management believes
that SFAS No. 133 will not have an effect on our financial statements.

In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage--Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise." This statement is not
applicable to us.

33
<PAGE>
BUSINESS

GENERAL

Genesis Intermedia.com is an integrated marketing and business solutions
provider utilizing conventional media and interactive and emerging multimedia
technologies. While Genesis has historically utilized conventional media to
fulfill its clients' marketing needs, and will continue to do so, it has focused
more recently on providing innovative multimedia solutions delivered through a
variety of platforms, including the Internet, interactive kiosks, CD-ROM and
DVD-ROM/RAM, to businesses seeking to conduct eCommerce. Additionally, Genesis
provides ongoing technical and back-office support services designed to maintain
and enhance its clients' marketing efforts. Genesis believes that many
businesses which rely on conventional marketing platforms, such as television,
radio and print, will require integrated multimedia solutions to effectively
adapt their marketing and growth strategies to the emerging eCommerce market and
the Internet. Genesis also believes that the interactive nature of its
integrated multimedia marketing and business solutions will enable Genesis's
clients to successfully participate in the emerging eCommerce market and will
appeal to their customers. The services offered by Genesis include: market
analysis; an assessment of a client's business requirements; the development and
deployment of an appropriate marketing strategy; ongoing solution maintenance;
back-office support; and media placement. These services are available to
Genesis's clients separately, on an as-needed basis, or together, on a fully
integrated basis.

Genesis has three additional revenue generating capabilities:

- proprietary products, such as the audio and video products based on the
book authored by John M. Gray, Ph.D. "Men Are From Mars, Women Are From
Venus;"

- public access communication networks, such as interactive kiosks, which
expose retail shoppers to eCommerce and integrate the physical shopping
experience with interactive options; and

- audio and visual streaming and download technology, which provides the
structure for direct application on the Internet of interactive multimedia
technologies, such as music, movies and combined audio and visual special
effects.

By using its technical expertise, vision and creativity, Genesis will
leverage its integrated marketing and interactive multimedia technologies to
provide further market exposure and distribution channels for its clients'
business solutions.

THE DEVELOPMENT OF THE INTEGRATED MARKETING AND BUSINESS SOLUTIONS INDUSTRY

Marketing solutions for business have evolved significantly over recent
years as new marketing channels and technologies have been developed.
Traditionally, marketing consultants worked to provide businesses with market
research and analysis, while independent advertising agencies created
advertising campaigns targeted to specific groups of consumers identified by
such market research and analysis. Businesses often relied on another vendor to
purchase desirable media time or space on its behalf. Advertising campaigns were
typically delivered to the public through conventional media, such as
television, radio and print advertisements. Additional parties provided
back-office support, such as inventory control systems, accounting services and
order processing, to a business seeking to add functionality to its marketing
effort. In May 1997, a national advertising industry magazine, Advertising Age,
reported that advertising expenditures in the United States grew significantly
faster than the economy in 1994, 1995 and 1996. According to Advertising Age,
total expenditures reached $175.2 billion in 1996, a gain of more than $12
billion over 1995.

In the 1980s and 1990s telemarketing services, infomercials and home
shopping networks emerged as additional marketing channels. These channels are
also known as direct response marketing, because they enable businesses to
deliver a marketing message to targeted consumers and to elicit an immediate
consumer response.

34
<PAGE>

In recent years, the use of the Internet by businesses and consumers has
grown at a rapid rate. According to the United States Department of Commerce in
its April 1998 Emerging Digital Economy publication, the number of users of
Internet technology is estimated to double every 100 days. International Data
Corporation estimated in August 1998 that the amount of commerce conducted over
the Internet will reach more than $400 billion by the year 2002, reflecting a
compound annual growth rate of 103%.

COMPANY BACKGROUND

Genesis was founded on October 28, 1993. Genesis initially produced
infomercials and performed telemarketing services for its own products. Genesis
identifies products or personalities around which it can create audio, video and
consumer products that can be marketed through multiple sales channels. In 1994,
for example, Genesis acquired a license to produce and sell the "Men are From
Mars, Women are From Venus" audio series based on a book authored by John M.
Gray, Ph.D. Genesis subsequently created a companion video series and marketed
these products through infomercials and in retail outlets. Genesis also
developed and telemarketed continuing education and training products based on
Dr. Gray's book and assisted Dr. Gray in scheduling personal promotional
appearances.

In 1995 and 1996, Genesis expanded the product offerings and marketing
relating to Dr. Gray to include other audio and video products. In 1996, Genesis
also produced an infomercial and ancillary audio, video and consumer products
relating to Jake Bernstein's "Trade Your Way to Riches" program for a joint
venture between Genesis and Positive Response Television Inc. The joint venture
was succeeded by a newly-founded corporation, Trade Your Way to Riches, Inc.
Subsequently, Genesis purchased media time and performed telemarketing for this
entity, which is owned by Genesis's majority stockholder. Genesis outsourced
certain administrative functions, including buying media time, managing
inventory levels and contracting order fulfillment, to third parties until 1997.

In 1997, Genesis purchased an office building and hired additional
personnel, which enabled it to perform these functions in-house. Additionally,
Genesis strengthened its infrastructure, which enabled it to perform many types
of marketing functions, including telemarketing services for products owned by
other companies. In late 1997, Genesis added another product line around the
Larry Williams "Secrets to Stock Investing" program and started performing
telemarketing services for Ted Thomas' "Personal Fortune" real estate investment
program. In 1998, Genesis added a product line around the "Money Mystery"
audio/video program and commercial telemarketing services for additional
third-party products such as the mentoring program for Optionetics and obtained
the exclusive rights to distribute the "Hawaiian Tropic" swimwear line. Genesis
sees the opportunity to add these product lines to Genesis's increasingly
integrated marketing channels as integral to its strategies of creating new
products and marketing those products and products from third parties through a
single, integrated multimedia infrastructure.

In 1998, Genesis also formed its Genesis Intermedia, Inc. subsidiary and
hired personnel experienced in multimedia technologies in order to target
consumers using new media (such as the Internet, interactive kiosks, eCommerce,
audio/video download and CD-ROM technologies) to position itself to deliver
integrated marketing and business solutions to its clients.

MARKET OPPORTUNITY

The expansion of the market for conventional media solutions, the growing
demand for innovative multimedia solutions delivered through a variety of
interactive electronic platforms, such as the Internet, and the complexity of
the global, digitized economy pose a significant challenge for many traditional
marketing companies. Genesis believes this challenge represents an opportunity
for companies prepared to offer integrated marketing and business solutions.

35
<PAGE>
INCREASED DEMAND FOR INTEGRATED MULTIMEDIA SOLUTIONS. The globalization of
the economy, advances in technology and the growth of the Internet as a popular
medium for eCommerce, entertainment and education have fostered the development
of new marketing approaches and delivery platforms. Consequently, businesses
demand integrated marketing and business solutions that will enable them to
effectively exploit these new media to compete in a diverse global economy and
improve their strategic market positions and business processes.

CONTINUED EMPHASIS ON TARGETED MARKETING. The demand for targeted marketing
strategies has continued through the development of new marketing channels.
Genesis believes businesses will not want to ignore or will not be competitively
able to ignore the emerging eCommerce market and, as a result, will demand that
their marketing strategies take advantage of the emerging eCommerce market
conducted through the Internet and other media to target their marketing and
advertising. Multimedia solutions that enable a business to deliver customized
messages to customers in an interactive format and to instantaneously evaluate
the success of their promotional activities address that demand.

Genesis believes that the demand for integrated multimedia solutions and
targeted marketing strategies represent compelling opportunities to expand its
own operations. Genesis believes that, to be successful, a marketing and
business solutions provider must be capable of developing and deploying
innovative multimedia solutions using the Internet and other interactive
platforms, as well as conventional media solutions. A marketing and business
solutions provider must also provide the back-office and support services
necessary to ensure the success of its clients' marketing and distribution
efforts.

THE GENESIS SOLUTION

Genesis believes it is positioned to address the growing demand for
integrated multimedia marketing and business solutions by providing a uniquely
integrated marketing strategy of conventional media and newly developed
multimedia technology. The services to deliver this strategy include:

- initial market and client assessment;

- the development and deployment of marketing strategies (which may involve
interactive multimedia solutions, conventional media solutions, or both);

- ongoing solutions support;

- back-office support; and

- media placement.

Clients may select any combination of these services to create the specific
marketing solution that meets their strategic requirements.

INITIAL ASSESSMENT

Genesis works closely with each client to thoroughly assess the client's
strategic marketing position, business requirements and existing systems
capabilities to determine which marketing strategies and business solutions will
most effectively assist that client to meet its goals. Genesis utilizes
comprehensive market research compiled by independent consultants to learn the
demographics of the client's customers and to determine what approach will meet
the client's marketing needs. For example, clients in the toy industry may find
that a traditional board game offered to Internet users in an interactive format
for a fee revitalizes the life and popularity of the game and generates a new
revenue stream for the company that owns it. A client in the retail industry,
such as a major department store, may find that an interactive kiosk in a
central mall location that links consumers to the physical store in the mall, as
well as to an electronic catalogue on the Internet, facilitates consumer access
to the products and services offered by the department store and increases
average revenue per consumer. Other

36
<PAGE>
clients may find that a conventional media solution, such as the distribution of
a printed catalogue to the general public, achieves their marketing objectives.

THE DEVELOPMENT AND DEPLOYMENT OF AN INTERACTIVE MULTIMEDIA SOLUTION

Genesis's Genesis Intermedia, Inc. subsidiary uses existing non-proprietary
technologies, proprietary interactive multimedia technologies (including
authoring and conversion tools, artistic templates and remote content updating
tools) and its expertise in marketing to develop and deploy creative multimedia
solutions that are tailored to each client's marketing needs. Genesis's graphic
designers and business strategists work together to create engaging user
interfaces using a variety of interactive delivery platforms, including the
Internet, intranets, extranets, interactive publicly accessible kiosks, CD-ROM
and DVD-ROM/RAM. Genesis generally designs such solutions to provide an
innovative introduction to the clients' products and services to targeted
customers and to satisfy the linguistic and cultural requirements of the markets
in which such products and services are offered. Such solutions are intended to
attract and hold the attention of the client's target audience while conforming
to and strengthening the client's brand image, which adds value to the client's
products and services. Multimedia solutions selected in consultation with the
client enable a client to improve its business processes and to promote and sell
its products or services to large target markets more efficiently and
effectively than is possible using solely conventional media solutions.

The unique characteristics of Genesis provide it the capability to provide
multimedia solutions to its clients. These characteristics include:

- an infrastructure that provides strong marketing and branding consultation
services to Genesis's client base;

- core competency in the development of system applications, systems
integration, data communications and back-office support;

- expertise in the development of proprietary multimedia technology; and

- a management team focused on providing creative and functional solutions
to its clients' marketing and business needs.

For example, Hallmark Entertainment, a producer of films, situation comedies
and cable programming, recently hired Genesis to develop an interactive
multimedia format for the delivery of its trade show presentations to film
distributors and representatives of television networks. Genesis determined that
distributors base the price point for such products on the amount of advertising
revenue such products are likely to generate. Thus, Genesis developed an
interactive kiosk with a high-resolution touchscreen and a link to the Internet,
where the Nielsen ratings are available in real-time, and assisted Hallmark in
producing a sophisticated, interactive trade show presentation. This format also
provided Hallmark with the flexibility it needed to edit and revise its
presentation during the trade show.

THE DEVELOPMENT AND DEPLOYMENT OF CONVENTIONAL MEDIA SOLUTIONS

In addition to its ability to provide interactive multimedia marketing and
business solutions, Genesis continues to provide solutions through conventional
media. These conventional media solutions include the following:

- radio, television and print advertising;

- business-to-consumer and business-to-business outbound telemarketing
services, which consist primarily of direct sales activities initiated by
Genesis on behalf of its clients; and

- inbound telemarketing services, which typically involve responding to
customer inquiries and electronic order processing.

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<PAGE>

RADIO, TELEVISION AND PRINT ADVERTISING. Radio, television and print
advertisements convey marketing information to a large number of consumers and
position a product within a broad market context. When the client's marketing
strategy calls for coverage to the public at large, Genesis will develop and
implement marketing solutions utilizing these traditional media.

TELEMARKETING SERVICES. Business-to-consumer and business-to-business
outbound telemarketing services involve the use of client-generated,
electronically transmitted lists of customers selected to match the demographic
profile of the targeted customer for the offered product or service. Genesis
specializes in marketing products at price points which typically range from
$100 to $5,000, with an average of approximately $2,000. Mentoring programs,
such as Ted Thomas' "Personal Fortune" real estate investment program and Jake
Bernstein's "Trade Your Way to Riches" program, are examples of the types of
products Genesis has promoted using outbound telemarketing.

Genesis recently acquired improved computer and telecommunications
technology to supplement its telemarketing business and to enable it to expand
this segment of its business. This technology assists telemarketers to more
accurately identify and contact potential customers, and provides telemarketing
sales representatives with more complete on-line guidance and support. Genesis's
computerized call management systems use predictive dialers to: (a)
automatically dial telephone numbers; (b) determine if a live connection is
made; and (c) present connected calls to a telephone sales representative who
has been specifically trained for the client's sales program. Genesis's ability
to train and to retain its sales personnel is critical to its success and
differentiates Genesis from many of its competitors. Sales personnel are
compensated by salary, commissions and bonuses based on individual performance
and overall profitability. As of November 30, 1998, there were a total of 59
full-time sales personnel employed in this division.

Inbound telemarketing services typically include: (a) the electronic receipt
and processing of all sales information; (b) the communication of necessary
sales information to Genesis's contracted order fulfillment center; and (c) the
administration of customer order and service inquiries.

Genesis continues to produce infomercials and to perform teleservices for
its own products. Genesis also performs these services for products owned by
third parties. Genesis typically retains a percentage of total sales revenue for
such services. The pricing for certain inbound teleservices may vary, depending
upon several factors, including the time spent, the number of calls received by
Genesis personnel and sales-based performance fees. Genesis will also work on a
fee-for-service basis.

In the normal course of business, Genesis has entered into various
agreements whereby it is obligated to pay royalties on products it sells. The
royalties vary by agreement and are based on percentages of net revenue
generally not to exceed 25% or a percentage of the net profits of the venture
generally not to exceed 50%. Royalty expense for the years ended December 31,
1997 and 1996, and for the nine months ended September 30, 1998 and 1997 was
$50,101, $423,207, $77,157 and $50,101, respectively.

Approximately 90% of Genesis's total revenues from telemarketing in 1997
were generated from the "Trade Your Way to Riches" product line. See "Certain
Transactions." Genesis did not generate more than 10% of its telemarketing
revenues in 1997 from any other client. Genesis does not expect to generate more
than 50% of its telemarketing revenues in 1998 from any individual client.

ONGOING SOLUTIONS SUPPORT

Genesis provides ongoing support services to its clients. These include
content maintenance, sales support administration, customer support and
technical support. Additionally, Genesis's systems and software engineers have
the expertise to provide intranet, extranet and web site hosting with enhanced
bandwidth, faster search capability, advanced audio/video streaming and secured
transaction technology.

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These systems facilitate post-implementation systems management and secure
eCommerce. In delivering these solutions, Genesis utilizes hardware manufactured
by independent third parties and off-the-shelf and proprietary software.

BACK-OFFICE SUPPORT CAPABILITIES

Genesis offers back-office support, such as inventory control systems,
accounting services and order processing and fulfillment capabilities, to
improve the business processes of Genesis's clients, enhance each marketing
effort and maximize each client's return on its marketing and business solutions
investment.

MEDIA PLACEMENT

Genesis's media planning, buying and placement services are conducted
through a team of media purchasers and sellers for clients seeking traditional
media solutions and for those seeking integrated multimedia business solutions.
Genesis typically purchases media time or space, holds it in inventory for a
relatively short period of time and then resells it to clients. As a result of
Genesis's successful media purchasing and sales, Genesis has established
relationships with media sellers and purchasers and developed a reputation for
successfully committing for, purchasing and selling media time. As a result,
Genesis believes that it frequently receives more favorable access to desirable
media time slots, and has consequently been able to place such time with its
clients at greater margins than less desirable time slots would support.

The placement of media time is a capital intensive segment of Genesis's
business because media time, unavailable on an as-needed basis, must be
purchased in advance and stored in Genesis's inventory. Genesis believes that
media sales will become more profitable when Genesis has more capital available
to purchase larger blocks of time. In fiscal 1997, Genesis sold approximately
$7.4 million of media time to an affiliate. See "Certain Transactions."

INDEPENDENT REVENUE STREAMS

In addition to revenue from Genesis's integrated multimedia marketing and
business solutions, Genesis's developed solutions provide independent sources
for revenue streams. These sources include Genesis's offerings of proprietary
products and media placement, as well as revenue streams from new technologies,
including public access networks and audio/visual streaming and download
technology.

PUBLIC ACCESS NETWORKS. Genesis, through its recent acquisition of certain
assets of Vision Digital Communications, Inc., utilizes proprietary multimedia
technologies to create engaging, interactive user interfaces that are delivered
through electronic platforms known as kiosks. These kiosks are presently located
in three regional shopping malls in the United States. Genesis intends to expand
the deployment of these kiosks to other malls throughout the United States and
to deploy kiosks in entertainment centers and other public environments in the
future. The kiosks enable merchants to communicate directly with their
customers, to learn more about their customers and to deliver consistent
marketing messages in a variety of locations. Genesis believes that the kiosks
also increase merchant visibility, facilitate product sales and enhance customer
service.

AUDIO/VISUAL STREAMING AND DOWNLOAD TECHNOLOGY. Genesis has the
technological capability and expertise to enable its clients to access disparate
audio and visual segments from the Internet. A customer may select audio or
visual programming and can either listen to or view in real time "streaming"
audio or video or download and store the audio or visual programming in digital
form so it can be retrieved and utilized at any time or location the user
determines. This technology will enhance existing applications as well. Genesis
believes that this technology has the potential to become a popular source of
entertainment and information to Internet users and a valuable marketing tool
for businesses conducting eCommerce.

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STRATEGY

Genesis's goal is to be recognized as a leading integrated marketing and
business solutions provider utilizing conventional and interactive multimedia
technologies. Genesis's strategy is to:

- effectively utilize and leverage its conventional and multimedia
capabilities and its media access;

- develop and market innovative consumer products;

- expand its capabilities through strategic acquisitions;

- focus on higher profit margin segments of the marketing and advertising
business; and

- engineer the most efficient business model for the conduct of its targeted
multimedia business.

LEVERAGING CONVENTIONAL AND MULTIMEDIA CAPABILITIES AND MEDIA
ACCESS. Genesis is positioned to become a leader in delivering integrated
marketing and business solutions. Genesis is currently able to:

- concurrently market a given product or service through both conventional
and existing and emerging interactive multimedia technologies;

- make approximately 1,000,000 direct marketing calls per month, with direct
customer contacts of as many as 60,000 per month utilizing existing
computerized call management systems and predictive dialers;

- deliver infomercial or other television product programming/advertising to
over 100 million households in the United States utilizing its media
access and order fulfillment operations;

- develop new product marketing opportunities that are particularly suited
to new and newly emerging interactive multimedia channels; and

- develop creative methods of marketing such products through conventional
marketing channels.

Genesis intends to continue to explore new ways to effectively utilize and
leverage this cross-discipline capability and its media access by:

- taking advantage of the product/brand awareness created by its various
methods of distribution (i.e., direct marketing, retail, Internet and
interactive multimedia) and leveraging it to other disciplines;

- continuing to offer its cross-discipline capability and media access to
other product and service distributors; and

- entering into alliances with or acquiring companies and developing or
acquiring technologies that provide expanded multimedia marketing
capabilities.

Additionally, Genesis intends to more aggressively utilize its assets such as
its customer lists in order to realize their true value.

CONTINUING TO DEVELOP AND MARKET INNOVATIVE PRODUCTS. Genesis continually
seeks out innovative consumer products which it can market and distribute
profitably. Genesis's in-house product development and marketing department
researches, develops and analyzes products and product ideas. The development of
relationships with third parties and the active solicitation of new clients
seeking multi-disciplinary marketing opportunities augment the activities of the
product development and marketing department.

GROWTH BY STRATEGIC ACQUISITIONS. Genesis regularly evaluates acquisition
opportunities that will enable it to expand its core multimedia marketing
capabilities and the geographic scope of its operations. To this end, Genesis
intends to acquire well-regarded niche companies or leaders in specific
marketing and communications disciplines. Genesis also reviews joint venture and
strategic alliance candidates. Genesis will focus on acquiring relatively
well-established, revenue producing, eCommerce businesses which will complement
Genesis's existing capabilities. Key personnel who possess technical expertise
will be given incentives to remain with Genesis on a long-term basis. Genesis
has made one acquisition to date and entered into a letter of intent relating to
another acquisition. See "--Acquisitions" below. Genesis is not currently a
party to any strategic alliances.

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ACQUISITIONS

In October 1998, Genesis acquired substantially all of the assets of Vision
Digital Communications, Inc., a company that uses proprietary multimedia
technologies to create engaging, interactive user interfaces that are delivered
through electronic platforms known as kiosks. The consideration for such assets
was 60,000 shares of common stock valued at $600,000 plus the assumption of
short-term obligations and long-term debt of $170,000 and $200,000,
respectively. Genesis has also granted to the seller (some to be issued directly
to Crown American Enterprises, Inc., a stockholder in seller) options to
purchase up to an additional 50,000 shares of common stock. The options will
become exercisable at a rate of 10,000 shares for each $1,000,000 of total
revenue generated by the acquired division during the three-year period after
the closing. The per share exercise prices of the options issued to Crown and
the seller are $8.50 and $10.00, respectively. All such options will all expire
at the end of such three-year period. In connection with the acquisition,
Genesis entered into three-year employment agreements with two of the executive
officers of the seller, each of which provides for an annual salary of $84,000.
Pursuant to such employment agreements, the employees will be eligible to
receive options covering up to an additional 150,000 shares (75,000 each) upon
the achievement of three kiosk deployment goals. Genesis has also agreed to make
a $40,000 interest-free loan to each of such employees. Up to $30,000 of each
such loan is subject to forgiveness upon the achievement of the same three kiosk
deployment goals.

In October 1998, Genesis also signed a letter of intent to acquire
substantially all of the assets of AniMagic Corporation, an interactive
multimedia company that provided audio and video download and streaming
capability to clients, for total consideration of $150,000. The consummation of
the acquisition is subject to bankruptcy court approval. Genesis has hired two
former employees of AniMagic Corporation. Prior to entering into the acquisition
agreements, there were no affiliations between Genesis and either Vision Digital
or AniMagic.

COMPETITION

Genesis's competitors can be divided into several groups, including
advertising and media agencies, Internet integrators and web presence providers,
large information technology consulting service providers and Internet and
online service providers. Each of these companies compete directly with
particular segments of Genesis's business. However, to the best of Genesis's
knowledge, none of them claim to provide the sort of integrated multimedia
solutions offered by Genesis. Genesis believes that it is uniquely positioned to
expand its operations into the eCommerce market because it already offers
conventional media and multimedia solutions, as well as back-office support, to
its clients. See "Risk Factors--Competition."

INTELLECTUAL PROPERTY

Genesis regards its trademarks, trade secrets and similar intellectual
property as critical to its success and relies on a combination of copyright and
trademark laws, trade secret protection, confidentiality and non-disclosure
agreements and contractual provisions with its employees and with third parties
to establish and protect is proprietary rights. These steps may not be adequate,
and Genesis may not be able to secure trademark registrations for all of its
marks in the United States or other countries. Third parties may also infringe
upon or misappropriate Genesis's copyrights, trademarks, service marks and
similar proprietary rights. Genesis has filed trademark claims for "Genesis
Intermedia" and "Show Super Star Interactive Video Presentation Systems," which
is an interactive media presentation software product developed for the
entertainment industry. Genesis intends to pursue the registration of its
trademarks based upon anticipated use internationally. Genesis may not be able
to secure adequate protection for these trademarks in foreign countries. In
addition, owners of other registered trademarks or servicemarks could bring
potential trademark or trademark infringement

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claims. Genesis does not have any registered copyrights or patents covering any
of its proprietary technology.

There is no assurance that any particular aspect of Genesis's technology
will not be found to infringe the rights of other companies. Other companies may
hold or obtain patents or copyrights on inventions or software or may otherwise
claim proprietary rights to technology useful or necessary to Genesis's
business. Genesis can not predict the extent to which Genesis may be required to
seek licenses under such proprietary rights of third parties. While it may be
necessary or desirable in the future to obtain licenses relating to one or more
of its proposed products or relating to current or future technologies, Genesis
may not be able to do so on commercially reasonable terms, if at all.

The measures taken by Genesis may not adequately protect the confidentiality
of Genesis's proprietary information and others may independently develop
products or technologies that are equivalent or superior to those of Genesis.
Moreover, Genesis may also be subject to litigation to defend against claims of
infringement of the rights of others or to determine the scope and validity of
the intellectual property rights of others. If competitors of Genesis prepare
and file applications in the United States that claim trademarks used or
registered by Genesis, Genesis may oppose those applications and be required to
participate in proceedings before the United States Patent and Trademark Office
to determine priority of rights to the trademark, which could result in
substantial costs to Genesis. Similarly, actions could be brought by third
parties claiming that Genesis's products or technology infringe patents or
copyrights owned by others. An adverse outcome could require Genesis to license
disputed rights from third parties or to cease using such trademark or
infringing product or technology. Any litigation regarding Genesis's proprietary
rights could be costly and divert management's attention, result in the loss of
certain of Genesis's proprietary rights, require Genesis to seek licenses from
third parties and prevent Genesis from selling its products and services, any
one of which could have a material adverse effect on Genesis's business, results
of operations and financial condition. In addition, Genesis anticipates in the
future licensing its content from third parties. As a result, its exposure to
copyright infringement actions may increase because Genesis must rely upon such
third parties for information as to the origin and ownership of such licensed
content. Genesis intends to obtain representations as to the origin and
ownership of such licensed content and to indemnification to cover any breach of
any such representations. However, there can be no assurance that such
representations will be accurate or that such indemnification will adequately
protect Genesis.

REGULATION

Advertising is regulated by the government, by private organizations,
including self-regulatory bodies and trade associations, and by consumer groups.
For example:

- The Federal Trade Commission administers the Federal Trade Commission Act
(the "FTCA"), which regulates a range of practices involving false,
misleading and unfair advertising, and the Federal Telemarketing and
Consumer Fraud and Abuse Prevention Act of 1994 (the "TCFAPA"), which
specifically prohibits deceptive, unfair or abusive practices in
telemarketing sales;

- The Federal Communications Commission administers the Federal Telephone
Consumer Protection Act of 1991 (the "TCPA");

- The Federal Food and Drug Administration and other federal agencies have
regulatory authority in the advertising business;

- Individual states and countries other than the United States often enact
rules and regulations similar to the FTCA which prohibit unfair or
deceptive advertising practices;

- The National Advertising Division and the National Advertising Review
Board review allegations that a particular company has violated state or
federal rules and regulations pertaining to advertising;

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- Trade associations in various industries publish advertising guidelines
for their members; and

- Consumer groups advocate increased regulation in advertising.

THE FTCA. The FTC may seek cease and desist orders, impose monetary
penalties, or pursue other remedies in the event that an advertising company
violates the FTCA rules or regulations pertaining to false, misleading and
unfair advertising. Genesis believes that it is in compliance with the FTCA and
the regulations promulgated thereunder.

THE TCFAPA. A variety of deceptive, unfair or abusive practices in
telemarketing sales have been prohibited under the TCFAPA. Generally, these
rules prohibit misrepresentations of the cost, quantity, terms, restrictions,
performance or characteristics of products or services offered by telephone
solicitation or of refund, cancellation or exchange policies. The regulations
also regulate the use of prize promotions in telemarketing to prevent deception
and require that a telemarketer identify promptly and clearly the seller on
whose behalf the telemarketer is calling, the purpose of the call, the nature of
the goods or services offered and, if applicable, that no purchase or payment is
necessary to win a prize. The regulations also require that telemarketers
maintain records on various aspects of their business. Genesis believes that it
is in compliance with the TCFAPA and the regulations promulgated pursuant to the
TCFAPA.

Violation of the rules and regulations applicable to telemarketing practices
may result in injunctions against certain operations, in monetary penalties or
disgorgement of profits; moreover, such violations may give rise to private
actions for damages.

