GENESISINTERMEDIA COM INC, SB-2/A, 1999-01-25

GENESISINTERMEDIA COM INC
SB-2/A, 1999-01-25
MISCELLANEOUS BUSINESS SERVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 25, 1999

REGISTRATION NO. 333-66281
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 4
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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DELAWARE 7311 95-4710370
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
Incorporation or Organization) Number)
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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)

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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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 JANUARY 25, 1999

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.
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PROSPECTUS
, 1999

[LOGO]

GENESISINTERMEDIA.COM, INC.

2,000,000 SHARES OF COMMON STOCK

We are a marketing company that markets our own products and our clients'
products utilizing conventional media and interactive multimedia technologies.
The underwriters named in this prospectus are initially offering the stock in
the United States and internationally on a firm commitment basis at a price we
currently estimate will be between $7 and $10 per share. All of the common stock
being offered is being sold by us.

This is our initial public offering and no public market currently exists
for our stock. We have applied to have our stock quoted on the Nasdaq National
Market (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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PER SHARE TOTAL
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- - Price to the Public................................................................... $ $

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

- - Proceeds to Genesis................................................................... $ $
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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 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 CORPORATION

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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 in this prospectus are
trademarks of their respective legal owners.

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PROSPECTUS SUMMARY

THE FOLLOWING IS ONLY A SUMMARY AND YOU SHOULD REFER TO THE MORE DETAILED
INFORMATION AND THE FINANCIAL STATEMENTS AND ACCOMPANYING NOTES APPEARING
ELSEWHERE IN THIS PROSPECTUS.

GENESISINTERMEDIA.COM, INC.

We are a marketing company that markets and sells our own products and those
of our clients through conventional media channels. We are presently
supplementing our marketing efforts with the interactive multimedia technologies
described below. We refer to this innovative blend of marketing services as an
integrated multimedia marketing solution.

As a marketing company, Genesis sells our marketing services and we also may
market, advertise and sell a wide variety of products. The products that we have
marketed and sold or are currently marketing and selling include:

- audio and video cassette packages and accompanying materials based on the
book Men Are From Mars, Women Are From Venus, authored by John M. Gray,
Ph.D.;

- audio and video cassette packages and accompanying materials based on
stock, commodities and real estate investing programs; and

- comsumer products, such as skin care and automotive products and exercise
equipment.

Traditionally, businesses delivered information about their products and
services through conventional media, or channels of marketing and
advertising--television, newspaper, magazine, billboard and radio
advertisements. Although these conventional channels continue to be an important
component of most marketing efforts, interactive multimedia technologies enable
businesses to deliver their marketing messages to a larger, more diverse
audience.

In general, interactive multimedia technologies allow businesses to convey a
combination of text, graphics, sound, video and animation content to consumers,
and these technologies permit consumers to actively manipulate this content.
Individuals utilizing an interactive multimedia technology may choose, for
example, to play a game or to request specific information that is immediately
delivered in an entertaining and engaging format.

Interactive multimedia technologies include:

- compact disks, or CD-ROMs and digital versatile disks, or DVDs, which
deliver audio and visual information stored on a disk through a
computer or other device, and

- the Internet, an international conglomeration of interconnected
computer networks, which allows individuals, businesses and governments
throughout the world to communicate with one another in a common
language and offers a wide array of resources to the general public.

The Internet allows any business to open its doors to the world, via an
electronic storefront, to market its products and services to a group of
individuals who may never have had access to that business' products and
services in any other context. In addition, electronic commerce, or eCommerce,
and the Internet now allow that business to sell its products and services
directly over the Internet. In the case of certain audio, video and textual
content, this sale and the delivery of product can both be immediate.

We utilize freestanding Internet access portals known as kiosks to provide
consumers with direct access to the Internet and to marketing messages that are
delivered in an interactive format and targeted to consumers with a specific
demographic profile. The kiosks provide a window to the Internet via a touch
screen computer terminal, which can be installed in almost any location, such as
shopping malls, grocery stores, schools and city halls. The kiosks provide us
and other businesses with information regarding the preferences and interests of
the consumers who utilize them, thus enabling these businesses to more
successfully target consumers likely to purchase their products and services in
the future.

Our principal executive offices are located at 13063 Ventura Boulevard,
Studio City, California 91604-2238. Our telephone number at that location is
(818) 464-7270.

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THE OFFERING

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

Assumed offering price.............. $8.50 per share

Outstanding common stock

Before offering................. 3,160,000 shares, exclusive of options

After offering.................. 5,160,000 shares, exclusive of options, including the
underwriters' over-allotment option.

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.

We intend 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.

Proposed Nasdaq symbol:............. GENI
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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, our
taxable income is passed through to our 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, we will terminate our 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.

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.
We 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. We
have 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 the three-year period;

- the surrender of an aggregate of 1,000,000 shares of common stock by
Genesis's two principal stockholders on November 1, 1998; and

- the private placement of 100,000 shares of common stock on January 25,
1999 at $10 per share, net of comissions and expenses of $115,000.

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The pro forma as adjusted balance sheet data are also adjusted to give
effect to:

- the pro forma adjustments described in the preceding paragraph;

- 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 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.

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AS OF DECEMBER 31, AS OF SEPTEMBER 30, 1998
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1995 1996 1997 ACTUAL PRO FORMA
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1994 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
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(UNAUDITED)
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BALANCE SHEET DATA:
Working capital (deficit)........... $ 58 $ (53) $ 334 $ 3,037 $ 3,312 $ 4,237
Current assets...................... 176 390 708 5,523 6,585 7,680
Total assets........................ 226 409 726 6,714 8,197 10,052
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 5,524

AS ADJUSTED
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(UNAUDITED)

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BALANCE SHEET DATA:
Working capital (deficit)........... $ 16,867
Current assets...................... 19,810
Total assets........................ 22,182
Current liabilities................. 2,943
Long-term debt...................... 1,085
Stockholders' equity (deficit)...... 18,154
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RISK FACTORS

THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. OUR 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 OUR BUSINESS, PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
FOLLOWING FACTORS IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS.

LIMITED OPERATING HISTORY

Genesis has only a limited operating history on which to base an evaluation
of our business and prospects. Genesis and our 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 electronic commerce, or eCommerce, market.
We may not be successful in meeting these challenges and addressing these risks.

CONTINUED RELIANCE ON TRADITIONAL MARKETS

Virtually all of our 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. We expect that conventional media solutions will continue to account
for a significant percentage of its revenues in the foreseeable future. A
decline in demand for traditional media solutions as a result of technological
changes, competition or otherwise would have a material adverse effect on
Genesis.

UNCERTAIN RESULTS FROM RECENT EXPANSION INTO NEW INTERACTIVE MULTIMEDIA MARKETS

In 1998, we commenced expansion of our media offerings into interactive
multimedia technologies, including the Internet, interactive kiosks, CD-ROMs and
DVDs to businesses seeking to conduct electronic commerce. The expansion
included the formation of our Genesis Intermedia, Inc. subsidiary. However, to
date, revenue generated by this subsidiary has not been significant, nor have we
generated revenue from our audio and video download and streaming capabilities.

RISKS RELATED TO RECENT AND PENDING ACQUISITIONS

We recently acquired substantially all of the assets of Vision Digital
Communications, Inc. and in late 1998 entered into a letter of intent and made
and offer to purchase substantially all of the assets of AniMagic Corporation.
Each of these acquisitions involves a new means, or distribution channel, by
which we can market, advertise and sell products--Vision Digital through
interactive electronic platforms known as kiosks and AniMagic through
nonproprietary technology that allows delivery of audio and video content to
customers through computer downloading or real-time "streaming" of the content.
We have also hired the principal employees of each of these two companies. To
date, revenue generated from these new operations has been minimal and we have
experienced operating losses in these start-up areas. Development and
integration of these different marketing channels is a significant part of our
strategy to be an integrated multimedia marketing and business solutions
provider. We are still undertaking integration of the first acquisition and the
second acquisition is still subject to bankruptcy court approval and possible
overbid. See "Business--Acquisitions."

RISKS RELATED TO FUTURE ACQUISITIONS

A key component of our growth strategy is the acquisition of other
professional service firms and products or companies with products that meet our
criteria for strategic fit, geographic presence, revenues, profitability, growth
potential and operating strategy. The successful implementation of this strategy
depends on our ability to identify suitable acquisition candidates, acquire such
products or companies on acceptable terms and integrate their operations
successfully with ours. Future acquisitions will involve a number of risks,
including:

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- adverse effects on our 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;

- the need for and possible unavailability of financing; and

- ownership dilution resulting from securities-based acquisitions.

We may not be able to continue to identify additional suitable acquisition
candidates in services--distribution channels such as Vision Digital or AniMagic
or products--like our acquisition of the rights to produce and market the
Hawaiian Tropic swimwear line--or we may not be able to make such acquisitions
on acceptable terms. In addition, in pursuing acquisition opportunities we 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, which is
critical to our growth strategy.

NEED TO MANAGE GROWTH EFFECTIVELY

Because internal and external growth are critical elements of our business
strategy, our ability to manage that growth effectively will be critical to our
success. Our future growth may place a significant strain on our managerial,
operational, financial and other resources.

In addition to the specific risks associated with acquisition-based growth
discussed in the preceding risk factors, growth will require that we continue to
implement and improve our operational, administrative and financial and
accounting systems. Our systems, procedures and controls may not be adequate to
support our operations and our management may not be able to achieve the rapid
execution necessary to exploit the market for our business model of a fully
integrated multimedia marketing and business solutions provider. This will be
further complicated by the fact that we anticipate integrating diverse product
and distribution channel companies and assets which may or may not have common
administrative or other support needs.

EMPLOYEE GROWTH RISKS

We have recently hired a number of new employees and anticipate that we will
continue to do so for some time as a result of contemplated business growth. A
number of our current personnel have been hired recently, including in
connection with the Vision Digital and AniMagic transactions, and we may not be
successful in retaining and assimilating all such non-management personnel.
Employees generally are not subject to contracts of employment and are,
therefore, typically able to move within the industry with relative ease.

Our success will continue to depend in part on our ability to identify,
hire, train and retain new personnel. Because of the intense interest in and
demand for talented persons experienced in multimedia business, including
eCommerce, it may be difficult to hire such personnel at reasonable cost, if at
all. Integration of employees and employee loss in the process has required and
will continue to require significant management attention and resources. Any
inability to continue to attract and retain additional key personnel, or to
retain and motivate our existing key personnel, will have a negative impact.

DEPENDENCE ON OUR SENIOR MANAGMENT

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

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acquisition of certain of the assets of Vision Digital. See
"Management--Employment agreements and termination of employment arrangements."
We do not presently have written employment agreements with any other of our
employees. The loss of the services of one or more members of senior management
could have a significant adverse effect on Genesis.

