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


                                   FORM 10-QSB

                QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                         COMMISSION FILE NUMBER: 0-28885


                           Q COMM INTERNATIONAL, INC.
           ----------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                  Utah                                     87-0674277
         ----------------------                       -------------------
        (State of incorporation)                      IRS Employer ID No.

                   1145 South West 1680, Orem, Utah 84058-4930
                   -------------------------------------------
                    (Address of principal executive offices)

                                 (801) 226-4222
                ------------------------------------------------
                         (Registrant's telephone number)

Check whether the issuer

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

Number of shares  outstanding of each of the issuer's  classes of common equity,
as of  the  latest  practicable  date:  As of  November  12,  2001,  there  were
12,713,107 shares of common stock outstanding.

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


                                       1
<PAGE>


Part I

Item 1. Financial Statements










                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

                    UNAUDITED CONDENSED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2001













<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY




                                    CONTENTS

                                                                          PAGE
                                                                          ----


--       Unaudited Condensed Consolidated Balance Sheets,
            September 30, 2001 and December 31, 2000                         F-1


--       Unaudited Condensed Consolidated Statements of
            Operations, for the three and nine months ended
            September 30, 2001 and 2000                                      F-2


--       Unaudited Condensed Consolidated Statements of Cash
            Flows, for the nine months ended September 30, 2001
            and 2000                                                     F-3 - 4


--        Notes to Unaudited Condensed Consolidated Financial
            Statements                                                  F-5 - 13



<PAGE>

<TABLE>
<CAPTION>
                          Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

                       UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                            ASSETS

                                                                 September 30,   December 31,
                                                                      2001           2000
                                                                  -----------    -----------
<S>                                                               <C>            <C>
CURRENT ASSETS:
     Cash in bank                                                 $    36,017    $    97,740
     Certificates of deposit                                          100,000        100,000
     Accounts receivable                                               64,720        184,764
     Prepaid expenses                                                  41,500           --
     Inventory                                                         23,663           --
                                                                  -----------    -----------
               Total Current Assets                                   265,900        382,504
                                                                  -----------    -----------

PROPERTY & EQUIPMENT, net                                             575,544        190,751
                                                                  -----------    -----------
OTHER ASSETS:
     Goodwill, net                                                    155,865        189,549
     Capitalized software development costs                           455,510          3,478
     Deposits                                                           3,558          2,738
                                                                  -----------    -----------
               Total Other Assets                                     614,933        195,765
                                                                  -----------    -----------
                                                                  $ 1,456,377    $   769,020
                                                                  ===========    ===========


                        LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Lines of credit                                              $    31,222    $    63,368
     Accounts payable                                                 813,706        355,633
     Accrued expenses                                                 172,001        136,729
     Related party obligations                                        419,602        334,529
     Notes payable and capital lease obligations                      146,973        100,000
     Investor advances                                                231,446        292,000
     Convertible note                                                 200,000           --
     Convertible debenture                                             50,000         50,000
     Contingent liability                                             159,235        159,235
                                                                  -----------    -----------
               Total Current Liabilities                            2,224,185      1,491,494
                                                                  -----------    -----------
LONG TERM OBLIGATIONS:
     Notes payable and capital lease obligations                       67,498        100,000
                                                                  -----------    -----------
               Total Liabilities                                    2,291,683      1,591,494
                                                                  -----------    -----------
STOCKHOLDERS' EQUITY (DEFICIT):
     Common stock, $.001 par value,
       50,000,000 shares authorized,
       12,456,255 and 9,213,655 shares
       issued and outstanding, respectively                            12,456          9,214
     Capital in excess of par value                                 3,801,602      2,853,633
     Retained Deficit                                              (4,514,364)    (3,685,321)
                                                                  -----------    -----------
                                                                     (700,306)      (822,474)
     Less stock subscription receivable                              (135,000)          --
                                                                  -----------    -----------

               Total Stockholders' Equity (Deficit)                  (835,306)      (822,474)
                                                                  -----------    -----------
                                                                  $ 1,456,377    $   769,020
                                                                  ===========    ===========
</TABLE>

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

                                             F-1

<PAGE>

<TABLE>
<CAPTION>

                              Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

                      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




                                                For the Three                  For the Nine
                                                Months Ended                   Months Ended
                                                September 30,                  September 30,
                                        ----------------------------    ----------------------------
                                            2001            2000            2001            2000
                                        ------------    ------------    ------------    ------------
<S>                                     <C>             <C>             <C>             <C>
NET SALES                               $  5,531,640    $    458,352    $ 11,271,480    $    908,323

COST OF GOODS SOLD                         3,774,877         301,832       7,089,842         555,674
                                        ------------    ------------    ------------    ------------
GROSS PROFIT                               1,756,763         156,520       4,181,638         352,649
                                        ------------    ------------    ------------    ------------
OPERATING EXPENSES:
     Commissions and fees                  1,548,153         106,492       3,729,952         181,773
     Research and development                 79,330            --           136,830            --
     Selling expenses                         77,372          51,058         195,343         185,794
     General and administrative              223,458         238,820         759,271         742,914
     Depreciation and amortization            43,599          21,528         112,880          45,349
                                        ------------    ------------    ------------    ------------
         Total Operating Expenses          1,971,912         417,898       4,934,276       1,155,830
                                        ------------    ------------    ------------    ------------
LOSS FROM OPERATIONS                        (215,149)       (261,378)       (752,638)       (803,181)

OTHER INCOME (EXPENSE):
     Other income                                908           1,352           2,684           1,352
     Other expense                           (40,557)        (16,694)        (81,313)        (43,204)
                                        ------------    ------------    ------------    ------------
         Total Other Income (Expense)        (39,649)        (15,342)        (78,629)        (41,852)
                                        ------------    ------------    ------------    ------------
LOSS BEFORE INCOME TAXES
     AND EXTRAORDINARY ITEM                 (254,798)       (276,720)       (831,267)       (845,033)

CURRENT TAX EXPENSE                             --              --              --              --

DEFERRED TAX EXPENSE                            --              --              --              --
                                        ------------    ------------    ------------    ------------
LOSS BEFORE EXTRAORDINARY ITEM              (254,798)       (276,720)       (831,267)       (845,033)

EXTRAORDINARY ITEM - Gain on
     extinguishment of debt                     --            12,799           2,224         106,889
                                        ------------    ------------    ------------    ------------

NET LOSS                                $   (254,798)   $   (263,921)   $   (829,043)   $   (738,144)
                                        ============    ============    ============    ============