THE TCPA. The TCPA imposes restrictions on unsolicited automated telephone
calls to residential telephone subscribers. Under the TCPA it is unlawful to
initiate telephone solicitations to residential telephone subscribers before
8:00 a.m. or after 9:00 p.m., local time at the subscriber's location, or to use
automated telephone dialing systems or artificial or prerecorded voices to call
certain subscribers. Additionally, the TCPA requires teleservice firms to
develop a written policy which (a) clearly delineates the types of calls that
such firms are prohibited from making under the TCPA, (b) lists specific
individuals or groups of individuals that such firms are prohibited from
contacting under the TCPA and (c) prohibits its personnel from making such
calls. Genesis's call management system has been modified to eliminate certain
capabilities to help prevent violations of the TCPA. These modifications prevent
personnel from initiating telephone calls during restricted hours or to
individuals listed on Genesis's "do not call" list. Genesis also educates its
personnel with respect to the restrictions and prohibitions set forth under the
TCPA.

STATE REGULATION. Most states have enacted statutes similar to the FTCA
prohibiting unfair or deceptive acts and practices. A number of states have
enacted legislation and other states are considering enacting legislation to
regulate telemarketing. For example, telephone sales in certain states are not
final until a written contract is delivered to and signed by the buyer, and such
a contract may often be canceled within three business days. At least one state
also prohibits telemarketers from requiring credit card payment, and several
other states require certain telemarketers to obtain licenses, post bonds or
submit sales scripts to the state's attorney general. State regulation has not
materially affected Genesis's operations as they are currently conducted and
Genesis does not presently anticipate that such regulation will materially and
adversely affect its operations in the future.

INTERNATIONAL REGULATION. Advertising is subject to regulation in countries
other than the United States in which Genesis may choose to do business. Genesis
will need to review such regulations before conducting business in any such
market.

SELF-REGULATORY BODIES; TRADE ASSOCIATIONS; AND CONSUMER
GROUPS. Self-regulatory activities have become significant in the advertising
business. The Council of Better Business Bureaus has created the

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National Advertising Division and the National Advertising Review Board. These
are private organizations that review and process allegations that a company has
violated state or federal rules or regulations pertaining to advertising.
Additionally, the national television networks and various other media have
adopted extensive regulations with respect to advertising that is acceptable for
broadcast or publication; trade associations in certain industries publish
advertising guidelines for their members; and various consumer groups have been
and continue to be powerful advocates of increased regulation of advertising.

INDUSTRY REGULATION. Certain of the industries served by Genesis are also
subject to government regulation. Genesis employees who complete the sale of
insurance products are required, for example, to be licensed by various state
insurance commissions and to participate in regular continuing education
programs. Genesis provides such continuing education to its employees and
believes that it has, in all material respects, complied with this and other
relevant industry regulations. Genesis may also be subject to regulation by the
Commodity Futures Trading Commission (the "CFTC"), which regulates commodities
trading. The CFTC has initiated an investigation which may affect the
infomercial titled "Success and You" based on Jake Bernstein's "Trade Your Way
to Riches" product. See "--Legal proceedings" below.

THE COMMUNICATION DECENCY ACT OF 1996. The Communications Decency Act of
1996 (the "CDA") was enacted in 1996. Although those sections of the CDA that,
among other things, proposed to impose criminal penalties on anyone distributing
"indecent" material to minors over the Internet were held to be unconstitutional
by the U.S. Supreme Court, there is no assurance that similar laws will not be
proposed and adopted. Although Genesis does not currently distribute the types
of materials that the CDA may have deemed illegal, the nature of such similar
legislation and the manner in which it may be interpreted and enforced cannot be
fully determined, and legislation similar to the CDA could subject Genesis to
potential liability, which in turn could have an adverse effect on Genesis's
business, result of operations and financial condition. Such laws could also
damage the growth of the Internet generally and decrease the demand for
Genesis's products and services, which could adversely affect Genesis's
business, results of operations and financial condition.

REGULATORY COMPLIANCE. Genesis has developed internal review procedures to
help ensure that its work product is accurate and fairly discloses the nature of
the products marketed and sold by Genesis. Genesis believes that it is in
compliance with federal, state and local laws and regulations pertaining to
advertising and the pre-clearance procedures of the broadcast media.

EMPLOYEES

As of November 30, 1998, Genesis had 100 full-time employees, including 59
telemarketers, four systems engineers and two graphic designers. None of these
employees are covered by collective bargaining agreements and management
believes that Genesis's relations with its employees are good.

PROPERTIES

Genesis owns its headquarters office building at 13063 Ventura Boulevard,
Studio City, California 91604-2238. The building consists of 6,300 square feet
and is entirely occupied by Genesis. All of Genesis's administrative,
telemarketing and media time operations are conducted at its headquarters.
Genesis leases production facilities for the production of direct marketing
programming on an as-needed basis from third parties on commercially available
terms. Genesis Intermedia, Inc. occupies approximately 4,000 square feet located
at 3151 Airway Avenue, Building T-3, Costa Mesa, California 92626. The lease for
such space provides for monthly rental payments of $8,175 and the term expires
on August 1, 2000.

Genesis's planned capital expenditures for 1998 include expenditures for
expansion of Genesis's telemarketing division, which will likely include lease
or acquisition of additional space for telephone

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service representatives and supporting infrastructure. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-- Liquidity and Capital Resources."

LEGAL PROCEEDINGS

On November 14, 1997, the CFTC issued an Order authorizing certain persons
to issue subpoenas and take depositions in a private investigation involving
Jake Bernstein and MBH Commodity Advisors. Although the Order does not reference
Genesis, its employees or affiliates, the CFTC has nonetheless requested that
Genesis provide various documents arising out of Genesis's involvement in the
production and marketing of an infomercial titled "Success and You" which
promotes and markets a video series titled "Trade Your Way To Riches." To date,
the CFTC has directed one subpoena to Genesis. Various documents have been
produced on behalf of Genesis in response to the subpoena. Additionally, the
CFTC has taken the deposition of Ramy El-Batrawi, president of Genesis, in
connection with its investigation.

Although the CFTC has articulated its belief that Genesis, by virtue of its
involvement in the production and marketing of the infomercial, may be required
to be registered in some capacity to continue to engage in the referenced
activities, Genesis believes the CFTC's analysis and conclusions are incorrect
and are based on incomplete information. In October 1998, Genesis issued a
written response to the CFTC's position setting forth the reasons why Genesis is
not required to register in any capacity with the CFTC. The CFTC has not yet
issued a response. Genesis has been advised by its counsel that the initiation
of a CFTC enforcement action against Genesis requiring registration or seeking
the imposition of sanctions is unwarranted. As of the date of this prospectus,
there has been no indication that the CFTC seeks any relief other than
registration. To date, no complaint or enforcement action has been asserted
against Genesis, its officers, directors or employees.

If it is determined in the investigation or any resulting proceeding that
registration is required, Genesis intends promptly to effect any required
registration. It is estimated that the cost of registering Genesis with the CFTC
will be less than $1,000.00. In the event that the CFTC brings an enforcement
action against Genesis by virtue of its failure to register, any adverse
determination or settlement in this action could adversely affect Genesis
through, among other things, the imposition of fines and/or restrictions on
business activities.

Although Genesis is not presently party to any material litigation, Genesis
may also be involved from time to time in various other claims and legal actions
incident to its operations, either as plaintiff or defendant.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Set forth below is certain information concerning the directors, executive
officers and other key employees of Genesis as of November 30, 1998.

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ------------------------------------------ --- --------------------------------------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Ramy El-Batrawi........................... 37 Chairman of the Board and Chief Executive
Officer
Douglas E. Jacobson....................... 52 Director, Chief Financial Officer
Sam I. Hassabo............................ 54 Director, President and Chief Executive
Officer, Genesis Intermedia, Inc.
Craig T. Dinkel........................... 40 Chief Operating Officer
Blair LaCorte............................. 35 Director

KEY EMPLOYEES
Sam Elkholy............................... 41 Vice President, Technology
Robert Kline.............................. 53 Vice President, Business Development
</TABLE>

RAMY EL-BATRAWI. Mr. El-Batrawi is the principal stockholder and Chief
Executive Officer of Genesis. He has been a Director and Chairman of the Board
of Genesis since its inception in October 1993. Mr. El-Batrawi's prior
experience has included international business marketing where he facilitated
and negotiated significant transactions between global industrial companies and
world governments. Firms with which he has been involved include Lockheed
Corporation, Carnival Cruise Lines Inc., Lonrho, Inc., McDonalds Corporation and
Eastern Airlines. Additionally, he is the sole shareholder, President and
Chairman of the Board of Directors of several other companies, including
International Futures Brokerage Company, Mars and Venus Counseling Centers,
Inc., Genesis Aviation, Inc., Jet Vacations Holding Corporation, Jet Vacations,
Inc., Jet Vacations International, Inc., Genesis Aviation II, Inc., Genesis
Diversified Investments, Inc., Sentient, Inc. and Trade Your Way to Riches, Inc.

DOUGLAS E. JACOBSON. Mr. Jacobson has been a Director of Genesis since
October 1998. Mr. Jacobson has been a certified public accountant for over 25
years and is a graduate of the College of William and Mary in Virginia. His
experience includes working for local public accounting firms and Coopers &
Lybrand where he audited privately held and SEC-registered public corporations.
He was responsible for supervising the financial audit staff of a major retail
drug chain, Eckerd Drugs in Clearwater, Florida for three years. Subsequent to
that position, he managed the internal audit functions for a highly diversified,
closely held family conglomerate, Lykes Bros. Inc., for four years. In that
position he was responsible for nationwide audits and reporting directly to the
Chairman. From 1983 to 1997, as a sole practitioner certified public accountant,
he performed accounting, audit and tax services for key family members and other
clients, including Genesis. As Genesis's Chief Financial Officer, Mr. Jacobson's
responsibilities include overseeing and preparing the financial analysis of
Genesis's financial growth and reporting.

SAM I. HASSABO. Mr. Hassabo joined Genesis Intermedia, Inc. in July 1998
bringing with him 25 years experience in sales and marketing nationwide and
internationally, mostly in the multimedia, computer hardware and software
industries. He has been a Director of Genesis since October 1998. Prior to
joining Genesis, Mr. Hassabo was the President of Advanced Media, Inc., a
position he held since 1996. Since 1992, Mr. Hassabo has served as President of
International Solutions Group, an enterprise software and hardware solutions
consulting firm. Prior to 1992, he worked for Software

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Products International, Talaris Systems, Inc., Integrated Software Systems
Corp., Computer Sciences Corporation and General Electric Information Services
Company. From 1972 to 1975, Mr. Hassabo served as an Audit Team Leader and
Management Consultant for Touche Ross & Company. Mr. Hassabo received a Bachelor
of Science degree in Commercial Engineering in 1968 from the University of
Brussels and a Masters in Business Administration degree in 1976 from the
University of Ottawa.

CRAIG T. DINKEL. Mr. Dinkel joined Genesis as its Chief Operating Officer
in October 1998. Prior to joining Genesis, Mr. Dinkel served as Chief Operating
Officer of Trade Your Way to Riches, Inc., a company owned by Genesis's majority
stockholder. Mr. Dinkel's responsibility is to manage and oversee the day-to-day
operations of Genesis, including the management of Genesis's core group of
inbound and outbound telemarketers. His principal responsibilities include
effectuating Genesis's marketing plans, business development, customer service
and fulfillment, and management of information systems. From April 1996 to April
1997, he was the Manager of Special Projects reporting directly to Michael Levy,
President and Chief Executive Officer of Positive Response Television, a
subsidiary of National Media Corporation. He managed that company's profit
center and was responsible for the delivery of customized, call center services
to inbound and outbound clients. Prior to April 1996, Mr. Dinkel acted as a
licensed futures trader. He received his undergraduate degree from California
State University Northridge and is currently seeking a masters degree from the
Peter Drucker School of Executive Management in Claremont, California.

BLAIR LACORTE. Mr. LaCorte has been a Director of Genesis since October
1998. Mr. LaCorte is an Entrepreneur in Residence at Internet Capital Group.
Prior to joining Internet Capital Group in 1998, Mr. LaCorte was the founder and
President of the Internet Technology Group at Cadis, Inc. Cadis, Inc. developed
and marketed parametric search technology used to enable electronic commerce
applications and offered a complete enterprise commodity and supplier management
software. Cadis, Inc. was sold to Aspect Development, Inc. in November 1997.
Prior to Cadis, Inc., Mr. LaCorte held several executive management roles at
Autodesk, maker of Autocad. Mr. LaCorte was the founder and General Manager of
the data publishing division, a stand-alone unit, that grew to become the
world's largest provider of catalogs with two-dimensional CAD graphics on the
web. This unit was later sold to Thomas Publishing. Mr. LaCorte was also
Director of Worldwide Product Marketing where he developed and released three
new products. Prior to that, Mr. LaCorte served as Manager of Worldwide
Strategic and Market Planning for Sun Microsystems and was a Senior Consultant
for Gemini Consulting. Mr. LaCorte graduated from the University of Maine with a
degree in Business Administration and graduated with honors from General
Electric's Financial Management Program and received a Masters of Business
Administration degree in strategy and marketing from the Tuck School at
Dartmouth College.

SAM ELKHOLY. Mr. Elkholy has been the Vice President, Technology of Genesis
since September 1998. Mr. Elkholy has been a pioneer in the development of
multimedia and Internet solutions. Before joining Genesis, he served as
President and Chief Executive Officer of AniMagic Corporation, a position he
held since 1993. AniMagic filed for protection under Chapter 11 of the United
States Bankruptcy Code in 1998. Mr. Elkholy also served as MIS Director for
Technicolor, Inc., PepsiCo Inc., Republic Pictures and the MCA/Universal prior
to joining AniMagic in 1993. Under his leadership, AniMagic completed projects
for Apple Computer, Inc., Microsoft Corporation, The Walt Disney Company, Epson
America, Inc., McDonnell Douglas Corporation, Sprint Corporation, Warner Records
and TRW, Inc. Mr. Elkholy was recognized as one of the Top 100 Multimedia
Producers in America in 1995 by Multimedia Producer Magazine. In 1997, Epson
America, Inc. selected AniMagic to develop an Internet eCommerce website.

ROBERT KLINE. Dr. Kline has been the Vice President, Business Development
of Genesis since September 1998. Prior to joining Genesis, Dr. Kline served as
the Vice President/Business Development

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<PAGE>
of AniMagic Corporation. AniMagic filed for protection under Chapter 11 of the
United States Bankruptcy Code in 1998. Dr. Kline has over 30 years of experience
in the implementation of networked, interactive multimedia systems. He has
developed high-performance product/service teams for various corporations,
including Exxon Corporation, International Business Machines Corporation, GTE
Corporation, Mitsui, Hughes Electronics Corporation, Chevron Corporation, FMC,
Halliburton Company, Harris, Caterpillar, Inc./Solar Turbines, Minnesota Mining
& Manufacturing Company, Xerox Corporation, AT&T and for United States
government agencies, including the United States Air Force and the Departments
of Commerce, Defense, Energy and Justice. Dr. Kline has worked extensively in
Korea, Japan, India, Russia, Europe and the Middle East. From 1967 to 1971, Dr.
Kline was a teacher of English and from 1971 to 1987 Dr. Kline was a university
professor of English Literature at the University of Texas. He serves on the
IEEE Medical Technology Policy Committee.

BOARD OF DIRECTORS

The Board of Directors is currently composed of four members. Within 90 days
of the completion of this offering, Genesis anticipates expanding the Board of
Directors to five members and appointing a second outside director who will
serve on the compensation committee and the audit committee with Mr. LaCorte.
Prior to this offering, Genesis has not had a compensation committee or an audit
committee. Each director holds office until the next annual meeting of the
stockholders or until his or her successor is duly elected and qualified.

Prior to this offering, directors of Genesis have not received compensation
for their services in such capacity. Genesis anticipates that, following this
offering, directors who are employees of Genesis will not be paid any fees or
additional compensation (other than expense reimbursement) for service as
members of the Board of Directors or any committee thereof. Genesis will enter
into arrangements with respect to fees and other compensation (including expense
reimbursement) for directors who are not employees of Genesis at the time they
are selected to serve on the Board. In addition, directors who are not employees
of Genesis may annually receive automatic grants of non-qualified stock options
under Genesis's 1998 Stock Incentive Program. See "--Employee Compensation
Programs--1998 Stock Incentive Program" below. Genesis maintains directors' and
officers' liability insurance and its Bylaws provide for indemnification of
directors and officers to the fullest extent permitted by Delaware law. Genesis
has entered into indemnification agreements with all of its directors. In
addition, the Certificate of Incorporation limits the personal liability of
directors of Genesis to Genesis or its stockholders for breaches of the
directors' fiduciary duties to the fullest extent currently permitted by
Delaware law. See "Description of Capital Stock--Certain Provisions of Delaware
Law."

COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year ended December 31, 1997, Genesis had no compensation
committee or other committee of the Board of Directors performing similar
functions. Decisions concerning compensation of executive officers were made
during such year by the Board of Directors. No interlocking relationship exists
between Genesis's Board of Directors and the board of directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past.

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<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
compensation earned by Genesis's Chief Executive Officer and each of the other
most highly compensated executive officers of Genesis (collectively, the "Named
Officers") whose aggregate cash compensation exceeded $100,000 for services
rendered in all capacities to Genesis during the fiscal year ended December 31,
1997.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION
-----------------------
---------------------- SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION SALARY ($) BONUS ($) OPTIONS/SARS(#)
- -------------------------------------------- ---------- ---------- -----------------------
<S> <C> <C> <C>
Ramy El-Batrawi, Chairman of the Board and
Chief Executive Officer................... $ 250,000 $ -- --
Sam I. Hassabo, President and Chief
Executive Officer, Genesis Intermedia,
Inc.(2)................................... $ 115,000 $ -- --(3)
</TABLE>

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

(1) No executive officer named in the table above received perquisites or other
personal benefits, securities or property in an amount in excess of the
lesser of $50,000 or 10% of such officer's cash compensation, nor did all
Named Officers together receive such other compensation in excess of the
lesser of $50,000 times the number of such Named Officers or 10% of such
officers' aggregate cash compensation. See, however, "Certain Transactions"
for a discussion of certain transactions between Genesis and Mr. El-Batrawi
and his affiliates.

(2) Mr. Hassabo was not an employee of Genesis during 1997 and is included in
the table based upon projected compensation.

(3) Does not include options to acquire 150,000 shares of common stock, which
were granted in October 1998 and vest September 30, 2000.

No stock appreciation rights or stock options were granted to any of the
Named Officers during the year ended December 31, 1997. No such rights or
options were held by the Named Officers at December 31, 1997.

EMPLOYEE COMPENSATION PROGRAMS

1998 STOCK INCENTIVE PROGRAM

In October 1998, the Board of Directors adopted and the stockholders
approved Genesis's 1998 Stock Incentive Program (the "1998 Stock Program").
Under the 1998 Stock Program, the Board of Directors, or its designated
administrators, has the flexibility to determine the type and amount of awards
to be granted to eligible participants.

PURPOSE, STRUCTURE, AWARDS AND ELIGIBILITY. The 1998 Stock Program is
intended to secure for Genesis and its stockholders the benefits arising from
ownership of Genesis's common stock by individuals employed or retained by
Genesis who will be responsible for the future growth of the enterprise. The
1998 Stock Program is designed to help attract and retain superior personnel for
positions of substantial responsibility with Genesis (including advisory
relationships where appropriate), and to provide individuals with an additional
incentive to contribute to Genesis's success.

The 1998 Stock Program is composed of seven parts and the program
administrators may make the following types of awards under the 1998 Stock
Program: (1) incentive stock options under the Incentive Stock Option Plan; (2)
nonqualified stock options under the Nonqualified Stock Option Plan; (3)
restricted shares under the Restricted Shares Plan; (4) rights to purchase stock
under the Employee Stock Purchase Plan; (5) stock appreciation rights under the
Stock Appreciation Rights Plan; (6) grants of options under the Non-Employee
Director Stock Option Plan; and (7) certain other stock rights

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<PAGE>

under the Stock Rights Plan, which may include the issuance of units
representing the equivalent of shares of common stock, payments of compensation
in the form of shares of common stock and rights to receive cash or shares of
common stock based on the value of dividends paid with respect to a share of
common stock. Officers, key employees, employee directors, consultants and other
independent contractors or agents of Genesis or its subsidiaries who are
responsible for or contribute to the management, growth or profitability of
Genesis's business will be eligible for selection by the program administrators
to participate in the 1998 Stock Program, provided, however, that incentive
stock options may be granted under the Incentive Stock Option Plan only to a
person who is an employee of Genesis or its subsidiaries.

SHARES SUBJECT TO 1998 STOCK PROGRAM. Genesis authorized and reserved for
issuance an aggregate of 500,000 shares of its common stock under the 1998 Stock
Program. The aggregate number of shares of common stock which may be granted
through awards under the 1998 Stock Program, other than stock payments and the
purchase of stock under the Employee Stock Purchase Plan, to any employee in any
calendar year may not exceed three percent of the then-outstanding shares of
common stock. The shares of common stock issuable under the 1998 Stock Program
may be authorized but unissued shares, shares issued and reacquired by Genesis
or shares purchased by Genesis on the open market. If any of the awards granted
under the 1998 Stock Program expire, terminate or are forfeited for any reason
before they have been exercised, vested or issued in full, the unused shares
subject to those expired, terminated or forfeited awards will again be available
for purposes of the 1998 Stock Program.

EFFECTIVE DATE AND DURATION. All of the plans other than the Incentive
Stock Option Plan and the Employee Stock Purchase Plan, became effective upon
their adoption by the Board of Directors of Genesis. The Incentive Stock Option
Plan and the Employee Stock Purchase Plan became effective upon their adoption
by the Board of Directors of Genesis and approval of the 1998 Stock Program by a
majority of the stockholders of Genesis. The 1998 Stock Program will continue in
effect until September 30, 2008 unless sooner terminated under the general
provisions of the 1998 Stock Program.

ADMINISTRATION. The 1998 Stock Program will be administered by the Board of
Directors or by a committee appointed by the Board, consisting of not less than
two directors of Genesis who are "non-employee directors" (within the meaning of
SEC Rule 16b-3 promulgated pursuant to the Securities Exchange Act of 1934, as
amended), so long as non-employee director administration is required under Rule
16b-3, and who are "outside directors" (as defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code")), so long as outside
directors are required by the Code. Subject to the foregoing limitations, as
applicable, the Board of Directors may from time to time remove members from the
committee, fill all vacancies on the committee, however caused, and may select
one of the members of the committee as its chairman. The program administrators
may hold meetings at such times and places as they may determine, will keep
minutes of their meetings, and may adopt, amend and revoke rules and procedures
in accordance with the terms of the 1998 Stock Program.

STOCK OPTION GRANTS

On November 30, 1998, Genesis had stock options outstanding with respect to
350,000 shares of common stock authorized under the 1998 Stock Program, all with
exercise prices of $8.50 per share. Of such options, 200,000 vest March 31, 1999
and 150,000 will vest September 30, 2000, two years after the date of grant.
Genesis also had 50,000 additional options outstanding that were not granted
under the 1998 Stock Program with a weighted average exercise price of $9.57.

EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

Mr. El-Batrawi has an employment agreement with Genesis. In September 1998,
Genesis entered into an employment agreement with Mr. El-Batrawi which continues
until September 30, 2003, unless

50
<PAGE>

terminated earlier by Genesis, either for cause, death or certain other
circumstances. Pursuant to the terms of the Employment Agreement, Mr. El-Batrawi
is to be paid an annual salary of $250,000. Mr. El-Batrawi is eligible to
receive bonuses at the discretion of the Board of Directors. Genesis has
obtained a $4 million term life insurance policy covering Mr. El-Batrawi.
Genesis is the sole beneficiary on the policy, $900,000 of which is allocated to
payment of the mortgage on Genesis's headquarters. In connection with its
acquisition of substantially all of the assets of Vision Digital Communications,
Inc., Genesis entered into employment agreements with two former employees of
Vision Digital, each providing for three-year terms and annual salaries of
$84,000. Each such employee is also eligible to receive grants of options to
purchase an aggregate of 75,000 shares of common stock, upon the achievement of
three separate performance hurdles. The 25,000 options that may be granted to
each employee at each such hurdle will have per share exercise prices of $11.00,
$13.00 and $15.00, respectively. Genesis is currently negotiating the terms of
an employment agreement with Sam Hassabo, whose original employment agreement
was terminated in accordance with its terms. Mr. Hassabo is currently being
compensated based upon the terms of the terminated agreement which provided for
an annual base salary of $115,000. There can be no assurance that Genesis and
Mr. Hassabo will be able to reach agreement on the terms of a replacement
employment agreement. Each of Genesis's employment agreements contains
non-competition provisions designed to protect Genesis that state courts may not
enforce or only partially enforce.

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<PAGE>
CERTAIN TRANSACTIONS

Genesis believes that the transactions set forth below were made on terms no
less favorable to Genesis than could have been obtained from unaffiliated third
parties. All future transactions, including loans to and advances from
affiliates, and contracts with affiliates will be approved by a majority of the
Board of Directors, including a majority of the independent and disinterested
directors, and will continue to be on terms no less favorable to Genesis than
could be obtained from unaffiliated third parties.

TRANSACTIONS WITH THE MAJORITY STOCKHOLDER

During the nine months ended September 30, 1998, Mr. El-Batrawi received a
distribution of $375,000 from S corporation earnings accrued through December
31, 1997. From the net proceeds of this offering Genesis expects to make an
additional distribution to Genesis's S corporation stockholders in the amount of
$2,000,000 to pay federal and state income taxes.

From time to time, Mr. El-Batrawi lends money to Genesis. These advances are
generally repaid at the stockholder's request. These advances are non-interest
bearing and have no scheduled repayment terms. At September 30, 1998, the amount
owed to Mr. El-Batrawi was $33,427.

In June 1997, Genesis obtained a $750,000 line of credit from a financial
institution. The line of credit is collateralized by substantially all of
Genesis's assets, except its corporate office building, and is personally
guaranteed by Mr. El-Batrawi.

From time to time, Genesis has advanced money to business associates of Mr.
El-Batrawi. Mr. El-Batrawi has guaranteed repayment of such advances and is
obligated to repay the advances in the event of non-payment by the borrower. At
September 30, 1998, advances to business associates of Mr. El-Batrawi were as
follows: Mr. F. Pigeon--$4,184; Mr. O. Khashoggi--$28,000; and World
Capital--$1,088.

TRANSACTIONS WITH AFFILIATES

From time to time, Genesis advances money to companies that are wholly-owned
by Mr. El-Batrawi or to companies in which Mr. El-Batrawi has an ownership
interest and exercises significant control. These advances to affiliates are
generally repaid upon Genesis's request, are non-interest bearing and have no
scheduled repayment terms. Mr. El-Batrawi has guaranteed repayment of such
advances and is responsible for repayment of these advances in the event of
non-payment by the borrower. At September 30, 1998, advances to affiliates are
as follows: Mentoring Institute, Inc.-- $117,118; Mars and Venus Counseling
Centers, Inc.--$98,029; International Futures Brokerage Company--$32,000; and
Jet Vacations, Inc.--$76,405.

From time to time, companies owned by Mr. El-Batrawi or companies in which
Mr. El-Batrawi has an ownership interest advance money to Genesis. These
advances are non interest bearing and are repaid upon demand. At September 30,
1998, advances from Genesis Aviation, Inc. amounted to $796,601.

Genesis was also engaged in the following transactions with Trade Your Way
to Riches, Inc., ("TYWR") a company that is wholly-owned by Mr. El-Batrawi.
During the nine months ended September 30, 1998 and the year ended December 31,
1997, Genesis sold media time to TYWR for $3,034,919 and $7,412,038,
respectively. In addition, during the nine months ended September 30, 1998 and
the year ended December 31, 1997, Genesis earned commissions from the sale of
TYWR products that amounted to $1,789,415 and $742,315, respectively. Amounts
due to Genesis at September 30, 1998 and December 31, 1997, related to the sales
of media to TYWR and commissions earned were $2,936,409 and $2,383,663,
respectively. Genesis's accounts receivable from TYWR are on a revolving open
account. Accounts are typically paid within 120 to 150 days, based upon the
anticipated sales and

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<PAGE>

collection cycle for TYWR's products which typically involve four equal monthly
payments by TYWR's customers.