CONCENTRATION OF REVENUES

A relatively small number of clients and products contribute significantly
to our 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 our
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 our
revenue. Our majority stockholder owns Trade Your Way To Riches, Inc. Because we
intend to continue to rely on products such as these, it is possible that our
dependence on revenues from a limited number of products will continue in the
future.

DEPENDENCE ON ORAL AGREEMENTS TERMINABLE AT WILL

We frequently market products on the basis of oral agreements which may be
terminated by either party at any time, and we have no written contracts
relating to our sale of media time to clients, including Trade Your Way to
Riches, Inc. Any of our clients may discontinue utilizing us and our 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 our
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 it
will have a significant adverse impact.

NEED TO DEVELOP NEW PRODUCTS AND MARKETS

Our marketing operations are dependent on our continuing ability to develop
or obtain rights to new products to supplement or replace existing products as
they mature through their product life cycles. See "--Unpredictable product
life" below. For instance, in the third quarter of 1998, we added 13 new
products to our product line. See "Business--Genesis Background and Genesis
Products." One or more or all of such products may fail to achieve profitability
or result in net loss to Genesis. Even if we are able to introduce other new
products, those products may not be successful.

Our future results of operations depend on our ability to spread our 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 we introduce
through all levels of consumer marketing, whether directly or through third
parties. The future revenues of the business will depend substantially on our
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 our products; and

- develop new and expand established geographic markets.

We may not be able to achieve these goals.

NEED TO DEVELOP POSITIVE CUSTOMER RESPONSE TO DIRECTLY MARKETED PRODUCTS

Our future results in product sales will be dependent upon our ability to
generate positive customer response to our products. Customer response to direct
marketing depends on many variables, including

- the appeal of the products being marketed,

- the effectiveness of the marketing medium chosen and the marketing script

- the availability of competing products, and

- the timing and frequency of consumer presence, phone contacts and
air-time.

Each of these variables presents risk and uncertainty.

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AS A DIRECT MARKETER OF PRODUCTS, GENESIS DEPENDS ON EXTENDING PRODUCT LIVES

Because of the significant investment we must make in introducing a new
product, we face risk that that product has a market life long enough to recoup
the investment and make a profit. 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
sales in the future. As a result, we are dependent on our ability to adapt to
market conditions and competition as well as other factors which affect the life
cycles of our products. We introduced our Men Are From Mars, Women Are From
Venus audio, video and companion materials products in 1994 and its Trade Your
Way to Riches audio, video and companion materials products in 1996. While we
have experienced continuing revenue from these products, we may not in the
future and other products we introduce may experience much shorter revenue
lives. If sales from these products diminish significantly or if newly
introduced products fail, then this would adversely impact our results of
operations in terms of both lost opportunity cost and actual loss of dollars
invested.

UNANTICIPATED SHORT PRODUCT LIVES REQUIRE THAT GENESIS RAPIDLY REALIZE MARKET
POTENTIAL AND MANAGE INVENTORY EFFECTIVELY

It is also 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. We may still hold a sizable inventory
position in such a product. Although we attempt to develop products with
extended product lives, our products will have a limited market life. Because of
this, it is extremely important that we rapidly realize the potential of each
successful product.

PRODUCT DELAYS

If we experience any significant delays or reductions in product
introductions or product deliveries in response to demand in future periods,
then it will have an adverse effect.

PRODUCT RETURNS

Even when market acceptance for our new products occurs, our results of
operations may be adversely impacted by returns of such products, either
pursuant to our product satisfaction guaranties or otherwise.

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS

FLUCTUATIONS IN QUARTERLY RESULTS AND DEVIATIONS FROM STOCK ANALYSTS'
EXPECTATIONS TEND TO ADVERSELY AFFECT STOCK PRICE. In some future quarter our
operating results may fall below expectations of securities analysts and
investors. In such event, the trading price of our common stock will likely be
materially and adversely affected.

THE NATURE OF GENESIS'S BUSINESS AND BUSINESS DEVELOPMENT MAKE QUARTERLY
FORECASTS DIFFICULT. As a result of our 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 we
compete, our historical financial data are of limited value in planning future
operating expenses. Our expense levels will be based in part on our expectations
concerning future revenues. Our revenues are derived primarily from media and
product sales, which are difficult to forecast accurately, particularly because
we have only recently entered interactive multimedia markets.

SEASONALITY AND TIMING OF SALES AND EXPENDITURES MAY INCREASE QUARTERLY
FLUCTUATIONS. Because our revenues generally reflect the media buying patterns
of advertisers and are concentrated in the second and fourth quarters of the
year, we 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 our services could have an immediate negative effect on our business.
Further, business development and marketing expenses may increase significantly
as we expand our operations. To the extent that such expenses precede or are not
rapidly followed by increased revenues, we may be adversely affected.

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As a strategic response to changes in the competitive environment, we 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 our quarterly results.

OTHER FACTORS THAT MAY CAUSE FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.
Our quarterly operating results may fluctuate significantly in the future as a
result of a variety of other factors, many of which are outside our control and
some of which are discussed elsewhere in these risk factors. These factors
include:

- the level of demand for our products or services;

- the level of demand for conventional media and interactive multimedia
solutions;

- our success in finding and acquiring suitable acquisition candidates;

- 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 our operations;

- the introduction of new products or services by us or our competitors;

- pricing changes in the marketing/advertising industry;

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

- general economic conditions.

UNCERTAIN ADOPTION OF INTEGRATED MULTIMEDIA SOLUTIONS

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

DEPENDENCE ON CLIENT OUTSOURCING OF MULTIMEDIA DEVELOPMENT

Even if companies adopt multimedia solutions, businesses may decide to
assign the design, development and implementation of multimedia solutions to
their internal information technology personnel rather than outsource this work
to third parties such as Genesis. The segment of our business designed around
developing and implementing such solutions for third parties will rely on the
continued need and desire of business to outsource this business.

UNCERTAIN ACCEPTANCE OF THE INTERNET AS A MARKETING AND ADVERTISING MEDIUM

THE MARKET FOR INTERNET MARKETING AND ADVERTISING IS NEW AND UNCERTAIN. The
market for Internet advertising has recently begun to develop, is rapidly
evolving and is characterized by an increasing number of market entrants. Still,
banner-type Internet advertising continues to be dominated by the larger web
sites. Non-advertising marketing solutions utilizing the Internet as a base,
such as direct sales and on-line shopping, have also only recently been
developed. We are seeking to enter this market through our acquisition-based
expansion, development or acquisition of new technological capability and the
hiring of additional personnel. In particular, our kiosk program commenced
through our Vision Digital acquisition is designed around using the Internet as
an information medium to such kiosks. 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.

Our ability to generate revenue will depend on, among other factors:

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

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

- our ability to develop marketing solutions, such as our kiosks, that use
the Internet and that appeal to both our clients and their customers;

- our ability to achieve and demonstrate user demographic characteristics
that are attractive to clients;

- the development and expansion of our marketing and advertising sales
forces; and

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

CLIENTS AND CUSTOMERS HAVE ONLY LIMITED EXPERIENCE WITH INTERNET MARKETING
AND ADVERTISING AND MAY NOT TRANSITION TO THESE MEDIA AS ANTICIPATED. Companies
and their marketing or advertising agencies who 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 may not be persuaded to allocate or continue to allocate
portions of their budgets to Internet solutions. Even if they are so persuaded,
they may not find Internet-based marketing and advertising to be effective for
promoting their products and services relative to conventional print and
broadcast media. Acceptance of the Internet for the conduct of eCommerce, and
not just advertising, will also depend, to a large extent, on the level of use
of the Internet by consumers.

THE LACK OF STANDARD MEASURES OF THE EFFECTIVENESS OF INTERNET MARKETING AND
ADVERTISING MAY SLOW GROWTH. No standards have yet been widely accepted for the
measurement of the effectiveness of Internet-based marketing or advertising.
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, we believe 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, we believe that long-term acceptance of the Internet as an advertising
medium will depend on both

(1) the advertising industry's ability to develop accepted standards of
measurement of the success of Internet advertising and

(2) Internet advertising being proven effective under such standards.

TECHNICAL CONCERNS EXIST REGARDING THE INTERNET. 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
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, or

- other reasons.

Genesis must also successfully design or adopt Internet solutions that are
compatible with the Internet's evolving standards. The Internet infrastructure
may not continue to be able to support the demands placed on it by its projected
continued growth and our contemplated service offerings may suffer as a result.
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 our ability to use Internet
technologies to solve businesses' marketing and advertising problems.

UNCERTAINTY ABOUT FUTURE GOVERNMENT REGULATION OF THE INTERNET

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

12
<PAGE>

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, which would negatively impact our
interactive multimedia strategy.

RAPID TECHNOLOGICAL CHANGE IN GENESIS'S MARKETS

We are developing our integrated multimedia marketing and business solutions
that we believe will be competitive. However, rapid technological changes,
changes in user and client requirements and preferences, frequent new product
and service introductions and evolving industry standards and practices may
cause our existing and proposed services and methodologies to become obsolete.
Aside from issues related to the Internet, our success will depend on our
ability to keep pace with technological developments, emerging industry
standards and evolving customer demands and expectations for engaging marketing
and advertising. Specifically our success will depend on our ability to respond
to our clients' requirements by enhancing our current marketing and advertising
services and developing and introducing new services that appeal to our clients
and effectively market and advertise those clients' and our own products.

NEED TO DEVELOP THE STRENGTH OF THE GENESIS BRAND

Because we are new to many of our markets, including interactive multimedia
marketing through the Internet, the strength of our brand in this market is
uncertain and will need to be developed. We believe that developing
GenesisIntermedia brand recognition among businesses seeking marketing and
business solutions in any of the media channels served by us will be an
important aspect of our 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 brand will depend largely
on:

- the success of our marketing efforts; and

- our 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 our ability to develop Internet and
eCommerce solutions. If clients do not perceive our services as meeting their
needs, or if we fail to market those services effectively, then we will be
unsuccessful in maintaining and strengthening its brand.

Furthermore, to promote the GenesisIntermedia brand in response to
competitive pressures, we may need to increase our marketing budget or to
otherwise increase our financial commitment to creating and maintaining brand
loyalty among clients. A failure to promote and maintain our brand or excessive
expense associated with such promotion will materially adversely affect us.

DEPENDENCE ON THIRD-PARTY MANUFACTURERS AND SERVICE PROVIDERS FOR PRODUCT
OFFERINGS

We are dependent on third-party sources, both foreign and domestic, to
manufacture all of our own products that we market and to provide certain
telemarketing services. We also rely on third parties for physical delivery of
our and our client's product orders. We do not contemplate developing
manufacturing capability and, as we add new products, we expect to continue to
rely on third parties for the manufacture and delivery of products.