BASIC LOSS PER COMMON SHARE:
Loss from continuing operations         $       (.02)   $       (.03)   $       (.08)   $       (.11)
     Extraordinary item                         --              --              --               .02
                                        ------------    ------------    ------------    ------------

BASIC LOSS PER COMMON SHARE             $       (.02)   $       (.03)   $       (.08)   $       (.09)
                                        ============    ============    ============    ============
</TABLE>


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

                                                 F-2

<PAGE>
<TABLE>
<CAPTION>


                           Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

                   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                         For the Nine
                                                                         Months Ended
                                                                         September 30,
                                                                  --------------------------
                                                                     2001            2000
                                                                  -----------    -----------
<S>                                                               <C>            <C>
Cash Flows from Operating Activities:
     Net loss                                                     $  (829,043)   $  (738,144)
     Adjustments to reconcile net
       loss to net cash used by
       operating activities:
        Gain on extinguishment of debt                                 (2,224)      (106,889)
        Depreciation and amortization expense                         112,880         45,349
        Stock issued for non-cash consideration                       115,211           --
        Change in assets and liabilities:
           Decrease in accounts receivable                            120,044            998
           Increase in prepaid expenses                               (41,500)          --
           Increase in other assets                                      (820)        (2,178)
           Increase in inventory                                      (23,663)          --
           Increase (decrease) in accounts payable                    460,297        (89,665)
           Increase in accrued expenses                                35,272        113,352
           Increase in related party obligations                       85,073         32,323
                                                                  -----------    -----------
               Net Cash Provided (Used) by Operating Activities        31,527       (744,854)
                                                                  -----------    -----------
Cash Flows from Investing Activities:
     Capitalized software development costs                          (452,032)          --
     Purchase of property & equipment                                (437,911)      (167,119)
     Increase in certificates of deposit                                 --         (100,000)
                                                                  -----------    -----------
               Net Cash Used by Investing Activities                 (889,943)      (267,119)
                                                                  -----------    -----------
Cash Flows from Financing Activities:
     Issuance of common stock                                         701,000        885,000
     Proceeds from investor advances                                     --          292,000
     Payment on investor advances                                     (60,554)          --
     Proceeds from convertible notes                                  200,000           --
     Proceeds from convertible debenture                                 --           50,000
     Net decrease in lines of credit                                  (32,146)       (97,533)
     Payments on notes payable                                        (11,607)       (30,827)
                                                                  -----------    -----------
               Net Cash Provided by Financing Activities              796,693      1,098,640
                                                                  -----------    -----------
Net Increase (Decrease) in Cash                                       (61,723)        86,667

Cash at Beginning of Period                                            97,740         42,488
                                                                  -----------    -----------
Cash at End of Period                                             $    36,017    $   129,155
                                                                  ===========    ===========
Supplemental Disclosures of Cash Flow Information:
     Cash paid during the periods for:
       Interest expense                                           $    28,645    $      --
       Capitalized interest                                       $    14,023    $      --
       Income taxes                                               $       100    $      --

</TABLE>

                                          (Continued)

                                             F-3
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Continued)

Supplemental Schedule of Noncash Investing and Financing Activities:

     For the nine months ended September 30, 2001:

          The Company issued 755,934 shares of common stock for services  valued
          at $244,079, including stock offering costs of $128,868.

          The Company  issued  385,715 shares of common stock for a subscription
          receivable.

          The Company  obtained  computer  equipment  with a value of $26,442 by
          entering into a capital lease.

     For the nine months ended September 30, 2000:

          The Company  issued  100,000 shares of common stock and a note payable
          in the  amount of  $50,000  in the  acquisition  of Azore  Acquisition
          Corporation (See Note 2).

          The Company  issued  896,055  shares of common stock in  conversion of
          $650,000 of debentures along with related accrued interest of $10,788.














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



                                      F-4
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization  - Q Comm  International,  Inc. (the Company) was organized on
     February 7, 1986 as Four Rivers Development,  Inc. This name was changed on
     August  3,  1998 to Q Comm  International  Inc.  in  conjunction  with  the
     purchase of three  operating  companies.  The Company is  headquartered  in
     Orem,  Utah but  provides  telecommunication  products  and services to end
     users  throughout the United States.  The Company has, at the present time,
     not paid any  dividends  and any  dividends  that may be paid in the future
     will  depend  upon the  financial  requirements  of the  Company  and other
     relevant factors.

     Unaudited  Condensed  Financial  Statements  - The  accompanying  financial
     statements  have been prepared by the Company without audit. In the opinion
     of  management,  all  adjustments  (which  include  only  normal  recurring
     adjustments) necessary to present fairly the financial position, results of
     operations  and cash flows at  September  30,  2001 and for all the periods
     presented have been made.

     Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles  have been  condensed  or  omitted.  These  condensed  financial
     statements should be read in conjunction with the financial  statements and
     notes thereto included in the Company's December 31, 2000 audited financial
     statements.  The results of operations for the periods ended  September 30,
     2001 and 2000 are not necessarily  indicative of the operating  results for
     the full year.

     Cash and Cash Equivalents - For purposes of the financial  statements,  the
     Company  considers  all highly  liquid debt  investments  purchased  with a
     maturity of three months or less to be cash equivalents.

     Certificates of Deposits - The Company accounts for investments in debt and
     equity  securities in  accordance  with  Statement of Financial  Accounting
     Standard (SFAS) 115, "Accounting for Certain Investments in Debt and Equity
     Securities".  Under SFAS 115 the  Company's  certificates  of deposit (debt
     securities)  have been classified as  held-to-maturity  and are recorded at
     amortized cost. Held-to-maturity securities represent those securities that
     the  Company  has  both the  positive  intent  and  ability  to hold  until
     maturity.

     Depreciation  -  Depreciation  of property and equipment is provided on the
     straight-line  method over the estimated useful lives of the assets of five
     years.

     Goodwill  -  In  connection  with  the  acquisition  of  Azore  Acquisition
     Corporation (See Note 2), the Company  recorded  goodwill of $224,561 which
     is being amortized over 5 years on a straight-line basis.

     Revenue  Recognition - The Company provides  electronic delivery of prepaid
     telecommunication  products through a variety of retail locations.  Revenue
     is  recognized  at the  time  of  product  sale.  Sales  of  the  Company's
     electronic  products and services are generally made directly to end-users.
     There  is no right of  return  for  products  sold and the  Company  is not
     obligated for further performance after the sale.