During the year ended December 31, 1997, Genesis reimbursed Genesis
Aviation, Inc., a company owned by Mr. El-Batrawi, $8,995 for travel expenses
related to the use of one of its airplanes.

TRANSACTIONS WITH JOHN M. GRAY, PH.D.

On December 31, 1997, Genesis sold 116,504 shares of its common stock to Dr.
Gray for $900,000.

Royalties paid to Dr. Gray for the nine months ended September 30, 1998 and
the years ended December 31, 1997 and 1996 were $77,157, $50,101 and $423,207,
respectively.

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<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of Genesis's common stock as of November 30, 1998 and as adjusted to
reflect the sale of common stock offered in this prospectus, by (1) each person
who is known by Genesis to own beneficially five percent or more of Genesis's
common stock prior to this offering, (2) each of Genesis's directors and Named
Officers and (3) all current directors and executive officers as a group. The
address of each person is in care of Genesis at 13063 Ventura Boulevard, Studio
City, California 91604-2218.

<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE PRIOR PERCENTAGE AFTER
NAME OF BENEFICIAL OWNER OWNED(1) TO THE OFFERING THE OFFERING(1)(2)
- ------------------------------------ -------------------- ----------------- -------------------
<S> <C> <C> <C>
Ramy El-Batrawi..................... 2,912,622 95.18% 57.56%
Sam I. Hassabo...................... 0 * *
Douglas E. Jacobson................. 0 * *
Blair LaCorte....................... 0 * *
All directors and executive officers
as a group (five persons)......... 2,912,622 95.18% 57.56%
</TABLE>

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

* Less than 1%

(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are
currently exercisable or become exercisable within 60 days following the
date of this prospectus are deemed outstanding. Such shares, however, are
not deemed outstanding for the purpose of computing the percentage ownership
of any other person. Unless otherwise indicated in the footnotes to this
table, the persons and entities named in the table have sole voting and sole
investment power with respect to the shares set forth opposite such
stockholder's name.

(2) Assumes no exercise of the underwriters' over-allotment option.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

Upon completion of this offering, the authorized capital stock of Genesis
will consist of 25,000,000 shares of common stock, par value $.001 per share,
and 5,000,000 shares of preferred stock, par value $.001 per share. As of
November 30, 1998, there were 3,060,000 shares of common stock outstanding held
by three stockholders and no shares of preferred stock were outstanding.

COMMON STOCK

The holders of common stock are entitled to one vote per share for the
election of directors and on all other matters to be voted upon by the
stockholders. Subject to preferences that may be applicable to any outstanding
preferred stock, the holders of common stock are entitled to receive, when and
if declared by the Board of Directors, out of funds legally available therefor,
any dividends on a pro rata basis. In the event of liquidation, dissolution or
winding up of Genesis, the holders of common stock are entitled to share ratably
in all assets remaining after payment of liabilities, subject to prior
distribution rights of preferred stock, if any, then outstanding. The common
stock has no preemptive or conversion rights or other subscription rights. There
are no redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and non-assessable, and the
shares of common stock offered by Genesis in this offering will, when issued, be
fully paid and non-assessable.

PREFERRED STOCK

The Board of Directors has the authority to issue the preferred stock in one
or more series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, liquidation preferences and the number of shares of
stock constituting any series or the designation of such series, without further
vote or action by Genesis's stockholders. The issuance of preferred stock may
have the effect of delaying, deferring or preventing a change in control of
Genesis and may adversely affect the voting and other rights of the holders of
common stock. At present, Genesis has no plan to issue any shares of preferred
stock.

AUTHORIZED BUT UNISSUED CAPITAL STOCK

Genesis estimates that following the completion of this offering it will
have approximately 19,940,000 shares of authorized but unissued common stock
(including an aggregate of 500,000 shares reserved for issuance upon the
exercise of options under the 1998 Stock Program) and 5,000,000 shares of
authorized but unissued preferred stock. If the underwriters' over-allotment
option is exercised in full, Genesis will have approximately 19,640,000 shares
of authorized but unissued common stock. Delaware law does not require
stockholder approval for the issuance of authorized shares. However, the listing
requirements of the Nasdaq Stock Market, Inc., which apply so long as the common
stock remains included in such inter-dealer quotation system, require prior
stockholder approval of certain issuances, including issuances of shares bearing
voting power equal to or exceeding 20% of the pre-issuance outstanding voting
power or pre-issuance outstanding number of shares of common stock. These
additional shares could be used for a variety of corporate purposes, including
future public offerings to raise additional capital or to facilitate corporate
acquisitions. Genesis currently does not have any plans to issue additional
shares of common stock or preferred stock, other than in connection with
employee compensation plans. See "Management--Executive Compensation." One of
the effects of the existence of unissued and unreserved common stock and
preferred stock may be to enable the Board of Genesis to issue shares to persons
who may agree or be inclined to vote in concert with current management on
issues put to consideration of stockholders, which issuance could render more
difficult or discourage an attempt to obtain control of Genesis by means of a
merger, tender offer, proxy contest or otherwise, and thereby protect the
continuity of Genesis's management and possibly

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<PAGE>

deprive the stockholders of the opportunity to sell their shares of common stock
at prices higher than prevailing market prices.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is U.S. Stock Transfer
Corporation, Glendale, California.

CERTAIN PROVISIONS OF STATE LAW

The terms of Section 203 of the Delaware General Corporations Law ("DGCL")
apply to Genesis. With certain exceptions, Section 203 generally prohibits an
"interested stockholder" from engaging in a broad range of "business
combination" transactions, including mergers, consolidations and sales of 10% or
more of a corporation's assets, with a Delaware corporation for three years
following the date on which such person became an interested stockholder unless
(i) the transaction that results in the person's becoming an interested
stockholder or the business combination is approved by the board of directors of
the corporation before the person becomes an interested stockholder, (ii) upon
consummation of the transaction which results in the stockholder becoming an
interested stockholder, the interested stockholder owns 85% or more of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding shares owned by persons who are directors and also officers
and shares owned by certain employee stock plans, or (iii) on or after the date
the person becomes an interested stockholder, the business combination is
approved by the corporation's board of directors and by holders of at least
two-thirds of the corporation's outstanding voting stock, excluding shares owned
by the interested stockholder, at a meeting of stockholders. Under Section 203,
an "interested stockholder" is generally defined as any person (and the
affiliates and associates of any such person), other than the corporation and
any direct or indirect majority-owned subsidiary, that is (a) the owner of 15%
or more of the outstanding voting stock of the corporation or (b) an affiliate
or associate of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation at any time within the three-year
period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder. The restrictions contained in
Section 203 do not apply to a corporation that so provides in an amendment to
its certificate of incorporation or by-laws passed by a majority of its
outstanding voting shares, but such stockholder action generally does not become
effective for 12 months following its adoption and would not apply to persons
who were already interested stockholders at the time of the amendment. Genesis's
Charter and Company's By-Laws do not exclude Genesis from the restrictions
imposed under Section 203, but Genesis's Charter provides that in no case shall
Mr. El-Batrawi or any person who is a transferee of Mr. El-Batrawi, regardless
of the total percentage of Genesis's common stock or other voting stock owned by
Mr. El-Batrawi or such persons, be deemed an interested stockholder for any
purpose under Section 203 whatsoever.

Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. The provisions of
Section 203 may encourage companies interested in acquiring Genesis to negotiate
in advance with Genesis's Board of Directors, because the stockholder approval
requirement would be avoided if the Board of Directors approves either the
business combination or the transaction which results in the stockholder
becoming an interested stockholder. Such provisions also may have the effect of
preventing changes in the Board of Directors. It is further possible that such
provisions could make it more difficult to accomplish transactions which
stockholders may otherwise deem to be in their best interests.

Genesis may be subject to Section 2115 of the California Corporations Code.
Section 2115 provides that, regardless of a company's legal domicile, certain
provisions of California corporate law will apply to that company if the company
meets certain requirements relating to its property, payroll and

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<PAGE>

sales in California and if more than one-half of its outstanding voting
securities are held of record by persons having addresses in California. Among
other things, Section 2115 may limit the ability of Genesis to elect a
classified Board of Directors and requires cumulative voting in the election of
Directors. Cumulative voting is a voting scheme which allows minority
stockholders a greater opportunity to have Board representation by allowing such
stockholders to have a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the stockholder's shares are
entitled and to "cumulate" those votes for one or more director nominees.
Generally, cumulative voting allows minority stockholders the possibility of
Board representation on a percentage basis equal to their stock holding, where
under straight voting such stockholders may receive less or no Board
representation. Genesis will not be subject to Section 2115 (1) at such time as
Genesis is qualified for trading as a national market security on the Nasdaq
Stock Market and has 800 stockholders as of the record date of its most recent
annual meeting of stockholders or (2) at the end of any income year during which
a certificate shall have been filed showing that less than one-half of its
outstanding voting securities are held of record by persons having addresses in
California or that one of the other tests of Section 2115 is not met. Genesis
expects that it will no longer be subject to Section 2115 by the record date of
its 1999 annual meeting of stockholders.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for the common stock and a
significant public market for the common stock may not develop or be sustained
after the offering. Sales of substantial amounts of common stock in the public
market following the offering could adversely affect the market price of the
common stock and could impair Genesis's future ability to raise capital through
the sale of its equity securities.

Upon the closing of the offering, Genesis will have outstanding 5,060,000
shares of common stock (5,360,000 if the underwriters' over-allotment option is
exercised in full). Of these shares, the 2,000,000 shares offered in this
prospectus will be freely tradable, without restriction under the Securities Act
of 1933, as amended (the "Securities Act") unless held by "affiliates" of
Genesis. The remaining 3,060,000 shares will be "restricted" securities, within
the meaning of Rule 144 under the Securities Act, and may not be sold in the
absence of registration under the Securities Act unless an exemption from
registration is available, including the exemption provided by Rule 144.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated),
including any affiliate of Genesis, who has beneficially owned restricted
securities for at least one year (including the holding period of any prior
owner except an affiliate of Genesis) would be entitled to sell within any
three-month period, a number of shares that does not exceed the greater of: (1)
one percent of the number of shares of common stock then outstanding
(approximately 5,060,000 shares immediately after the offering); or (2) the
average weekly trading volume of the common stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale and notice requirements and to
the availability of current public information about Genesis. Under Rule 144(k),
a person who is not deemed to have been an affiliate of Genesis at any time
during the three months preceding a sale, and who has beneficially owned
restricted securities for at least two years (including the holding period of
any prior owner except an affiliate of Genesis), is entitled to sell such shares
without complying with the volume limitations or the manner of sale, public
information or notice requirements of Rule 144. Sales of shares by affiliates of
Genesis will continue to be subject to such volume limitations and the manner of
sale, notice and public information requirements.

The directors, executive officers and certain other stockholders of Genesis
holding 3,000,000 outstanding shares of common stock and options to purchase
350,000 shares of common stock, have

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<PAGE>

agreed pursuant to Lock-Up Agreements that, for a period of one-year from the
date of this prospectus, they will not, without the prior written consent of the
underwriters' representative, offer, sell, contract to sell, or otherwise
dispose of, any shares of common stock or any securities convertible into, or
exercisable or exchangeable for common stock, or grant any options or warrants
to purchase common stock, except in certain circumstances. The underwriters'
representative has informed Genesis that it has no current intention to release
shares from the Lock-Up Agreements prior to expiration of the one-year term of
such agreements. Any request for release would be evaluated by the underwriters'
representative, and the decision whether or not to permit early release of stock
would be made, dependent upon the facts and circumstances existing at the time
of the request. Beginning upon expiration of the Lock-Up Agreements, such shares
will be eligible for sale pursuant to Rule 144 or Rule 701 under the Securities
Act subject to the provisions of such rules and continued vesting. The remaining
60,000 restricted securities will be eligible for resale pursuant to Rule 144 in
October 1999, subject to the volume limitations and the manner of sale and
notice restrictions of Rule 144. In addition, Genesis may file a registration
statement on Form S-8 under the Securities Act to register the shares of common
stock issuable upon the exercise of options and the sale by certain employees of
shares of common stock issuable upon the exercise of currently outstanding
options (which sales will be subject to the Lock-Up Agreements described above).
Genesis intends to file a registration statement on Form S-8 under the
Securities Act within 90 days after the date of consummation of the offering.
See "Underwriting."

CERTAIN U.S. TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of common stock by a
person that, for U.S. federal income tax purposes, is not a U.S. person (a
"non-U.S. holder"). For purposes of this Section a "U.S. person" means a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, an estate the income of which is subject to United States
federal income taxation regardless of its source or a trust if (1) a U.S. court
is able to exercise primary supervision over the trust's administration and (2)
one or more U.S. persons have the authority to control all of the trust's
substantial decisions, and the term "United States" means the U.S. of America
(including the States and the District of Columbia). The discussion does not
consider specific facts and circumstances that may be relevant to a particular
non-U.S. holder's tax position. Accordingly, each non-U.S. holder is urged to
consult its own tax advisor with respect to the U.S. tax consequences of the
ownership and disposition of common stock, as well as any tax consequences that
may arise under the laws of any state, municipality, foreign country or other
taxing jurisdiction.

DIVIDENDS

Dividends paid to a non-U.S. holder of common stock ordinarily will be
subject to withholding of U.S. federal income tax at a 30 percent rate, or at a
lower rate under an applicable income tax treaty that provides for a reduced
rate of withholding. However, if the dividends are effectively connected with
the conduct by the holder of a trade or business within the United States, then
the dividends will be exempt from the withholding tax described above and
instead will be subject to U.S. federal income tax on a net income basis.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to U.S. federal income tax
in respect of gain realized on a disposition of common stock, provided that (a)
the gain is not effectively connected with a trade or business conducted by the
non-U.S. holder in the United States and (b) in the case of a non-U.S. holder
who is an individual and who holds the common stock as a capital asset, such
holder is

58
<PAGE>
present in the United States for less than 183 days in the taxable year of the
sale and other conditions are met.

FEDERAL ESTATE TAXES

Common stock owned or treated as being owned by a non-U.S. holder at the
time of death will be included in such holder's gross estate for U.S. federal
estate tax purposes, unless an applicable estate tax treaty provides otherwise.

U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

U.S. information reporting requirements and backup withholding tax will not
apply to dividends paid on common stock to a non-U.S. holder address outside the
United States, except that with regard to payments made after December 31, 1998,
a non-U.S. Holder will be entitled to such an exemption only if it provides a
Form W-8 (or satisfies certain documentary evidence requirements for
establishing that it is a non-U.S. person) or otherwise establishes an
exemption. As a general matter, information reporting and backup withholding
also will not apply to a payment of the proceeds of a sale of common stock
effected outside the United States by a foreign office of a foreign broker.
However, information reporting requirements (but not backup withholding) will
apply to a payment of the proceeds of a sale of common stock effected outside
the United States by a foreign office of a broker if the broker (1) is a U.S.
person, (2) derives 50 percent or more of its gross income for certain periods
from the conduct of a trade or business in the United States, or (3) is a
"controlled foreign corporation" as to the United States, or (4) with respect to
payments made after December 31, 1998, is a foreign partnership that, at any
time during its taxable year is 50 percent or more (by income or capital
interest) owned by U.S. persons or is engaged in the conduct of a United States
trade or business, unless the broker has documentary evidence in its records
that the holder is a non-U.S. holder and certain conditions are met, or the
holder otherwise establishes an exemption. Payment by a United States office of
a broker of the proceeds of a sale of common stock will be subject to both
backup withholding and information reporting unless the holder certifies its
non-United States status under penalties of perjury or otherwise establishes an
exemption.

59
<PAGE>
UNDERWRITING

The underwriters named below, for whom Millennium Financial Group, Inc. is
acting as representative, have severally agreed, subject to the terms and
conditions of the Underwriting Agreement to purchase from Genesis and Genesis
has agreed to sell to the underwriters on a firm commitment basis, the number of
shares of common stock set forth opposite their names:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
Millennium Financial Group, Inc............................................
HD Brous & Co., Inc........................................................
American Fronteer Financial Corporation....................................

-----------------
Total.................................................................. 2,000,000
-----------------
-----------------
</TABLE>

The underwriters are committed to purchase all the shares of common stock
offered hereby, if any of such shares of common stock are purchased. The
Underwriting Agreement provides that the obligations of the several underwriters
are subject to conditions precedent specified therein. Millennium anticipates
that a significant portion of the shares of common stock to be sold by it will
be sold in Europe, primarily to institutional investors.

COMMISSIONS, DISCOUNTS AND COMPENSATION

Genesis has been advised by the representative that the underwriters propose
initially to offer the shares of common stock to the public at the initial
public offering price, set forth on the cover page of this prospectus and to
certain dealers at such price less concessions not in excess of $ per share of
common stock. After the commencement of this offering, the public offering
price, concession and reallowance may be changed by the representative, but only
after the initial distribution of the common stock has been completed.

The representative has informed Genesis that it does not expect sales to
discretionary accounts by the underwriters to exceed five percent of the shares
of common stock offered.

Genesis has agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the underwriters may be required to make. Genesis has also agreed
to pay to the representative a non-accountable expense allowance equal to three
percent of the gross proceeds derived from the sale of the shares of common
stock underwritten, of which $35,000 has been paid to date.

Genesis has granted to the underwriters an over-allotment option,
exercisable during the 45-day period from the date of this prospectus, to
purchase up to 300,000 shares of common stock at the initial public offering
price per share of common stock offered hereby, less underwriting discounts and
the non-accountable expense allowance. Such option may be exercised only for the
purpose of covering over-allotments, if any, incurred in the sale of the shares
of common stock offered hereby. To the extent such option is exercised in whole
or in part, each underwriter will have a firm commitment, subject to certain
conditions, to purchase the number of the additional shares of common stock
proportionate to its initial commitment.

In connection with this offering, Genesis has agreed to sell to the
representative, for nominal consideration, warrants to purchase from Genesis up
to 200,000 shares of common stock. The representative's warrants are initially
exercisable at a price of 120% of the initial public offering price per share of
common stock. The representative's warrants are restricted from sale, transfer,
assignment or

60
<PAGE>

hypothecation for a period of 12 months from the date hereof, except to the
officers of the representative and may be exercised for a period of four years,
commencing one year from the date of this prospectus. The representative's
warrants provide for adjustment in the number of shares of common stock issuable
upon the exercise thereof and in the exercise price of the representative's
warrants as a result of certain events, including subdivisions and combinations
of the common stock. The representative's warrants grant to the holders thereof
certain demand and "piggyback" rights of registration for the securities
issuable upon exercise thereof and also provide for cashless exercise.

NO SALES OF SIMILAR SECURITIES; OFFERING LIMITATIONS

All officers, directors and existing stockholders of Genesis, and all
holders of any outstanding options, warrants or other securities convertible,
exercisable or exchangeable for or convertible into shares of common stock have
agreed not to, directly or indirectly, issue, offer, agree or offer to sell,
sell, transfer, assign, encumber, grant an option for the purchase or sale of,
pledge, hypothecate or otherwise dispose of any beneficial interest in such
securities until the expiration of 12 months following the date of this
prospectus. An appropriate legend shall be marked on the face of certificates
representing all such securities.

Genesis has agreed not to, directly or indirectly, without the prior written
consent of Millennium, issue, sell, agree or offer to sell, grant an option for
the purchase or sale of, or otherwise transfer or dispose of any of its
securities for a period of 12 months following the date of this prospectus,
except (x) pursuant to the exercise of the representative's warrants or
Genesis's 1998 Stock Incentive Program or (y) debt under certain circumstances
in connection with bona fide business acquisitions and/or expansions consistent
with Genesis's business plans as generally described in this prospectus.

BOARD REPRESENTATION RIGHT

Genesis has agreed for a period of five years after the date hereof, if
requested by Millennium, to use its best efforts to nominate for election to
Genesis's Board of Directors one person designated by Millennium. In the event
Millennium Financial Group, Inc. elects not to exercise such right, Millennium
may designate a person to receive all notices of meetings of Genesis's Board of
Directors and all other correspondence and communications sent by Genesis to its
Board of Directors and to attend all such meetings of Genesis's Board of
Directors. Genesis has agreed to reimburse designees of Millennium for their
out-of-pocket expenses incurred in connection with their attendance of meetings
of Genesis's Board of Directors. Millennium has not yet exercised its right to
elect a Board member or designate a person to receive notice of and attend Board
meetings.

LIMITED EXPERIENCE OF MANAGING UNDERWRITER

The managing underwriter, Millennium, has had limited experience in acting
as an underwriter in public offerings of securities. Commencing in September
1996, the managing underwriter has acted as an underwriter or a member of the
selling group in seven public offerings. It acted as co-managing underwriter in
four such offerings and participated in five private offerings. The managing
underwriter has never previously acted as the managing underwriter of a public
offering. This may adversely affect the proposed public offering of the common
stock and the subsequent development of a trading market, if any, for Genesis's
common stock.

NASDAQ STOCK MARKET LISTING; DETERMINATION OF OFFERING PRICE

Prior to this offering, there has been no public market for the shares of
common stock. Genesis will submit an application to have the common stock
included in the Nasdaq Stock Market, Inc.'s National Market System ("Nasdaq").
If approved for quotation in Nasdaq, trading of the common stock is expected to
begin within 30 days of the issuance of the common stock. In order to meet all
of

61
<PAGE>

the requirements for inclusion of the common stock in Nasdaq, the underwriters
have agreed to sell the common stock to a minimum of 400 beneficial holders. We
can not give any assurance about the liquidity of the trading market for the
common stock.

The initial public offering price of the shares of common stock will be
determined by negotiation between Genesis and the representative and will not
necessarily bear any relationship to Genesis's asset value, net worth, or other
established criteria of value. The factors to be considered in such
negotiations, in addition to prevailing market conditions, are expected to
include the history of and prospects for the industry in which Genesis competes,
an assessment of Genesis's management, the prospects of Genesis, its capital
structure, the market for initial public offerings and certain other factors are
deemed relevant.

PRICE STABILIZATION, SHORT POSITIONS AND PENALTY BIDS

In connection with this offering, certain underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the shares of common
stock. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M, pursuant to which such persons may bid
for or purchase shares of common stock for the purpose of stabilizing their
respective market prices. The underwriters also may create a short position for
the account of the underwriters by selling more shares of common stock in
connection with this offering than they are committed to purchase from Genesis,
and in such case may purchase shares of common stock in the open market
following completion of this offering to cover all or a portion of such short
position. The underwriters may also cover all or a portion of such short
position by exercising the over-allotment option referred to above. In addition,
the representative, on behalf of the underwriters, may impose "penalty bids"
under contractual arrangements with the underwriters whereby it may reclaim from
an underwriter (or dealer participating in this offering for the account of
other underwriters) the selling concession with respect to shares of common
stock that are distributed in this offering but subsequently purchased for the
account of the underwriters in the open market. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
shares of common stock at a level above that which might otherwise prevail in
the open market. None of the transactions described in this paragraph is
required, and, if they are undertaken, they may be discontinued at any time.

The foregoing is a summary of the principal terms of the agreements
described above. Reference is made to the copies of such agreements which are
filed as exhibits to the Registration Statement of which this prospectus is a
part for a more complete description thereof. See "Additional Information."

62
<PAGE>
LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for Genesis by Nida & Maloney, a Professional Corporation, Santa Barbara,
California. Certain legal matters in connection with the offering will be passed
upon for the underwriters by Donahue, Mesereau & Leids, LLP, Los Angeles,
California. Certain information contained in the sections of the prospectus
captioned "Risk Factors--CFTC Investigation," "Business--Industry Regulation"
and "Business--Legal Proceedings" is set forth herein in reliance upon the
opinion of Henderson & Lyman, Chicago, Illinois.

EXPERTS

The consolidated financial statements as of December 31, 1996 and 1997 and
for each of the two years in the period ended December 31, 1997 included in this
Prospectus have been so included in reliance on the report of Singer Lewak
Greenbaum & Goldstein LLP, independent accountants, given on authority of said
firm as experts in auditing and accounting.

AVAILABLE INFORMATION

Genesis has filed with the SEC a Registration Statement on Form SB-2 (of
which this prospectus forms a part) covering the common stock offered hereby.
This prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain items of which are
omitted as permitted by the rules and regulations of the SEC. Statements made in
this prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, we refer you to the copy of such
contract or other document filed as an exhibit to the Registration Statement.
Each such statement is qualified in its entirety by such reference.

Following the offering, Genesis will become subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith will be required to file reports and other information with
the SEC. The Registration Statement (including exhibits), as well as such
reports and other information, when so filed, can be inspected without charge
and copied, at prescribed rates, at the public reference facilities maintained
by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549; and at the
regional offices of the SEC at 7 World Trade Center, Suite 1300, New York, New
York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material may be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates or at the SEC's web site at http:// www.sec.gov. Such reports
and other information may also be inspected at the offices of the Nasdaq Stock
Market, Inc., 1735 K. Street N.W., Washington D.C. 70006-1500, once the common
stock has been approved for quotation.

Genesis will furnish its stockholders annual reports and unaudited quarterly
reports for the first three quarters of each fiscal year. Annual reports will
include audited consolidated financial statements prepared in accordance with
generally accepted accounting principles. The financial statements included in
the annual reports will be examined and reported upon, with an opinion
expressed, by Genesis's independent auditors.

63
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Report of Independent Certified Public Accountants......................................................... F-2

Consolidated Balance Sheets as of December 31, 1997 and September 30, 1998 (unaudited)..................... F-3

Consolidated Statements of Operations for the years ended December 31, 1996 and 1997, and the nine months
ended September 30, 1997 and 1998 (unaudited)............................................................ F-4

Consolidated Statement of Stockholders' Equity............................................................. F-5

Consolidated Statements of Cash Flows for the years ended December 31, 1996 and 1997 and the nine months
ended September 30, 1997 and 1998 (unaudited)............................................................ F-6

Notes to Consolidated Financial Statements................................................................. F-7
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders

GenesisIntermedia.com, Inc.

We have audited the accompanying balance sheet of GenesisIntermedia.com, Inc. as
of December 31, 1997, and the related statements of operations, stockholders'
equity, and cash flows for each of the two years in the period ended December
31, 1997. These financial statements are the responsibility of the Genesis's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GenesisIntermedia.com, Inc. as
of December 31, 1997, and the results of its operations and its cash flows for
each of the two years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles.

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California

June 23, 1998, except for Note 7

as to which the date is

October 27, 1998 and Note 7,

6th paragraph, as to which

the date is December 3,

1998

F-2
<PAGE>

GENESISINTERMEDIA.COM, INC.