If we are unable, either temporarily or permanently, to obtain a timely
supply of product to fulfill sales orders for one of our own products

13
<PAGE>

or to satisfy orders for such products, then this would adversely affect our
results of operations. Moreover, because the time from the initial approval of a
product by our product development personnel to the first sale of such product
is relatively short, our ability to cause its manufacturing sources to meet our
production and order fulfillment deadlines at reasonable costs and produce a
high-quality product or render quality service is important to our business. We
may not be able to successfully manage this process in such a way to maximize
the sales of our products.

In addition, we retain title to our products while they are at third-party
warehouses, known as fulfillment centers, that process orders and ship product
to fill these orders. Although we maintain business interruption insurance and
other insurance for our business, the termination of or adverse change in our
relationship with any such fulfillment center or the partial or total loss to
any of these facilities or our inventories stored there may have a material
adverse effect.

DEPENDENCE ON MEDIA ACCESS FOR DIRECT MARKETING

MEDIA PURCHASE COMMITMENTS. We have historically been dependent on having
access to media time to televise our infomercials on cable networks, network
affiliates and local stations. Media time is unavailable on an as-needed basis
and must be purchased in advance. We typically take advantage of single time or
spot purchases, but intend to consider long-term purchases when prudent.
However, to date, our media purchases have been limited by our capital
resources. For numerous reasons, including those outside our control, we 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. We purchase a
significant amount of our 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. We
currently do not pay and are 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 us to continue broadcasting our 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--the hours during which a station does not broadcast its own programming.

Significant increases in the cost of media time or significant decreases in
our access to media time would negatively impact our results of operations. Our
programming may also not attract viewers and its products may not be accepted by
consumers as anticipated by us.

NEED TO EFFECTIVELY MANAGE MEDIA TIME

Our ability to manage our media time is vitally important to our success in
media sales. This media management function must also include a meaningful
coordination between available marketing and available media time. Whenever we
make advance purchases and commitments to purchase media time, any failure by us
to manage that time effectively could have a material adverse effect on our
results of operations. If we are unable to utilize all of the media time we have
acquired, we attempt to arrange to sell a portion of our media time to others.
However, we may not be able to use all of our media time or sell it to others
and, if we enter into long-term media contracts, we may not be able to
successfully negotiate extensions on terms favorable to us.

LACK OF INTELLECTUAL PROPERTY PROTECTION FOR TECHNOLOGY

We do not have any registered copyrights, trademarks or patents covering any
of our proprietary technology. Our success will depend in part on our ability to
protect our proprietary rights and to operate without infringing on the
proprietary rights of third parties. The measures we use to protect our
unpatented proprietary rights--including requiring that our employees and third
parties who are granted access to our proprietary technology enter into
confidentiality

14
<PAGE>

agreements with us--may not be sufficient to protect our rights against third
parties.

We may in the future be required to defend our intellectual property rights
against infringement, duplication, discovery and misappropriation by third
parties or to defend ourself against third-party claims of infringement.
Likewise, particularly because of our acquisition and growth strategy, disputes
may arise with respect to ownership of technology developed by employees who
were previously employed by other companies.

RELIANCE ON THIRD-PARTY LICENSES FOR CRITICAL INTELLECTUAL PROPERTY AND
PROTECTION

We generally license intellectual property from third parties. We license
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
us. We also license the rights to produce and market other products, such as
Hawaiian Tropic swimwear. We are dependent upon the protection of these
intellectual properties by their licensors and are responsible for protecting
them as well.

Licenses to products or necessary technology may not be available on
acceptable terms, or at all, and we may not be able to develop alternate
technology or products at an acceptable price, if at all.

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 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 our 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 and this influence may
adversely affect our business or ability to obtain future financing. This
influence results from the following factors:

- Millennium will be able to appoint a member of the board of directors for
a five-year period;

- Millennium has the right to have an observer present at all meetings of
our board of directors;

- 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 us 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; and

- Millennium may refuse to allow us 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.

CONTROL BY PRINCIPAL STOCKHOLDER

Substantially all of our common stock is owned by Ramy El-Batrawi. Mr.
El-Batrawi will own 56.45% of the outstanding shares of common stock after the
offering is completed. 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, our 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

15
<PAGE>
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

We currently anticipate that our available cash resources and credit
facilities, combined with the net proceeds to us from this offering, will be
sufficient to meet our presently anticipated working capital and capital
expenditure requirements through 1999. However, we may need to raise additional
funds to support our business prior to that time, particularly acquisitions. Our
future liquidity and capital requirements will depend upon numerous factors,
including the success of our existing and new product and service offerings and
competing technological and market developments.

UNCERTAINTY OF ADDITIONAL FINANCING

To meet its future capital needs, we may seek 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 us, or at all, and may involve additional risks, including risks
that:

- additional equity financing may be dilutive or otherwise prejudicial to
the rights of stockholders;

- debt financing may involve restrictive covenants, which may limit our
operating flexibility with respect to certain business matters;

- strategic arrangements, may require us to relinquish our rights to certain
of our intellectual or other property;

If adequate funds are not available on acceptable terms, we may be unable to
develop or enhance our services and products, take advantage of future
opportunities or respond to competitive pressures, any of which could have a
significant negative impact.

COMMODITY FUTURES TRADING COMMISSION INVESTIGATION

We may also be subject to regulation by the Commodity Futures Trading
Commission, 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, we 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 our failure to register, or against Trade Your Way to
Riches, Inc. with whom we do significant business and which is owned by our
majority stockholder, any adverse determination or settlement in such action
could materially adversely affect Genesis. The range of possible sanctions
available to the CFTC include a simple request to become registered, a cease and
desist order--which may terminate sales of certain Trade Your Way To Riches
products or services--and a possible order of disgorgement of profits--which
would, if applied to us, result in substantial payments by us. The CFTC may
still bring an enforcement action against Genesis. See "Business--Legal
proceedings."

GENESIS AS AN ADVERTISER AND AS A SELLER OF PRODUCTS AND SERVICES MAY BE EXPOSED
TO LIABILITY TO CONSUMERS, COMPETITORS OR OTHERS

We from time to time may be, or may be joined as, a defendant in litigation
brought against us or our clients by third parties. These

16
<PAGE>

possible claims include those brought by clients' competitors, regulatory bodies
or consumers alleging that advertising claims are false, deceptive or
misleading, that our products or our clients' products are defective or
injurious or that marketing and communications materials infringe on the
proprietary rights of third parties. If we are not adequately insured or
indemnified with respect to such claims, then the damages, costs, expenses or
attorneys' fees arising from any such claims could have an adverse effect.

In addition, our contracts with clients sometimes require us to indemnify
clients for claims brought by competitors or others claiming that advertisements
or other communications infringe on intellectual property rights. Although we
maintain business insurance we believe is adequate for our operations, adequate
insurance coverage in the future, or the insurance held by us may not be
sufficient if a significant adverse claim is made. We do not maintain insurance
designed specifically for advertising agency liability.

POTENTIAL LIABILITY TO CLIENTS WHO BUY GENESIS MARKETING AND BUSINESS SOLUTIONS

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

ANALYSIS AND REMEDY OF THE YEAR 2000 ISSUE MAY TAKE LONGER OR COST MORE THAN
ANTICIPATED

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 or Y2K issue. We are also continuing to
monitor our 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. 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 systems.
We expect to complete our Year 2000 compliance program by mid-1999 and
anticipate that our 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 us. 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 or may cost substantially more to remedy than the
amount we anticipate. Failure to satisfactorily address the Year 2000 issue
could have a material adverse effect on us.

IMMEDIATE AND SUBSTANTIAL DILUTION TO INVESTORS IN THE OFFERING

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 $5.00 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. See "Dilution." Additionally, we may issue additional shares, stock
options and stock bonuses to the stockholders and employees of the companies we
acquire in the future pursuant

17
<PAGE>

to our acquisition program, resulting in further substantial ownership dilution
to investors participating in this offering.

MANAGEMENT'S USE OF THE OFFERING PROCEEDS MAY NOT ACHIEVE THE INTENDED RESULTS

Our 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
management's determinations as to the proper use of the proceeds are unwise or
do not bring the intended results, this may adversely impact Genesis.

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 stockholder. In addition, the existing
stockholders will receive a $2 million dividend related to undistributed S
corporation earnings.

NEED TO DEVELOP AN ACTIVE TRADING MARKET FOR THE COMMON STOCK

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 us and the underwriters'
representative and may not be indicative of the market price of the common stock
following the offering.

MARKET AND BUSINESS FACTORS MAY CAUSE SIGNIFICANT VOLATILITY IN GENESIS'S STOCK
PRICE

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 our business;

changes in general economic or market conditions; and

broad market fluctuations.

THE SIGNIFICANT NUMBER OF SHARES ELIGIBLE FOR FUTURE SALE MAY HAVE AN ADVERSE
IMPACT ON THE MARKET VALUE OF THE COMMON STOCK

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 our ability to raise capital through
the equity markets. Following this offering, we will have 5,160,000 shares of
common stock outstanding--5,460,000 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 3,160,000
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 holding
3,100,000 shares of common stock and options to purchase 250,000 shares of
common stock have agreed not to sell or otherwise dispose of such shares or
related securities for a period of one-year from the date of this prospectus,
without the prior written consent of the underwriters' representative. The
underwriters' representative has informed us that it has no current intention to
release shares from the lock-up agreements prior to the end of one-year. 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-

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<PAGE>
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.

ELIMINATION OF CERTAIN SHAREHOLDER PROTECTIONS REQUIRED BY CALIFORNIA LAW

The consummation of the offering and listing of the common stock on Nasdaq
may cause certain provisions of California law that are generally designed to
protect shareholders to no longer apply to us. These provisions include
provisions limiting the ability of a company to have a classified board of
directors and requiring cumulative voting in the election of directors. See
"Description of Capital Stock--Certain provisions of state law."

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<PAGE>

FORWARD LOOKING STATEMENTS

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.

USE OF PROCEEDS

The net proceeds to Genesis from this offering, assuming an initial public
offering price of $8.50 per share and 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.......................................................... 45,000 0.31
Acquisitions........................................................................ 4,980,000 34.04
General corporate purposes.......................................................... 2,105,000 14.39
------------- ------
------------- ------
Total........................................................................... $ 14,630,000 100.00%
</TABLE>

As of December 31, 1998, there was an aggregate of $671,000 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 and 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 1999 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.

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<PAGE>
CAPITALIZATION

The table set forth below shows our capitalization as of September 30, 1998.