     The  Company  also  provides  non-electronic   telecommunication   products
     primarily  to others for  resale.  These  sales are  recorded  net of sales
     discounts and allowances.

                                      F-5
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Loss Per Share - The Company  computes  loss per share in  accordance  with
     Statement of Financial  Accounting  Standards (SFAS) No.  128,"Earnings Per
     Share," which  requires the Company to present basic earnings per share and
     dilutive earnings per share when the effect is dilutive (see Note 14).

     Income Taxes - The Company  accounts for income  taxes in  accordance  with
     Statement of Financial Accounting Standards No. 109, "Accounting for Income
     Taxes."  This  statement  requires  an asset  and  liability  approach  for
     accounting for income taxes.

     Research  and  Development  - Research  and  Development  costs are for the
     purpose of new product development and are expensed as incurred.

     Software  Development Costs - The Company capitalizes  software development
     costs  incurred  to  develop  certain of the  Company's  new  products  and
     services in accordance  with  Statement of Financial  Accounting  Standards
     (SFAS) No. 86,  "Accounting for the Costs of Computer  Software to Be Sold,
     Leased,  or  Otherwise  Marketed".  Costs are  capitalized  only  after the
     technological  feasibility  of  the  project  has  been  established.  Once
     completed,  project costs will be amortized over the estimated  useful life
     of the software of five years.

     The  Company  regularly  reviews  the  carrying  value of such  capitalized
     software  costs.  At the  time a  determination  is made  that  capitalized
     amounts  are not  recoverable  based  on the  estimated  cash  flows  to be
     generated from the applicable software,  any remaining  capitalized amounts
     are written off.

     Advertising  Costs -  Advertising  and  marketing  costs  are  expensed  as
     incurred.

     Inventory - Inventory consists of wireless  telecommunication  products and
     is carried at the lower of cost or market.

     Accounting   Estimates  -  The  preparation  of  financial   statements  in
     conformity  with  generally   accepted   accounting   principles   requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities, the disclosures of contingent assets and
     liabilities  at the  date of the  financial  statements,  and the  reported
     amounts of  revenues  and  expenses  during the  reporting  period.  Actual
     results could differ from those estimated by management.

     Reclassifications  - Certain  amounts in the financial  statements  for the
     periods  ended  September  30,  2000 have been  reclassified  to conform to
     headings  and  classifications  used in the  September  30, 2001  financial
     statements.


                                      F-6
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - ACQUISITION

     During March 2000, the Company issued 100,000 shares of common stock valued
     at $1.76 and a note  payable for $50,000 to purchase  all of the issued and
     outstanding shares of Azore Acquisition Corporation (Azore). The merger was
     accounted  for as a purchase.  Subsequent  to the merger,  Azore was merged
     into the Company and  dissolved.  Goodwill  of  $224,561  representing  the
     excess of the cost of  purchasing  Azore over the fair market  value of the
     assets at the date of  acquisition  was recorded and is being  amortized on
     the  straight-line  method over 5 years.  Amortization  expense  recognized
     during the  periods  ended  September  30,  2001 and 2000 was  $33,684  and
     $18,504, respectively.

NOTE 3 - CERTIFICATES OF DEPOSIT

     The Company has  certificates  of deposit  with a cost and market  value of
     $100,000 at September  30, 2001.  The  certificates  mature May 2002 with a
     maturity  value of  $103,600.  One of the  certificates  of  deposit in the
     amount of $50,000 is collateral  for the Company's line of credit (See Note
     6).

NOTE 4 - PROPERTY & EQUIPMENT

     The following is a summary of property and equipment:

                                                September 30,    December 31,
                                                   2001             2000
                                                -----------     ------------

              Equipment                         $   696,381     $    234,312
              Office and miscellaneous                4,512            2,633
                                                -----------     ------------
              Total Cost                            700,893          236,945

              Accumulated Deprecation              (125,349)         (46,194)
                                                ------------    ------------
              Property & Equipment, net         $   575,544     $    190,751
                                                ============    ============

     Depreciation  expense for the nine months ended September 30, 2001 and 2000
     was $79,196 and $26,845, respectively.

     Equipment  with a value  of  approximately  $200,000  has been  pledged  as
     collateral  on a convertible  note (see Note 10).  Also,  equipment  with a
     remaining  book  value  of  approximately   $25,000  has  been  pledged  as
     collateral on a capital lease (see note 9).



                                      F-7
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - CAPITALIZED SOFTWARE DEVELOPMENT

     Capitalized software costs at September 30, 2001 are related to projects in
     process and  accordingly,  no amortization  has been recorded.  Information
     related to capitalized software costs is as follows:

                  Balance, beginning of period                  $      3,478
                  Capitalized during the period                      452,032
                                                                ------------
                  Balance, end of period                        $    455,510
                                                                ============

     There were no capitalized  software costs during the period ended September
     30, 2000.

NOTE 6 - LINES OF CREDIT

     The Company  has a $50,000  line of credit with a bank.  At  September  30,
     2001, there was no balance outstanding.  The line accrues interest at prime
     plus 2% (9% at September  30,  2001),  and is due in May 2002.  The line is
     secured by a $50,000 certificate of deposit.

     At September 30, 2001, the Company has a $31,222  balance  outstanding on a
     line of credit with a bank.  The line of credit bears interest at a rate of
     10.5% and is due on demand.

NOTE 7 - RELATED PARTY OBLIGATIONS

     Accrued  Expenses - At  September  30,  2001,  the  Company  owes the Chief
     Executive  Officer  $238,842,  principally  consisting of unpaid  equipment
     lease expenses (see Note 15) and deferred salary.

     Notes Payable - At September 30, 2001,  the Company has two notes  together
     with accrued  interest  totaling  $180,760  payable to the Company's  Chief
     Executive  Officer.  The notes are  payable on demand and bear  interest at
     10%.

NOTE 8 - INVESTOR ADVANCES

     At September 30, 2001,  the Company owes  investors  $231,446 for advances.
     The advances were  restructured  on September 15, 2001 with the full amount
     of the note plus accrued interest at 18% due on January 31, 2002.


                                      F-8
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - NOTES PAYABLE

     At September  30, 2001,  the Company has a note payable for  $100,000.  The
     note bears interest at a rate of 15% per annum, payable monthly, and is due
     January 2, 2002.  If the  Company  does not make the  interest  payments or
     principal  balloon payment,  a late penalty equal to 10% of the amount owed
     will be assessed 5 calendar days after the payment was due. The Company has
     pledged 400,000 common shares as collateral for the loan (see Note 13).