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND SEPTEMBER 30, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31,
1997
PRO FORMA SEPTEMBER 30, ------------
SEPTEMBER 30, 1998
1998 -------------
(NOTE 8)
------------- (UNAUDITED)
(UNAUDITED)
<S> <C> <C> <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents.......................................... $ 1,141,984 $ 280,289
Accounts receivable--trade, net of allowance for doubtful accounts
of $75,000 and $75,000........................................... 1,214,890 1,041,113
Accounts receivable--affiliates.................................... 2,936,409 2,383,663
Inventory.......................................................... 300,040 275,579
Prepaid advertising................................................ 170,726 1,059,423
Deposits and other prepaid assets.................................. 496,586 355,835
Due from related parties........................................... 324,640 126,752
------------- ------------
Total current assets............................................. 6,585,275 5,522,654
PROPERTY AND EQUIPMENT, net.......................................... 1,452,093 1,191,554
DEFERRED OFFERING COSTS.............................................. 117,607 --
OTHER ASSETS......................................................... 41,563 --
------------- ------------
TOTAL ASSETS................................................... $ 8,196,538 $6,714,208
------------- ------------
------------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current portion of notes payable................................... $ 579,229 $ 52,734
Current portion of capital lease obligations....................... 20,565 --
Line of Credit..................................................... 322,399 --
Accounts payable................................................... 751,520 1,800,506
Other accrued liabilities.......................................... 489,073 141,709
Income taxes payable............................................... 45,000 35,000
Deferred revenue................................................... 267,500 267,500
Due to related parties............................................. 797,844 188,380
------------- ------------
Total current liabilities........................................ 3,273,130 2,485,829
NOTES PAYABLE, net of current portion................................ 843,583 609,545
CAPITAL LEASE OBLIGATIONS, net of current portion.................... 40,989 --
------------- ------------
Total liabilities.............................................. 4,157,702 3,095,374
------------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
25,000,000 shares authorized
4,000,000 shares issued and outstanding.......................... $ 4,000 4,000 4,000
Additional paid-in capital......................................... 2,034,836 920,582 920,582
Retained earnings.................................................. -- 3,114,254 2,694,252
------------- ------------- ------------
Total stockholders' equity....................................... $ 2,038,836 4,038,836 3,618,834
------------- ------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..................... $ 8,196,538 $6,714,208
------------- ------------
------------- ------------
</TABLE>

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

F-3
<PAGE>

GENESISINTERMEDIA.COM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1997 1996
NINE MONTHS ENDED ------------- -------------
SEPTEMBER 30,
--------------------------
1998 1997
------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET REVENUE
Media sales--affiliate............................... $ 3,043,329 $ 5,642,610 $ 7,412,038 $ --
Product sales........................................ 3,565,936 4,854,231 8,251,628 13,152,158
Commissions and royalties............................ 2,754,930 1,203,645 2,480,178 78,855
Other................................................ 13,482 23,575 20,322 1,110,707
------------ ------------ ------------- -------------
Total net revenue.................................. 9,377,677 11,723,461 18,164,166 14,341,720
------------ ------------ ------------- -------------
OPERATING COSTS AND EXPENSES
Media purchases...................................... 2,582,408 4,796,218 6,445,250 --
Direct costs......................................... 299,921 503,755 713,311 1,841,704
Selling, general, and administrative expenses........ 5,618,173 5,626,741 8,570,739 12,113,838
------------ ------------ ------------- -------------
Total operating costs and expenses................. 8,500,502 10,926,714 15,729,300 13,955,542
------------ ------------ ------------- -------------
INCOME FROM OPERATIONS................................. 877,175 796,747 2,434,866 386,178
INTEREST EXPENSE....................................... 72,173 13,637 33,247 45
------------ ------------ ------------- -------------
INCOME BEFORE PROVISION FOR INCOME TAXES............... 805,002 783,110 2,401,619 386,133
PROVISION FOR INCOME TAXES............................. 10,000 20,000 35,000 --
------------ ------------ ------------- -------------
NET INCOME............................................. $ 795,002 $ 763,110 $ 2,366,619 $ 386,133
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
BASIC EARNINGS PER COMMON SHARE........................ $ 0.20 $ 0.20 $ 0.61 $ 0.10
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
DILUTED EARNINGS PER COMMON SHARE...................... $ 0.20 $ 0.20 $ 0.61 $ 0.10
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING............. 4,000,000 3,883,495 3,883,814 3,883,495
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------

UNAUDITED PRO FORMA INFORMATION (NOTE 8):
INCOME BEFORE PROVISION FOR INCOME TAXES............... $ 805,002 $ 783,110 $ 2,401,619 $ 386,133
Income taxes assuming Sub-Chapter S corporation
election had not been made......................... 322,000 313,000 961,000 154,000
------------ ------------ ------------- -------------
NET INCOME............................................. $ 483,002 $ 470,110 $ 1,440,619 $ 232,133
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
PRO FORMA BASIC EARNINGS PER COMMON SHARE.............. $ 0.12 $ 0.12 $ 0.37 $ 0.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
PRO FORMA DILUTED EARNINGS PER COMMON SHARE............ $ 0.12 $ 0.12 $ 0.37 $ 0.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING............. 4,000,0000 3,883,495 3,883,814 3,883,495
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>

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

F-4
<PAGE>

GENESISINTERMEDIA.COM, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------------- PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995......................... 3,883,496 $ 3,883 $ 20,699 $ (58,500) $ (33,918)
NET INCOME......................................... 386,133 386,133
---------- --------- ---------- ------------ ------------
BALANCE, DECEMBER 31, 1996......................... 3,883,496 3,883 20,699 327,633 352,215
SALE OF COMMON STOCK TO RELATED PARTY.............. 116,504 117 899,883 900,000
NET INCOME......................................... 2,366,619 2,366,619
---------- --------- ---------- ------------ ------------
BALANCE, DECEMBER 31, 1997......................... 4,000,000 4,000 920,582 2,694,252 3,618,834
DISTRIBUTION TO STOCKHOLDER (unaudited)............ (375,000) (375,000)
NET INCOME (unaudited)............................. 795,002 795,002
---------- --------- ---------- ------------ ------------
BALANCE, SEPTEMBER 30, 1998 (unaudited)............ 4,000,000 $ 4,000 $ 920,582 $ 3,114,254 $ 4,038,836
---------- --------- ---------- ------------ ------------
---------- --------- ---------- ------------ ------------
</TABLE>

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

F-5
<PAGE>

GENESISINTERMEDIA.COM, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1997 1996
NINE MONTHS ENDED ----------- ----------
SEPTEMBER 30,
------------------------
1998 1997
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 795,002 $ 763,110 $ 2,366,619 $ 386,133
Adjustments to reconcile net income to net cash provided
by (used in) operating activities
Depreciation............................................ 72,166 22,088 37,619 8,198
(Increase) decrease in
Accounts receivable--trade................................ (173,777) (434,323) (789,629) (62,417)
Accounts receivable--affiliates........................... (552,746) (1,087,272) (2,358,626) (25,037)
Inventory................................................. (24,461) (152,470) (142,258) (6,812)
Prepaid advertising....................................... 888,697 (660,085) (1,059,423) --
Deposits and other prepaid assets......................... (140,751) (175,736) (342,158) (1,264)
Increase (decrease) in
Accounts payable.......................................... (1,048,986) 328,857 1,654,203 119,996
Other accrued liabilities................................. 347,364 (77,622) 20,985 (177,206)
Income taxes.............................................. 10,000 20,000 35,000 --
Deferred revenue.......................................... -- 697,500 267,500 --
----------- ----------- ----------- ----------
Net cash provided by (used in)
operating activities...................................... 172,508 (755,953) (310,168) 241,591
----------- ----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment........................ (266,759) (970,293) (1,210,846) (7,365)
Other..................................................... (41,563) -- -- --
----------- ----------- ----------- ----------
Net cash used in investing activities..................... (308,322) (970,293) (1,210,846) (7,365)
----------- ----------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from related parties......................... 411,576 1,061,220 10,946 (68,276)
Net proceeds from line of credit.......................... 322,399 -- -- --
Distribution to stockholder............................... (375,000) -- -- --
Proceeds from sale of common stock to related party....... -- -- 900,000 --
Proceeds from notes payable............................... 800,000 676,596 676,596 --
Payment of offering costs................................. (117,607) -- -- --
Payments on capital lease obligations..................... (4,392) -- -- --
Payments on notes payable................................. (39,467) (3,993) (14,317) --
----------- ----------- ----------- ----------
Net cash provided by financing activities................... 997,509 1,733,823 1,573,225 (68,276)
----------- ----------- ----------- ----------
Increase (decrease) in cash and cash equivalents during
period.................................................... 861,695 7,577 52,211 165,950
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD........................................ 280,289 228,078 228,078 62,128
----------- ----------- ----------- ----------
END OF PERIOD.............................................. $ 1,141,984 $ 235,655 $ 280,289 $ 228,078
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
INTEREST PAID............................................. $ 72,173 $ 13,637 $ 33,247 $ 45
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
INCOME TAXES PAID.......................................... $ -- $ -- $ -- $ --
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
</TABLE>

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

F-6
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

GenesisIntermedia.com, Inc. was incorporated in the State of Florida on
October 28, 1993. Genesis is an integrated marketing and business solutions
provider utilizing conventional, emerging and interactive multimedia
technologies. Genesis has devoted substantially all its resources to selling
products it owned or had purchased the rights to sell through conventional
marketing methods. Genesis sold these products to the general public through the
use of infomercials, radio advertisements, print media and retail outlets. A
substantial portion of Genesis's product revenue has come from its "Men Are From
Mars, Women Are From Venus" product series authored by John Gray, Ph.D.

PRINCIPLES OF CONSOLIDATION

The accompanying financial statements include the accounts of the Company
and its wholly owned subsidiary Genesis Intermedia, Inc. from its inception in
August 1998. All intercompany accounts and transactions have been eliminated.

INTERIM FINANCIAL INFORMATION

The unaudited financial information furnished herein reflects all
adjustments, consisting only of normal recurring adjustments, which in the
opinion of management, are necessary to fairly state Genesis's financial
position, the results of its operations, and cash flows for the periods
presented. The results of operations for the nine months ended September 30,
1998 are not necessarily indicative of the results for the entire fiscal year
ending December 31, 1998.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Genesis measures its financial assets and liabilities in accordance with
generally accepted accounting principles. For certain of Genesis's financial
instruments, including cash and cash equivalents, accounts receivable, accounts
payable, and other accrued liabilities, the carrying amounts approximate fair
value due to their short maturities. The amounts shown for debt also approximate
fair value because current interest rates offered to Genesis for debt of similar
maturities are substantially the same.

ESTIMATES

In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

STOCK OPTIONS

Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-Based Compensation," establishes and encourages the use of the fair
value based method of accounting for stock-based compensation arrangements under
which compensation cost is determined using the fair

F-7
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

value of stock-based compensation determined as of the date of grant and is
recognized over the periods in which the related services are rendered. The
statement also permits companies to elect to continue using the current implicit
value accounting method specified in Accounting Principles Bulletin ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," to account for
stock-based compensation. Genesis has elected to use the implicit value based
method and has disclosed the pro forma effect of using the fair value based
method to account for its stock-based compensation.

CASH AND CASH EQUIVALENTS

For purpose of the statement of cash flows, Genesis considers all
highly-liquid investments purchased with original maturities of three months or
less to be cash equivalents.

INVENTORY

Inventory consists principally of products purchased for resale and are
stated at the lower of cost (determined by the first-in, first-out method) or
market.

PRODUCTION COSTS

Costs related to the production of Genesis's direct response televised
advertising programs are capitalized and amortized over the estimated useful
life of the production, generally from 12 to 24 months. The estimated useful
life of each production is regularly evaluated and adjusted as sales response
becomes available. All production costs had been fully amortized at December 31,
1997.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation is provided on a
straight-line basis over estimated useful lives of the assets as follows:

<TABLE>
<S> <C>
7 to 39
Building and improvements..................................... years
Vehicles...................................................... 5 years
Furniture and equipment....................................... 5 to 7 years
</TABLE>

Expenditures for maintenance and repairs are charged to operations as
incurred while renewals and betterments are capitalized. Gains and losses on
disposals are included in the results of operations.

REVENUE RECOGNITION

Product sales are recognized when the product is shipped. Generally, it is
Genesis's policy to refund unconditionally the total price of merchandise
returned within 30 days of the customer's receipt of the merchandise. Genesis
provides an allowance, based upon experience, for returned merchandise. Revenue
from media sales is recognized when the media time is aired. Commissions and
royalties are recognized when earned.

F-8
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

Genesis has elected to be taxed as an S corporation; accordingly, the
stockholders are liable for federal and state income taxes on their respective
shares of Genesis's taxable income. In addition, there is a minimal franchise
tax on Genesis's taxable income for state purposes.

ADVERTISING COSTS

Genesis expenses advertising costs when the advertisement takes place,
except for direct-response advertising costs that elicits a customer to respond
to a specific advertisement and that results in future benefits. These costs are
capitalized and amortized using an accelerated method over its expected period
of future benefit, not to exceed twelve months. Genesis is able to identify to
which advertisement a customer is responding by using a separate toll free
number for each ad. Genesis evaluates the probable future benefits of
direct-response advertising costs based on recent historical experience based on
the type of advertisement, the target audience and the product being sold.

Direct response advertising consists principally of television airtime
purchased to broadcast Genesis's infomercials and print media. At December 31,
1997, $1,059,423 of advertising was reported as an asset which consisted of
amounts paid for advertisements not taken place of $342,949 and the unamortized
portion of the capitalized direct response advertising of $716,474, net of
accumulated amortization of $3,637,118. Genesis incurred $5,296,069 and
$8,580,386 in advertising expense for the years ended December 31, 1997 and
1996, respectively. At September 30, 1998, $170,726 of advertising was reported
as an asset which consisted of the unamortized portion of the capitalized direct
response advertising, net of accumulated amortization of $1,418,843. Genesis
incurred $2,383,376 and $3,552,120 in advertising expense for the nine months
ended September 30, 1998 and 1997, respectively.

CONCENTRATION OF CREDIT RISK

Genesis places its cash with high-credit, quality financial institutions. At
times, such amounts may be in excess of the Federal Deposit Insurance
Corporation limit. As of December 31, 1997 and September 30, 1998, the uninsured
portions of the balances held at these financial institutions aggregated to
$361,125 and $1,039,054, respectively. Genesis has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash and cash equivalents.

EARNINGS PER SHARE

Genesis reports earnings per share in accordance with SFAS No. 128,
"Earnings per Share." Basic earnings per share is computed by dividing income
available to common stockholders by the weighted average number of common shares
available. Diluted earnings per share is computed similar to basic earnings per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.

F-9
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RISKS AND UNCERTAINTIES

Genesis operates in an industry that is highly competitive. Genesis's
principal competitors are marketing and communication companies that operate in
the United States. In order to maintain its current sales levels, Genesis must
continue to maintain existing client relationships, and attract new clients by
demonstrating its creative reputation, knowledge of media and high quality
service.

The majority of Genesis's revenue has come from selling media time to a
related party and from product sales from one group of products. Genesis must
continue to develop new sources of revenue and obtain new products to sell
because the majority of products generate their most significant revenue in
their introductory year.

Genesis also relies on third party fulfillment facilities to store
inventory, process orders and ship products. The termination of or adverse
change in Genesis's relationship with such fulfillment facilities or the partial
or total loss of any of these facilities or Genesis's inventories stored there
may have a material adverse effect upon Genesis's business.

DEFERRED OFFERING COSTS

Amounts paid for costs associated with an anticipated initial public
offering ("IPO") are capitalized and will be recorded as a reduction to
additional paid in capital upon the completion of the IPO. In the event that the
IPO is not successful, the deferred offering costs will be charged to expense.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income." This statement requires companies to
classify items of other comprehensive income by their nature in a financial
statement and display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position. SFAS No. 130 is effective for
financial statements issued for fiscal years beginning after December 15, 1997.
Management believes that SFAS No. 130 will not have a material effect on
Genesis's financial statements.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits." This statement is not
applicable to Genesis.

F-10
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATIONS

Certain amounts in the 1996 financial statements have been reclassified to
conform with the 1997 presentation.

NOTE 2--PROPERTY AND EQUIPMENT

Property and equipment at September 30, 1998 and December 31, 1997 consisted
of the following:

<TABLE>
<CAPTION>
DECEMBER 31, 1997
SEPTEMBER 30, 1998 -----------------
------------------
(UNAUDITED)
<S> <C> <C>
Land................................................... $ 87,750 $ 87,750
Building and improvements.............................. 851,475 791,329
Vehicles............................................... 113,269 113,269
Furniture and equipment................................ 518,233 245,886
------------------ -----------------
1,570,727 1,238,234
Less accumulated depreciation.......................... 118,634 46,680
------------------ -----------------
TOTAL................................................ $ 1,452,093 $ 1,191,554
------------------ -----------------
------------------ -----------------
</TABLE>

Depreciation expense for the years ended December 31, 1997 and 1996, and for
the nine months ended September 30, 1998 and 1997 was $37,619, $8,198, $72,166,
and $22,088, respectively.

F-11
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 3--NOTES PAYABLE

Notes payable at September 30, 1998 and December 31, 1997 consisted of the
following:

<TABLE>
<CAPTION>
DECEMBER 31, 1997
SEPTEMBER 30, 1998 -----------------
------------------
(UNAUDITED)
<S> <C> <C>
Note payable--bank is collateralized by an automobile.
The note bears interest at 11.5%. Monthly principal
and interest payments are $4,405 with any unpaid
principal and interest due on September 4, 1998...... $ 44,732 $ 79,279

Note payable--bank is collateralized by a 1st Trust
Deed on the land and building located in Studio City,
California and is guaranteed by Genesis's majority
stockholder. The note bears interest at prime (8.25%
at September 30, 1998 and 8.50% at December 31, 1997)
plus 2.75%. Monthly principal and interest payments
are $5,823 with any unpaid principal and interest due
on July 1, 2002...................................... 578,080 583,000

Note payable--bank is collateralized by a 2nd Trust
Deed on the land and building located in Studio City,
California and is guaranteed by Genesis's majority
stockholder. The note bears interest at prime (8.25%
at September 30, 1998 and 8.50% at December 31, 1997)
plus 2.75%. Monthly principal and interest payments
are $5,217 with any unpaid principal and interest due
on August 1, 2005.................................... 300,000 --

Notes payable to an unrelated third party. The notes
are unsecured, bear interest at 8% and are due on
January 30, 1999..................................... 500,000 --
------------------ --------

$ 1,422,812 $ 662,279

Current portion........................................ 579,229 52,734
------------------ --------

LONG-TERM PORTION.................................... $ 843,583 $ 609,545
------------------
------------------ --------
--------
</TABLE>

F-12
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 3--NOTES PAYABLE (CONTINUED)
The following is a schedule by years of future maturities of notes payable:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ----------------------------------------------------------------------------------
<S> <C>
1998.............................................................................. $ 52,734
1999.............................................................................. 37,936
2000.............................................................................. 5,870
2001.............................................................................. 6,565
2002.............................................................................. 7,343
Thereafter...................................................................... 551,831
----------
Total......................................................................... $ 662,279
----------
----------
</TABLE>

NOTE 4--LINE OF CREDIT

In June 1998, Genesis obtained a $750,000 line of credit from a financial
institution. The line of credit becomes due on June 30, 1999 and is renewable
for an additional year at the option of Genesis. The line of credit bears
interest at prime plus 2.90%, is collateralized by substantially all of
Genesis's assets, except real estate, and is guaranteed by Genesis's majority
stockholder.

NOTE 5--RELATED PARTY TRANSACTIONS

DUE TO RELATED PARTIES

Due to related parties are principally amounts advanced to Genesis by its
majority stockholder. The advances are non-interest bearing with no repayments
terms. The amount outstanding is subordinate to all other debts of Genesis.

DUE FROM RELATED PARTIES

From time to time, Genesis lends funds to companies that are owned by
Genesis's majority stockholder. The amounts receivable from these companies are
non-interest bearing with no repayment terms.

MEDIA SALES AND ACCOUNTS RECEIVABLE--AFFILIATE

Genesis purchases media airtime and resells it to other companies. For the
years ended December 31, 1997 and 1996, and the nine months ended September 30,
1998 and 1997, media sold to a company owned by Genesis's majority stockholder
amounted to $7,412,038, $0, $3,034,919 and $5,642,610, respectively. The amount
due from this affiliated company, principally related to media purchases and
commissions earned by selling this affiliated company's products, was $2,936,409
and $2,383,663 at September 30, 1998 and December 31, 1997, respectively.

COMMISSION REVENUE

For the years ended December 31, 1997 and 1996 and the nine months ended
September 30, 1998 and 1997, Genesis earned $742,315, $0, $1,789,415 and
$118,324, respectively, in commission from selling products for companies owned
by Genesis's majority stockholder.

F-13
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 5--RELATED PARTY TRANSACTIONS (CONTINUED)

TRANSACTIONS WITH DR. GRAY

On December 31, 1997, Genesis sold 116,504 shares of its common stock to Dr.
John Gray for $900,000. Royalties paid to Dr. Gray for the years ended December
31, 1997 and 1996, and for the nine months ended September 30, 1998 and 1997
were $50,101, $423,207, $77,157 and $50,101, respectively.

NOTE 6--COMMITMENTS AND CONTINGENCIES

F-14
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Commodity Futures Trading Commission (the "CFTC") has initiated an
investigation of Genesis as a result of its role in the production and marketing
of the informercial titled "Success and You." The infomercial "Success and You"
involves the marketing of videos which provide instruction regarding trading
strategies. Although the CFTC has articulated its belief that Genesis by virtue
of its involvement in the production and marketing of the infomercial may be
required to be registered in some capacity to continue to engage in the
referenced activities, Genesis believes the CFTC's analysis and conclusions are
incorrect and are based on incomplete information. Accordingly, Genesis disputes
any requirement that Genesis will be required to register, as Genesis is not
engaging in any activities which it believes would require registration. As a
result, the Company has been advised by counsel to Genesis that the initiation
of a CFTC enforcement action against Genesis requiring registration or seeking
the imposition of sanctions is unwarranted. To date, no complaint or enforcement
action has been asserted against Genesis, its officers, directors or employees.
If it is determined in the investigation or any resulting proceeding that
registration is required, Genesis intends promptly to effect any required
registration. Although Genesis is not presently party to any material
litigation, Genesis may also be involved from time to time in various other
claims and legal actions incident to its operations, either as plaintiff or
defendant.

Genesis leases certain office space under a non-cancelable operating lease
expiring in July 2000. Genesis also leases certain office furniture and
equipment under capitalized lease obligations. Future minimum rental commitments
under lease agreements with initial or remaining terms of one year or more are
as follows:

<TABLE>
<CAPTION>
YEAR ENDING OPERATING CAPITAL
DECEMBER 31, LEASES LEASES
- ----------------------------------------------------------------------- ---------- ---------
<S> <C> <C>
1998................................................................... $ 14,643 $ 6,090
1999................................................................... 59,196 24,360
2000................................................................... 35,042 24,360
2001................................................................... -- 13,495
---------- ---------
$ 108,881 $ 68,305
----------
----------
Less amount representing interest...................................... 6,751
---------
61,554
Less current portion................................................... 20,565
---------
$ 40,989
---------
---------
</TABLE>

Included in property and equipment is capitalized lease equipment of $65,946
with accumulated amortization of $1,649 at September 30, 1998.

Rent expense for the nine months ended September 30, 1998 was $9,762. There
was no rent expense for any other period presented in the statements of
operations.

F-15
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENCIES (CONTINUED)

In September 1998, Genesis entered into an employment agreement with its
President which continues until September 30, 2003, unless terminated earlier by
Genesis, either for cause, death or certain other circumstances. Pursuant to the
terms of the Employment Agreement, the President is to be paid an annual salary
of $250,000 and is eligible to receive bonuses at the discretion of the Board of
Directors.

NOTE 7--SUBSEQUENT EVENTS

On October 27, 1998, Genesis effected a 38,834.95-for-1 stock split of its
common stock, increased the number of authorized shares to 25,000,000 and
changed the par value of its common stock to $0.001. All share and per share
data have been retroactively restated to reflect this stock split, change is the
authorized shares and par value. In addition, Genesis authorized 5,000,000
shares of $0.001 par value preferred stock. No preferred shares are issued or
outstanding.

On October 1, 1998, the Board of Directors adopted and the stockholders
approved Genesis's 1998 Stock Incentive Program (the "Program"). Genesis has
authorized and reserved for issuance an aggregate of 500,000 shares of its
common stock under the Program. On October 1, 1998, Genesis issued 350,000
options under the Program with a weighted average exercise price of $8.50.

On October 20, 1998, Genesis acquired certain of the assets of Vision
Digital Communications, Inc., a company that places interactive kiosks in
shopping malls. Genesis purchased current assets, equipment and intangible
assets of $210,000, $750,000 and $10,000, respectively, in exchange for 60,000
shares of Genesis's common stock valued at $600,000 plus the assumption of
short-term obligations and long-term debt of $170,000 and $200,000,
respectively. Genesis has issued to the seller options to purchase up to an
additional 50,000 shares of common stock at a weighted average exercise price of
$9.57 per share. The options will be exercisable if the acquired division meets
certain targeted levels of total revenue over a three-year period. These options
were issued outside the Program. Such options will expire at the end of such
three-year period. Genesis entered into employment agreements with two former
employees of Vision Digital, each providing for three-year terms and annual
salaries of $84,000. Each such employee is also eligible to receive grants of
options to purchase an aggregate of 75,000 shares of common stock, upon the
achievement of three separate performance hurdles. The 25,000 options that may
be granted to each employee at each such hurdle will have per share exercise
prices of $11.00, $13.00 and $15.00, respectively.

On October 26, 1998, Genesis has signed a letter of intent to acquire
AniMagic Corporation, an interactive multimedia company that produces CD-ROMs
for the edutainment industry. AniMagic is currently in bankruptcy and the
ultimate acquisition is dependent upon bankruptcy court approval.

On November 1, 1998, Genesis's two principal stockholders surrendered an
aggregate of 1,000,000 shares of Genesis's common stock.

On December 3, 1998, Genesis amended its Certificate of Incorporation to
change its name to GenesisIntermedia.com, Inc.

F-16
<PAGE>

GENESISINTERMEDIA.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)

NOTE 8--PRO FORMA INFORMATION (UNAUDITED)

Shortly before the closing of the IPO, Genesis will terminate its status as
an S corporation and will be subject to federal and additional state income
taxes thereafter.

For informational purposes, the accompanying balance sheets include the
unaudited pro forma adjustments for the distribution of $2,000,000 to the S
corporation stockholders and the transfer of the undistributed S corporation
earnings to additional paid-in capital.

For informational purposes, the accompanying statements of operations
include the unaudited pro forma adjustment for income taxes which would have
been recorded if Genesis had been an S corporation, based on a combined federal
and state income tax rate of 40% which approximates the federal and state income
tax rates in effect during the respective periods.

F-17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE UNDERWRITERS OR ANY OTHER
PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
The Company............................................................... 3
Risk Factors.............................................................. 7
Use of Proceeds........................................................... 22
Dividend Policy........................................................... 22
Capitalization............................................................ 23
Dilution.................................................................. 24
Selected Financial Data................................................... 25
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 27
Business.................................................................. 34
Management................................................................ 46
Certain Transactions...................................................... 52
Principal Stockholders.................................................... 54
Description of Capital Stock.............................................. 55
Underwriting.............................................................. 60
Legal Matters............................................................. 63
Experts................................................................... 63
Available Information..................................................... 63
Index to Financial Statements............................................. F-1
</TABLE>

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

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

2,000,000 SHARES

GENESISINTERMEDIA.COM, INC.

[LOGO]

COMMON STOCK

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

PROSPECTUS

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

MILLENNIUM FINANCIAL GROUP, INC.

HD BROUS & CO. INC.

AMERICAN FRONTEER FINANCIAL CORP.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses in connection with the
issuance and distribution of the Common Stock being registered, other than
underwriting discounts and commissions:

<TABLE>
<S> <C>
Registration Fee.......................................................... $ 7,034
NASD Filing Fee........................................................... $ 3,294
Nasdaq Stock Market Listing Fees.......................................... $ 7,000
Printing and Engraving Expenses........................................... $ 125,000
Blue Sky Fees and Expenses................................................ $ 5,000
Legal Fees and Expenses................................................... $ 150,000
Accounting Fees and Expenses.............................................. $ 75,000
Transfer Agent Fees and Expenses.......................................... $ 10,000
Directors and Officers' Insurance......................................... $ 50,000
Miscellaneous............................................................. $ 67,672
---------
Total................................................................. $ 500,000
</TABLE>

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

* All amounts are estimated except for the Registration Fee, the NASD Filing
Fee and the Nasdaq Stock Market Listing Fees.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Seventh of the Registrant's Certificate of Incorporation provides
substantially as follows:

Section A. Elimination of Certain Liability of Directors. A director of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit.

Section B. Indemnification and Insurance.

(a) Right to indemnification. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the Company or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Company to the fullest extent authorized by
the General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended but, in the case of any such amendment, to the fullest
extent permitted by law, only to the extent that such amendment permits the
Company to provide broader indemnification rights than said law permitted the
Company to provide prior to such amendment), against all expense, liability and
loss (including, without limitation, attorneys' fees, judgments, fines, amounts
paid or to be paid in settlement, and excise taxes or penalties arising under
the Employee Retirement Income Security Act of 1974) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit

II-1
<PAGE>
of his or her heirs, executors and administrators; provided, however, that,
except as provided in paragraph (b) hereof, the Company shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Company. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Company the expenses incurred in defending
any such proceeding in advance of its final disposition; provided, however,
that, if the General Corporation Law of the State of Delaware requires, the
payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Company of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section or
otherwise. The Company may, by action of the Board of Directors, provide
indemnification to employees and agents of the Company with the same scope and
effect as the foregoing indemnification of directors and officers.

(b) Right of Claimant to Bring Suit. If a claim under paragraph (a) of this
Section is not paid in full by the Company within thirty days after a written
claim has been received by the Company, the claimant may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the Company to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Company. Neither the failure of the Company (including
its Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the General Corporation
Law of the State of Delaware, nor an actual determination by the Company
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.

(c) Non-Exclusivity of Rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested directors or otherwise.

(d) Insurance. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware.