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. In accordance with Staff Accounting
Bulletin Topic 4.B, 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.

<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, 3,160,000 and 5,160,000,
respectively, shares issued and outstanding... 4,000 3,160 5,160

Additional paid-in capital........................ 920,582 2,406,422 18,148,676

Retained earnings................................. 3,114,254 3,114,254 --
------------ ------------ -------------

Total stockholders' equity...................... 4,038,836 5,523,836 18,153,836
------------ ------------ -------------

Total capitalization............................ $ 4,923,408 $ 6,608,408 $ 19,238,408
------------ ------------ -------------
------------ ------------ -------------
</TABLE>

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<PAGE>
DILUTION

On a pro forma basis at September 30, 1998, there were 3,160,000 shares of
our common stock outstanding, having a net tangible book value per share of
$1.72. Net tangible book value per share represents the amount of our 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 5,160,000 shares of common stock
outstanding with a net tangible book value of $3.50 per share. This would
represent an immediate increase in net tangible book value of $1.78 per share to
existing stockholders and an immediate dilution of $5.00 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..................................................... $ 1.72
Increase attributable to new investors..................... 1.78
---------

Pro forma net tangible book value per share after this
offering................................................... 3.50
---------

Dilution per share to new investors.......................... $ 5.00
---------
---------
</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....... 3,160,000 61.24% $ 2,524,582 12.93% $ 0.80
New investors............... 2,000,000 38.76% 17,000,000 87.07% $ 8.50
---------- --------- ------------- ---------

Total..................... 5,160,000 100.00% $ 19,524,582 100.00%
---------- --------- ------------- ---------
---------- --------- ------------- ---------
</TABLE>

The preceding table assumes no exercise of any stock options outstanding as
of December 31, 1998. As of December 31, 1998, there were options outstanding to
purchase a total of 300,000 shares of common stock, with a weighted average
exercise price of $8.68 per share. If all options outstanding as of December 31,
1998 had been exercised as of such date, the dilution per share to new investors
in the offering would be $4.71. On October 1, 1998, we adopted a stock incentive
program pursuant to which 500,000 shares of common stock were reserved for
issuance. Options with respect to 250,000 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.

22
<PAGE>
SELECTED FINANCIAL DATA

We are 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 accompanying
notes 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, which consist
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 25 and our financial statements and related notes included
elsewhere in the prospectus.

STATEMENT OF OPERATIONS DATA

Genesis is currently taxed as an S corporation. As an S corporation, our
taxable income is passed through to our individual stockholders who are
responsible for paying federal and state income taxes on their portion of our
taxable income. Shortly before the closing of the initial public offering, we
will terminate our status as an S corporation and we 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 we 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.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, NINE MONTHS ENDED
---------------------------------------------------- SEPTEMBER 30,
1995 1996 1997 ------------------------
------------- --------- ----------- 1997 1998
(UNAUDITED) ----------- -----------
1994 (UNAUDITED) (UNAUDITED)
-------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENTS OF OPERATIONS DATA:
Net revenue
Media sales--affiliate.......................... $ -- $ -- $ -- $ 7,412 $ 5,643 $ 3,043
Product sales................................... 149 8,268 13,152 8,252 4,854 3,566
Commissions and royalties--affiliate............ -- -- -- 745 118 1,789
Commissions and royalties....................... 183 325 79 1,735 1,085 966
Other........................................... -- 72 1,111 20 24 14
------ ------ --------- ----------- ----------- -----------
Total net revenue............................. 332 8,665 14,342 18,164 11,724 9,378
Operating costs and expenses
Media purchases................................. -- -- -- 6,445 4,796 2,583
Direct costs.................................... 53 1,264 1,842 713 504 300
Selling, general and administrative............. 428 7,290 12,114 8,571 5,627 5,618
------ ------ --------- ----------- ----------- -----------
Total operating costs and expenses............ 481 8,554 13,956 15,729 10,927 8,501
------ ------ --------- ----------- ----------- -----------
Income (loss) from operations..................... (149) 111 386 2,435 797 877
Interest expense.................................. 2 18 -- 33 14 72
------ ------ --------- ----------- ----------- -----------
Income before taxes............................... (151) 93 386 2,402 783 805
Income taxes...................................... -- -- -- 35 20 10
------ ------ --------- ----------- ----------- -----------
Net income (loss)................................. $ (151) $ 93 $ 386 $ 2,367 $ 763 $ 795
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
Basic earnings (loss) per share................... $ (0.04) $ 0.02 $ 0.10 $ 0.57 $ 0.20 $ 0.19
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
Diluted earnings (loss) per share................. $ (0.04) $ 0.02 $ 0.10 $ 0.57 $ 0.20 $ 0.19
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
Weighted average shares outstanding............... 3,883 3,883 3,883 4,119 3,883 4,235
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
PRO FORMA
Income before taxes............................... $ (151) $ 93 $ 386 $ 2,402 $ 783 $ 805
Pro forma income taxes............................ -- -- 154 961 313 322
------ ------ --------- ----------- ----------- -----------
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 $ 0.35 $ 0.12 $ 0.11
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
Pro forma diluted earnings (loss) per share....... $ (0.04) $ 0.02 $ 0.06 $ 0.35 $ 0.12 $ 0.11
------ ------ --------- ----------- ----------- -----------
------ ------ --------- ----------- ----------- -----------
</TABLE>

23
<PAGE>
BALANCE SHEET DATA

The following pro forma balance sheet data are 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; and

- the private placement of 100,000 shares of common stock on January 25,
1999 at $10 per share, net of comissions and expenses of $115,000.

The pro forma as adjusted balance sheet data are also adjusted to give
effect to:

- the pro forma adjustments described in the preceding paragraph;

- 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."

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------------------------------------------
1997
--------- AS OF SEPTEMBER 30, 1998
----------------------------
1994 1995 1996 ACTUAL PRO FORMA
------------- ------------- ------------- ------------- -------------
(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 $ 4,237
Current assets......................... 176 390 708 5,523 6,585 7,680
Total assets........................... 226 409 726 6,714 8,197 10,052
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 5,524

PRO FORMA
AS ADJUSTED

<S> <C>

BALANCE SHEET DATA:
Working capital (deficit).............. $ 16,867
Current assets......................... 19,810
Total assets........................... 22,182
Current liabilities.................... 2,943
Long-term debt......................... 1,085
Stockholders' equity (deficit)......... 18,154
</TABLE>

24
<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. OUR 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 company that utilizes conventional media and
emerging, interactive multimedia technologies to market our own products and our
clients' products. The interactive multimedia technologies we use include
CD-ROMs, DVDs and the Internet. 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, approximately $2.53 million or 48% of the
commission and royalty 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 marketing and sales plans and capabilities
that allow businesses to convey a combination of text, graphics, sound, video
and animation content to their customers in a way that the customers can
actively manipulate or interact with the content. These plans and capabilities
are referred to as

25
<PAGE>

interactive multimedia business solutions. This subsidiary uses existing
technologies available from third parties, company-owned or proprietary
interactive multimedia technologies and its expertise in marketing to develop
and deploy creative marketing plans and programs using multimedia technologies
that are tailored to each of its client's marketing needs. Genesis Intermedia
uses a variety of interactive delivery platforms including the Internet,
interactive publicly accessible kiosks, CD-ROMs and DVDs. 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 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. The Company has acquired the rights to
distribute these products and has agreed to pay royalties of approximately 5% of
net sales to the licensor of such products. These products include, for example,
a memory improvement program, a money management program, an educational line of
DVDs and the Hawaiian Tropic swimwear line. Genesis will market these products
using integrated multimedia technology, as well as conventional media, such as
television and print advertisements, and through retail distribution outlets.
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. Our offer to purchase the
AniMagic assets has been accepted by AniMagic's Chapter 7 trustee, and we
anticipate concluding the AniMagic asset acquisition by the end of the first
quarter of 1999. But, consummation of the acquisition is still subject to
bankruptcy court approval and possible overbid. 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-ROMs and DVDs.

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

26
<PAGE>
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.

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--affiliate.................................. 118 1,789 1.0% 19.1%
Commissions and royalties............................................. 1,085 966 9.3% 10.3%
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--affiliate increased $1,671,000 principally from
commissions received from the sale of mentoring programs for the Trade
Your Way to Riches products. The increase in revenue is due to this
affiliate company purchasing names and phone numbers of potential
customers and contracting with us to sell its products and mentoring
services through our outbound telemarketing capabilities. We receive a
commission ranging from 35% to 55% for the sale of these products and
mentoring programs. The mentoring programs give the customer unlimited
access during business hours for periods ranging from three to 12 months
to mentors who can help the customer understand and utilize the audio and
video tapes and materials sold by Trade Your Way to Riches, Inc.

- 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. This affiliated company
that purchased media from us was able to purchase names and phone

27
<PAGE>
numbers of potential buyers for its products and, therefore, used its
resources on outbound telemarketing to increase sales rather than
purchasing media time to advertise its products. We have just recently
focused on selling media to unrelated third parties and expect media sales
to unrelated third parties to increase as we obtain additional capital
with which to purchase larger blocks of media time to resale; 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. Promoting our products
through the use of infomercials is capital intensive due to the need to
prepay for media airtime. During the second and third quarters of 1998, we
used more of our resources to acquire new products and to create our
Genesis Intermedia, Inc. subsidiary. As a result, we spent less money on
advertising our current products which resulted in lower product sales.
With the acquisition of new products and the new sources of income that
will result from Genesis Intermedia, we expect our product sales to
increase in 1999.

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 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

28
<PAGE>
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>
PERCENTAGE OF NET
YEAR ENDED DECEMBER 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--affiliate.................................. -- 742 -- 4.1%
Commissions and royalties............................................. 79 1,738 0.6% 9.6%
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>

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--affiliate increased $742,000 due to increased
commissions received from the sale of mentoring services for a company
owned by our majority stockholder; and

- Commissions and royalties increased $1,656,000 principally from sales of
customer names to an unrelated third party totaling $689,000 and an
increase in royalty income totaling $880,000.

- 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.

29
<PAGE>
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.

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

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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. In
January 1999, we sold 100,000 shares of common stock in a private placement at
$10 per share for an aggregate of $1,000,000, with underwriting commissions and
expenses of $115,000.

At September 30, 1998, we had an accounts receivable from affiliate of
$2,936,469 which was an increase of $552,746 from the balance at December 31,
1997. The increase in accounts receivable from affiliate is due to us selling
more products and mentoring services of this affiliate for which we receive a
commission. Generally, we are not paid our commission on these sales for 90 to
120 days which is longer than the payment cycle for media sales to this
affiliate. To date, all of the December 31, 1997 accounts receivable--affiliate
balance has been collected and $2,036,601 of the September 30, 1998 balance has
been collected. We believe the amounts due from affiliate are fully collectible.