     At  September  30,  2001,  the Company has a note  payable with an original
     balance of $50,000  and a  remaining  balance  of  $46,350.  The note bears
     interest at a rate of 12% per annum and is due on  November  27,  2002.  On
     August 15, 2001,  the note was extended one year in exchange for payment of
     accrued interest to date of $4,350 and principal reduction in the amount of
     $3,650.  In connection  with  obtaining the note, the Company issued 25,000
     options to purchase  common stock  exercisable  at $.60 per share  expiring
     November 27, 2003, with demand registration rights.

     At  September  30,  2001,  the Company has a note  payable with an original
     balance of $50,000 and a remaining balance of $42,084 in connection with an
     acquisition (see Note 2). The note bears interest at 18% per annum. Monthly
     principal and interest payments of $4,951 are due through May 2002.

     In July  2001,  the  Company  entered  into a lease  for  certain  computer
     equipment with a value of $26,442. The lease was capitalized for accounting
     purposes  and the  Company  recorded  a capital  lease  obligation  in that
     amount. The lease is payable over four years with monthly payments of $820.
     At September 30, 2001, the outstanding  balance on the lease is 26,037,  of
     which 21,148 is classified as long-term.

NOTE 10 - CONVERTIBLE DEBENTURES/NOTES

     At September 30, 2001,  the Company has $50,000 in  convertible  debentures
     which may be  converted  to common stock at $.30 per share at the option of
     the holder. The debentures bear interest at 12.5% and are due July 6, 2002.

     On August 9, 2001, the Company entered into a $200,000, secured convertible
     note agreement.  The note is due January 31, 2002 and bears interest at 6%.
     The note may be converted to restricted  shares of common stock at $.30 per
     share at the option of the holder.  The note is  collateralized  by certain
     equipment  with  an  approximate  value  of  $200,000.  If the  note is not
     converted  to common  stock,  the  Company has the option to repay the note
     with cash or by releasing  the  equipment  collateralizing  the note to the
     holder.


                                      F-9
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - CONTINGENT LIABILITY

     During the year ended  December 31,  2000,  the Company  purchased  certain
     software and hardware from an unrelated  party for  $1,000,000,  payable at
     various dates through October 2001.  Subsequently,  the Company  determined
     through due  diligence to exercise  its right of recision  specified in the
     contract  and  return  the  items to the  seller.  Under  the  terms of the
     contract,  the Company  may be liable for  amounts due the seller  prior to
     notification of termination.  Management of the Company believes the amount
     that will ultimately be paid to the seller, if any, is not determinable but
     will be immaterial to the financial statements at September 30, 2001.

     During the year ended December 31, 1999, the Company sold certain  services
     to a third  party who in turn sold these  services to  consumers.  When the
     third  party  failed  to  deliver  as  anticipated,  some of the  consumers
     reversed the charges  that had been made on their  credit card  accounts to
     purchase the services.  These reversals were ultimately  covered by charges
     made  to the  Company's  merchant  account  with a  bank,  resulting  in an
     overdraft of that account. The Company,  under the agreement with the third
     party, is entitled to be reimbursed 50% of the amount of the charge-backs.

     Management of the Company  believes the bank  reversed  charges that should
     not have been under the terms and  conditions of the  consumers'  agreement
     and therefore disputes the amount claimed by the bank.

     The Company has recorded a contingent  liability of $159,235 in  connection
     with these matters.

NOTE 12- INCOME TAXES

     The Company  accounts  for income  taxes in  accordance  with  Statement of
     Financial  Accounting Standards No. 109 "Accounting for Income Taxes". SFAS
     No. 109 requires the Company to provide a net deferred tax  asset/liability
     equal to the expected  future tax  benefit/expense  of temporary  reporting
     differences  between  book and tax  accounting  methods  and any  available
     operating  loss or tax credit  carryforwards.  The Company has available at
     September  30,  2001  operating   loss   carryforwards   of   approximately
     $4,500,000,  which may be applied  against  future taxable income and which
     expires in various years through 2020.

     The amount of and ultimate  realization  of the benefits from the operating
     loss  carryforward for income tax purposes is dependent,  in part, upon the
     tax laws in effect,  the future  earnings of the Company,  and other future
     events,  the  effects  of  which  cannot  be  determined.  Because  of  the
     uncertainty  surrounding  the  realization  of the  loss  carryforward  the
     Company has  established a valuation  allowance  equal to the amount of the
     loss carryforward and, therefore, no deferred tax asset has been recognized
     for the loss  carryforward.  The net  deferred  tax asset is  approximately
     $1,600,000 as of September 30, 2001, with an offsetting valuation allowance
     of the same  amount.  The change in the  valuation  allowance  for the nine
     months ended September 30, 2001 is approximately $350,000.




                                      F-10
<PAGE>

                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - CAPITAL STOCK AND STOCK OPTIONS

     A summary of common stock transactions for the nine months ended September
     30, 2001 and 2000 is as follows:
<TABLE>
<CAPTION>

                                                                      No. of        Price
     Period Ended September 30, 2001                                  Shares      Per Share
     -------------------------------                                  ------      ---------
     <S>                                                              <C>         <C>
     Common stock issued for cash of $40,000 through private
        placement memorandum, February 2001                           133,333     $    .30

     Common stock issued for services of $81,929, February 2001       281,000     $.28 - $.40

     Common stock issued for services of $118,300, March 2001         345,000     $.34 - $.35

     Common stock issued for services of $6,250, May 2001              25,000     $    .25

     Common stock issued for cash of $100,000 through exercise of
        stock option, May 2001                                        285,714     $    .35

     Common stock issued for services of $12,500, June 2001            25,000     $    .50

     Common stock issued for cash of $17,000 through exercise of
        stock option, June 2001                                        48,571     $    .35

     Common stock issued for cash of $25,000 through exercise of
        stock option, July 2001                                        71,429     $    .35

     Common stock issued for cash of $204,000 through private
        placement memorandum, August 2001                             680,000     $    .30

     Common stock issued for cash of $172,000 through private
        placement memorandum, September 2001                          573,333     $    .30

     Common stock issued for cash of $73,000 through exercise of
        stock option, September 2001                                  208,571     $    .35

     Common stock issued for cash of $70,000 through exercise of
        stock option, September 2001                                  100,000     $    .70

     Common stock issued for services of $25,100, September 2001       79,934     $.30 - $.54

     Common stock issued for subscription receivable of $135,000,
        September 2001                                                385,715     $    .35