The 1998 Stock Incentive Program (the "Program") provides that no Program
Administrator, as that term is defined in the 1998 Stock Program, or any officer
or employee of the Registrant or an affiliate acting at the direction or on
behalf of the Program Administrator shall be personally liable for any action or
determination taken or made in good faith with respect to the Program, and
shall, to the extent permitted by law, be fully indemnified and protected by the
Registrant with respect to any such action or determination.

II-2
<PAGE>
The Registrant also carries liability insurance covering officers and
directors.

Pursuant to the proposed form of Underwriting Agreement, the underwriters
have agreed to indemnify the directors and officers of the Registrant in certain
circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Set forth in chronological order below is information regarding the number
of shares of capital stock issued and the number of options granted by the
Registrant since January 1, 1995. Further included is the consideration, if any,
received by the Registrant for such shares and options, and information relating
to the section of the Securities Act or rule of the Securities and Exchange
Commission under which exemption from registration was claimed. All awards of
options under the Registrant's 1998 Stock Incentive Program did not involve any
offer or sale under the Securities Act and therefore the issuance of such
options by the Registrant was not registered under the Securities Act.

In December 1997, the Registrant issued 116,504 shares (giving effect to the
subsequent stock split) of common stock to Dr. John M. Gray in consideration of
$900,000.

In October 1998, the Registrant issued 60,000 shares of common stock and
granted options to purchase 50,000 shares of common stock to Vision Digital
Communications, Inc., in partial consideration of the acquisition of
substantially all of the assets of such company. Vision Digital distributed
28.5% of such securities to one of its stockholders, Crown American Enterprises,
Inc. Such offers and sales of securities were made in reliance on the exemption
from registration under Section 4(2) of the Securities Act relating to offers
and sales not involving a public offering. Each recipient of such securities in
both transactions represented in such transaction that such investor was a
sophisticated investor (Dr. Gray is also an accredited investor) and such
recipient's intention to acquire the securities for investment only and not with
a view to or for sale in connection with any distribution thereof, and
appropriate legends were affixed to the share certificates issued in such
transaction. In each transaction the investor received access to and reviewed
full financial and business records of the Registrant and visited with the
Registrant's management and inspected the Registrant's facilities and
operations. Vision Digital and each of its stockholders also received
substantially all of the disclosure contained in the draft of the prospectus
contained in this Registration Statement, including all information contained in
the risk factor, business, management and financial statement sections.

In addition to the foregoing transactions, in October 1998, the Registrant
granted options to purchase an aggregate of 350,000 shares of common stock to
three employees under the Program. The securities underlying such options were
offered in reliance upon the exemption from registration under Rule 701
promulgated under the Securities Act relating to certain offers and sales by an
issuer to its employees under certain compensatory benefit plans. In addition,
in connection with the hiring of two employees in October 1998, the Registrant
agreed to issue options to purchase an aggregate of 150,000 shares of common
stock at an average exercise price of $13.00 if certain business performance
goals are met. To the extent such agreement constituted an offer or sale of
securities, it was made in reliance upon the exemption from registration under
Rule 701 promulgated under the Securities Act relating to certain sales by an
issuer to its employees under a written compensation contract.

ITEM 16. EXHIBITS.

(a) Exhibits

See Exhibit Index at page II-6.

(b) Financial Statement Schedules

None.

II-3
<PAGE>
ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

(b) (1) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) That for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(c) To provide to the underwriters at the closing specified in the
underwriting agreement, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery each to
purchaser.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, California, on December 4, 1998.

<TABLE>
<S> <C> <C>
GENESIS INTERMEDIA.COM, INC.

By: /s/ RAMY EL-BATRAWI
-----------------------------------------
Ramy El-Batrawi
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed by the following
persons (which persons constitute a majority of the Board of Directors) in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
Chairman of the Board and
/s/ RAMY EL-BATRAWI Chief Executive Officer
- ------------------------------ (Principal Executive December 4, 1998
Ramy El-Batrawi Officer)

Director, Chief Financial
/s/ DOUGLAS E. JACOBSON Officer (Principal
- ------------------------------ Financial and Accounting December 4, 1998
Douglas E. Jacobson Officer)

/s/ SAM I. HASSABO * Director, President and
- ------------------------------ Chief Executive Officer, December 4, 1998
Sam I. Hassabo Genesis Intermedia, Inc.

/s/ BLAIR LACORTE *
- ------------------------------ Director December 4, 1998
Blair LaCorte
</TABLE>

* By Douglas E. Jacobson, Attorney-in-Fact

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION FILED (F)
- ----------- ---------------------------------------------------------------------------------------------- ---------
<C> <S> <C>
1.1 Form of Underwriting Agreement................................................................ *
2.1 Form of Agreement and Plan of Merger between Genesis Media Group, Inc., a Florida corporation
("enesis Florida") and GenesisIntermedia.com, Inc. (formerly Genesis Media Group, Inc.), a
Delaware corporation ("Genesis Delaware")................................................... *
2.2 Asset Purchase Agreement between the Registrant and Vision Digital Communications, Inc. dated
as of October 26, 1998...................................................................... *
2.3 Letter Agreement between the Registrant and AniMagic Corporation dated October 27, 1998....... *
2.4 Letter of Agreement between the Registrant and Crown American Enterprises, Inc. dated as of
November 17, 1998........................................................................... F
3.1 Articles of Incorporation of Genesis Florida filed with the Florida Secretary of State on
October 28, 1993............................................................................ *
3.2 Articles of Amendment of Genesis Florida filed on October 27, 1998............................ *
3.3 Certificate of Incorporation of Genesis Delaware filed with the Delaware Secretary of State on
October 26, 1998............................................................................ *
3.4 Bylaws of Genesis Florida..................................................................... *
3.5 Bylaws of Genesis Delaware.................................................................... F
3.6 Certificate of Amendment of Certificate of Incorporation of Genesis Delaware filed with the
Delaware Secretary of State on December 3, 1998............................................. F
4.1 Specimen Stock Certificate.................................................................... F
5.1 Opinion of Nida & Maloney, a Professional Corporation......................................... +
10.1 Genesis Media Group, Inc. 1998 Stock Incentive Program........................................ *
10.2 Form of Indemnification Agreement with Directors and Executive Officers....................... *
10.3 Form of Representative's Warrant.............................................................. *
10.4 Form of Lock-Up Agreement..................................................................... *
10.5 Employment Agreement between the Registrant and Ramy El-Batrawi............................... F
10.6 Employment Agreement between the Registrant and Sam I. Hassabo................................ F
10.7 Deed of Trust (dated July 24, 1997)........................................................... *
10.8 Note U.S. Small Business Administration (dated July 24, 1997)................................. *
10.9 Promissory Note (dated January 1, 1998)....................................................... *
10.10 Promissory Note (dated April 23, 1998)........................................................ *
10.11 Note U.S. Small Business Administration (dated August 20, 1998)............................... *
10.12 Commercial Security Agreement (dated August 20, 1998)......................................... *
10.13 Lease Agreement (dated July 24, 1998)......................................................... *
10.14 WCMA Note, Loan and Security Agreement between the Registrant and Merrill Lynch Business
Financial Services, Inc. ................................................................... *
10.15 Addendum to that Lease dated July 24, 1998 between the Registrant and Southern California
Sunbelt Developers, Inc. ................................................................... F
10.16 License Agreement between the Registrant (as assignee) and John Gray, Ph.D. dated September
29, 1993.................................................................................... F
10.17 Amendment to Agreement between the Registrant (as assignee) and John Gray, Ph.D. ............. F
10.18 Employment Agreement between Registrant and Michael F. Costa.................................. F
</TABLE>

II-6
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION FILED (F)
- ----------- ---------------------------------------------------------------------------------------------- ---------
<C> <S> <C>
10.19 Employment Agreement between Registrant and Christopher Miglino............................... F
10.20 Assignment between Registrant (as Assignee) and Ramy El-Batrawi (as Assignor)................. F
10.21 Surrender and Cancellation Agreement among the Registrant, Ramy El-Batrawi and John M. Gray... F
21.1 Subsidiaries of the Registrant................................................................ *
23.1 Consent of Singer Lewak Greenbaum & Goldstein LLP............................................. F
23.2 Consent of Nida & Maloney, a Professional Corporation (included in Exhibit 5.1)............... +
23.3 Consent of Henderson & Lyman.................................................................. F
24.1 Power of Attorney............................................................................. *
24.2 Authorizing Resolutions....................................................................... *
27.1 Financial Data Schedule....................................................................... F
</TABLE>

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

* Previously filed.

+ To be filed by amendment.

II-7

<PAGE>

November 17, 1998

Crown American Enterprises, Inc.
Pasquerilla Plaza
Johnstown, PA 15901

Attn: George Sackandy

Re: Genesis Media Group, Inc./Vision Digital Communications, Inc.
-------------------------------------------------------------

Dear Mr. Sackandy:

This letter agreement is made with reference to that certain Asset
Purchase Agreement (the "Agreement") dated as of October 26, 1998 among
Vision Digital Communications, Inc., a California corporation ("Vision
Digital"), certain shareholders of Visions Digital and Genesis
Intermedia.com, Inc., a Delaware corporation (formerly Genesis Media Group,
Inc.) ("Genesis"). This letter agreement confirms our mutual agreements with
Vision Digital, Christopher Miglino ("Miglino"), Michael F. Costa ("Costa")
and Crown American Enterprises, Inc., a Pennsylvania corporation ("Crown
American"), to amend the Agreement as follows:

1. SECTIONS 2.2(a) and 3.2(a)(i) of the Agreement, presently provides
that Genesis will issue an aggregate number of sixty thousand (60,000)
restricted shares of its Common Stock (the "Shares") to Vision Digital at the
Closing. It is hereby agreed that twenty-eight and one-half percent (28.5%)
of the Shares shall be distributed directly to Crown American and seventy-one
and one-half percent (71.5%) of the Shares shall be distributed to Vision
Digital.

2. SECTION 9.5 of the Agreement provides that all of the Shares will be
pledged to secure the indemnification obligations of Vision Digital and its
Affiliates (as defined in this Agreement) (including Miglino and Costa) under
the Agreement. It is hereby agreed that Crown American shall not be liable
for any such indemnification obligations and that the 28.5% of the Shares
that are to be distributed directly to Crown American shall not be pledged as
security for the indemnification obligations of Vision Digital, Miglino or
Costa pursuant to SECTION 9.5 of the Agreement. It is also hereby agreed
that, Genesis shall have no recourse against Crown American with respect to
such obligations.

3. Pursuant to SECTIONS 2.2(b) and 2.5 of the Agreement, Genesis has
agreed to issue up to an aggregate of 50,000 Options (as defined in the
Agreement) to Vision Digital upon satisfaction

<PAGE>

Page 2

of certain conditions. It is hereby agreed that at the Closing Genesis will
issue directly to Crown American Options to purchase 14,250 shares of Common
Stock of Genesis, equal to 28.5% of the total number of Options issuable to
Vision Digital under the Agreement. Such Options shall vest ratably with the
Options issued to Vision Digital upon the occurrence of the events specified
in SECTION 2.5 of the Agreement. The remaining Options to purchase 35,750
shares of Common Stock (71.5% of the total Options) shall be issued to Vision
Digital at the Closing, subject to the ratable vesting upon the conditions
provided in SECTION 2.5 of the Agreement. The exercise price of the Options
issuable to Crown American shall be the price at which the Common Stock is
initially offered to the public pursuant to Form SB-2; the exercise price of
the Options issuable to Vision Digital shall be $10.00 per share.

4. SECTION 2.2(c) of the Agreement provides for the assumption by
Genesis of the Assumed Liabilities (as defined in the Agreement) set forth on
SCHEDULE 1.1(b) of the Agreement. It is hereby confirmed and agreed that the
Assumed Liabilities include: (a) the existing loan to Vision Digital extended
by U.S. Bank and guaranteed by Crown American, among others, and (b) the
existing loan extended to Vision Digital by Crown American, in the aggregate
amount of Eighty Thousand Dollars ($80,000). No further amendment of either
such loan shall be effected hereby.

Please confirm your agreement to the foregoing agreements and amendments
of the Agreement by signing a copy of this letter in the space indicated
below and returning the same to our office. Please contact me at (805)
568-1151 if you have any questions regarding this matter.

Very truly yours,

GENESISINTERMEDIA.COM, INC.

By: /s/ Ramy El-Batrawi
-----------------------------
Ramy El-Batrawi
Chairman

AGREED:
- -------

CROWN AMERICAN ENTERPRISES, INC.,
a Pennsylvania corporation

By: /s/ John M. Kurak
---------------------------
Name:John M. Kurak
Title: Vice President

<PAGE>

Page 3

THE FOREGOING AMENDMENTS TO THE
AGREEMENT ARE CONSENTED TO AND
AGREED BY THE UNDERSIGNED:

VISION DIGITAL COMMUNICATIONS, INC.,
a California corporation

By: /s/ Michael F. Costa
--------------------------------------
Name: Michael F. Costa
Title:President

/s/ Christopher Miglino
- -----------------------------------------
CHRISTOPHER MIGLINO

/s/ Michael F. Costa
- -----------------------------------------
MICHAEL F. COSTA

<PAGE>

BYLAWS

GENESIS MEDIA GROUP, INC.

<PAGE>

BYLAWS
OF
GENESIS MEDIA GROUP, INC.

ARTICLE I

OFFICE AND RECORDS

SECTION 1.1 DELAWARE OFFICE. The principal office of the Corporation
in the State of Delaware shall be located in the City of Wilmington, County of
New Castle, and the name and address of its registered agent is Corporation
Service Company, 1013 Centre Road, Wilmington, County of New Castle, Delaware.

SECTION 1.2 OTHER OFFICES. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.

SECTION 1.3 BOOKS AND RECORDS. The books and records of the
Corporation may be kept at the Corporation's principal executive offices in
Studio City, California or at such other locations inside or outside the State
of Delaware as may from time to time be designated by the Board of Directors.
Any stockholder, in person or by attorney or other agent, shall, upon written
demand under oath stating the purpose thereof, have the right during the usual
hours for business to inspect for any proper purpose the Corporation's stock
ledger, a list of its stockholders, and its other books and records, and to make
copies or extracts therefrom. The demand under oath shall be directed to the
Corporation's Secretary at its registered Delaware office or at its principal
place of business.

ARTICLE II

STOCKHOLDERS

SECTION 2.1 ANNUAL MEETING. The annual meeting of stockholders of
the Corporation shall be held on the date designated by the Board of Directors;
PROVIDED, HOWEVER, that the annual meeting of stockholders of this Corporation
shall be held (i) in the case of the initial annual meeting of stockholders, not
later than 13 months after the date of incorporation of this Corporation or (ii)
in the case of any subsequent annual meeting of stockholders, not later than 13
months after the date of the last annual meeting of stockholders of the
Corporation. The annual meeting in each year shall be held at 10:00 A.M., local
time, at the principal executive offices of the Corporation, or at such other
date, time and/or place within or without the State of Delaware as may be fixed
by the Board of Directors.

SECTION 2.2 SPECIAL MEETINGS. Subject to the rights of the holders
of any series of preferred stock, par value $.001 per share, of the Corporation
(the "PREFERRED STOCK"), or any other series or class of stock as set forth in
the Certificate of Incorporation of the Corporation (the "CERTIFICATE OF
INCORPORATION") to elect additional directors under specified circumstances, a
special meeting of the holders of stock of the Corporation entitled to vote on
any business to be considered at any such meeting may be called by the President
of the Corporation, the Chief Executive Officer of the Corporation or the
Chairman of the Board of the Corporation, or shall be called by the Secretary of
the Corporation at the request of the Board of Directors pursuant

<PAGE>

to a resolution adopted by a majority of the Board of Directors of the
Corporation or at the request of the holders of ten percent (10%) or more of
the outstanding voting stock of the Corporation. The Board of Directors may
designate the place of meeting for any special meeting of the stockholders,
and if no such designation is made, the place of meeting shall be the
principal executive offices of the Corporation.

SECTION 2.3 NOTICE OF MEETINGS. Whenever stockholders are required
or permitted to take any action at a meeting, unless notice is waived as
provided in Section 8.1 of these Bylaws, a written notice of the meeting shall
be given which shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called.

Unless otherwise provided by law, and except as to any stockholder
duly waiving notice, the written notice of any meeting shall be given personally
or by mail, not less than ten (10) nor more than sixty (60) days before the date
of the meeting to each stockholder entitled to vote at such meeting. If mailed,
notice shall be deemed given when deposited in the mail, postage prepaid,
directed to the stockholder at his or her address as it appears on the records
of the Corporation. Any previously scheduled meeting of the stockholders may be
postponed by resolution of the Board of Directors upon public notice given prior
to the time previously scheduled for such meeting of stockholders.

When a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting the
Corporation may transact any business which might have been transacted at the
original meeting. If, however, the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.

SECTION 2.4 QUORUM. Except as otherwise provided by law or by the
Certificate of Incorporation or by these Bylaws, at any meeting of stockholders
the holders of a majority of the voting power of the outstanding shares of the
Corporation entitled to vote generally in the election of directors (the "VOTING
STOCK"), either present or represented by proxy, shall constitute a quorum for
the transaction of any business at such meeting, except that when specified
business is to be voted on by a class or series voting as a class, the holders
of a majority of the shares of such class or series shall constitute a quorum
for the transaction of such business. The chairman of the meeting or a majority
of the voting power of the shares of Voting Stock so represented may adjourn the
meeting from time to time, whether or not there is such a quorum (or in the case
of specified business to be voted on as a class or series, the chairman or a
majority of the shares of such class or series so represented may adjourn the
meeting with respect to such specified business). No notice of the time and
place of adjourned meetings need be given except as provided in the last
paragraph of Section 2.3 of these Bylaws. The stockholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

SECTION 2.5 VOTING. Except as otherwise set forth in the Certificate
of Incorporation with respect to the right of any holder of any series of
Preferred Stock or any other series or class of stock to elect additional
directors under specified circumstances, whenever directors are to be elected at
a meeting, they shall be elected by a plurality of the votes cast at the meeting
by the holders of stock entitled to vote. Whenever any corporate action, other
than the election of directors, is to be taken by vote of stockholders at a
meeting, it shall, except as otherwise required by law or by the Certificate of
Incorporation or by these Bylaws, be authorized by a majority of the votes cast
with

<PAGE>

respect thereto at the meeting (including abstentions) by the holders of
stock entitled to vote thereon.

Except as otherwise provided by law, or by the Certificate of
Incorporation, each holder of record of stock of the Corporation entitled to
vote on any matter at any meeting of stockholders shall be entitled to one vote
for each share of such stock standing in the name of such holder on the stock
ledger of the Corporation on the record date for the determination of the
stockholders entitled to vote at the meeting.

Upon the demand of any stockholder entitled to vote, the vote for
directors or the vote on any other matter at a meeting shall be by written
ballot, but otherwise the method of voting and the manner in which votes are
counted shall be discretionary with the presiding officer at the meeting.

SECTION 2.6 PROXIES. Each stockholder entitled to vote at a meeting
of stockholders may authorize another person or persons to act for him or her by
proxy, but no such proxy shall be voted or acted upon after three (3) years from
its date, unless the proxy provides for a longer period. Every proxy shall be
signed by the stockholder or by his duly authorized attorney. Such proxy must
be filed with the Secretary of the Corporation or his or her representative at
or before the time of the meeting.

SECTION 2.7 NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.

(A) ANNUAL MEETING OF STOCKHOLDERS.

(1) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a) by or at the
direction of the Chairman of the Board or the Board of Directors pursuant to a
resolution adopted by a majority of the Board of Directors or (b) by any
stockholder of the Corporation who is entitled to vote at the meeting with
respect to the election of directors or the business to be proposed by such
stockholder, as the case may be, who complies with the notice procedures set
forth in clauses (2) and (3) of paragraph (A) of this Section 2.7 and who is a
stockholder of record at the time such notice is delivered to the Secretary of
the Corporation as provided below.

(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (b) of paragraph (A)(1) of
this Section 2.7, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation and such business must be a proper
subject for stockholder action under the Delaware General Corporation Law (the
"GCL"). To be timely, a stockholder's notice shall be delivered to the
Secretary of the Corporation at the principal executive offices of the
Corporation not less than ninety (90) days prior to the first anniversary of the
preceding year's annual meeting; PROVIDED, HOWEVER, that in the event that
the date of the annual meeting is advanced by more than thirty (30) days, or
delayed by more than sixty (60) days, from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the one hundred
and twentieth (120th) day prior to such annual meeting and not later than the
close of business on the later of the sixtieth (60th) day prior to such annual
meeting or the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
including such person's written consent to being named in the proxy statement as
a nominee and to serving as a director if elected; (b) as to any other

<PAGE>

business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest
in such business of such stockholder and the beneficial owner, if any, on
whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder, as they appear
on the Corporation's books, and of such beneficial owner and (ii) the class
and number of shares of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.

(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Section 2.7 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least eighty
(80) days prior to the first anniversary of the preceding year's annual meeting,
a stockholder's notice required by paragraph (A)(2) of this Section 2.7 shall
also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary of
the Corporation at the principal executive offices of the Corporation not later
than the close of business on the tenth (10th) day following the day on which
such public announcement is first made by the Corporation.

(B) SPECIAL MEETING OF STOCKHOLDERS. Nominations of persons for
election to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected (i) by or at the direction of
the Chairman of the Board of the Corporation or the Board of Directors pursuant
to a resolution adopted by a majority of the Board of Directors or (ii) by any
stockholder of the Corporation who is entitled to vote at the meeting with
respect to the election of directors, who complies with the notice procedures
set forth in this paragraph (B) and who is a stockholder of record at the time
such notice is delivered to the Secretary of the Corporation as provided below.
Nominations by stockholders of persons for election to the Board of Directors
may be made at such a special meeting of stockholders if the stockholder's
notice as required by paragraph (A)(2) of this Section 2.7 shall be delivered to
the Secretary of the Corporation at the principal executive offices of the
Corporation not later than the ninetieth (90th) day prior to such special
meeting or the tenth (10th) day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.

(C) GENERAL. (1) Only persons who are nominated in accordance with
the procedures set forth in this Section 2.7 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 2.7.

(2) Except as otherwise provided by law, the Certificate of
Incorporation or this Section 2.7, the chairman of the meeting shall have the
power and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the procedures set forth
in this Section 2.7 and, if any proposed nomination or business is not in
compliance with this Section 2.7, to declare that such defective nomination or
proposal shall be disregarded.

(3) For purposes of this Section 2.7, "PUBLIC ANNOUNCEMENT" shall
mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.

<PAGE>

(4) Notwithstanding the foregoing provisions of this Section 2.7, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Section 2.7. Nothing in this Section 2.7 shall be deemed to
affect any rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy materials with respect to a meeting of stockholders pursuant
to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of
Preferred Stock or any other series or class of stock as set forth in the
Certificate of Incorporation to elect directors under specified circumstances or
to consent to specific actions taken by the Corporation.

SECTION 2.8 INSPECTORS OF ELECTIONS; OPENING AND CLOSING THE POLLS.

(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve the
Corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives of the Corporation, to act at the meeting
and make a written report thereof. One or more persons may be designated as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate has been appointed to act, or if all inspectors or alternates who
have been appointed are unable to act, at a meeting of stockholders, the
chairman of the meeting shall appoint one or more inspectors to act at the
meeting. Each inspector, before discharging his or her duties, shall take and
sign an oath faithfully to execute the duties of his or her ability. The
inspectors shall have the duties prescribed by the GCL.

(B) The chairman of the meeting shall fix and announce at the meeting
the time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting.

SECTION 2.9 LIST OF STOCKHOLDERS. The officer who has charge of
the stock ledger of the Corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.

The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
Section or the books of the Corporation, or to vote in person or by proxy at any
meeting of stockholders.

SECTION 2.10 WRITTEN CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any
action required by the GCL to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt written notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing. Any such written consent may be
given by one or any number of substantially concurrent written instruments of
substantially similar

<PAGE>

tenor signed by such stockholders, in person or by attorney or proxy duly
appointed in writing, and filed with the Secretary or an Assistant Secretary
of the Corporation. Any such written consent shall be effective as of the
effective date thereof as specified therein, provided that such date is not
more than sixty (60) days prior to the date such written consent is filed as
aforesaid, or, if no such date is so specified, on the date such written
consent is filed as aforesaid.

ARTICLE III

DIRECTORS

SECTION 3.1 GENERAL POWERS. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors. In addition to the powers and authorities by these Bylaws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by the
Certificate of Incorporation or by these Bylaws required to be exercised or done
by the stockholders.

SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights
of the holders of any series of Preferred Stock or any other series or class of
stock as set forth in the Certificate of Incorporation to elect directors under
specified circumstances, the number of directors shall be fixed from time to
time exclusively pursuant to a resolution adopted by a majority of the Board of
Directors, but shall consist of not more than nine (9) nor less than three (3)
directors.

SECTION 3.3 VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Subject to the
rights of the holders of any series of Preferred Stock or any other series or
class of stock as set forth in the Certificate of Incorporation to elect
additional directors under specified circumstances, vacancies resulting from
death, resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires and until such director's successor shall have
been duly elected and qualified. No decrease in the number of authorized
directors constituting the Board of Directors shall shorten the term of any
incumbent director.

SECTION 3.4 RESIGNATION. Any director may resign at any time upon
written notice to the Corporation. Any such resignation shall take effect at
the time specified therein or, if the time be not specified, upon receipt
thereof, and the acceptance of such resignation, unless required by the terms
thereof, shall not be necessary to make such resignation effective.

SECTION 3.5 REMOVAL. Subject to the rights of the holders of any
series of Preferred Stock or any other series or class of stock as set forth in
the Certificate of Incorporation to elect additional directors under specified
circumstances, any director may be removed from office at any time with or
without cause, by the affirmative vote of the holders of at least a majority of
the voting power of the then outstanding Voting Stock, voting together as a
single class.

SECTION 3.6 MEETINGS. Meetings of the Board of Directors, regular or
special, may be held at any place within or without the State of Delaware.
Members of the Board of Directors, or of any committee designated by the Board
of Directors, may participate in a meeting of the Board of Directors or such
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting by such means shall constitute presence in person
at such meeting. An annual meeting of the Board of Directors shall be held at
the same place and immediately following

<PAGE>

each annual meeting of stockholders, and no further notice thereof need be
given other than this Bylaw. The Board of Directors may fix times and places
for additional regular meetings of the Board of Directors and no further
notice of such meetings need be given. A special meeting of the Board of
Directors shall be held whenever called by the President of the Corporation,
the Chief Executive Officer of the Corporation or the Chairman of the Board
of the Corporation, or by a majority of the Board of Directors, at such time
and place as shall be specified in the notice or waiver thereof. The person
or persons authorized to call special meeting of the Board of Directors may
fix the place and time of the meetings. Notice of any special meeting shall
be given to each director at his or her business or residence in writing or
by telegram or by telephone communication. If mailed, such notice shall be
deemed adequately delivered when deposited in the United States mails so
addressed, with postage thereon prepaid, at least five (5) days before such
meeting. If by telegram, such notice shall be deemed adequately delivered
when the telegram is delivered to the telegraph company at least twenty-four
hours before such meeting. If by facsimile transmission, such notice shall
be transmitted at least twenty-four hours before such meeting. If by
telephone, the notice shall be given at least twelve hours prior to the time
set for the meeting. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice of such meeting, except for amendments to these
Bylaws as provided under Section 10.1 of these Bylaws.

SECTION 3.7 QUORUM AND VOTING. A whole number of directors equal to
at least a majority of the Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but if there
be less than a quorum, a majority of the directors present may adjourn the
meeting from time to time, and no further notice thereof need be given other
than announcement at the meeting which shall be so adjourned. Except as
otherwise provided by law, by the Certificate of Incorporation, or by these
Bylaws, the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.

SECTION 3.8 WRITTEN CONSENT OF DIRECTORS IN LIEU OF A MEETING. Any
action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting if all
members of the Board of Directors or of such committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or of such committee.

SECTION 3.9 COMPENSATION. Directors may receive compensation for
services to the Corporation in their capacities as directors or otherwise in
such manner and in such amounts as may be fixed from time to time by the Board
of Directors.