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.

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.

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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.

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BUSINESS

GENERAL

We market and sell our own products and those of our clients through
conventional media channels. We are presently supplementing our marketing
efforts with interactive multimedia technologies. We refer to this innovative
blend of marketing services as an integrated multimedia marketing solution.
While Genesis has historically utilized conventional media to fulfill our
clients' marketing needs, and will continue to do so, we have focused more
recently on providing innovative multimedia solutions to businesses seeking to
conduct eCommerce through a variety of interactive platforms. These interactive
platforms include the Internet, interactive kiosks, CD-ROMs and DVDs.

Numerous businesses have begun to establish their own websites and e-mail
addresses and to advertise their products and services on the Internet. We
believe that many of these businesses, accustomed to marketing their products
and services through conventional media in local markets, will require
assistance to effectively adapt their marketing strategies to the emerging
eCommerce marketplace. The interactive multimedia marketing solutions offered by
us allow businesses that may be struggling with this transition to enhance their
traditional marketing strategies with new technologies and an element of
interactivity that Internet users find engaging.

We believe our assessment of the importance of the Internet as a new source
of revenue for growing businesses is substantiated, as recently reflected in a
report published by the Internet Advertising Bureau in October 1998. The report
indicates that Internet advertising expenditures grew to $423 million in the
second quarter of 1998, a 97% increase over the second quarter of 1997.

The services offered by Genesis that are designed to maintain and enhance
our clients' marketing efforts include:

- market analysis;

- an assessment of a client's business requirements; the development and
deployment of an appropriate marketing strategy--which may involve
interactive multimedia solutions, conventional media solutions, or both;

- ongoing solution maintenance;

- back-office support; and

- media placement.

These services are available to our clients separately, on an as-needed basis,
or together, on a fully integrated basis.

Genesis has two additional revenue generating capabilities:

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

- non-proprietary 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 our technical expertise, vision and creativity, Genesis will
leverage our conventional media and interactive multimedia technologies to
provide integrated marketing and business solutions which will increase our
clients' market exposure and facilitate the distribution of our clients'
products.

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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. Advertising spending tends to correlate to trends in the overall economy
and corporate profits. The media and communications consulting firm Veronis,
Suhler & Associates Inc. in its October 1998 Communications Industry Forecast
reported that overall advertising spending growth over the 1993 to 1997 period
was driven by the growth in corporate profits during the same period. Despite
projecting reduced corporate profits, Veronis, Suhler forecasts that overall
advertising spending will continue to grow at a compound annual growth rate of
8.3% over the 1997 to 2000 period.

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.

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%. According to Veronis, Suhler, online
advertising spending is forecast to increase from $906 million in 1997 to $6.5
billion in 2002.

GENESIS BACKGROUND AND GENESIS PRODUCTS

Genesis produces infomercials and performs telemarketing services for our
own products and for products that are owned by third parties. These products
include counseling programs and mentoring seminars on topics related primarily
to interpersonal relationships and financial planning. The counseling programs
and mentoring seminars are reproduced on audio and video cassettes and are
supplemented with printed materials, including workbooks and user manuals, which
assist consumers to learn to apply the principles discussed during the programs
to their own lives. The mentoring seminars are unique, as they include personal
tutorial services which are discussed below. Recently, we acquired the right to
market and distribute certain consumer products developed by third parties, such
as skin care products, engine additives and exercise equipment, as well. Genesis
will utilize a mix of conventional media and interactive multimedia technology
to market and distribute all of these products. We were incorporated on October
28, 1993 under the name Genesis Media Group, Inc. and we changed our name to
GenesisIntermedia.com, Inc. on December 3, 1998.

In 1994, we acquired a license to produce, market and distribute a
counseling program based on the book Men Are From Mars, Women Are From Venus
authored by John M. Gray, Ph.D. Consumers who purchase this particular product
receive the book, several audio cassettes and a companion video series
concerning interpersonal relationships. During 1995 and 1996, Genesis worked
with Dr. Gray to develop a continuing education and training program on this
topic as well. Although we currently produce infomercials and perform
telemarketing to sell these products to consumers, it is likely that these
products and others like them will be produced on CD-ROMs and DVDs and marketed
through the Internet in the future.

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In 1996, Genesis also produced a mentoring program concerning trading
strategies on the commodity futures trading market. The program, Trade Your Way
to Riches, is hosted by Jake Bernstein. It is available on audio and video
cassette and includes a training manual and a workbook. Individuals who purchase
this product are assigned a mentor and participate in regularly scheduled,
private tutorials with their mentor. Each mentor is available to its pupil to
answer questions regarding the product and to provide continuing education with
respect to the trading strategies set forth in the program. The program was
produced in connection with a joint venture between Genesis and Positive
Response Television, Inc., which was succeeded by Trade Your Way to Riches, Inc.
Trade Your Way to Riches, Inc. is owned by Genesis's majority stockholder.

Until 1997, certain administrative functions, including media sales,
inventory management and order fulfillment were outsourced to third parties. In
1997, Genesis purchased an office building and hired additional personnel,
enabling us to perform all of the administrative functions relevant to our
business in-house. Additionally, Genesis strengthened its infrastructure by
purchasing sophisticated telemarketing and computer equipment, which enabled us
to sell our proprietary products and those of our customers to a greater number
of consumers. Late in the year, Genesis added Larry Williams' Secrets to Stock
Investing mentoring program and Ted Thomas' Personal Fortune real estate
investment program to our product line. Each of these products is available in
traditional audio and video formats and includes training manuals and workbooks.
The program hosted by Larry Williams also includes mentoring services.

In 1998, Genesis obtained the exclusive right to market and distribute the
Hawaiian Tropic swimwear line and added several programs and consumer products
to our line, including:

- Money Mastery, a financial planning program;

- Emergency Room and District Attorney, DVDs that are designed to provide
continuing education to doctors and lawyers in an entertaining,
interactive format;

- Theracel, a skin care product; and

- Pure Power EHP Lubricant, an engine additive.

These programs and products are integral to Genesis's strategy to diversify its
marketing approach and product offerings.

In 1998, we also formed our Genesis Intermedia, Inc. subsidiary and hired
personnel experienced in multimedia technologies. The purpose of these
initiatives is to target consumers utilizing interactive multimedia technologies
and to position Genesis to deliver integrated multimedia marketing and business
solutions to our 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.

INCREASED DEMAND FOR INTEGRATED MULTIMEDIA SOLUTIONS. Several factors have
fostered the development of new marketing approaches and delivery platforms.
These factors have included:

- the globalization of the economy; and

- advances in technology and the growth of the Internet as a popular medium
for eCommerce, entertainment and education.

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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 that many businesses will be unable to ignore the competitive
challenge posed by the emerging eCommerce market and, as a result, will demand
that their marketing strategies target a generation accustomed to the fast-paced
power of the Internet and other interactive technologies, as well as those
individuals who continue to rely on conventional media for information and
entertainment. 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 our
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 we are 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. Clients may select any combination of the services
offered by Genesis 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 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

We use existing technologies available from third parties, proprietary
interactive multimedia technologies and our expertise in marketing to develop
and deploy creative solutions that are tailored to each client's marketing
needs. Our graphic designers and business strategists work together to create
engaging audio/visual experiences for the user by employing a variety of
interactive delivery platforms, including the Internet, interactive publicly
accessible kiosks, CD-ROMs and DVDs.

We generally design our 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 the products and
services are offered. The solutions are intended to attract and hold the

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attention of the client's target audience while at the same time 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 can also
enable a client to improve its business processes--for instance through direct
sales through kiosks or the Internet--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 us the capability to provide
multimedia solutions to our 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 our 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 our 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 our clients; and

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

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.

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Genesis recently acquired improved computer and telecommunications
technology to supplement our telemarketing business and to enable us to expand
this segment of our 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:

- automatically dial telephone numbers;

- determine if a live connection is made; and

- present connected calls to a telephone sales representative who has been
specifically trained for the client's sales program.

Our ability to train and to retain our sales personnel is critical to our
success because of the need to develop an in-depth knowledge of the complex
products typically sold by us. Genesis believes the complexity of our products,
the in-depth knowledge of our telemarketing personnel and our success in
retaining such personnel following training differentiate us from many of our
competitors in this field. Sales personnel are compensated by salary,
commissions and bonuses based on individual performance and overall
profitability. As of December 31, 1998, there were a total of 59 full-time sales
personnel employed in this division.

Inbound telemarketing services typically include:

- the electronic receipt and processing of all sales information;

- the communication of necessary sales information to Genesis's contracted
order fulfillment center; and

- the administration of customer order and service inquiries.

Genesis continues to produce infomercials and to perform teleservices for
our 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 under which we are obligated to pay royalties on products we sell.
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 our 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 our telemarketing
revenues in 1997 from any other client. We do not expect to generate more than
50% of our telemarketing revenues in 1998 from any individual client.

ONGOING SOLUTIONS SUPPORT

Genesis provides ongoing support services to our clients. These include:

(1) content maintenance;

(2) sales support administration;

(3) customer support; and

(4) technical support.

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Additionally, our 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. This facilitates management of the implemented system and secure
eCommerce. In delivering these solutions, we utilize 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 our 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. We will place media for clients
seeking traditional media solutions and for those seeking integrated multimedia
business solutions. We typically purchase media time or space, hold it in
inventory for a relatively short period of time and then resell it to clients,
which may include our own products. As a result of our successful media
purchasing and sales, we have established relationships with media sellers and
purchasers and developed a reputation for successfully committing for,
purchasing and selling media time. Because of these relationships, we believe
that we frequently receive more favorable access to desirable media time slots,
and have consequently been able to place such time with our 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 our inventory. We believe that media sales
will become more profitable when we have 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."

GENESIS'S INDEPENDENT REVENUE STREAMS

In addition to revenue from Genesis's integrated multimedia solutions, our
marketing capabilities provide independent sources for revenue streams. These
sources include:

- Genesis's offerings of proprietary products;

- media placement; and

- revenue streams from new technologies, including:

- public access networks; and

- audio/visual streaming and download technology.

PUBLIC ACCESS NETWORKS

Genesis, through our 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. We intend 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. We believe that the kiosks also increase merchant visibility,
facilitate product sales and enhance customer service.

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AUDIO/VISUAL STREAMING AND DOWNLOAD TECHNOLOGY

Genesis has the technological capability and expertise to enable our 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. We
believe that this non-proprietary 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.