     Period Ended September 30, 2000
     -------------------------------
     Common stock issued for conversion of $500,000 in debentures
        and accrued interest of $7,755, February 2000                 683,523     $.70 - $1.00

     Common stock issued for acquisition, March 2000                  100,000     $   1.76

     Common stock issued for cash of $550,000 through private
        placement memorandum, April 2000                              594,595     $    .93

     Common stock issued for conversion of $150,000 in debentures
        and accrued interest of $3,033, May 2000                      212,532     $    .72

     Common stock issued for cash of $25,000 through private
        placement memorandum, July 2000                                27,027     $    .93

     Common stock issued for cash of $150,000 through private
        placement memorandum, August 2000                             162,162     $    .93

     Common stock issued for cash of $210,000 through stock
        registration, September 2000                                  300,000     $    .70
</TABLE>

                                      F-11
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - CAPITAL STOCK AND STOCK OPTIONS (Continued)

     The above  issuances of common stock under  private  placement  memorandums
     were restricted shares.

     The Company has 400,000 shares of common stock held in escrow as collateral
     for a note  payable  (see Note 9). The Company has not valued  these shares
     since they will only be issued in the event of default on the loan.

     The  Company's  board of directors has the authority to grant stock options
     to  employees,  officers,  and  certain  non-employees.  These  options are
     considered nonqualified for income tax purposes.

     As of September 30, 2001,  the Company had granted to employees  options to
     purchase  2,430,000  shares of common stock at a weighted  average exercise
     price of $1.00 per share and with a weighted average remaining  contractual
     life of 5 years.  Of these options,  1,586,250  shares were  exercisable at
     September 30, 2001.

     As of  September  30, 2001,  the Company had  outstanding  2,490,049  stock
     options to  non-employees  under various  agreements  with exercise  prices
     ranging  from $.30 to $3.00 per  share,  expiring  between  March  2002 and
     September 2006. During the nine months ended September 30, 2001,  3,198,667
     options were granted to non-employees at prices ranging from $.30 to $1.25.
     During that same time period,  1,100,000  options were  exercised at prices
     ranging from $.35 to $.70 per share and 275,271 options expired.

NOTE 14 - LOSS PER SHARE

     The  amounts  used in  computing  loss per share and the  weighted  average
     number of shares of common stock  outstanding for the periods presented are
     as follows:
<TABLE>
<CAPTION>

                                                           For the Three                  For the Nine
                                                           Months Ended                   Months Ended
                                                           September 30,                  September 30,
                                                   ----------------------------    ----------------------------
                                                      2001             2000            2001            2000
                                                   ------------    ------------    ------------    ------------
     <S>                                           <C>             <C>             <C>             <C>
     Loss from continuing operations
       available to common shareholders
       (numerator)                                 $   (254,798)   $   (276,720)   $   (831,267)   $   (845,033)
                                                   ------------    ------------    ------------    ------------

     Gain on extinguishment of debt  (numerator)   $       --      $     12,799    $      2,224    $    106,889
                                                   ------------    ------------    ------------    ------------
     Weighted average number of common
       shares outstanding during the period used
       in per share calculations (denominator)       11,028,570       8,344,297      10,234,722       7,792,446
                                                   ------------    ------------    ------------    ------------
</TABLE>

     Because the Company  incurred  losses for the three and nine month  periods
     ended  September  30,  2001,  the effect of  dilutive  securities  totaling
     1,526,717 and 1,376,717 equivalent shares, respectively,  has been excluded
     from the loss per share computation as its impact would be antidilutive.


                                      F-12
<PAGE>


                    Q COMM INTERNATIONAL, INC. AND SUBSIDIARY

     NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - OPERATING LEASES

     The Company  leased  equipment  and  furniture  from a company owned by the
     Company's CEO under an operating  lease which expired on March 31, 2001. At
     September  30,  2001,  approximately  $96,000  in past  lease  payments  is
     outstanding (see Note 7).

     The Company  leases  office and  warehouse  space under an operating  lease
     agreement  dated November 22, 1999. The base monthly rental under the lease
     is $3,190.  The lease expires December 31, 2001, with an option on the part
     of the Company to renew for an additional two years.  The Company's  future
     minimum  rental under this  operating  lease amounts to $9,570 at September
     30, 2001.

NOTE 16- SUBSEQUENT EVENTS

     On October 18, 2001,  the Company  entered into an agreement  with American
     Payment Systems, Inc. (APS) wherein APS will acquire a minority interest in
     the Company through the purchase of 11,400,000  shares of common stock from
     the Company for $5,700,000. Upon closing, APS will also be issued a warrant
     to purchase additional shares of common stock from the Company at $1.25 per
     share such that the  ownership  percentage  of APS will  increase to 55% of
     fully  diluted  shares  outstanding  after  exercise.  The warrant  will be
     exercisable  after the  earlier of two years from the  closing  date or the
     termination of the Company's  president  other than for cause,  except that
     the  warrant  may be  exercised  immediately  in the event any third  party
     accumulates  over 15% of the  outstanding  shares of the  Company or in the
     event  of a change  in  control.  The  board of  directors  of the  Company
     approved the transaction on October 22, 2001. The proposed  transaction may
     be  terminated by either party in limited  circumstances.  The deadline for
     closing of the transaction is January 31, 2002.


     During  October  2001,  380,000  options to  purchase  common  stock of the
     Company  were  exercised  through a "cashless  exercise",  resulting in the
     issuance of 256,852 shares of common stock.

NOTE 17- GOING CONCERN

     The  accompanying  condensed  financial  statements  have been  prepared in
     conformity with generally accepted accounting principles, which contemplate
     continuation  of the Company as a going concern.  However,  the Company has
     incurred  significant losses in recent years and has current liabilities in
     excess of current  assets and has not yet been  successful in  establishing
     profitable  operations.  These  factors raise  substantial  doubt about the
     ability of the  Company to  continue as a going  concern.  In this  regard,
     management plans to mitigate this doubt by raising additional funds through
     debt and/or equity offerings (see Note 16) and by substantially  increasing
     sales.  There  is no  assurance  that the  Company  will be  successful  in
     achieving  profitable  operations.  The financial statements do not include
     any adjustments that might result from the outcome of these uncertainties.


                                      F-13
<PAGE>

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

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITIONS  AND RESULTS OF
OPERATIONS

The following is a discussion of certain factors affecting Q Comm International,
Inc.'s ("Q Comm" or the "Company") results of operations,  liquidity and capital
resources.  You should read the following discussion and analysis in conjunction
with the Company's consolidated condensed financial statements and related notes
that are included herein.