SECTION 3.10 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of
Directors may from time to time, by resolution passed by majority of the Board
of Directors, designate one or more committees, each committee to consist of one
or more directors of the Corporation. The Board of Directors may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. The resolution
of the Board of Directors may, in addition or alternatively, provide that in the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he, she or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it, except as otherwise provided by law.
Unless the resolution of the Board of Directors expressly so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance

<PAGE>

of stock. Any such committee may adopt rules governing the method of calling
and time and place of holding its meetings. Unless otherwise provided by the
Board of Directors, a majority of any such committee (or the member thereof,
if only one) shall constitute a quorum for the transaction of business, and
the vote of a majority of the members of such committee present at a meeting
at which a quorum is present shall be the act of such committee. Each such
committee shall keep a record of its acts and proceedings and shall report
thereon to the Board of Directors whenever requested so to do. Any or all
members of any such committee may be removed, with or without cause, by
resolution of the Board of Directors, passed by a majority of the Board of
Directors.

ARTICLE IV

OFFICERS

SECTION 4.1 ELECTED OFFICERS. The elected officers of the
Corporation shall be a Chairman of the Board, a President, a Secretary and a
Treasurer, and may also include one or more Vice Presidents, one or more
Assistant Secretaries and one or more Assistant Treasurers. All officers chosen
by the Board of Directors shall each have such powers and duties as generally
pertain to their respective offices, subject to the specific provisions of this
Article IV, together with such other powers and duties as from time to time may
be conferred by the Board of Directors or any committee thereof. The Chairman
of the Board shall be chosen from among the directors. Any number of such
offices may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity. The Board of
Directors may appoint, and may delegate power to appoint, such other officers,
agents and employees as it may deem necessary or proper, who shall hold their
offices or positions for such terms, have such authority and perform such duties
as may from time to time be determined by or pursuant to authorization of the
Board of Directors.

SECTION 4.2 ELECTION AND TERM OF OFFICE. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after each annual meeting of the
stockholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as convenient. Subject to
Section 4.3 of these Bylaws, each officer shall hold office until his or her
successor shall have been duly elected and shall have qualified or until his or
her death or until such officer shall resign.

SECTION 4.3 RESIGNATION AND REMOVAL. Any officer may resign at any
time upon written notice to the Corporation. Any elected officer may be removed
by a majority of the members of the Board of Directors, with or without cause,
at any time. The Board of Directors may delegate such power of removal as to
officers, agents and employees not elected by the Board of Directors. Such
removal shall be without prejudice to a person's contract rights, if any, but
the appointment of any person as an officer, agent or employee of the
Corporation shall not of itself create contract rights.

SECTION 4.4 COMPENSATION AND BOND. The compensation of the officers
of the Corporation shall be fixed by the Board of Directors, but this power may
be delegated to any officer in respect of other officers under his or her
control. The Corporation may secure the fidelity of any or all of its officers,
agents or employees by bond or otherwise.

SECTION 4.5 CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of stockholders and of the Board of Directors. The
Chairman of the Board shall be responsible for the general management of the
affairs of the Corporation, shall make reports to the Board of Directors and the
stockholders and shall perform all duties incidental to such office which may be
required by law and all such other duties as are properly required by the Board
of Directors.

<PAGE>

Except where by law the signature of the President is required, the Chairman
of the Board shall possess the same power as the President to sign all
certificates, contracts and other instruments of the Corporation which may be
authorized by the Board of Directors. The Chairman of the Board shall see
that all orders and resolutions of the Board of Directors and of any
committee thereof are carried into effect.

SECTION 4.6 PRESIDENT. The President shall act in a general
executive capacity and shall assist the Chairman of the Board in the
administration and operation of the Corporation's business and general
supervision of its policies and affairs. The President shall, in the absence of
or because of the inability to act of the Chairman of the Board, perform all
duties of the Chairman of the Board and preside at all meetings of stockholders
and of the Board of Directors. The President may sign, alone or with the
Secretary or any other proper officer of the Corporation authorized by the Board
of Directors, certificates, contracts and other instruments of the Corporation
as authorized by the Board of Directors.

SECTION 4.7 VICE PRESIDENTS. Each Vice President shall have such
powers and perform such duties as the Board of Directors, the Chairman of the
Board or the President may from time to time prescribe. In the absence or
inability to act of the President, unless the Board of Directors shall
otherwise provide, the Vice President who has served in that capacity for the
longest time and who shall be present and able to act, shall perform all the
duties and may exercise any of the powers of the President.

SECTION 4.8 TREASURER. The Treasurer shall have charge of all funds
and securities of the Corporation, shall endorse the same for deposit or
collection when necessary and deposit the same to the credit of the Corporation
in such banks or depositories as the Board of Directors may authorize. He or
she may endorse all commercial documents requiring endorsements for or on behalf
of the Corporation and may sign all receipts and vouchers for payments made to
the Corporation. He or she shall have all such further powers and duties as
generally are incident to the position of Treasurer or as may be assigned to him
or her by the Chairman of the Board, the President or the Board of Directors.

SECTION 4.9 SECRETARY. The Secretary shall record all the
proceedings of the meetings of the stockholders and directors in a book to be
kept for that purpose and shall also record therein all action taken by written
consent of directors in lieu of a meeting. He or she shall attend to the giving
and serving of all notices of the Corporation. He or she shall have custody of
the seal of the Corporation and shall attest the same by his or her signature
whenever required. He or she shall have charge of the stock ledger and such
other books and papers as the Board of Directors may direct, but he or she may
delegate responsibility for maintaining the stock ledger to any transfer agent
appointed by the Board of Directors. He or she shall have all such further
powers and duties as generally are incident to the position of Secretary or as
may be assigned to him or her by the President or the Board of Directors.

SECTION 4.10 ASSISTANT TREASURERS. In the absence or inability to
act of the Treasurer, any Assistant Treasurer may perform all the duties and
exercise all the powers of the Treasurer. An Assistant Treasurer shall also
perform such other duties as the Treasurer or the Board of Directors may assign
to him or her.

SECTION 4.11 ASSISTANT SECRETARIES. In the absence or inability to
act of the Secretary, any Assistant Secretary may perform all the duties and
exercise all the powers of the Secretary. An Assistant Secretary shall also
perform such other duties as the Secretary or the Board of Directors may assign
to him or her.

<PAGE>

SECTION 4.12 DELEGATION OF DUTIES. In case of the absence of any
officer of the Corporation, or for any other reason that the Board of Directors
may deem sufficient, the Board of Directors may confer for the time being the
powers or duties, or any of them, of such officer upon any other officer or upon
any director.

ARTICLE V

INDEMNIFICATION AND INSURANCE

SECTION 5.1 RIGHT TO INDEMNIFICATION. Each person who was or is made
a party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "PROCEEDING"), by reason of the fact that he or she
or a person of whom he or she is the legal representative is or was a director
or an officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of any other corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to any employee benefit plan (hereinafter an "INDEMNITEE"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the GCL, as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including, without
limitation, attorneys' fees, judgments, fines, excise taxes or penalties under
the Employee Retirement Income Security Act of 1974, as amended, and amounts
paid or to be paid in settlement) actually and reasonably incurred by such
indemnitee in connection therewith; PROVIDED, HOWEVER, that except as provided
in Section 5.3 with respect to proceedings seeking to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by the
Board of Directors.

SECTION 5.2 RIGHT TO ADVANCEMENT OF EXPENSES. The right to
indemnification conferred in Section 5.1 shall include the right to be paid by
the Corporation the expenses (including attorneys' fees) incurred in defending
any such proceeding in advance of its final disposition (hereinafter an
"ADVANCEMENT OF EXPENSES"); PROVIDED, HOWEVER, that, if the GCL requires, an
advancement of expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "UNDERTAKING"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"FINAL ADJUDICATION") that such indemnitee is not entitled to be indemnified for
such expenses under this Section 5.2 or otherwise.

SECTION 5.3 RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
Section 5.1 or Section 5.2 is not paid in full by the Corporation within thirty
(30) days after a written claim has been received by the Corporation, except in
the case of a claim for an advancement of expenses, in which case the applicable
period shall be twenty (20) days, the indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim. If
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a

<PAGE>

right to indemnification hereunder (but not in a suit brought by the
indemnitee to enforce a right of an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
Corporation shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the GCL. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or stockholders)
to have made a determination prior to the commencement of such action that
indemnification of the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth in the GCL,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or stockholders) that the indemnitee has
not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified, or
to such advancement of expenses, under this Article V or otherwise shall be
on the Corporation.

SECTION 5.4 NON-EXCLUSIVITY OF RIGHTS. The right to indemnification
and the advancement of expenses conferred in this Article V shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, provision of
these Bylaws, agreement, vote of stockholders or disinterested directors or
otherwise.

SECTION 5.5 INSURANCE. The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the GCL.

SECTION 5.6 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE
CORPORATION. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to the
advancement of expenses, to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article V with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.

SECTION 5.7 CONTRACT RIGHTS. The rights to indemnification and to
the advancement of expenses conferred in Section 5.1 and Section 5.2 shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.

<PAGE>

ARTICLE VI

COMMON STOCK

SECTION 6.1 CERTIFICATES. Certificates for stock of the Corporation
shall be in such form as shall be approved by the Board of Directors and shall
be signed in the name of the Corporation by the Chairman of the Board, the
President or a Vice President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary. Such certificates may be sealed
with the seal of the Corporation or a facsimile thereof. Any of or all the
signatures on a certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.

SECTION 6.2 TRANSFERS OF STOCK. Transfers of stock shall be made
only upon the books of the Corporation by the holder, in person or by duly
authorized attorney, and on the surrender of the certificate or certificates for
the same number of shares, with an assignment and power of transfer endorsed
thereon or attached thereto, duly executed, with such proof of the authenticity
of the signature as the Corporation or its agents may reasonably require. The
Board of Directors shall have the power to make all such rules and regulations,
not inconsistent with the Certificate of Incorporation and these Bylaws and the
GCL, as the Board of Directors may deem appropriate concerning the issue,
transfer and registration of certificates for stock of the Corporation. The
Board of Directors may appoint one or more transfer agents or registrars of
transfers, or both, and may require all stock certificates to bear the signature
of either or both.

SECTION 6.3 LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation
may issue a new stock certificate in the place of any certificate theretofore
issued by it, alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or destroyed certificate
or his or her legal representative to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate. The Board of Directors may require such owner to
satisfy other reasonable requirements as it deems appropriate under the
circumstances.

SECTION 6.4 STOCKHOLDER RECORD DATE. In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which shall not be more than sixty nor less than ten (10) days before the date
of such meeting, nor more than sixty (60) days prior to any other action.

If no record date is fixed by the Board of Directors, (1) the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
date on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held, and (2) the
record date for determining stockholders for any other purpose shall be at the
close of business on the day on which the Board of Directors adopts the
resolution relating thereto.

A determination of stockholders of record entitled to notice of or to
vote at a meeting of

<PAGE>

stockholders shall apply to any adjournment of the meeting; PROVIDED,
HOWEVER, that the Board of Directors may fix a new record date for the
adjourned meeting.

Only such stockholders as shall be stockholders of record on the date
so fixed shall be entitled to notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend or other
distribution, or to exercise such rights in respect of any such change,
conversion or exchange of stock, or to participate in such action, as the case
may be, notwithstanding any transfer of any stock on the books of the
Corporation after any record date so fixed.

ARTICLE VII

SEAL

SECTION 7.1 SEAL. The seal of the Corporation shall be circular in
form and shall bear, in addition to any other emblem or device approved by the
Board of Directors, the name of the Corporation, the year of its incorporation
and the words "Corporate Seal" and "Delaware". The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.

ARTICLE VIII

WAIVER OF NOTICE

SECTION 8.1 WAIVER OF NOTICE. Whenever notice is required to be
given to any stockholder or director of the Corporation under any provision of
the GCL or the Certificate of Incorporation or these Bylaws, a written waiver
thereof, signed by the person or persons entitled to notice, whether before or
after the time stated therein, shall be deemed equivalent to the giving of such
notice. In the case of a stockholder, such waiver of notice may be signed by
such stockholder's attorney or proxy duly appointed in writing. Attendance of
a person at a meeting shall constitute a waiver of notice of such meeting,
except when the person attends a meeting for the express purpose of objecting at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors or members of a committee of directors need be specified
in any written waiver of notice.

ARTICLE IX

CHECKS, NOTES, DRAFTS, ETC.

SECTION 9.1 CHECKS, NOTES, DRAFTS, ETC. Checks, notes, drafts,
acceptances, bills of exchange and other orders or obligations for the payment
of money shall be signed by such officer or officers or person or persons as the
Board of Directors or a duly authorized committee thereof may from time to time
designate.

ARTICLE X

AMENDMENTS

SECTION 10.1 AMENDMENTS. These Bylaws may be amended, added to,
rescinded or repealed at any time by the stockholders by vote at a meeting or by
written consent without a meeting. The Board of Directors shall also have the
power, by a majority vote, to alter or repeal any of these Bylaws, and to adopt
new Bylaws. In the case of amendments by stockholders and

<PAGE>

notwithstanding the foregoing or any other provisions of these Bylaws or any
provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any affirmative vote of the holders of any particular class or
series of stock required by law, the Certificate of Incorporation or these
Bylaws, the affirmative vote of the holders of at least 66-2/3 percent of the
voting power of the then outstanding shares of Voting Stock voting together
as a single class, shall be required to alter, amend or repeal Sections 2.2,
2.7, 3.2, 3.3, 3.5 and this Section 10.1 of these Bylaws, unless such
amendments are approved by a majority of the directors of the Corporation not
affiliated or associated with any person, other than Ramy El-Batrawi, holding
(or which has announced an intention to acquire) 20% or more of the voting
power of the Corporation's then outstanding voting capital stock, voting
together as a single class.

The Bylaws of this Corporation were hereby adopted on October 26, 1998.

/s/ Ramy El-Batrawi
--------------------------
Ramy El-Batrawi, Secretary

<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GENESIS MEDIA GROUP, INC.

FIRST: That pursuant to a Unanimous Written Consent of the Board of
Directors of Genesis Media Group, Inc., a Delaware corporation, resolutions were
duly adopted setting forth a proposed amendment of the Certificate of
Incorporation of said corporation. The resolution setting forth the proposed
amendment is as follows:

RESOLVED, that it is advisable that the Certificate of
Incorporation of this Corporation be amended by amending and
restating the FIRST Article in its entirety so that, as amended
and restated, said Article shall be and read in its entirety as
follows:

FIRST: The name of the corporation is
GenesisIntermedia.com, Inc. (hereinafter referred to as the
"Corporation");

SECOND: That the corporation has not received any payment for any of its
stock.

THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 241 of the General Corporation Law of the State of
Delaware.

FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.

IN WITNESS WHEREOF, the undersigned has caused this Certificate of
Amendment to be executed as of this 3rd day of December, 1998.

By: /s/ Douglas E. Jacobson
--------------------------------
Name: Douglas E. Jacobson
Its: Chief Financial Officer

<PAGE>

EXHIBIT 4.1

[LOGO]

GENESISINTERMEDIA.COM, INC.

NUMBER SHARES

INCORPORATED UNDER THE LAWS SEE REVERSE FOR CERTAIN DEFINITIONS
OF THE STATE OF DELAWARE CUSIP 371934 20 9

This Certifies that

is the record holder of

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.001 PAR VALUE, OF

-------------------- GENESISINTERMEDIA.COM, INC. --------------------

transferable on the books of the Corporation by the holder hereof in person
or by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar. WITNESS the facsimile seal of the
Corporation and the facsimile signatures of its duly authorized officers.

Dated:

[SEAL]

PRESIDENT TREASURER

COUNTERSIGNED AND REGISTERED:

TRANSFER AGENT AND REGISTRAR

BY:

AUTHORIZED SIGNATURE
<PAGE>

The Corporation shall furnish without charge to each stockholder who so
requests a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock of the
Corporation or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Such requests shall be made
to the Corporation's Secretary at the principal office of the Corporation.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common.

TEN ENT -- as tenants by the entireties.

JT TEN -- as joint tenants with right of survivorship and not as tenants in
common.

UNIF GIFT MIN ACT -- ...................... Custodian ...................
(Cust) (Minor)
under Uniform Gifts to Minors Act ..............................................
(State)

UNIF TRF MIN ACT -- ................. Custodian (until age ................)
(Cust) (Minor)
under Uniform Transfers to Minors Act ......................................
(State)

Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, ____________________________ hereby sell, assign and
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

_____________________________
/ /
/ /
_____________________________

_______________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________ Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

<PAGE>

Dated _____________________________

X ___________________________________________
X ___________________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.

Signature(s) Guaranteed

By _________________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

<PAGE>

EMPLOYMENT AGREEMENT
---------------------

This AGREEMENT is made and entered into as of this 30th day of
September, 1998, between Genesis Media Group, Inc. (the "COMPANY") and Ramy
El-Batrawi (the "EXECUTIVE").

WHEREAS, the Company desires to employ the Executive and to enter into
an agreement embodying the terms of such employment (the "AGREEMENT") and the
Executive desires to accept such employment and to enter into the Agreement;

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
the Executive (individually a "PARTY" and together the "PARTIES") agree as
follows:

1. DEFINITIONS.

(a) "AFFILIATE" shall mean any corporation, partnership or other
entity in which the Company owns, directly or indirectly, an equity interest of
50% or more or which owns, directly or indirectly, an equity interest of 50% in
the Company.

(b) "BOARD" shall mean the Board of Directors of the Company.

(c) "CAUSE" shall mean (i) the commission of a serious crime by the
Executive, (ii) the Executive, in carrying out his duties under this Agreement,
is guilty of gross neglect or gross misconduct, (iii) the Executive engages in
chronic alcohol or drug abuse or (iv) conduct on the part of the Executive which
causes damage to the reputation of the Company.

(d) "CONFIDENTIAL INFORMATION" shall mean all nonpublic information
respecting the Company's business including, but not limited to, its products,
research and development, processes, customer lists, marketing plans and
strategies. Confidential information does not include information that is, or
becomes, available to the public unless such availability occurs through an
unauthorized act on the part of the Executive.

(e) "DISABILITY" shall mean the Executive's inability to render, for
180 days during any 365 day period, full and effective services hereunder by
reason of permanent physical or mental disability, whether resulting from
illness, accident or otherwise.

(f) "SALARY" shall mean the salary provided for in SECTION 3 of this
Agreement or any adjusted salary granted to the Executive by the Board.

(g) "SALARY CONTINUATION PERIOD" shall mean the period after the
termination of the Executive's employment pursuant to the terms of this
Agreement during which the Executive is entitled to continued payment of the
Salary.

(h) "TERM OF THIS AGREEMENT" shall mean that period of time specified
in SECTION 2(b).

- 1 -

<PAGE>

(i) "TERM OF EMPLOYMENT" shall mean the period of the Executive's
employment by the Company.

2. TERM OF AGREEMENT, POSITION AND DUTIES.

(a) The Company hereby employs the Executive and the Executive hereby
accepts employment with the Company for the Term of this Agreement in the
position and with the duties and responsibilities set forth below and upon such
other terms and conditions as are hereinafter stated.

(b) The term of this Agreement shall commence as of September 30,
1998 and shall terminate upon the first to occur of (i) the termination of this
Agreement as provided herein or (ii) September 30, 2003. In the event that the
Executive's Term of Employment continues beyond the Term of this Agreement, such
continued employment shall be at will and no provision or condition of this
Agreement shall govern such extended period of employment except as specifically
noted herein.

(c) During the Term of this Agreement, the Executive shall be
employed as the Chief Executive Officer and a Director of the Company.
During the time as he serves in this position, the Executive shall serve
under the direction of and report directly to the Board. During the Term of
Employment, the Executive agrees to devote his full time and attention to
carrying out his duties and responsibilities hereunder and shall use his best
efforts, skills and abilities to further the interests of the Company; the
Company acknowledges that the Executive has separate business interests which
require his time and attention. During the Term of Employment, the Executive
may not serve on the board of directors of any other business entities
without the express written permission of the Board and subject to such
limitations as may be imposed by the Board in granting such permission.

3. SALARY.

During the Term of this Agreement, the Executive shall be paid a
salary by the Company at an annual rate of Two Hundred Fifty Thousand Dollars
($250,000) payable in accordance with the Company's standard payroll practices.
Such salary shall be reviewed at least annually for adjustment. Any adjustment
shall be determined by the Board, in its sole discretion.

4. ANNUAL BONUS.

During the Term of Employment, the Board may grant the Executive an
annual bonus. The amount of such annual bonus, if any, shall be determined by
the Board, in its sole discretion.

5. EMPLOYEE BENEFIT PROGRAMS.

- 2 -

<PAGE>

Company. The Executive shall be entitled to a pro rata share of an annual
accrual for fractional years of employment with the Company.

6. PERQUISITES.

During the Term of this Agreement, the Executive shall be entitled to
such perquisites as are provided, from time to time, to all senior executives of
the Company.

7. TERMINATION OF EMPLOYMENT.

(a) TERMINATION DUE TO DEATH. In the event of the death of the
Executive during the Term of this Agreement, this Agreement shall immediately
terminate and the estate or other legal representative of the Executive shall be
entitled to:

(i) Salary at the rate in effect at the time of the
Executive's death, through the end of the month in which his death occurs;
and

(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his death, determined in accordance with the applicable terms
and provisions of such programs.

(b) TERMINATION DUE TO DISABILITY. The Company may terminate the
Executive's employment due to the Disability of the Executive. In the event of
such a termination of the Executive's employment due to Disability during the
Term of this Agreement, this Agreement shall immediately terminate and the
Executive shall be entitled to:

(i) Salary at the rate in effect at the time the Executive's
Disability is deemed to have commenced, through the date on which he is
terminated due to Disability; and

(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his Termination Due to Disability, determined in accordance
with the applicable terms and provisions of such programs.

(c) TERMINATION FOR CAUSE. The Executive's employment may be
terminated immediately by the Company for Cause. In the event the Executive's
employment is terminated for Cause during the Term of this Agreement, the
Executive shall be entitled to:

(i) Salary at the rate in effect at the time of the
Termination for Cause, through the date on which such Termination for Cause
occurs; and

(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of the Termination for Cause, determined in accordance with the
applicable terms and provisions of such programs.

- 3 -

<PAGE>

(d) TERMINATION WITHOUT CAUSE. The Executive's employment under this
Agreement may be terminated without Cause, as provided in this subsection.
"TERMINATION WITHOUT CAUSE" shall mean a termination of the Executive's
employment by the Company during the Term of this Agreement other than due to
Death, due to Disability or for Cause.

In the event there is a Termination Without Cause of the Executive's
employment, the Executive shall be entitled to:

(i) Salary at the rate in effect immediately prior to the
Termination Without Cause, for a period which shall end upon the earlier of
(x) the end of the twelfth (12th) month following such termination of
employment or (y) the Executive's reemployment in a position comparable to
that which he held with the Company immediately prior to the termination of
his employment ("COMPARABLE REEMPLOYMENT"), PROVIDED, HOWEVER, any Salary
due the Executive under this subsection shall be off-set by any
compensation earned by the Executive in respect of reemployment other than
Comparable Reemployment during the Salary Continuation Period; and

(ii) any other rights and benefits available under employee
benefit programs of the Company in which the Executive was a participant at
the time of his Termination Without Cause, determined in accordance with
the applicable terms and provisions of such programs;

PROVIDED, HOWEVER, that if at any time during the Salary Continuation Period,
the Company becomes aware of any action on the part of the Executive that would
constitute grounds for termination of the Executive's employment by the Company
for Cause, the Company shall be under no obligation to make any payments or
provide any rights or other benefits due under this Agreement.

Any payments received by the Executive under this Agreement that are
attributable to the termination of the Executive's employment shall be in full
and complete satisfaction of any and all claims the Executive may have against
the Company which are, in any way, related to the employment relationship
between the Executive and the Company.

8. INDEMNIFICATION.

(a) The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding by reason of the
fact that he is or was a director or officer of the Company (a "PROCEEDING"), he
shall be indemnified by the Company to the fullest extent authorized by Delaware
law, consistent with the Company's certificate of incorporation (or charter) and
by-laws, against expenses, liabilities and losses reasonably incurred or
suffered by the Executive in connection therewith; PROVIDED, HOWEVER:

(i) written notice of such Proceeding is given promptly to the
Company by the Executive;

(ii) the Company is permitted to participate in and assume the
defense of

- 4 -

<PAGE>

such Proceeding; and

(iii) such liability results from the final judgment of a court
of competent jurisdiction or, as a result of a settlement entered into with
the prior written consent of the Company or is required (x) by such court
as a bond, payment into escrow or similar payment, or (y) otherwise to
forestall imminent attachment or similar process against any of the
Executive's assets, and,

PROVIDED FURTHER that the Company agrees to indemnify the Executive if he seeks
indemnification in connection with a Proceeding (or part thereof) initiated by
the Executive only if such Proceeding (or part thereof) was authorized by the
Board.

(b) Notwithstanding anything to the contrary in SUBSECTION (a) above,
the Company shall be under no obligation to indemnify the Executive with respect
to any act or acts of the Executive:

(i) in a knowing violation of any written agreement between
the Executive and the Company;

(ii) for which a court, having jurisdiction in the matter,
determines that indemnification is not lawful; or

(iii) which a court, having jurisdiction in the matter,
determines to have been knowingly and fraudulently committed by the
Executive or which is the result of willful misconduct by the Executive.

9. COVENANT NOT TO COMPETE OR ENGAGE IN CERTAIN OTHER ACTS.

(a) During the Term of Employment, and for a period equal to the
greater of (x) 24 months following the end of the Term of Employment or (y) the
Salary Continuation Period, the Executive shall not, except while employed by
the Company, in the business of and for the benefit of the Company, directly or
indirectly, engage in any business whether as an employee, consultant, partner,
principal, agent, representative or stockholder or in any other corporate or
representative capacity, if it involves:

(i) manufacturing, purchasing, marketing or selling any item
or service that is manufactured, purchased, marketed or sold by the Company
or any of its Affiliates in the State of California;

(ii) rendering services or advice pertaining to the
manufacturing, purchasing, marketing or selling of any item or service
manufactured, purchased, marketed or sold by the Company or any Affiliate
to, or on behalf of, any person, firm or corporation in the State of
California; or

(iii) engaging, in, or rendering services or advice pertaining
to any other line of business that the Company, or any Affiliate, was
actively

- 5 -

<PAGE>

conducting or actively considering during the Term of Employment with the
Company, in competition with the Company, or any Affiliate, in the State of
California in the same aspect of such line of business as the Company or
any such Affiliate.

(b) The Executive agrees that for the Term of Employment and for the
period described in SUBSECTION (a) above, except when acting on behalf of the
Company or an Affiliate, he shall not:

(i) assist any other entity to enter into any line of business
that the Company, or any Affiliate, was actively conducting or was actively
considering during the Term of Employment in the State of California;

(ii) take any action to divert any business from the Company,
or from any Affiliate, or any business which was under active consideration
by the Company, or by any Affiliate, during the Term of Employment; or

(iii) induce customers, suppliers, agents, franchisees or other
persons under contract or franchise or otherwise doing business with the
Company, to terminate, reduce or alter business with or from the Company or
any Affiliate.

The subsections of this Section are intended by the Parties as separate and
divisible provisions and if, for any reason, any one of them is held to be
invalid or unenforceable, neither the validity nor the enforceability of any
other provision shall thereby be affected. It is the intention of the Parties
that the restrictions on the Executive's future employment imposed by this
Section be reasonable in both duration and geographic scope. If for any reason
any court of competent jurisdiction shall find the provisions of this Section
unreasonable in duration or geographic scope, the Parties hereby agree that the
prohibitions contained herein shall be effective to the fullest extent allowed
under applicable law in such jurisdiction. It is further agreed that any
limitations on the restrictions such court shall impose shall apply only with
respect to the operations of such restrictions in the particular jurisdiction in
which such adjudication is made.

The Executive understands that the provisions of this Section may
limit his ability to earn a livelihood in a business similar to the business of
the Company, but nevertheless believes that he shall receive sufficient
remuneration and other benefits hereunder to justify the restrictions contained
in such provisions which, given his education, skills and abilities, he does not
believe would prevent him from earning a living.

(c) The Executive agrees that for the Term of Employment and for the
period described in SUBSECTION (a) above, except when acting on behalf of the
Company or any Affiliate, he shall not induce any person in the employment of
the Company or any Affiliate to (i) terminate such employment, (ii) accept
employment with anyone other than the Company or any Affiliate or (iii)
interfere with the business of the Company or any Affiliate in any material
manner.

(d) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.