STRATEGY

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

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

- develop and market innovative consumer products;

- expand our 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 our 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. We are 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 our 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 our media access by:

- taking advantage of the product/brand awareness created by our various
methods of distribution, including direct marketing, retail, Internet and
interactive multimedia, and leveraging it to other disciplines;

- continuing to offer our 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 our assets such as
our customer lists in order to realize their full value.

CONTINUING TO DEVELOP AND MARKET INNOVATIVE PRODUCTS. Genesis continually
seeks out innovative consumer products which we can market and distribute
profitably. For example, in the third quarter of 1998 we added 13 new products
that we will sell directly. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations." 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.

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GROWTH BY STRATEGIC ACQUISITIONS. Genesis regularly evaluates acquisition
opportunities that will enable us to expand our product offerings, core
multimedia marketing capabilities and the geographic scope of our operations. To
this end, Genesis intends to acquire well-regarded niche companies or leaders in
specific marketing and communications disciplines. We will also seek to acquire
product lines or companies that have products that we believe we can integrate
into our product offerings and successfully market through our marketing
channels. Genesis also reviews joint venture and strategic alliance candidates.
We will focus on acquiring relatively well-established, revenue producing,
eCommerce businesses, or businesses we believe can be marketed and sold
effectively in eCommerce, which will complement our existing capabilities. Key
personnel who possess technical expertise will be given incentives to remain
with Genesis on a long-term basis. We have made one acquisition to date and made
an offer to purchase assets in another acquisition. See "--Acquisitions" below.
We are not currently a party to any strategic alliances.

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 the 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 and a shareholder in the
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 the shareholder and the seller are $8.50 and $10.00,
respectively. All of the options will expire at the end of such three-year
period. In connection with the acquisition, we 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, each of the employees will be eligible to receive options covering
up to an additional 75,000 shares upon the achievement of three kiosk deployment
goals. We have also agreed to make a $40,000 interest-free loan to both
employees. Up to $30,000 of each loan is subject to forgiveness upon the
achievement of the same three kiosk deployment goals.

In the fourth quarter of 1998, we also signed a letter of intent and made an
offer to purchase substantially all of the assets of AniMagic Corporation, an
interactive multimedia company that provided audio and video download and
streaming capability to clients. Our offer to purchase the AniMagic assets for
$45,000 has been accepted by the bankruptcy trustee for AniMagic, but
consummation of the acquisition is still subject to bankruptcy court approval
and possible overbid. We have hired two former employees of AniMagic. Prior to
entering into the acquisition agreements, there were no affiliations between
Genesis and either Vision Digital or AniMagic.

COMPETITION

The market for fully integrated multimedia marketing and business solutions
is relatively new, is intensely competitive and is subject to rapid
technological change. Genesis expects competition to persist, intensify and
increase in the future. Our 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;

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- 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.

Each of these companies compete directly with particular segments of our
business. 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.

There are relatively low barriers to entry into the multimedia marketing and
business solutions market. Genesis relies heavily on the skill of our personnel
and the quality of our client service, and we have no patented technology that
would preclude or inhibit competitors from entering our market. Genesis expects
that we will 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 our business, results of operations and financial condition
would be negatively affected.

Most of our 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 our market. In addition, the relatively new market
for eCommerce is subject to continuing definition, and, as a result, may better
position our competitors to compete in this market as it matures.

INTELLECTUAL PROPERTY

Genesis regards our trademarks, trade secrets and similar intellectual
property as critical to our success. Although we currently have no registered
copyrights, trademarks or patents covering any of our proprietary technology, we
currently rely on a combination of common law copyright and trademark laws,
trade secret protection, confidentiality and non-disclosure agreements and
contractual provisions with our employees and with third parties to establish
and protect our proprietary rights. For the development of our marketing channel
capabilities and technologies, we intend to rely upon unpatented trade secrets
and know-how and on the expertise of our employees. These steps may not be
adequate.

We intend to pursue the registration of our copyrights and trademarks based
upon anticipated use internationally. We may not be able to secure copyright or
trademark registrations for all of our marks in the United States or other
countries. We have 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.

Owners of other registered or unregistered copyrights, trademarks or
servicemarks could bring potential copyright or trademark infringement claims.
If our technology infringes on the rights of other

42
<PAGE>

companies, we may be required to seek licenses from third parties. However, we
may not be able to do so on commercially reasonable terms, if at all. Moreover,
we 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. See "Risk Factors--Lack of intellectual property
protection for technology."

If our competitors prepare and file applications in the United States that
claim trademarks used or registered by us, we 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 us. Similarly, actions could be brought by third
parties claiming that our products or technology infringe patents or copyrights
owned by others. An adverse outcome could require us to license disputed rights
from third parties or to cease using such trademark or infringing product or
technology. Any litigation regarding our proprietary rights could be costly and
divert management's attention, result in the loss of certain of our proprietary
rights, require us to seek licenses from third parties and prevent us from
selling our products and services.

In addition, we anticipate in the future licensing our content from third
parties. As a result, our exposure to copyright infringement actions may
increase because we must rely upon such third parties for information as to the
origin and ownership of such licensed content. We intend 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, such
representations may not be accurate and such indemnification may not adequately
protect us.

REGULATION

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

THE FEDERAL TRADE COMMISSION ACT. The Federal Trade Commission may seek
cease and desist orders, impose monetary penalties, or pursue other remedies in
the event that an advertising company violates this Act rules or regulations
pertaining to false, misleading and unfair advertising. Genesis believes that we
are in compliance with the Act and the regulations promulgated under the Act.

THE FEDERAL TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT. A
variety of deceptive, unfair or abusive practices in telemarketing sales have
been prohibited under this Act. 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. We believe that we are in compliance with the
Act and the regulations promulgated pursuant to the Act.

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 FEDERAL TELEPHONE CONSUMER PROTECTION ACT OF 1991. This Act imposes
restrictions on unsolicited automated telephone calls to residential telephone
subscribers. Under the Act 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 Act requires teleservice firms to develop a written policy which

- clearly delineates the types of calls that such firms are prohibited from
making under the Act,

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- lists specific individuals or groups of individuals that such firms are
prohibited from contacting under the Act, and

- prohibits its personnel from making such calls.

Our call management system has been modified to eliminate certain capabilities
to help prevent violations of the Act. These modifications prevent personnel
from initiating telephone calls during restricted hours or to individuals listed
on our "do not call" list. We also educate our personnel on the restrictions and
prohibitions of the Act.

STATE REGULATION. Most states have enacted statutes similar to the Federal
Trade Commission Act 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 our operations as they are
currently conducted and we do not presently anticipate that such regulation will
materially and adversely affect our operations in the future.

INTERNATIONAL REGULATION. Advertising is subject to regulation in countries
other than the United States in which we may choose to do business. We 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 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 us are also
subject to government regulation. Our 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. We provide such continuing education to our employees and believe that
we have, in all material respects, complied with this and other relevant
industry regulations. We may also be subject to regulation by the Commodity
Futures Trading Commission, which regulates commodities trading. The Commission
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 was enacted in 1996. Although those sections of this Act 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 we do not currently distribute the types of materials that
this Act 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 Communications Decency Act could subject us to
potential liability, which in turn could have an adverse effect on our

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<PAGE>

business. Such laws could also damage the growth of the Internet generally and
decrease the demand for our products and services.

REGULATORY COMPLIANCE. We have developed internal review procedures to help
ensure that our work product is accurate and fairly discloses the nature of the
products marketed and sold by us. We believe that we are 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 December 31, 1998, we 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 our relations with our employees are good.

PROPERTIES

Genesis owns our 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 our administrative, telemarketing
and media time operations are conducted at our headquarters. We lease 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 1999 include expenditures for
expansion of our telemarketing division, which will likely include lease or
acquisition of additional space for telephone 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 Commodity Futures Trading Commission issued an
order authorizing certain persons to issue subpoenas and take depositions in a
private investigation involving Jake Bernstein and MBH Commodity Advisors, a
company not affiliated with Genesis. 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. Genesis has not to date been required to discontinue sales of
Trade Your Way to Riches products or services as a result of the CFTC's actions.

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, we believe 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 our 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.

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<PAGE>

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. 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. The
range of possible sanctions available to the CFTC include a simple request to
become registered, a cease and desist order--which may terminate sales of
certain Trade Your Way To Riches products or services--and a possible order of
disgorgement of profits--which would, if applied to Genesis, result in
substantial payments by Genesis.

Although Genesis is not presently party to any material litigation, we 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 December 31, 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
Craig T. Dinkel........................... 40 Chief Operating Officer
Blair LaCorte............................. 35 Director
George W. Heyworth........................ 49 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.

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

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<PAGE>
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.

GEORGE W. HEYWORTH. Mr. Heyworth was elected a director of Genesis in
January 1999. Since March 1998, Mr. Heyworth has been the Vice-President of
Intersolv/MicroFocus Inc., a software change management firm. He is directly
responsible for formulating business strategy, partnerships, acquisitions and
product direction for Intersolv/MicroFocus, Inc. Prior to joining Intersolv, Mr.
Heyworth was Chief Technology Officer and Vice President of Engineering at
Cadis, Inc., where he was a key member of the senior management team. Prior to
joining Cadis, Inc. in March 1997, Mr. Heyworth held several technical
management positions at Perot Systems Corporation, which he joined in April
1994. These positions included Director of Software Development and Director of
Global Technical Training. Mr. Heyworth also served as Chief Software Engineer
for NASA's Space Station Trainer from January to December 1993. Prior to this
project, Mr. Heyworth worked as Program Manager of NASA's Computer Services
Programs. Mr. Heyworth received his Masters of Science degree from the
University of Oregon and is a graduate of the United States Military Academy,
where he received a Bachelor of Science degree in Civil Engineering.

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. In 1998, AniMagic filed for protection under Chapter 11 of the
United States Bankruptcy Code, which case was dismissed, and AniMagic then filed
for protection under Chapter 7 of the Code. Mr. Elkholy also served as MIS
Director for Technicolor, Inc., Coca Cola Enterprise West, 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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of AniMagic Corporation. In 1998, AniMagic filed for protection under Chapter 11
of the United States Bankruptcy Code, which case was dismissed, and AniMagic
then filed for protection under Chapter 7 of the Code. 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

Genesis's board of directors is currently composed of four members. We
anticipate expanding the board of directors to five members. Prior to this
offering, we have 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. We anticipate 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. We 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. We maintain directors' and
officers' liability insurance and our corporate 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
our directors. In addition, our Certificate of Incorporation limits the personal
liability of the directors 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, 1998, 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 whose aggregate cash
compensation exceeded $100,000 for services rendered in all capacities to
Genesis during the fiscal year ended December 31, 1998.