CAUTIONARY  STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.

The statements  contained in the section captioned  Management's  Discussion and
Analysis of Financial  Condition and Results of Operations  which are historical
are  "forward-looking  statements"  within the  meaning  of  Section  27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act  of  1934,  as  amended.  These  forward-looking  statements  represent  the
Company's present  expectations or beliefs concerning future events. The Company
cautions that such  forward-looking  statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,  performance
or  achievements  of the  Company  to be  materially  different  from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking  statements.  Such  factors  include,  among other  things,  the
uncertainty as to the Company's future profitability;  the uncertainty as to the
demand  for  prepaid   telephone   services;   increasing   competition  in  the
telecommunications  market;  the  Company's  ability  to hire,  train and retain
sufficient  qualified  personnel;  the Company's  ability to obtain financing on
acceptable  terms to finance its growth strategy;  and the Company's  ability to
develop and implement operational and financial systems to manage its growth.

OVERVIEW

Q Comm International, Inc., a Utah corporation, is a national telecommunications
service  provider  specializing in the sale and  distribution of various prepaid
telecommunications  products  including prepaid calling cards,  prepaid wireless
service and prepaid home dialtone phone  services  throughout the United States.
The Company  dispenses  its products  through  Qxpress(TM),  a total  management
system   that  allows   retailers   to:  (i)   instantly   provide  any  prepaid
telecommunications  service at the point of purchase on demand and thus minimize
shelf space requirements, (ii) print flexible sales reports, and (iii) eliminate
expensive inventory, and prevent theft and fraud.

The  Company's  securities  are quoted on the  Over-the-Counter  Bulletin  Board
("OTCBB") under the symbol QCCM.OB

                                       2
<PAGE>


The  Company's  revenues  originate  from the  sale of  prepaid  calling  cards,
wireless  services and prepaid home dialtone  through the  Qxpress(TM)  point of
sale  activation  system and from service fees  associated  with the Qxpress(TM)
system,  which are charged when weekly sales quotas have not reached the minimum
amount set by Q Comm.  The  Company  also  generates  revenues  from the sale of
printed  prepaid  wireless  phone cards.  Other  revenues  include  interest and
miscellaneous  income.  While Q Comm offers  several  prepaid  telecommunication
products, the Company believes that its future business will be primarily in the
prepaid  wireless  market and  providing  point-of-sale  solutions  to  wireless
carriers.

The Company's  objective is to be one of the leading prepaid  telecommunications
companies in the United States. To achieve this, it will be necessary for Q Comm
to expand the size of its revenues  through  direct as well as third party sales
and to  expand  its scope of  services  to  generate  revenue  through  multiple
business models and customer types.  The Company also needs to capitalize on its
early  marketing  success  by  continuing  to expand  the  current  distribution
channels and to maintain its focus on emerging  technology  while  continuing to
retain its high level of  expertise  in this  industry.  The Company  intends to
introduce   many   more   innovative    product   solutions   to   the   prepaid
telecommunication   market  by  exploiting  leading  technologies  and  creating
leading-edge, customized solutions for emerging customer segments.

International   opportunities   are  also   emerging  for  the  Company  in  the
telecommunications  industry.  The  international  market for  prepaid  wireless
services is generally more developed than in the United States, which provides Q
Comm with an unprecedented  opportunity to develop  strategic  relationships for
the marketing prepaid telecommunication systems.

The key to the  Company's  future  success  lies in its  ability to  continue to
provide premier prepaid  telecommunications  products, enhance its point of sale
activation  system  (Qxpress(TM)),  execute  its  strategy  of  acquisition  and
broker/wholesaler  network  expansion,  and obtain  funding  needed to carry out
these objectives.

PROPOSED TRANSACTION

On October 18, 2001, the Company entered into an agreement with American Payment
Systems,  Inc. (APS) wherein APS will acquire a minority interest in the Company
by purchasing 11,400,000 shares of common stock from the Company for $5,700,000.
Upon  closing  of the  transaction,  APS will be  granted a 10-year  warrant  to
purchase  additional  shares  of common  stock at $1.25 per share  such that the
ownership  percentage  of APS will be increased to 55% of fully  diluted  shares
outstanding  after exercise.  The warrant is exercisable upon the earlier of two
years or the termination of Q Comm's president other than for cause, except that
the  warrant  may  be  exercised  immediately  in  the  event  any  third  party
accumulates over 15% of the outstanding  shares of the Company,  or in the event
of a change in control.  Other key features of the proposed  transaction include
i) interim  financing  for the  Company in the form of  $600,000  in loans to be
repaid  from  proceeds  at closing;  ii) up to $10  million in  equipment  lease
financing to the Company and/or its customers; iii) restructuring Q Comm's board
of directors to a five-member board of which two seats will be nominated by APS;
and iv) granting a license for APS to use the Company's  technology in the event
Q Comm fails to fulfill any of its ongoing  material  obligations  to APS or its
subsidiaries or in the event of bankruptcy,  insolvency,  or reorganization of Q
Comm.  The proposed  transaction  is  contingent  upon  reaching a  satisfactory
employment  agreement  with the  Company's  President,  approval  by each of the
entities' boards of directors (which has subsequently occurred),  and closing by
January 31, 2002. The proposed  transaction may be terminated by either party in
limited circumstances. On October 26, 2001 the Company filed a current report on
Form 8-K describing this transaction more fully.


                                       3
<PAGE>


Management of Q Comm believes the proposed  transaction benefits the Company and
its  shareholders  by i)  providing  capital  needed  to allow the  Company  the
opportunity  to grow at an increased  rate in a  rapidly-expanding  market;  ii)
improving  significantly  the Company's  balance sheet position,  which provides
enhanced   credibility  as  the  Company   pursues   significant   domestic  and
international  opportunities;  iii)  providing a strategic  relationship  with a
strong  financial  partner,  with  opportunities to increase the use of Q Comm's
technology by APS in the bill payment industry;  and iv) accomplishing the above
in a period of uncertain  conditions in the financial markets,  particularly for
relatively smaller companies such as Q Comm.

RESULTS OF OPERATIONS  FOR THE NINE MONTHS ENDED  SEPTEMBER 30, 2001 COMPARED TO
THE NINE  MONTHS  ENDED  SEPTEMBER  30,  2000  AND FOR THE  THREE  MONTHS  ENDED
SEPTEMBER 30, 2001 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2000.