- 6 -

<PAGE>

10. INVENTIONS.

(a) The Executive shall, during the Term of Employment, disclose to
the Company, immediately after the same is made, discovered or devised, any
improvement, process, development, discovery or invention (including works of
authorship, trade secrets, technology, computer programs, formulas,
compositions, ideas, designs, techniques and data, whether or not patentable or
otherwise capable of being protected and whether or not related to technical or
commercial matters) which he may make, discover or devise (alone or in
conjunction with others) either:

(i) in the course of his normal duties (or of duties
specifically assigned to him);

(ii) as a result of knowledge gained during his employment; or

(iii) as a result of the use by the Executive of materials,
equipment or facilities of the Company.

Subject to SUBSECTIONS (b) AND (c) below, all such items shall become the
absolute property of the Company without further payment and the Executive shall
satisfy his obligation in this regard by presenting the same to the Company.
The Executive hereby assigns any and all rights in such items to the Company.
The Executive shall not at any time during the Term of Employment (except in the
performance of his duties) or thereafter, disclose any such improvement,
process, development, discovery or invention to any third party and, further,
shall, if and whenever required so to do by the Company (at the Company's
expense), do all acts and things as the Company may reasonably require for
obtaining any patent or other protection in respect thereof and vesting the same
and all rights therein in the Company or as the Company may direct; provided
that the above restriction shall not apply to any such improvement, process,
development, discovery or invention which is or becomes generally available to
the public other than as a result of disclosure by the Executive or by any
person to whom he has made such disclosure.

(b) In respect of any particular improvement, process, development,
discovery or invention which is not covered by SUBSECTION (a) above, the
Executive shall (before exploiting or disclosing the same or otherwise
committing himself to a third party) discuss any such item with the Company to
ascertain whether or not it would be in the best interest of the Company for the
Company to take an assignment or license thereof.

(c) The Executive agrees that all inventions which the Executive
makes, conceives, reduces to practice or develops (in whole or in part, either
alone or jointly with others) during his employment shall be the sole property
of the Company to the maximum extent permitted by Section 2870 of the California
Labor Code, a copy of which is attached hereto as Exhibit A, and hereby assigns
such inventions, and all rights therein, to the Company. No assignment in this
Agreement shall extend to inventions, the assignment of which is prohibited by
Labor Code section 2870. The Company shall be the sole owner of all rights in
connection therewith.

- 7 -

<PAGE>

respect of any improvement, process, development, discovery, or invention, and
his obligation to disclose to the Company, immediately after the same is made,
discovered or devised, any improvement, discovery or invention as provided in
SUBSECTION (a) above.

11. COVENANTS TO PROTECT CONFIDENTIAL INFORMATION.

(a) The Executive shall not, during the Term of Employment or
thereafter, without the prior written consent of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership or
corporation, except while employed by the Company in the business of and for the
benefit of the Company or when required to do so by a lawful order of a court of
competent jurisdiction, any Confidential Information.

(b) Except as may be otherwise consented to in writing by the
Company, the Executive shall proffer to an appropriate officer of the Company,
at the termination of his employment, without retaining any copies, notes or
excerpts thereof, all memoranda, diaries, notes, records, cost information,
customer lists, marketing plans and strategies, and any other documents
containing any Confidential Information made or compiled by, or delivered or
made available to, or otherwise obtained by the Executive in his possession or
subject to his control at such time except that the Executive may proffer a
legible copy, and retain the original, of any personal diary or personal notes.

12. REMEDY FOR VIOLATION OF NONCOMPETITION, CONFIDENTIAL INFORMATION OR
INVENTIONS PROVISIONS.

(a) The Executive acknowledges that the Company has no adequate
remedy at law and would be irreparably harmed if the Executive breaches or
threatens to breach the provisions of SECTION 9, 10 OR 11 above, and, therefore,
agrees that the Company shall be entitled to injunctive relief to prevent any
breach or threatened breach of any of those sections, and to specific
performance of the terms of each of such sections in addition to any other legal
or equitable remedy it may have. The Executive further agrees that he shall
not, in any equity proceeding involving him relating to the enforcement of
SECTION 9, 10 OR 11 above, raise the defense that the Company has an adequate
remedy at law. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies at law or in equity that it may have or
any other rights that it may have under any other agreement.

(b) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.

Notwithstanding anything herein to the contrary, in no event shall the
Company be obligated to provide payments or benefits pursuant to this Section
if, and to the extent, such payments or benefits would be nondeductible for
Federal income tax purposes as a result of the application of Section 280G of
the Internal Revenue Code of 1986. Any determination to be made with respect to
this clause shall be made by the Company's regular independent certified
accountants.

- 8 -

<PAGE>

13. BINDING ARBITRATION.

Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.

14. WITHHOLDING.

Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Executive shall be
subject to withholding of such amounts relating to taxes as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation. In lieu of withholding such amounts, in whole or in part, the
Company may, in its sole discretion, accept other provision for payment of taxes
as required by law, provided it is satisfied that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.

15. ASSIGNABILITY; BINDING NATURE.

This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs and assigns. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits hereunder,
which may be transferred only by will or operation of law and subject to the
limitations of this Agreement.

16. REPRESENTATION.

The Executive represents and warrants that the performance of the
Executive's duties under this Agreement will not violate any agreement between
the Executive and any other person, firm, partnership, corporation or
organization.

17. MUTUAL INTENT.

The language used in this Agreement is the language chosen by the
Parties to express their mutual intent. The Parties agree that in the event
that any language, section, clause, phrase or word used in this Agreement is
determined to be ambiguous, no presumption shall arise against or in favor of
either Party and that no rule of strict construction shall be applied against
either Party with respect to such ambiguity.

18. ENTIRE AGREEMENT.

This Agreement contains the entire agreement between the Parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto.

- 9 -

<PAGE>

19. AMENDMENT OR WAIVER.

No provision in this Agreement may be amended or waived unless such
amendment or waiver is agreed to in writing, signed by a duly authorized officer
of the Company. No waiver by the Company of any breach by the other Party of
any condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time.

20. SEVERABILITY.

In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.

21. SURVIVORSHIP.

The respective rights and obligations of the Parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section are in addition to the survivorship provisions of any other section of
this Agreement.

22. GOVERNING LAW/JURISDICTION.

This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the state of California without reference to
principles of conflict of laws. The Parties agree to submit exclusively to the
jurisdiction of the courts of the State of California with respect to any
controversy, dispute or claim arising out of this Agreement.

23. NOTICES.

Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered (whether by telecopy or otherwise) or
two days after being sent by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may subsequently give
notice of:

If to the Company:

Genesis Media Group, Inc.
13063 Ventura Boulevard
Studio City, California 91604-2238
Attn: Ramy El-Batrawi

- 10 -

<PAGE>

With a copy to:

Nida & Maloney
800 Anacapa Street
Santa Barbara, California 93110
Attn: Theodore R. Maloney, Esq.

If to the Executive:

Ramy El-Batrawi
13063 Ventura Boulevard
Studio City, California 91604-2238

24. HEADINGS.

The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

25. COUNTERPARTS.

This Agreement may be executed in two or more counterparts.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

GENESIS MEDIA GROUP, INC.

By: /s/ Douglas E. Jacobson
---------------------------------
Douglas E. Jacobson
Director

/s/ Ramy El-Batrawi
---------------------------------
Ramy El-Batrawi

- 11 -

<PAGE>

EXHIBIT A
- ---------

Section 2870. Application of provision providing that employee shall assign
or offer to assign rights in invention to employer.

(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities or trade secret information except for those
inventions that either:

(1) relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or

(2) result from any work performed by the employee for his employer.

(b) To the extent that a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.

- 12 -

<PAGE>

EMPLOYMENT AGREEMENT

This AGREEMENT is made and entered into as of this 27th day of
October, 1998, between GENESIS MEDIA GROUP, INC., a Delaware corporation (the
"COMPANY"), and Sam I. Hassabo (the "EXECUTIVE").

1. DEFINITIONS.

(b) "BOARD" shall mean the Board of Directors of the Company.

(c) "CONFIDENTIAL INFORMATION" shall mean all nonpublic information
respecting the Company's business including, but not limited to, its products,
research and development, processes, customer lists, marketing plans and
strategies. Confidential information does not include information that is, or
becomes, available to the public unless such availability occurs through an
unauthorized act on the part of the Executive.

(d) "DISABILITY" shall mean the Executive's inability to render, for
180 days during any 365 day period, full and effective services hereunder by
reason of permanent physical or mental disability, whether resulting from
illness, accident or otherwise.

(e) "SALARY" shall mean the salary provided for in Section 3 of this
Agreement or any adjusted salary granted to the Executive by the Board.

(f) "TERM OF EMPLOYMENT" shall mean the period of the Executive's
employment by the Company.

2. TERM OF AGREEMENT, POSITION AND DUTIES.

- 1 -
<PAGE>

(b) The term of this Agreement shall commence as of October 27, 1998
and shall terminate upon the first to occur if (i) the termination of this
Agreement as provided herein or (ii) October 26, 2001. In the event that the
Executive's Term of Employment continues beyond the Term of this Agreement, such
continued employment shall be at will and no provision or condition of this
Agreement shall govern such extended period of employment except as specifically
noted herein.

(c) During the Term of this Agreement, the Executive shall be
employed as President and Chief Executive Officer of the Company's wholly owned
subsidiary, Genesis Intermedia, Inc. and as a director of the Company. During
the time as he serves in this position, the Executive shall serve under the
direction of and and report directly to the Board. During the Term of
Employment, the Executive agrees to devote his full time and attention to
carrying out his duties and responsibilities hereunder and shall use his best
efforts, skills and abilities to further the interests of the Company. During
the Term of Employment, the Executive may not serve on the board of directors of
any other business entities without the express written permission of the Board
and subject to such limitations as may be imposed by the Board in granting such
permission.

3. SALARY.

During the Term of this Agreement, the Executive shall be paid a
salary by the Company at an annual rate of One Hundred Fifteen Thousand Dollars
($115,000) payable in accordance with the Company's standard payroll practices.
Such salary shall be reviewed at least annually for adjustment. Any adjustment
shall be determined by the Board, in its sole discretion.

4. ANNUAL BONUS.

During the Term of Employment, the Board may grant the Executive an
annual bonus. The amount of such annual bonus, if any, shall be determined by
the Board, in its sole discretion.

5. EMPLOYEE BENEFIT PROGRAMS.

During the Term of this Agreement, the Executive shall be eligible to
participate in employee benefit plans and programs available, from time to time,
to all senior executives of the Company. Specifically, the Executive shall be
entitled to the current annual vacation entitlement as set by the Board, but not
less than ten (10) business days of vacation. The Executive shall be entitled
to a pro rata share of an annual accrual for fractional years of employment with
the Executive. In October, 1998 the Executive received options, which shall
vest on September 30, 2000, to acquire 200,000 shares of the common stock of the
Company pursuant to the Company's 1998 Stock Incentive Program.

6. PERQUISITES.

During the Term of this Agreement, the Executive shall be entitled to
such perquisites as are provided, from time to time, to all senior executives of
the Company.

- 2 -
<PAGE>

7. TERMINATION OF EMPLOYMENT.

(i) Salary at the rate in effect at the time of the Executive's
death, through the end of the month in which his death occurs; and

(i) Salary at the rate in effect at the time the Executive's
Disability is deemed to have commenced, through the date on which he is
terminated due to Disability; and

(c) AT WILL EMPLOYMENT. The Executive's employment shall be "at
will" and the Company may terminate this Agreement at any time for any reason
whatsoever or for no reason.

8. INDEMNIFICATION.

(a) The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding by reason of the
fact that he is or was a director or officer of the Company (a "PROCEEDING"), he
shall be indemnified by the Company to the fullest extent authorized by
applicable law, consistent with the Company's certificate of incorporation (or
charter) and by-laws, against expenses, liabilities and losses reasonably
incurred or suffered by the Executive in connection therewith; PROVIDED,
HOWEVER:

(i) written notice of such Proceeding is given promptly to
the Company by the Executive;

(ii) the Company is permitted to participate in and assume
the defense of such Proceeding; and

(iii) such liability results from the final judgment of a
court of competent

- 3 -
<PAGE>

jurisdiction or, as a result of a settlement entered into with the prior
written consent of the Company or is required (x) by such court as a bond,
payment into escrow or similar payment, or (y) otherwise to forestall
imminent attachment or similar process against any of the Executive's
assets, and,

(b) Notwithstanding anything to the contrary in SUBSECTION (a) above,
the Company shall be under no obligation to indemnify the Executive with respect
to any act or acts of the Executive:

(i) in a knowing violation of any written agreement between
the Executive and the Company;

(ii) for which a court, having jurisdiction in the matter,
determines that indemnification is not lawful; or

(iii) which a court, having jurisdiction in the matter,
determines to have been knowingly and fraudulently committed by the
Executive or which is the result of willful misconduct by the Executive.

9. COVENANT NOT TO COMPETE OR ENGAGE IN CERTAIN OTHER ACTS.

(a) During the Term of Employment, and for a period equal to 24
months following the end of the Term of Employment, the Executive shall not,
except while employed by the Company, in the business of and for the benefit of
the Company, directly or indirectly, engage in any business whether as an
employee, consultant, partner, principal, agent, representative or stockholder
or in any other corporate or representative capacity, if it involves:

(i) manufacturing, purchasing, marketing or selling any item
or service that is manufactured, purchased, marketed or sold by the Company
or any of its Affiliates in the State of California;

(iii) engaging, in, or rendering services or advice pertaining
to any other line of business that the Company, or any Affiliate, was
actively conducting or actively considering during the Term of Employment
with the Company, in competition with the Company, or any Affiliate, in the
State of California in the same aspect of such line of business as the
Company or any such Affiliate.

- 4 -
<PAGE>

(b) The Executive agrees that for the Term of Employment and for the
period described in SUBSECTION (a) above, except when acting on behalf of the
Company or an Affiliate, he shall not:

(i) assist any other entity to enter into any line of
business that the Company, or any Affiliate, was actively conducting or was
actively considering during the Term of Employment in the State of
California;

(d) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.

10. INVENTIONS.

(a) The Executive shall, during the Term of Employment, disclose to
the Company, immediately after the same is made, discovered or devised, any
improvement, process, development,

- 5 -
<PAGE>

discovery or invention (including works of authorship, trade secrets,
technology, computer programs, formulas, compositions, ideas, designs,
techniques and data, whether or not patentable or otherwise capable of being
protected and whether or not related to technical or commercial matters) which
he may make, discover or devise (alone or in conjunction with others) either:

(i) in the course of his normal duties (or of duties
specifically assigned to him);

(ii) as a result of knowledge gained during his employment; or

(iii) as a result of the use by the Executive of materials,
equipment or facilities of the Company.

(d) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement, including, without limitation, his
obligation to do all acts and other things that the Company may reasonably
require for obtaining any patent or other protection in respect of any
improvement, process, development, discovery, or invention, and his obligation
to disclose to the Company, immediately after the same is made, discovered or
devised, any improvement, discovery or invention as provided in SUBSECTION (a)
above.

- 6 -
<PAGE>

11. COVENANTS TO PROTECT CONFIDENTIAL INFORMATION.

12. REMEDY FOR VIOLATION OF NONCOMPETITION, CONFIDENTIAL INFORMATION OR
INVENTIONS PROVISIONS.

(b) The Executive agrees that the provisions of this Section shall
survive the termination of this Agreement.

13. BINDING ARBITRATION.

- 7 -
<PAGE>

14. WITHHOLDING.

15. ASSIGNABILITY; BINDING NATURE.

16. REPRESENTATION.

17. MUTUAL INTENT.

18. ENTIRE AGREEMENT.

19. AMENDMENT OR WAIVER.

No provision in this Agreement may be amended or waived unless such
amendment

- 8 -
<PAGE>

or waiver is agreed to in writing, signed by a duly authorized officer of the
Company. No waiver by the Company of any breach by the other Party of any
condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of a similar or dissimilar condition or provision at
the same or any prior or subsequent time.

20. SEVERABILITY.

21. SURVIVORSHIP.

22. GOVERNING LAW/JURISDICTION.

23. NOTICES.

If to the Company:

Genesis Media Group, Inc.
13063 Ventura Boulevard
Studio City, California 91604-2238
Attn: Ramy El-Batrawi

- 9 -
<PAGE>

With a copy to:

Nida & Maloney
800 Anacapa Street
Santa Barbara, California 93110
Attn: Theodore R. Maloney, Esq.

If to the Executive:

Sam I. Hassabo
Genesis Intermedia, Inc.
3151 Airway Avenue, Building T-3
Costa Mesa, California 92626

24. HEADINGS.

The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

25. COUNTERPARTS.

This Agreement may be executed in two or more counterparts.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

GENESIS MEDIA GROUP, INC.

By: /s/ Ramy El-Batrawi
----------------------------------
Ramy El-Batrawi
Chief Executive Officer

/s/ Sam I. Hassabo
----------------------------------
Sam I. Hassabo

- 10 -
<PAGE>

EXHIBIT A

Section 2870. Application of provision providing that employee shall assign
or offer to assign rights in invention to employer.

(1) relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or

(2) result from any work performed by the employee for his employer.

- 11 -

<PAGE>

EXHIBIT 10.15

ADDENDUM TO THAT LEASE
DATED JULY 24, 1998

THIS ADDENDUM TO THAT LEASE between SOUTHERN CALIFORNIA SUNBELT
DEVELOPERS, INC. ("Landlord") and GENESIS INTERMEDIA, INC., A FLORIDA
CORPORATION; AND GENESIS MEDIA, GROUP, A FLORIDA CORPORATION ("Tenant") for
property located at 3151 Airway Avenue, Costa Mesa, California 92626, is
dated as below written.

WHEREAS, Tenant is presently the occupant of approximately 2,503
rentable square feet ("RSF") of ground floor office space located in Building
"T" at THE JOHN WAYNE EXECUTIVE GUILD CENTER ("the GUILD"), 3151 Airway
Avenue, Costa Mesa, California 92626 (the "Premises"), currently designated
as Suite T-3; and

WHEREAS, Tenant desires to expand the occupied Premises to include an
additional 1,690 RSF of an adjacent suite, which is presently designated as
Suite T-2.

IT IS THEREFORE AGREED AND UNDERSTOOD THAT:

PREMISES: Effective November 16, 1998, the Premises shall consist of ground
floor office space located within THE JOHN WAYNE EXECUTIVE GUILD,
Building T and further designated [for reference purposes] as
"Suite T-3" (2,503 RSF) and "Suite T-2" (1,690 RSF) totaling
approximately 4,193 RSF. The suite number designation (i.e.,
Suite T-2 and/or T-3) for receipt of mail, shall be subject to
Tenant's sole election.

TERM: The term of the lease, as further embraced by this Addendum,
commenced on August 1, 1998, and terminates on July 31, 2000.
Tenant's move-in date and the commencement of rent, with respect
to Suite T-2, shall be November 16, 1998.

EARLY
ACCESS TO
PREMISES: Landlord hereby grants Lessee the option to enter and occupy the
Suite T-2 prior to the Lease commencement date for purposes of
installing equipment, furniture, fixtures and all related cabling,
so long as Tenant does not interfere with Landlord's agents'
performance of any Tenant Improvement work. Lessee shall be
granted said early occupancy, prior to the actual agreed upon
commencement date of the lease rent free.

EXTENSION: The Lease will automatically renew for an additional two-year
period, commencing on August 1, 2000, and terminating on July 31,
2002, unless written notice to the contrary is received, from
Tenant to Landlord, not less than ninety (90) days prior to the
termination date of July 31, 2000.

<PAGE>

BASE
YEAR RENT: Effective Base Rental Rate for the remaining prorated portion of
the first year and each year thereafter is hereby adjusted as
follows:

Year 1 $8,176.35 per month ($1.95 per sq. ft.)
Year 2 $8,386.00 per month ($2.00 per sq. ft.)

SUBJECT TO OPTION:

Year 3 $8,805.30 per month ($2.10 per sq. ft.)
Year 4 $9,224.60 per month ($2.20 per sq. ft.)

ADDITIONAL
SECURITY
DEPOSIT: While acknowledging prior receipt of a security deposit in the
amount of $6,000.00 (as regards Suite T-3), Landlord requires an
additional $3,500.00 (as regards Suite T-2), for a combined total
security deposit, for Suites T-2 and T-3, of $9,500.00.

TENANT
IMPROVEMENTS: The following "Tenant Improvements" will be provided by Landlord
at Landlord's sole cost and expense.

- Open the common wall between Suites T-2 and T-3 (where a
doorway formerly existed) to provide access between Suites
T-2 and T-3.;

- Stain the wood surfaces in Suite T-2 to match the wood
surfaces in Suite T-3;

- Furnish and install new blinds in Suite T-2;

- Furnish and install new carpeting in Suite T-2;

- Paint throughout Suite T-2.

Tenant is apprized that care and maintenance of the Project's
parking lot is within the purview of the Owner's Association.
However, to the limit of Landlord's authority and ability, at
Tenant's request, Landlord will do its utmost to effect repair,
repaving and restriping of said parking facility at the earliest
possible date.

Any ADDITIONAL improvements, not currently anticipated or listed
above, requested by Tenant, either prior to or subsequent to
Tenant's occupancy, shall be at the Tenant's sole cost and
expense. Additionally, any further Tenant improvements, even if
provided by and/or paid by Tenant, must receive prior approval
by Landlord, which will not be unreasonably withheld.

<PAGE>

COUNTERPARTS: For the Convenience of the parties, this Addendum to Lease may
be executed in counterparts.

TIME IS OF
THE ESSENCE: Time is of the essence in this Agreement.

EXCEPT AS MODIFIED HEREIN, ALL OTHER TERMS AND CONDITIONS OF THE LEASE
BETWEEN THE PARTIES ABOVE DESCRIBED, SHALL REMAIN UNCHANGED AND IN FULL FORCE
AND EFFECT.

DATED: OCTOBER 30, 1998 at ORANGE COUNTY, California.

Landlord:

SOUTHERH CALIFORNIA SUNBELT DEVELOPERS, INC.
A CALIFORNIA CORPORATION

By: /s/ Dan W. Baer
---------------------------
DAN W. BAER, President

Tenant:

GENESIS INTERMEDIA, INC.,
A FLORIDA CORPORATION

By: /s/ Sam Hassabo Date: 11/3/98
----------------------------
SAM HASSABO, President

GENESIS MEDIA GROUP, INC.
A FLORIDA CORPORATION

By: /s/ Douglas E. Jacobson Date: 11/3/98
-----------------------------
DOUGLAS E. JACOBSON, CFO

<PAGE>

EXHIBIT 10.16

LICENSE AGREEMENT

THIS LICENSE AGREEMENT entered into this 29th day of September, 1993 by
and between JOHN GRAY, Ph.D., an individual whose address is 13 Lyon Place,
Mill Valley, CA 94941 ("Licensor") and RAMY EL-BATRAWI, whose address is P.O.
Box 114625, Miami, FL 33111, and his successors and assigns ("Licensee").

W I T N E S S E T H:

WHEREAS, Licensor has authored numerous books and articles and has
produced a series of video cassette and audio tapes (the "Tapes"), and also
regularly conducts seminars on topics generally having to do with
interpersonal relationships; and

WHEREAS, the only method Licensor is currently utilizing to market and
sell the Tapes is to sell to individuals in attendance at his seminars; and

WHEREAS, Licensor has determined that it is desirable to market the
Tapes on a national basis; and

WHEREAS, Licensee has the knowledge and expertise in the direct response
business to arrange for the marketing, sale and distribution of the Tapes on
a national scale through the use of infomercials, television and radio
commercial and print advertisements; and

WHEREAS, Licensor and Licensee wish to enter into an agreement whereby
Licensor will provide certain information, documentation and assistance
concerning the direct marketing of the Tapes, and whereby Licensee would be
entitled to market, distribute and sell the Tapes for a royalty to be paid to
Licensor.

NOW, THEREFORE, in consideration of the mutual covenants of the parties
hereto, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties mutually agree as
follows:

1. LICENSE. Licensor grants to Licensee a continuing license to sell
the Tapes, with the right to grant sublicenses to Licensee's distributors,
and to use the name "John Gray, Ph.D., Dr. John Gray and Dr. Gray," together
with the signature, voice and likeness of Licensor, and all trademarks and
trade names acquired for use with the Tapes, in connection with the
advertising, merchandising, promotion, sale and distribution of the Tapes
until the termination of this Agreement in accordance with the terms hereof.
The license granted hereunder shall be an exclusive license for Licensee to
advertise, market and sell the Tapes at retail or wholesale through any
medium, including but not limited to radio, television, direct mail and
print. Licensor retains the right to sell the Tapes to attendees at his
seminars and to continue to advertise, market or sale the Tapes through the
print mediums he is utilizing on the date of this Agreement. Licensor agrees
that he will not permit any other individual or entity to sell the Tapes
through any medium whatsoever during the term hereof. For purposes of this
Agreement, the term "Tapes"

<PAGE>

shall include all existing and any future video and audio products developed,
produced or made available by Licensor, except books authored by Licensor.

2. INFORMATION AND DOCUMENTATION TO BE PROVIDED BY LICENSOR. Licensor
shall provide to Licensee, as soon as is practical after the execution of
this Agreement, information and documentation concerning sales volume of
Tapes and other works by Licensor. In addition, Licensor shall provide to
Licensee copies of any printed promotional material currently available
concerning Dr. Gray and his works, whether printed or on video or audio tape.

3. PRODUCTION OF PROMOTIONAL CAMPAIGN. The parties contemplate that
after review of the documentation to be provided by Licensor above, Licensee
will produce certain advertising and promotional material to sell the Tapes
by direct response. The parties contemplate that the marketing campaign
implemented by the Licensee may include, but not be limited to, the
production and use of a 30 minute infomercial, various length television
commercials and other promotional materials. Licensee shall bear all costs
associated with the production of any advertising and shall be solely
responsible for the content and purchase of air time for the advertisements.
Licensee agrees that he will spend not less than $500,000 towards the
marketing of the Tapes. Licensor retains the right to approve any
infomercials or commercials produced by Licensee, but Licensor's approval
will not be unreasonably withheld. Licensor agrees to provide consulting
services and make reasonable personal appearances as requested by Licensee in
connection with the production of any infomercial, commercial or revisions
thereto, at no charge to Licensee. Licensor shall have the right to have a
trailer of not more than one minute in length advertising Licensor's seminars
attached to the end of any 30 minute infomercial produced by Licensee. Any
costs or expenses associated with the production of any trailer shall be at
the sole expense of Licensor.

4. COMPENSATION TO LICENSOR. As compensation for the performance of
Licensor's obligations hereunder, Licensee agrees to pay Licensor a royalty
of the greater of (a) 15% of gross sales of the Tapes after Licensee has
recouped all expenses incurred in connection with the marketing and sale of
the Tapes (expenses shall not exceed $750,000), or (b) 50% of net income from
sales of the Tapes. For purposes of this Agreement, the term "Net Income"
shall be defined as gross income from Tape sales by Licensee, less all
returns and allowances, and less all expenses reasonably related to the
marketing, sale and distribution of the Tapes. Provided, however, payments
of compensation to Licensee shall not be deemed an "expense" in the
calculation of "net income."

5. PAYMENT OF COMPENSATION TO LICENSOR. Payment of the amounts due
pursuant to paragraph 4 above, shall be made to Licensor on the 15th day of
the month following each calendar quarter. Each payment shall be calculated
on sales represented by receipts of the previous calendar quarter. That is,
payments due Licensor hereunder for any video or audio cassettes sold,
whether at retail or wholesale, shall be made on the 15th day of the month
following the calendar quarter during which Licensee receives payment for the
sale. Licensee shall receive a credit against amounts due Licensor

<PAGE>

hereunder for any Tapes refunds made to customers during the previous
calendar quarter. Licensee shall provide quarterly reports showing all sales
of Tapes together with supporting documentation including reports from any
"800 service" utilized by Licensee and reports from any credit card agencies.
If payment is not made within fifteen (15) days of due date then Licensor
has option to add the royalty to the Tapes at time of purchase by the
Licensee.

6. NON-CIRCUMVENTION. Licensor hereby represents and warrants that he
has not, and will not during the term of this Agreement, divulge any
information concerning this Agreement to any third person or entity, and
agrees not to participate in any manner whatsoever in the production,
marketing or selling of audio or video cassettes tapes in a manner not
provided for herein. Licensor also agrees not to produce, market, sell or
assist any other party in the production, marketing or sale of any video or
audio cassettes tapes during the term hereof except as permitted herein.