No executive officer named in the table below 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. Of the options granted to Mr. Jacobson, 100,000 vest March 31, 1999
and 50,000 vest March 31, 2000.

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL 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 $ -- --
Douglas E. Jacobson, Chief Financial
Officer................................... 115,000 -- 150,000
</TABLE>

OPTION GRANTS

The following table sets forth information with respect to grants of stock
options to the named officers during 1998. We did not grant any stock
appreciation rights in 1998.

OPTIONS/SAR GRANTS IN 1998

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARS
OPTIONS/ GRANTED TO
SARS EMPLOYEES IN EXERCISE PRICE
NAME GRANTED (#) FISCAL YEAR ($/SHARE) EXPIRATION DATE
- --------------------------------------------- ----------- ----------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Ramy El-Batrawi.............................. -- -- -- --
Douglas E. Jacobson.......................... 100,000 40% $ 8.50 September 30, 2005
Douglas E. Jacobson.......................... 53,000 20% $ 8.50 December 31, 2005
</TABLE>

EMPLOYEE COMPENSATION PROGRAMS

1998 STOCK INCENTIVE PROGRAM

In October 1998, the board of directors adopted and the stockholders
approved our 1998 Stock Incentive Program. Under the 1998 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 program is intended to
secure for Genesis and our stockholders the benefits arising from ownership of
Genesis's common stock by individuals employed or retained by us who will be
responsible for the future growth of the enterprise. The 1998 program is
designed to help attract and retain superior personnel for positions of
substantial responsibility, and to provide individuals with an additional
incentive to contribute to our success.

The 1998 program is composed of seven parts and the program administrators
may make the following types of awards under the 1998 program:

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(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 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 our subsidiaries who are responsible for or
contribute to the management, growth or profitability of our business will be
eligible for selection by the program administrators to participate in the 1998
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 PROGRAM. We authorized and reserved for issuance an
aggregate of 500,000 shares of our common stock under the 1998 program. The
aggregate number of shares of common stock which may be granted through awards
under the 1998 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 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 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
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. The Incentive Stock Option Plan and
the Employee Stock Purchase Plan became effective upon their adoption by the
board of directors and approval of the 1998 program by a majority of the
stockholders. The 1998 program will continue in effect until September 30, 2008
unless sooner terminated under the general provisions of the 1998 program.

ADMINISTRATION. The 1998 program will be administered by the board of
directors or by a committee appointed by the board. Any such committee must
consist of not less than two directors who are:

- non-employee directors within the meaning of SEC Rule 16b-3 promulgated
pursuant to the Securities Exchange Act of 1934, so long as non-employee
director administration is required under Rule 16b-3; and

- outside directors as defined in Section 162(m) of the Internal Revenue
Code of 1986, so long as outside directors are required by the Code.

Subject to these 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 program.

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<PAGE>
STOCK OPTION GRANTS

On December 31, 1998, we had stock options outstanding with respect to
250,000 shares of common stock authorized under the 1998 program, all with
exercise prices of $8.50 per share. Of such options, 200,000 vest March 31, 1999
and 50,000 vest March 31, 2000. We also had 50,000 additional options
outstanding that were not granted under the 1998 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,
we entered into an employment agreement with Mr. El-Batrawi 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, 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. We have obtained a $4 million term life insurance policy covering Mr.
El-Batrawi. We are the sole beneficiary on the policy, $900,000 of which is
allocated to payment of the mortgage on our headquarters.

In connection with its acquisition of substantially all of the assets of
Vision Digital Communications, Inc., we 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 hurdle will have per share exercise
prices of $11.00, $13.00 and $15.00, respectively.

Effective December 7, 1998, the former Chief Executive Officer of our
Genesis Intermedia, Inc. subsidiary ceased to hold such position and was removed
from the position of director of Genesis. In the event that there is a dispute
with respect to the terms of any Genesis employment agreement, a state court may
determine not to enforce or only to partially enforce, certain provisions of the
employment agreements relating to non-competition.

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<PAGE>
CERTAIN TRANSACTIONS

We believe 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 We expect 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 our
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, we have advanced 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 have
generally been repaid upon our 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 were
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 have advanced 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., 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, we
sold media time to Trade 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, we earned commissions from the sale of Trade products that
amounted to $1,789,415 and $742,315, respectively. Amounts due to us at
September 30, 1998 and December 31, 1997, related to the sales of media to Trade
and commissions earned were $2,936,409 and $2,383,663, respectively. Our
accounts receivable from Trade are on a revolving open account. Accounts are
typically paid within 90 to 120 days, based upon the anticipated sales and
collection cycle for Trade's products, which typically involve four equal
monthly payments by Trade's customers.

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<PAGE>

During the year ended December 31, 1997, we 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, we sold 116,504 shares of our common stock to Dr. Gray
for $900,000. Dr. Gray surrendered to Genesis 29,126 of such shares,
representing 25% of his shares, on November 1, 1998 concurrently with the
surrender by Mr. El-Batrawi of 970,874 of such shares, representing 25% of his
shares of common stock, to Genesis.

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.

TRANSACTIONS WITH DOUGLAS E. JACOBSON

Between 1993 and 1997, Mr. Jacobson performed accounting and tax services
for us for which he was compensated based on his standard hourly rates ranging
from $100 to $125.

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<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of our common stock as of November 30, 1998 and as adjusted to reflect
the sale of common stock offered in this prospectus, by

- each person who is known by us to own beneficially five percent or more of
our common stock prior to this offering,

- each of our directors and each of the officers named in
"Management--Executive compensation" section of this prospectus, and

- 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.

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. All share
numbers and percentages assume no exercise of the underwriters' over-allotment
option.

<TABLE>
<CAPTION>
PERCENTAGE PRIOR PERCENTAGE AFTER
SHARES TO THE OFFERING THE OFFERING
BENEFICIALLY IF GREATER THAN IF GREATER THAN ONE
NAME OF BENEFICIAL OWNER OWNED PERCENT ONE PERCENT PERCENT
- -------------------------------------- ----------------- ----------------- -------------------
<S> <C> <C> <C>
Ramy El-Batrawi....................... 2,912,622 92.17% 56.45%
Douglas E. Jacobson................... 0 * *
Blair LaCorte......................... 0 * *
George W. Heyworth.................... 0 * *
All directors and executive officers
as a group (five persons)........... 2,912,622 92.17% 56.45%
</TABLE>

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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
January 25, 1999, there were 3,160,000 shares of common stock outstanding held
by five 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 for such
purpose, 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
of such stock, 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 19,840,000 shares of authorized but unissued common stock,
including an aggregate of 500,000 shares reserved for issuance upon the exercise
of options under its stock incentive 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 19,540,000 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

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<PAGE>
and possibly 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 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

- 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,

- 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

- 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

- the owner of 15% or more of the outstanding voting stock of the
corporation or

- 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
provides that the section will not apply 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. Our Certificate of
Incorporation and bylaws do not exclude us from the restrictions imposed under
Section 203, but our Certificate of Incorporation 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 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 us to negotiate in
advance with our 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

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<PAGE>

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.

We 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 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

- at such time as Genesis is qualified for trading as a national market
security on the Nasdaq Stock Market and has at least 800 stockholders as
of the record date of its most recent annual meeting of stockholders or

- 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.

We expect that we will no longer be subject to Section 2115 by the record
date of our 1999 annual meeting of stockholders because we anticipate that our
stock will be qualified for trading as a national market security on the Nasdaq
Stock Market and we will have more than 800 stockholders as calculated under
Section 2115.

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 our future ability to raise capital through the
sale of its equity securities.

Upon the closing of the offering, we will have outstanding 5,160,000 shares
of common stock, 5,460,000 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 unless held by affiliates of Genesis. The remaining 3,160,000 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

58
<PAGE>

owner other than 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 5,160,000 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 other than 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 holding
3,100,000 outstanding shares of common stock and options to purchase 250,000
shares of common stock, have 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, or
otherwise dispose of any shares of common stock or any related securities except
in certain circumstances. The underwriters' representative has informed us that
it has no current intention to release shares from the lock-up agreements until
the one-year has passed. 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, we 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.
We intend 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 United States federal
income and estate tax consequences of the ownership and disposition of common
stock by a person that, for United States federal income tax purposes, is not a
U.S. person. 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 of the United States, an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust if (1)
a United States 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. The discussion does not consider
specific facts and circumstances that may be relevant to a particular non-U.S.
person's tax position. Accordingly, each non-U.S. person is urged to consult its
own tax advisor with respect to the United States 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.

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<PAGE>
DIVIDENDS

Dividends paid to a holder of common stock who is not a U.S. person
ordinarily will be subject to withholding of United States 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 United States federal income
tax on a net income basis.

GAIN ON DISPOSITION OF COMMON STOCK

A holder who is not a U.S. person generally will not be subject to United
States 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. person in the United States and (b) in the
case of a non-U.S. person who is an individual and who holds the common stock as
a capital asset, such holder is 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. person at the
time of death will be included in such holder's gross estate for United States
federal estate tax purposes, unless an applicable estate tax treaty provides
otherwise.

UNITED STATES INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

United States information reporting requirements and backup withholding tax
will not apply to dividends paid on common stock to a non-U.S. person address
outside the United States, except that with regard to payments made after
December 31, 1998, a non-U.S. person will be entitled to such an exemption only
if it provides a Form W-8, 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

- is a U.S. person,

- derives 50 percent or more of its gross income for certain periods from
the conduct of a trade or business in the United States,

- is a "controlled foreign corporation" as to the United States, or

- is a foreign partnership that, at any time during its taxable year is 50
percent or more 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. person 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-U.S. person status under penalties
of perjury or otherwise establishes an exemption.

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<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 us and we have 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 in this prospectus, if any of such shares of common stock are purchased.
The underwriting agreement provides that the obligations of the several
underwriters are subject to certain conditions specified in the underwriting
agreement. 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. The co-managing underwriters have agreed among themselves to limit
European sales to no more than 50% of the offering.

COMMISSIONS, DISCOUNTS AND COMPENSATION

The representative has advised us 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 us 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. We have 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 by this prospectus, less underwriting
discounts and the non-accountable expense allowance. This 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 in this prospectus. To the extent
the 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 equal to 165% of the initial public offering price per

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<PAGE>

share of common stock. The representative's warrants are restricted from sale,
transfer, assignment, pledge or hypothecation for a period of 12 months from the
date of this prospectus, 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 their exercise 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 certain demand and piggyback rights of registration for the
securities issuable upon exercise and also provide for cashless exercise.