REVENUES

Q  Comm   generates  and  recognizes   revenues  under  the  category   entitled
"telecommunications"  which includes prepaid wireless services,  prepaid calling
cards, prepaid home dialtone services, renewal fees of those master sales agents
who have maintained their licensing agreements with the Company, and other sales
and miscellaneous income.

During  the nine  months  ended  September  30,  2001,  Q Comm's  net sales were
$11,271,480 as compared to $908,323  during the nine months ended  September 30,
2000, representing an increase of $10,363,157.  The increase during the year was
primarily  attributable  to the Company's  successful  growth  strategies in the
rapidly  expanding prepaid wireless market and from the benefits provided by its
point-of-sale activation system (Qxpress(TM)).

The Company changed its  distribution  methodology  approximately  18 months ago
from a business-to-consumer  model, in which sales were effected by small master
agent resellers selling directly to consumers, to a business-to-business  model,
in  which  large  independent  telecommunications  brokers  and  wholesale  food
distributors marketed Q Comm's products to a large number of retailers with whom
they had pre-existing relationships.  The Company believes that targeting retail
environments   through   large    business-to-business    oriented   independent
telecommunications brokers and food wholesalers will continue to generate higher
and more stable net sales and overall profitability. This change in strategy has
resulted in  increasing  revenues  throughout  the latter part of the year ended
December 31, 2000 and continuing into 2001.

During the three months ended  September 30, 2001, Q Comm's net sales  increased
$5,073,288 to $5,531,640,  from $458,352 in the  comparable  period in 2000. The
Company attributes this change to the same factors discussed above.

COST OF GOODS SOLD

The  Company's  cost of goods  sold was  $7,089,842  for the nine  months  ended
September 30, 2001 compared to $555,674 for the nine months ended  September 30,
2000.  The increase in the cost of goods sold during this period is  principally
associated  with the increase in revenues.  Additionally,  the Company's  direct
cost  structure  has  changed  somewhat  as a result of the  discontinuation  of
marketing  the master  agent  reseller  program,  as noted  above.  The  Company
believes there are many advantages in terms of controlling  costs in its current
business model, which is focused on purchasing  electronic PINs for distribution
through its Qxpress (TM) terminals. These advantages include no inventory costs,
minimal distribution costs, and


                                       4
<PAGE>

immediate  payment for product sales all of which favorably  impact both cost of
goods sold and operating expenses.

During  the three  months  ended  September  30,  2001,  cost of goods  sold was
$3,774,877  compared to $301,832 for the three months ended  September 30, 2000.
This increase is also attributable to the increase in revenues as noted above.

OPERATING EXPENSES

Total operating  expenses for the nine months ended September 30, 2001 increased
to $4,934,276 from $1,155,830  during the same period in 2000, or an increase of
$3,778,446.  For the three months ended  September  30,  2001,  total  operating
expenses  were  $1,971,912  compared  to  $417,898  for the same period in 2000.
Factors contributing to the changes are discussed below.

Commissions  and fees  increased  $3,548,179,  from $181,773 for the nine months
ended  September 30, 2000 to $3,729,952 for the nine months ended  September 30,
2001.  These expenses are principally  commissions paid to merchants and brokers
for product sales through the Qxpress(TM)  terminals and are a fixed  percentage
of the sale amount. The increase in commissions and fees is solely a function of
increased  revenues.  Beginning in 2001,  the Company  reflects these costs as a
component of operating  expenses.  Prior to 2001, such expenses were included in
the  cost of  goods  sold.  For  purposes  of  comparability,  the  Company  has
reclassified  comparable  amounts for the three- and  nine-month  periods  ended
September 30, 2000. For the three months ended  September 30, 2001,  commissions
and fees were $1,548,153  compared to $106,492 the three months ending September
30, 2000. The increase is due to the increase in revenues during the period.

Research and  development  expenses were $79,330 and $136,830 for the three- and
nine-month periods ended September 30, 2001,  respectively.  No expenses of this
nature  were  incurred in the  comparable  periods in 2000.  Beginning  with the
second quarter of 2001, the Company incurred  research and development  expenses
related to the  development  of new products and  services.  These  expenses are
primarily fees paid to an external  company.  The Company  expects to incur only
minimal  research and development  expenses  related to current  projects in the
future since they have progressed beyond this phase of development.

Selling expenses increased $9,549 (5.1%) for the nine months ended September 30,
2001 compared to the nine months ended September 30, 2000, and increased $26,314
(51.6%) for the three  months  ended  September  30,  2001  compared to the same
period in 2000.  Both these  increases  were due to a higher  level of sales and
marketing activity and associated travel costs in the respective periods.

General and administrative expenses increased $16,357 (2.2%) from the nine-month
period ended September 30, 2000 to the comparable  period in 2001, and decreased
$15,362  (6.5%) from the  three-month  period  ended  September  30, 2000 to the
comparable  period  in  2001.  The  relatively  small  changes  in  general  and
administrative  expenses  reflect the Company's  commitment to contain  overhead
expenses.  The Company believes only modest growth in general and administrative
personnel costs will be required to sustain increased sales and the new products
and services contemplated by the Company.

Depreciation and  amortization  expenses  increased  $22,071 and $67,531 for the
three- and  nine-month  periods  ended  September 30, 2001,  respectively,  when
compared to the same periods in 2000 reflecting increased investment in property
and equipment (principally Qxpress(TM) terminals).


                                       5
<PAGE>


LOSS FROM OPERATIONS

The Company had a loss from  operations  of $752,638  for the nine months  ended
September  30, 2001 as compared to a loss of $803,181  for the nine months ended
September 30, 2000.  This decline in loss from  operations was  attributable  to
increased  revenues,  offset by increases in commissions and fees,  research and
development expense, and depreciation and amortization.  The Company expects its
investment in an expanded  distribution network and in new products and services
to  result in  continued  growth  in  revenues  in the  future,  with  resulting
improvement in results from  operations.  Also see discussion  regarding  future
revenues under "Proposed Transaction" above.

The loss from  operations  for the three  months  ended  September  30, 2001 was
$215,149  compared to $261,378 for the three months ended September 30, 2000 due
to the same factors noted above.

OTHER INCOME (EXPENSE) AND EXTRAORDINARY ITEM

Net other  expense for the nine months  ended  September  30, 2001  increased by
$36,777  compared to the nine months  ended  September  30,  2000  ($78,629  vs.
$41,852,  respectively),  and  increased  by $24,307 for the three  months ended
September  30,  2001  when  compared  to the same  period in 2000  ($39,649  vs.
$15,342,  respectively).  The  increases  were the  result  of  higher  interest
expenses associated with borrowings.