7. OWNERSHIP OF MAILING LIST. Any mailing list compiled by or for
either party hereto as a direct or indirect consequence of this Agreement
shall be the joint property of the parties hereto and both parties shall
share equally in any profits from the sale or lease of such list. This
provision shall survive any termination of this Agreement.

8. ASSIGNMENT. Licensee may assign it rights and duties hereunder.
In the event of an assignment, any reference herein to Licensee shall apply
to the assignee.

9. WAIVER. A waiver by any party hereto or the breach of any
provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach. No waiver shall be valid
unless in writing and signed.

10. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof
and supersedes all prior agreements, or understandings, if any, relating to
the subject matter hereof. This Agreement may not be changed orally, but
only by agreement in writing signed by the party against whom enforcement of
any waiver, change, modification, extension or discharge is sought.

11. INDEPENDENT PROVISIONS. If any term or provision of this Agreement
becomes illegal or unenforceable, the remaining terms and provisions shall
nevertheless be valid, binding and subsisting.

12. ENFORCEMENT; ATTORNEYS' FEES. Should either party to this
Agreement retain an attorney to enforce any of the provisions, terms or
covenants of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and all costs incurred in any legal
proceeding. Licensor's sole remedy for breach of this Agreement by Licensee
is termination hereof.

13. GOVERNING LAW; ARBITRATION. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of California. Any
controversy or

<PAGE>

claim arising our of, or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in California or Florida as selected by the
party bringing the action, all in accordance with the applicable rules of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof.

14. TERM. This Agreement shall continue for in full force and effect
for a period of two (2) years from the date of its execution, unless earlier
terminated upon the mutual agreement of the parties hereto. This Agreement
shall, without the further action of either party, automatically renew for
(a) an additional two (2) year period if Licensee has sold 75,000 or more
tapes during the initial two year period of this Agreement or (b) an
additional four (4) year period if Licensee has sold 200,000 or more tapes
during one initial two year period unless Licensee has defaulted under the
terms of this Agreement which default has not been cured in accordance with
the provisions hereof at the expiration of the original term.

15. BREACH. In the event of a breach of this Agreement by either
party, the non-defaulting party shall give written notice of such breach to
the defaulting party. The breaching party shall have thirty (30) days to
cure such breach. If such breach has not been cured within such thirty (30)
day, the non-defaulting party may, in addition to any other remedies
available, terminate this Agreement.

16. PURCHASE OF TAPES BY LICENSEE. Licensor agrees to provide Licensee
all of the Tapes necessary to fill orders obtained through Licensee's
marketing efforts at Licensor's cost. In the alternative, Licensor agrees to
make arrangements for Licensee to purchase the Tapes at that same cost
directly from Licensor's supplier.

17. ORDERS AND FULFILLMENT. Licensee shall be solely responsible for
processing all orders received as a result of his advertising and for
fulfillment of all orders received.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

/s/ Bonnie Gray /s/ John Gray 4:20PM
- --------------------------- ------------------------------
JOHN GRAY, Ph.D.

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

/s/ Bonnie Gray /s/ Ramy El-Batrawi
- --------------------------- ------------------------------
RAMY EL-BATRAWI

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

<PAGE>

EXHIBIT 10.17

AMENDMENT TO AGREEMENT

This is an amendment to the License Agreement (the "Agreement") entered
into on September 29, 1993 by and between JOHN GRAY, Ph.D ("Licensor") and
RAMY El-BATRAWI, his successors and assigns ("Licensee").

1. Paragraph 4 of the Agreement is deleted and the following is
substituted in its place:

4. COMPENSATION TO LICENSOR. As compensation for the performance
of Licensor's obligations hereunder, Licensee agrees to pay Licensor a
royalty of 50% of net income from sales of the Tapes. For purposes of
this Agreement, the term "Net Income" shall be defined as gross income
from Tape sales by Licensee, less all returns and allowances, and less all
expenses reasonably related to the marketing, sale and distribution of the
Tapes (including but not limited to advertising, media costs, product
costs, shipping and processing fees, media buying fees, telemarketing fees,
merchant account costs and fees, assembly and fulfillment, database
processing, customer service, insurance and infomercial production costs
and tests and amounts paid to third party distributors, whether such
amounts are paid directly to a third party or are paid to a third party
through the medium of a joint venture or partnership). Provided, however,
payments of compensation to Licensee shall not be deemed an "expense" in
the calculation of "net income"; but general and administrative expenses
(including but not limited to legal and accounting fees, telephone and
travel) shall be deemed an "expense" provided that such general and
administrative expenses for each period do not exceed two percent (2%) of
gross sales for such period. For purposes of this determination, "Net
Income" shall be computed on the cash basis of accounting.

2. Notwithstanding the provisions of Paragraph 5 of the Agreement,
Licensor agrees that he will defer his right to receive payments of royalties
to the extent reasonably required to allow Licensee to finance increases in
receivables, television time acquisition, inventory and any required merchant
credit care reserves.

3. Licensor represents and warrants that the material contained on the
Tapes is wholly original with Licensor, and does not infringe on copyrighted
materials of any other person. Licensor warrants that he is the sole owner
of the copyright to the Tapes and all material contained on the Tapes.
Licensor warrants that the Tapes and the material contained in the Tapes are
subject to no prior assignments, sales or encumbrances that would prevent
Licensee from freely performing under the Agreement. Licensor warrants that
the Tapes do not and will not defame any person or violate any right of
privacy of any other person. Licensor warrants that all persons appearing on
the Tapes have executed full releases authorizing their appearance on the
Tapes without further compensation (except for Licensor's compensation under
this Agreement).

<PAGE>

4. Licensor and Licensee agree that the Agreement does not create a
partnership between the parties.

(Initialed by /s/ John Gray; /s/ Ramy El-Batrawi)

Dated: 11/20/93

/s/ John Gray /s/ Ramy El-Batrawi
- ----------------------------- -------------------------------
JOHN GRAY, Ph.D. ("Licensor") RAMY El-BATRAWI ("Licensee")

<PAGE>

EMPLOYMENT AGREEMENT EXHIBIT 10.18

This AGREEMENT is made and entered into as of this 26 day of October,
1998, between Genesis Media Group, Inc. (the "COMPANY") and Michael F. Costa
(the "EXECUTIVE").

WHEREAS, the Company desires to employ the Executive and to enter
into an agreement embodying the terms of such employment (the "AGREEMENT") and
the Executive desires to accept such employment and to enter into the Agreement.

NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
Company and the Executive (individually a "PARTY" and together the "PARTIES")
agree as follows:

1. DEFINITIONS.

(a) "AFFILIATE" shall mean any corporation, partnership or
other entity in which the Company owns, directly or indirectly, an equity
interest of 50% or more or which owns, directly or indirectly, an equity
interest of 50% in the Company.

(b) "BOARD" shall mean the Board of Directors of the Company.

(c) "CAUSE" shall mean acts of moral turpitude; personal
dishonesty; incompetence; negligence; willful misconduct; insubordination;
conflict of interest or breach of fiduciary duty involving intent for or
obtainment of material personal profit; any disclosure of confidential
information; unjustifiable neglect of duties; willful violation of any law, rule
or regulation (other than traffic offenses and the like); drug, alcohol or other
substance abuse; any act or omission which has a material adverse effect on the
Company's reputation or business; a material breach of any provision of this
Agreement; or the Executive's failure to meet the performance goals set forth in
SECTION 6 on or before the dates specified therefor.

(d) "CONFIDENTIAL INFORMATION" shall mean all nonpublic
information respecting the Company's business, including, but not limited to,
its products, research and development, processes, customer lists, marketing
plans and strategies, and trade secrets. Confidential information does not
include information that is, or becomes, available to the public unless such
availability occurs through an unauthorized act on the part of the Executive.

(e) "DISABILITY" shall mean the Executive's inability to
render, for 180 days during any 365 day period, full and effective services
hereunder by reason of permanent physical or mental disability, whether
resulting from illness, accident or otherwise.

(f) "SALARY" shall mean the salary provided for in SECTION 3
of this Agreement or any adjusted salary granted to the Executive by the Board.

(g) "SALARY CONTINUATION PERIOD" shall mean the period after
the termination of the Executive's employment pursuant to the terms of this
Agreement during which the Executive is entitled to continued payment of the
Salary.

(h) "TERM OF THIS AGREEMENT" shall mean that period of time
specified in SECTION 2(b).

<PAGE>

(i) "TERM OF EMPLOYMENT" shall mean the period of the
Executive's employment by the Company.

2. TERM OF AGREEMENT, POSITION AND DUTIES.

(a) The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company for the Term of this
Agreement in the position and with the duties and responsibilities set forth
below and upon such other terms and conditions as are hereinafter stated.

(b) The term of this Agreement shall commence as of November
1st, 1998 and shall terminate upon the first to occur if (i) the termination of
this Agreement as provided herein or (ii) October 31st, 2001. In the event that
the Executive's Term of Employment continues beyond the Term of this Agreement,
such continued employment shall be at will and no provision or condition of this
Agreement shall govern such extended period of employment except as specifically
noted herein.

(c) During the Term of this Agreement, the Executive shall be
employed as Vice President of Genesis Intermedia, Inc., a wholly-owned
subsidiary of the Company. During the time as he serves in this position, the
Executive shall serve under the direction of and report directly to the
President and Chief Executive Officer of Genesis Intermedia, Inc., a
wholly-owned subsidiary of the Company. During the Term of Employment, the
Executive agrees to devote his full time and attention to carrying out his
duties and responsibilities hereunder and shall use his best efforts, skills and
abilities to further the interests of the Company. During the Term of
Employment, the Executive may not serve on the board of directors of any other
business entities without the express written permission of the Board and
subject to such limitations as may be imposed by the Board in granting such
permission.

3. SALARY.

During the Term of this Agreement, the Executive shall be paid a
salary by the Company at an annual rate of Eighty-Four Thousand Dollars
($84,000) payable in accordance with the Company's standard payroll practices.
Such salary shall be reviewed at least annually for adjustment. Any adjustment
shall be determined by the Board, in its sole discretion, as long as it is not
reduced to below $84,000 per year.

4. ANNUAL BONUS.

During the Term of Employment, the Board may grant the Executive
an annual bonus. The amount of such annual bonus, if any, shall be determined
by the Board, in its sole discretion.

5. EMPLOYEE BENEFIT PROGRAMS.

During the Term of this Agreement, the Executive shall be
eligible to participate in employee benefit plans and programs available, from
time to time, to all senior executives of the Company. Specifically, the
Executive shall be entitled to the current annual vacation entitlement as set by
the Board, but not less than 10 business days of vacation for each employment
year with the Company. The Executive shall be entitled to a pro rata share of
an annual accrual for fractional years of employment with the Company.

6. OPTIONS. The Company desires to provide the Executive
with an incentive to contribute to the success of the Company. The Executive
will, therefore, receive options (the "OPTIONS")

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<PAGE>

to purchase up to an aggregate of 75,000 shares of the common stock of the
Company (the "COMMON STOCK") upon the achievement of the performance goals
described herein. The Options shall be granted and become exercisable in three
(3) separate installments, the Executive having the right hereunder to purchase
from the Company up to the following number of shares of Common Stock, subject
to the following conditions, in a cumulative fashion:

(a) up to twenty-five thousand (25,000) shares of Common Stock at a
price of Eleven Dollars ($11.00) per share, if the Executive successfully
installs a communications system kiosk and video network known as the
"CenterlinQ System" in five (5) additional shopping centers on or before July 1,
1999;

(b) an additional twenty-five thousand (25,000) shares of Common
Stock at a price of Thirteen Dollars ($13.00) per share, if the Executive
successfully installs the CenterlinQ System in an additional ten (10) shopping
centers on or before July 1, 2000; and

(c) an additional twenty-five thousand (25,000) shares of Common
Stock at a price of Fifteen Dollars ($15.00) per share, if the Executive
successfully installs the CenterlinQ System in an additional twenty (20)
shopping centers on or before January 1, 2002.

The Options shall be granted and be immediately exercisable on the date
the respective performance goal is achieved, provided that such goal is achieved
on or before the date specified therefor. If on the date specified for the
achievement of a particular goal the goal has not been achieved in whole, but
has been in part, then the Executive shall be entitled to receive a percentage
of the total Options issuable on such date equal to the percentage that the
number of malls installed with respect to such incremental goal represents of
the total of the malls targeted for installation in such incremental goal.
Funding for the installation in the malls is to be available in each case in
accordance with the typical costs and timing for such efforts. Failure to
provide such funding in accordance with the agreed development plan therefor
will trigger an immediate vesting of all options that would otherwise vest in
connection with such installment. The parties hereto agree that to the extent
permissible the Options will be part of the Company's Incentive Stock Option
Plan, the parties understanding and agreeing that if on the date of grant of any
such Option the exercise price thereof is less than the then-current fair market
value of the Company's Common Stock, then such Option will be a non-qualified
option.

The Executive may exercise the Options with respect to all or any part
of the number of shares then exercisable by giving the Secretary of the Company
written notice of intent to exercise. The notice of exercise shall specify the
number of shares which shall be exercised and the date of exercise thereof.
Full payment by the Executive of the exercise price for the shares purchased
shall be made on or before the exercise date specified in the notice of
exercise.

The Options and all rights hereunder with respect thereto to the extent
such rights shall not have been exercised, shall terminate and become null and
void at 5:00 p.m. PT on January 30, 2003. In the event, however, that the
Executive's employment is terminated by the Company during the term of this
Agreement (i) due to Death, the Options, to the extent not previously exercised,
shall terminate and become null and void on the earlier of (x) one (1) year
following the date of the Executive's Death or (y) January 30, 2003; (ii) due to
Disability, the Options, to the extent not previously exercised, shall terminate
and become null and void one (1) year following the date on which the Executive
is terminated due to Disability; (iii) for Cause, the Options, to the extent not
previously exercised, shall terminate and become null and void immediately; (iv)
without Cause, the Options, to the extent not previously exercised, shall
terminate and become null and void on the thirtieth (30th) day folowing the date
of the

3
<PAGE>

Executive's termination without Cause. Additionally, in the event that the
Executive resigns for any reason, the Options, to the extent not previously
exercised, shall become null and void immediately.

7. LOAN. The Executive shall receive a loan from the Company in the
principal amount of Forty Thousand Dollars ($40,000) on January 1, 1999,
according to the terms of a promissory note attached hereto as Exhibit A.

8. TERMINATION OF EMPLOYMENT.

(a) TERMINATION DUE TO DEATH. In the event of the death of
the Executive during the Term of this Agreement, this Agreement shall
immediately terminate and the estate or other legal representative of the
Executive shall be entitled to:

(i) Salary at the rate in effect at the time of the
Executive's death, through the end of the month in which his death
occurs; and

(ii) any other rights and benefits available under
employee benefit programs of the Company in which the Executive was a
participant at the time of his death, determined in accordance with the
applicable terms and provisions of such programs.

(b) TERMINATION DUE TO DISABILITY. The Company may terminate
the Executive's employment due to the Disability of the Executive. In the event
of such a termination of the Executive's employment due to Disability during the
Term of this Agreement, this Agreement shall immediately terminate and the
Executive shall be entitled to:

(i) Salary at the rate in effect at the time the
Executive's Disability is deemed to have commenced, through the date
on which he is terminated due to Disability; and

(ii) any other rights and benefits available under
employee benefit programs of the Company in which the Executive was a
participant at the time of his Termination Due to Disability, determined
in accordance with the applicable terms and provisions of such programs.

(i) Salary at the rate in effect at the time of the
Termination for Cause, through the date on which such Termination for
Cause occurs; and

(ii) any other rights and benefits available under
employee benefit programs of the Company in which the Executive was a
participant at the time of the Termination for Cause, determined in
accordance with the applicable terms and provisions of such programs.

(d) TERMINATION WITHOUT CAUSE. In the event that the
Executive's Term of Employment continues beyond the Term of this Agreement, such
continued employment shall be at will and may be terminated without Cause, as
provided in this subsection. "TERMINATION WITHOUT CAUSE" shall mean a
termination of the Executive's employment by the Company during the Term of this
Agreement other than due to Death, due to Disability or for Cause.

4
<PAGE>

In the event there is a Termination Without Cause of the
Executive's employment, the Executive shall be entitled to:

(i) Salary at the rate in effect immediately prior to
the Termination Without Cause, for a period which shall end upon the end
of the sixth (6th) month following such termination of employment,
PROVIDED, HOWEVER, any Salary due the Executive under this subsection
shall be off-set by any compensation earned by the Executive in respect
of reemployment during the Salary Continuation Period;

(ii) Accelerated grant of unmatured installments of the
Options to which the Executive would be entitled under SECTION 6 of this
Agreement; and

(iii) any other rights and benefits available under
employee benefit programs of the Company in which the Executive was a
participant at the time of his Termination Without Cause, determined in
accordance with the applicable terms and provisions of such programs;

Any payments received by the Executive under this Agreement that
are attributable to the termination of the Executive's employment shall be in
full and complete satisfaction of any and all claims the Executive may have
against the Company which are, in any way, related to the employment
relationship between the Executive and the Company.

9. INDEMNIFICATION.

(a) The Company agrees that if the Executive is made a party
or is threatened to be made a party to any action, suit or proceeding by reason
of the fact that he is or was a director or officer of the Company (a
"PROCEEDING"), he shall be indemnified by the Company to the fullest extent
authorized by Delaware law, consistent with the Company's certificate of
incorporation (or charter) and by-laws, against expenses, liabilities and losses
reasonably incurred or suffered by the Executive in connection therewith;
PROVIDED, HOWEVER:

(i) written notice of such Proceeding is given
promptly to the Company by the Executive;

(ii) the Company is permitted to participate in and
assume the defense of such Proceeding; and

(iii) such liability results from the final judgment of
a court of competent jurisdiction or, as a result of a settlement
entered into with the prior written consent of the Company or is
required (x) by such court as a bond, payment into escrow or similar
payment, or (y) otherwise to forestall imminent attachment or similar
process against any of the Executive's assets, and,

5
<PAGE>

(b) Notwithstanding anything to the contrary in SUBSECTION
(a) above, the Company shall be under no obligation to indemnify the Executive
with respect to any act or acts of the Executive:

(i) in a knowing violation of any written agreement
between the Executive and the Company;

(ii) for which a court, having jurisdiction in the
matter, determines that indemnification is not lawful; or

(iii) which a court, having jurisdiction in the matter,
determines to have been knowingly and fraudulently committed by the
Executive or which is the result of willful misconduct by the Executive.

10. COVENANT NOT TO COMPETE OR ENGAGE IN CERTAIN OTHER ACTS.

(a) During the Term of Employment, and for a period equal to
the greater of (x) 24 months following the end of the Term of Employment or (y)
the Salary Continuation Period, the Executive shall not, except while employed
by the Company, in the business of and for the benefit of the Company, directly
or indirectly, engage in any business whether as an employee, consultant,
partner, principal, agent, representative or stockholder or in any other
corporate or representative capacity, if it involves:

(i) manufacturing, purchasing, marketing or selling any
item or service that is manufactured, purchased, marketed or sold by the
Company or any of its Affiliates in the State of California;

(ii) rendering services or advice pertaining to the
manufacturing, purchasing, marketing or selling of any item or service
manufactured, purchased, marketed or sold by the Company or any
Affiliate to, or on behalf of, any person, firm or corporation in the
State of California; or

(iii) engaging, in, or rendering services or advice
pertaining to any other line of business that the Company, or any
Affiliate, was actively conducting or actively considering during the
Term of Employment with the Company, in competition with the Company, or
any Affiliate, in the State of California in the same aspect of such
line of business as the Company or any such Affiliate.

(b) The Executive agrees that for the Term of Employment and for
the period described in SUBSECTION (a) above, except when acting on behalf of
the Company or an Affiliate, he shall not:

(i) assist any other entity to enter into any line of
business that the Company, or any Affiliate, was actively conducting or
was actively considering during the Term of Employment in the State of
California;

6
<PAGE>

(ii) take any action to divert any business from the
Company, or from any Affiliate, or any business which was under active
consideration by the Company, or by any Affiliate, during the Term of
Employment; or

(iii) induce customers, suppliers, agents, franchisees
or other persons under contract or franchise or otherwise doing business
with the Company, to terminate, reduce or alter business with or from
the Company or any Affiliate.

(c) The Executive agrees that for the Term of Employment and for
the period described in SUBSECTION (a) above, except when acting on behalf of
the Company or any Affiliate, he shall not induce any person in the employment
of the Company or any Affiliate to (i) terminate such employment, (ii) accept
employment with anyone other than the Company or any Affiliate or (iii)
interfere with the business of the Company or any Affiliate in any material
manner.

(d) The Executive agrees that the provisions of this Section
shall survive the termination of this Agreement.

11. INVENTIONS.

(a) The Executive shall, during the Term of Employment, disclose
to the Company, immediately after the same is made, discovered or devised, any
improvement, process, development, discovery or invention (including works of
authorship, trade secrets, technology, computer programs, formulas,
compositions, ideas, designs, techniques and data, whether or not patentable or
otherwise capable of being protected and whether or not related to technical or
commercial matters) which he may make, discover or devise (alone or in
conjunction with others) either:

(i) in the course of his normal duties (or of duties
specifically assigned to him);

(ii) as a result of knowledge gained during his employment; or

(iii) as a result of the use by the Executive of materials,
equipment or facilities of the Company.

7
<PAGE>

(b) In respect of any particular improvement, process,
development, discovery or invention which is not covered by SUBSECTION (a)
above, the Executive shall (before exploiting or disclosing the same or
otherwise committing himself to a third party) discuss any such item with the
Company to ascertain whether or not it would be in the best interest of the
Company for the Company to take an assignment or license thereof.

(c) The Executive agrees that all inventions which the
Executive makes, conceives, reduces to practice or develops (in whole or in
part, either alone or jointly with others) during his employment shall be the
sole property of the Company to the maximum extent permitted by Section 2870 of
the California Labor Code, a copy of which is attached hereto as Exhibit B, and
hereby assigns such inventions, and all rights therein, to the Company. No
assignment in this Agreement shall extend to inventions, the assignment of which
is prohibited by Labor Code section 2870. The Company shall be the sole owner
of all rights in connection therewith.

(d) The Executive agrees that the provisions of this Section
shall survive the termination of this Agreement, including, without limitation,
his obligation to do all acts and other things that the Company may reasonably
require for obtaining any patent or other protection in respect of any
improvement, process, development, discovery, or invention, and his obligation
to disclose to the Company, immediately after the same is made, discovered or
devised, any improvement, discovery or invention as provided in SUBSECTION (a)
above.

12. COVENANTS TO PROTECT CONFIDENTIAL INFORMATION.

8
<PAGE>

13. REMEDY FOR VIOLATION OF NONCOMPETITION, CONFIDENTIAL INFORMATION
OR INVENTIONS PROVISIONS.

(a) The Executive acknowledges that the Company has no adequate
remedy at law and would be irreparably harmed if the Executive breaches or
threatens to breach the provisions of SECTION 8, 9 OR 10 above, and, therefore,
agrees that the Company shall be entitled to injunctive relief to prevent any
breach or threatened breach of any of those sections, and to specific
performance of the terms of each of such sections in addition to any other legal
or equitable remedy it may have. The Executive further agrees that he shall
not, in any equity proceeding involving him relating to the enforcement of
SECTION 8, 9, OR 10 above, raise the defense that the Company has an adequate
remedy at law. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies at law or in equity that it may have or
any other rights that it may have under any other agreement.

(b) The Executive agrees that the provisions of this Section
shall survive the termination of this Agreement.

Notwithstanding anything herein to the contrary, in no event
shall the Company be obligated to provide payments or benefits pursuant to this
Section if, and to the extent, such payments or benefits would be nondeductible
for Federal income tax purposes as a result of the application of Section 280G
of the Internal Revenue Code of 1986. Any determination to be made with respect
to this clause shall be made by the Company's regular independent certified
accountants.

14. BINDING ARBITRATION.

Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration administered
by the American Arbitration Association under its Commercial Arbitration Rules
and judgment on the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.

15. WITHHOLDING.

16. ASSIGNABILITY; BINDING NATURE.

This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors, heirs and assigns. No rights or
obligations of the Executive under this Agreement may be assigned or transferred
by the Executive other than his rights to compensation and benefits hereunder,
which may be transferred only by will or operation of law and subject to the
limitations of this Agreement.

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17. REPRESENTATION.

18. MUTUAL INTENT.

19. ENTIRE AGREEMENT.

20. AMENDMENT OR WAIVER.

No provision in this Agreement may be amended or waived unless
such amendment or waiver is agreed to in writing, signed by a duly authorized
officer of the Company. No waiver by the Company of any breach by the other
Party of any condition or provision of this Agreement to be performed by such
other Party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time.

21. SEVERABILITY.

In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
law.

22. SURVIVORSHIP.

The respective rights and obligations of the Parties hereunder
shall survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations. The provisions of this
Section are in addition to the survivorship provisions of any other section of
this Agreement.

23. GOVERNING LAW/JURISDICTION.

This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the state of California without reference to
principles of conflict of laws. The Parties agree to submit exclusively to the
jurisdiction of the courts of the State of California with respect to any
controversy, dispute or claim arising out of this Agreement.

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<PAGE>

24. NOTICES.

If to the Company:

Genesis Media Group, Inc.
13063 Ventura Boulevard
Studio City, California 91604-2238
Attn: Ramy El-Batrawi

With a copy to:

Nida & Maloney PC
800 Anacapa Street
Santa Barbara, California 93110
Attn: Theodore R. Maloney, Esq.

If to the Executive:

Michael F. Costa
_________________
_________________
_________________

25. HEADINGS.

The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

26. COUNTERPARTS.

This Agreement may be executed in two or more counterparts.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

GENESIS MEDIA GROUP, INC.

By: /s/ Ramy El-batrawi
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/s/ Michael F. Costa
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MICHAELF.COSTA

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EMPLOYMENT AGREEMENT EXHIBIT B

This AGREEMENT is made and entered into as of this 26 day of October,
1998, between Genesis Media Group, Inc. (the "COMPANY") and Christopher Miglino
(the "EXECUTIVE").

WHEREAS, the Company desires to employ the Executive and to enter
into an agreement embodying the terms of such employment (the "AGREEMENT") and
the Executive desires to accept such employment and to enter into the Agreement.

NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
Company and the Executive (individually a "PARTY" and together the "PARTIES")
agree as follows:

1. DEFINITIONS.

(a) "AFFILIATE" shall mean any corporation, partnership or
other entity in which the Company owns, directly or indirectly, an equity
interest of 50% or more or which owns, directly or indirectly, an equity
interest of 50% in the Company.

(b) "BOARD" shall mean the Board of Directors of the Company.

(e) "DISABILITY" shall mean the Executive's inability to
render, for 180 days during any 365 day period, full and effective services
hereunder by reason of permanent physical or mental disability, whether
resulting from illness, accident or otherwise.

(f) "SALARY" shall mean the salary provided for in SECTION 3
of this Agreement or any adjusted salary granted to the Executive by the Board.

(g) "SALARY CONTINUATION PERIOD" shall mean the period after
the termination of the Executive's employment pursuant to the terms of this
Agreement during which the Executive is entitled to continued payment of the
Salary.

(h) "TERM OF THIS AGREEMENT" shall mean that period of time
specified in SECTION 2(b).

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(i) "TERM OF EMPLOYMENT" shall mean the period of the
Executive's employment by the Company.

2. TERM OF AGREEMENT, POSITION AND DUTIES.

(a) The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company for the Term of this
Agreement in the position and with the duties and responsibilities set forth
below and upon such other terms and conditions as are hereinafter stated.

3. SALARY.

4. ANNUAL BONUS.

During the Term of Employment, the Board may grant the Executive
an annual bonus. The amount of such annual bonus, if any, shall be determined
by the Board, in its sole discretion.

5. EMPLOYEE BENEFIT PROGRAMS.

During the Term of this Agreement, the Executive shall be
eligible to participate in employee benefit plans and programs available, from
time to time, to all senior executives of the Company. Specifically, the
Executive shall be entitled to the current annual vacation entitlement as set by
the Board, but not less than 10 business days of vacation for each employment
year with the Company. The Executive shall be entitled to a pro rata share of
an annual accrual for fractional years of employment with the Company.

6. OPTIONS. The Company desires to provide the Executive with an
incentive to contribute to the success of the Company. The Executive will,
therefore, receive options (the "OPTIONS")