NO SALES OF SIMILAR SECURITIES; OFFERING LIMITATIONS

All officers, directors and existing stockholders holding a total of
3,100,000 shares of common stock, and all holders of options granted under the
1998 program 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

We have agreed for a period of five years after the date of this prospectus,
if requested by Millennium, to use our best efforts to nominate for election to
the board of directors one person designated by Millennium. In the event
Millennium elects not to exercise such right, Millennium may designate a person
to receive all notices of meetings of the board of directors and all other
correspondence and communications sent by Genesis to our board of directors and
to attend all such meetings of the board of directors. We have agreed to
reimburse designees of Millennium for their out-of-pocket expenses incurred in
connection with their attendance of meetings of the 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. We have submitted an application to have the common stock quoted
on the Nasdaq Stock Market, Inc.'s National Market System. If approved for
quotation on 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 the

62
<PAGE>

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. If the common stock is not approved for quotation on Nasdaq, we intend to
seek listing on the American Stock Exchange, where we have applied for listing.

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 our 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 we compete, an
assessment of our management, our prospects, our capital structure, the market
for initial public offerings and such 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 this 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 pursuant to which 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. Please refer to the complete copies of such agreements which
are filed as exhibits to the registration statement of which this prospectus is
a part. See "Available Information."

63
<PAGE>
LEGAL MATTERS

The validity of the shares of common stock offered in this prospectus 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--Commodity Futures Trading Commission
investigation," "Business-- Regulation" and "Business--Legal proceedings" is set
forth 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 such
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. This prospectus
does not contain all of the information set forth in the registration statement
and the exhibits to the registration statement, 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, we will become subject to the reporting requirements
of the Securities Exchange Act of 1934, and in accordance with that law we will
be required to file reports and other information with the SEC. The registration
statement and 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. 20006-1500, once the common stock has been approved for
quotation.

We will furnish our 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 our independent auditors.

64
<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 1, 1st 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 $ 579,229 $ 52,734
Current portion of capital lease obligations....................... 20,565 20,565 --
Line of Credit..................................................... 322,399 322,399 --
Accounts payable................................................... 751,520 751,520 1,800,506
Other accrued liabilities.......................................... 489,073 489,073 141,709
Income taxes payable............................................... 45,000 45,000 35,000
Deferred revenue................................................... 267,500 267,500 267,500
Distribution to stockholders....................................... 2,000,000 -- --
Due to related parties............................................. 797,844 797,844 188,380
------------- ------------- ------------
Total current liabilities........................................ 5,273,130 3,273,130 2,485,829
NOTES PAYABLE, net of current portion................................ 843,583 843,583 609,545
CAPITAL LEASE OBLIGATIONS, net of current portion.................... 40,989 40,989 --
------------- ------------
Total liabilities.............................................. 6,157,702 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 $ 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--affiliate................. 1,789,415 118,324 742,315 --
Commissions and royalties............................ 965,515 1,084,721 1,737,863 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........................ $ 0.19 $ 0.20 $ 0.57 $ 0.10
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
DILUTED EARNINGS PER COMMON SHARE...................... $ 0.19 $ 0.20 $ 0.57 $ 0.10
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING............. 4,235,294 3,883,495 4,119,108 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.............. $ 0.11 $ 0.12 $ 0.35 $ 0.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
PRO FORMA DILUTED EARNINGS PER COMMON SHARE............ $ 0.11 $ 0.12 $ 0.35 $ 0.06
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING............. 4,235,294 3,883,495 4,119,108 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. On December 3, 1998, Genesis amended its Certificate of
Incorporation to change its name to Genesis Intermedia.com, Inc. 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 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.

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)
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 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.

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)
Revenue from media sales is recognized when the media time is aired. Commissions
and royalties are recognized when earned.

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)

In accordance with staff Accounting Bulletin Topic 1.B.3, the weighted
average number of common shares outstanding for the year ended December 31, 1997
and the nine months ended September 30, 1998 was increased by 235,294 to reflect
the number of shares that will be sold in the Company's initial public offering
to pay the $2 million distribution to stockholders. As a result, earnings per
share decreased from $.61 to $.57 for the year ended December 31, 1997 and
decreased from $.20 to $.19 for the nine months ended September 30, 1998.

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)
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 Genesis's financial statements.

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>

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>

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 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 above
mentioned media sales resulted in a gross profit of $966,788, $0, $455,238 and
$846,392, respectively. The mark-up on the media sales was 15% which is the
standard industry mark-up and consistent with amounts that could be realized
from sales to unrelated third parties. 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. The commission received from selling these
products ranged from 35% to 55%.

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

In the normal course of business, Genesis has entered into various
agreements under which 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.

On November 14, 1997, the Commodity Futures Trading Commission 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
Commission 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 Commission has directed one
subpoena to Genesis. Various documents have been produced on behalf of Genesis
in response to the subpoena. Additionally, the Commission has taken the
deposition of Ramy El-Batrawi, president of Genesis, in connection with its
investigation.

Although the Commission 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 Commission's analysis and
conclusions are incorrect and are based on incomplete information. In October
1998, Genesis issued a written response to the Commission's position setting
forth the reasons why Genesis is not required to register in any capacity with
the Commission. The Commission has not yet issued a response. Genesis has been
advised by its counsel that the initiation of a Commission 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 Commission 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
Commission will be less than $1,000.00. In the event that the Commission 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. The range of possible sanctions available to the Commission include a
simple request to become registered, a cease and desist order--which may
terminate sales of certain Trade Your Way To Riches products or services--and a
possible order of disgorgement of profits--which would, if applied to Genesis,
result in substantial payments by Genesis.

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)
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.

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 (UNAUDITED)

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. 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. Of such options,
200,000 vest

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 7--SUBSEQUENT EVENTS (UNAUDITED) (CONTINUED)

March 31, 1999 and 150,000 will not vest as a result of a termination of
employment after November 30, 1998. As a result of such non-vesting, Genesis may
re-grant options with respect to such 150,000 shares under the Program. On
December 31, 1998, Genesis issued 50,000 additional options with a weighted
average exercise price of $8.50 per share. Such options vest March 31, 2000.

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
certain assets of AniMagic Corporation, an interactive multimedia company that
produces CD-ROMs for the edutainment industry. In December 1998 Genesis made an
offer to purchase such assets. AniMagic is currently in bankruptcy and the
ultimate acquisition is subject to overbid and 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 January 25, 1999, Genesis completed a private placement of 100,000 shares
of common stock at $10.00 per share, net of commissions and expenses of
approximately $115,000.

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. In addition, the accompanying statements
of operations for the nine months ended September 30, 1998 and the year ended
December 31, 1997 include pro forma earnings per share information assuming the
number of shares being sold in the IPO to pay the $2,000,000 distribution to
stockholders were outstanding throughout the most recent year and interim
periods presented.

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) (CONTINUED)
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 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 IN THIS PROSPECTUS IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 7
Forward Looking Statements................................................ 20
Use of Proceeds........................................................... 20
Dividend Policy........................................................... 20
Capitalization............................................................ 21
Dilution.................................................................. 22
Selected Financial Data................................................... 23
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 25
Business.................................................................. 33
Management................................................................ 47
Certain Transactions...................................................... 53
Principal Stockholders.................................................... 55
Description of Capital Stock.............................................. 56
Underwriting.............................................................. 61
Legal Matters............................................................. 64
Experts................................................................... 64
Available Information..................................................... 64
Index to Financial Statements............................................. F-1
</TABLE>

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

UNTIL , 1999 (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 CORPORATION

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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.......................................... $ 58,725
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............................................................. $ 15,947
---------
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 provides that no Program Administrator, as
that term is defined in the 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.

The Registrant also carries liability insurance covering officers and
directors.

II-2
<PAGE>
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 and in December 1998, the Registrant granted
options to purchase an additional 50,000 shares of common stock to one employee
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.

In January 1999, the Registrant issued 100,000 shares of its common stock to
an institutional investor in Europe that is not a U.S. person within the meaning
of Regulation S under the Securities Act in consideration of $1,000,000, with
aggregate underwriting commissions and discounts of $115,000. The offer and sale
of such securities were made in reliance on the exemption from registration
under Regulation S relating to non-United States offers and sales.

ITEM 16. EXHIBITS.

(a) Exhibits

II-3
<PAGE>
See Exhibit Index at page II-6.

(b) Financial Statement Schedules

None.

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. 4 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, California, on January 25, 1999.

<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. 4 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 January 25, 1999
Ramy El-Batrawi Officer)

Director, Chief Financial
/s/ DOUGLAS E. JACOBSON Officer (Principal
- ------------------------------ Financial and Accounting January 25, 1999
Douglas E. Jacobson Officer)

/s/ BLAIR LACORTE *
- ------------------------------ Director January 25, 1999
Blair LaCorte

/s/ GEORGE W. HEYWORTH
- ------------------------------ Director January 25, 1999
George W. Heyworth
</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 Agreement and Plan of Merger between Genesis Media Group, Inc., a Florida corporation
("Genesis 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........................................................................... *
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.................................................................... *
3.6 Certificate of Amendment of Certificate of Incorporation of Genesis Delaware filed with the
Delaware Secretary of State on December 3, 1998............................................. *
3.7 Certificate of Merger of Genesis Florida into Genesis Delaware filed with the Delaware
Secretary of State on December 9, 1998...................................................... *
4.1 Specimen Stock Certificate.................................................................... *
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............................... *
10.6 Employment Agreement between the Registrant and Sam I. Hassabo................................ *
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. ................................................................... *
10.16 License Agreement between the Registrant (as assignee) and John Gray, Ph.D. dated September
29, 1993.................................................................................... *
</TABLE>

II-6
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION FILED (F)
- ----------- ---------------------------------------------------------------------------------------------- ---------
<C> <S> <C>
10.17 Amendment to Agreement between the Registrant (as assignee) and John Gray, Ph.D. ............. *
10.18 Employment Agreement between Registrant and Michael F. Costa.................................. *
10.19 Employment Agreement between Registrant and Christopher Miglino............................... *
10.20 Assignment between Registrant (as Assignee) and Ramy El-Batrawi (as Assignor)................. *
10.21 Surrender and Cancellation Agreement among the Registrant, Ramy El-Batrawi and John M. Gray... *
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.................................................................. *
24.1 Power of Attorney............................................................................. *
24.2 Authorizing Resolutions....................................................................... *
27.1 Financial Data Schedule....................................................................... *
</TABLE>

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

* Previously filed.

II-7

<PAGE>
EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated June 23, 1998 (except for Note 1, 1st
paragraph, as to which the date is December 3, 1998) accompanying the financial
statements of GenesisIntermedia.com, Inc. contained in the Registration
Statement and Prospectus. We consent to the use of the aforementioned report in
the Registration Statement and Prospectus, and to the use of our name as it
appears under the caption "Experts."

SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
January 25, 1999