The Company  experienced a gain on extinguishment of debt of $2,224 for the nine
months  ended  September  30, 2001 as compared  to $106,889  for the  comparable
period  in  2000.  The  difference  is due to a large  one-time  settlement  and
resulting gain in April 2000. For the three months ended  September 30, 2001, no
gain of this type occurred while $12,799 was recorded in the  comparable  period
in 2000.

NET LOSS

For the nine months  ended  September  30,  2001,  the Company had a loss before
extraordinary  items of $831,267 as compared to $845,033  for the same period in
2000.  For the three months  ended  September  30, 2001,  the Company had a loss
before  extraordinary  items of $254,798  as  compared to $276,720  for the same
period in 2000. The Company expects to continue to experience an increase in its
revenue base and,  with margins on sales  expected to be  relatively  consistent
with current levels, anticipates profitability in the foreseeable future.

The Company has available at September 30, 2001, operating loss carryforwards of
approximately $4,500,000,  which may be applied against future taxable income in
years through 2020. The amount of and ultimate  realization of the benefits from
the operating loss  carryforward for income tax purposes is dependent,  in part,
upon the tax laws in  effect,  the future  earnings  of the  Company,  and other
future  events,  the  effects  of which  cannot be  determined.  Because  of the
uncertainty  surrounding the realization of the loss  carryforward,  the Company
has  established  a  valuation  allowance  equal  to  the  amount  of  the  loss
carryforward and,  therefore,  no deferred tax asset has been recognized for the
loss carryforward.  The net deferred tax asset is approximately $1,600,000 as of
September 30, 2001, with an offsetting valuation allowance at September 30, 2001
of the same amount.


                                       6
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Historically,  the Company has financed its working capital requirements through
internally generated funds, the sale of shares of its common stock, and proceeds
from short-term bank borrowings,  convertible debentures,  and notes payable. As
of September 30, 2001, the Company had a working capital deficit (current assets
less current  liabilities) of approximately  $2,000,000 compared to a deficit of
approximately  $1,100,000  at December  31,  2000.  This  increase is  primarily
attributable  to the Company's  funding of an increase in property and equipment
(primarily  Qxpress(TM)  terminals) and certain  operating costs with short-term
liabilities.  The Company may seek to issue corporate debt or equity  securities
in order to satisfy  its cash needs for the coming  year.  Any debt  incurred or
issued by the  Company  may be  secured or  unsecured,  fixed or  variable  rate
interest  and may be  subject  to such  terms as the board of  directors  of the
Company deems prudent. Any sales of equity securities may be at or below current
market rates for the Company's  common stock. No assurance can be given that the
Company will be successful in generating  sufficient capital from new borrowings
or from the sale of its securities to adequately fund its liquidity needs.

For further  discussion  regarding  liquidity and capital  needs,  see "Proposed
Transaction" above.

The Company does not believe that its business is subject to seasonal trends.

The Company  does not believe that  inflation  had a  significant  impact on the
Company's results of operations for the period  presented.  On an ongoing basis,
the Company  attempts to minimize  any  effects of  inflation  on its  operating
results by controlling  operating  costs,  and,  whenever  possible,  seeking to
insure that product price rates reflect increases in costs due to inflation.

NEW ACCOUNTING PRONOUNCEMENTS

No new  pronouncement  issued by the Financial  Accounting  Standards Board, the
American  Institute  of  Certified  Public  Accountants  or the  Securities  and
Exchange  Commission  is  expected  to have a material  impact on the  Company's
financial position or reported results of operations.

Part II

Item 1.  Legal Proceedings

On October 23,  2001,  the  Registrant  was notified of a suit filed in the U.S.
Bankruptcy  Court for the Eastern  District of Pennsylvania by Global  Financial
Press,  Inc.,  claiming damages of $19,838 for unpaid  services.  The Registrant
believes the amount  charged by the  plaintiff  for services was  incorrect  and
therefore  disputes the claim.  Registrant is not the subject of any other legal
proceedings other than those disclosed in its Annual Report on Form 10-KSB.


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Item 2.  Changes in Securities

The following  narrative  describes the sales of unregistered  securities during
the period covered by this Quarterly Report on Form 10-QSB.

Common  stock was issued for  services  rendered  in the  following  amounts and
prices per shares,  on the following dates  (reference is made to Note 13 to the
Unaudited  Condensed  Financial  Statements  dated September 30, 2001, which are
included herein under Part I, Item 1.

         4,600 shares, at $0.54 per share, for $2,500, September 2001
        20,000 shares, at $0.30 per share, for $6,000, September 2001
        23,667 shares, at $0.30 per share, for $7,100, September 2001
        31,667 shares, at $0.30 per share, for $9,500, September 2001

The nature of the services  provided were legal services,  consulting  services,
commission for private placement  memorandum  referrals,  and fees in connection
with a loan.

Common stock was issued for cash in the following  amounts and prices per share,
on the following dates:

        680,000 shares, at $0.30 per share, for $204,000, August 2001
        573,333 shares, at $0.30 per share, for $172,000, September 2001

All of the  transactions  set forth above involved  transactions  under Rule 144
promulgated under the Securities Act of 1933.


Item 3.  Defaults Upon Senior Securities

There were no defaults upon  Registrant's  senior  securities  during the period
covered by this Quarterly Report on Form 10-QSB.


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

No matters were submitted to Registrant's security holders for a vote during the
period covered by this Quarterly Report on Form 10-QSB.


Item 5.  Other Information

Registrant  is not  reporting  any  additional  matters  under this Item on this
Quarterly Report on Form 10-QSB.


Item 6.  Exhibits and Reports on Form 8-K

Registrant  filed the following  reports on Form 8-K with the Commission  during
the period covered by this Quarterly Report on Form 10-QSB.

         On October 26, 2001, Registrant filed a current report on Form 8-K to
         announce it had entered into an agreement for the acquisition of a
         minority interest in Q Comm International, Inc. by American Payment
         Systems, Inc.


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<PAGE>



SIGNATURES

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

Q Comm International, Inc. [Registrant]
October 14, 2001


By: /s/ Paul C. Hickey
Paul C. Hickey, Chief Executive Officer

By: /s/ Stephen C. Flaherty
Stephen C. Flaherty, President

By: /s/ Michael K. Openshaw
Michael K. Openshaw, Chief Financial Officer






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