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

                                   FORM 10-Q

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

For the quarter ended                           Commission File Number 0-21138
 September 30, 2001


                                 INPRIMIS, INC.
             (Exact name of registrant as specified in its charter)

         Florida                                         59-2479377
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

    1601 Clint Moore Road
     Boca Raton, Florida
    (Address of principal                                   33487
      executive offices)                                 (Zip Code)

                                 (561) 997-6227
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year
                          if changed since last report)

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

                                   Yes X No___

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                                                             Outstanding as of
         Class                                               November 14, 2001
         -----                                               -----------------
  Common stock, par value                                       11,781,604
      $.01 per share


                                      -1-

<PAGE>

                         INPRIMIS, INC. AND SUBSIDIARIES
               Form 10-Q for the Quarter Ended September 30, 2001

                                      INDEX


Part I. FINANCIAL INFORMATION
    Item 1. Financial Statements                                          Page
                                                                         -----

                     Condensed Consolidated Balance Sheets
                     (unaudited) as of September  30, 2001 and
                     December 31, 2000................................      3

                     Condensed Consolidated Statements of
                     Operations (unaudited) for the three and nine
                     months ended September 30, 2001 and 2000.........      4

                     Condensed Consolidated Statements of
                     Cash Flows (unaudited) for the nine
                     months ended September 30, 2001 and 2000.........      5

                     Notes to Condensed Consolidated
                     Financial Statements (unaudited) ................      6

    Item 2. Management's Discussion and Analysis of
                     Financial Condition and Results of
                     Operations ......................................     19

    Part II.   OTHER INFORMATION

        Item 1.      Legal Proceedings ...............................     32

        Items 2-3.   Not applicable    ...............................     32

        Item 4.      Submissions of Matters to a Vote of
                     Security Holders ................................     32

        Item 5.      Other Information ...............................     32

        Item 6       Exhibits and Reports on Forms 8-K ...............     32

        Signatures ...................................................     33


                                      -2-
<PAGE>

PART I.    Item 1.

                        INPRIMIS, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
                        (In thousands except share data)
<TABLE>
<CAPTION>

                                                                         September 30,     December 31,
                                                                             2001              2000
                                                                       ----------------- -----------------
                                     ASSETS
<S>                                                                    <C>               <C>
Current assets:
   Cash and cash equivalents................................               $  1,144         $  5,454
   Trade receivables, net...................................                    132            1,204
   Prepaid expenses and other current assets................                    259              661
                                                                           --------         --------
     Total current assets...................................                  1,535            7,319
Property and equipment, net.................................                    732              971
Other assets................................................                    544              795
                                                                           --------         --------
     Total assets...........................................               $  2,811         $  9,085
                                                                           ========         ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable.........................................               $    672         $  1,259
   Deferred revenue.........................................                    399              161
   Accrued expenses and other current liabilities...........                    622            3,277
                                                                           --------         --------
     Total current liabilities                                                1,693            4,697
                                                                           --------         --------

Other non-current liabilities...............................                      6               --
                                                                           --------         --------
Commitments and contingencies
Stockholders' equity:
   Preferred stock, par value $.01 per share, 5,000,000
    shares authorized; none issued and outstanding at
    September 30, 2001 and December 31, 2000................                     --               --
   Common stock, par value $.01 per share, 25,000,000
    shares authorized; 11,631,604 issued and outstanding
    at September 30, 2001, 11,608,788 issued and
    outstanding at December 31, 2000........................                    116              116
   Additional paid-in capital...............................                 40,057           40,043
   Accumulated deficit......................................                (39,061)         (35,771)
                                                                           --------         --------
     Total stockholders' equity.............................                  1,112            4,388
                                                                           --------         --------
       Total liabilities and stockholders' equity...........               $  2,811         $  9,085
                                                                           ========         ========
</TABLE>


           See notes to condensed consolidated financial statements.


                                      -3-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                      (In thousands except per share data)

<TABLE>
<CAPTION>

                                                        Three months                   Nine Months
                                                    Ended September 30,            Ended September 30,
                                               ------------------------------   ---------------------------
                                                     2001             2000         2001            2000
                                               -------------   --------------   -----------   -------------
<S>                                            <C>             <C>              <C>           <C>
Net sales
    Product sales...........................    $       225     $      2,413     $     614     $     9,398
    Engineering services....................            654            1,760         2,253           2,867
                                                -----------     ------------     ---------     -----------
      Total.................................            879            4,173         2,867          12,265
Cost of goods sold..........................            810            2,836         3,772          10,955
                                                -----------     ------------     ---------     -----------
  Gross profit (loss).......................             69            1,337          (905)          1,310
                                                -----------     ------------     ---------     -----------
Operating expenses:
  Research and development ................             199              433           503           2,004
  Selling, general and administrative                   297            1,757         2,053           8,986
  Asset impairment and other charges                     --               --            --           4,633
                                                -----------     ------------     ---------     -----------
   Total operating expenses ...............             496            2,190         2,556          15,623
                                                -----------     ------------     ---------     -----------
Loss from operations ......................            (427)            (853)       (3,461)        (14,313)
Non-operating income, net                                 9              442           173           1,849
                                                -----------     ------------     ---------     -----------
Loss before income taxes ..................            (418)            (411)       (3,288)        (12,464)
Income taxes...............................              --               --             2               2
                                                -----------     ------------     ---------     -----------
Net loss...................................     $      (418)    $       (411)    $  (3,290)    $   (12,466)
                                                ===========     ============     =========     ===========
Net loss per share (basic and diluted)          $     (0.04)    $      (0.04)    $   (0.28)    $     (1.08)
                                                ===========     ============     =========     ===========
Weighted average
   shares outstanding .....................          11,631           11,609        11,626          11,579
                                                ============    ============     =========     ===========
</TABLE>


           See notes to condensed consolidated financial statements.


                                      -4-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                 Nine Months
                                                                             Ended September 30,
                                                                            ---------------------
                                                                            2001             2000
                                                                       --------------   --------------
<S>                                                                    <C>              <C>
Cash provided by (used in):
Operating activities:
    Net loss.........................................................   $     (3,290)      $  (12,466)
    Depreciation and amortization....................................            525            1,523
    Adjustment for asset impairment and other charges................             --            4,633
    Gain on sale of shares received under
     marketing agreement.............................................             --           (1,194)
    Gain on sale of fixed assets.....................................             --             (292)
    Changes in assets and liabilities ...............................         (1,493)           1,812
                                                                        ------------       ----------
     Net cash used in operating activities...........................         (4,258)          (5,984)
                                                                        ------------       ----------
Investing activities:
    Proceeds from sale of shares received under
     marketing agreement and shares in foreign
     investment......................................................             --            1,470
    Proceeds from sale of fixed assets...............................             --              715
    Payment received on note from Boundless .........................             63               --
    Capital expenditures.............................................           (102)          (1,101)
                                                                        ------------       ----------
     Net cash (used in) provided by investing activities.............            (39)           1,084
                                                                        ------------       ----------
Financing activities:
    Issuance of common stock ........................................             14              502
    Payment on obligation of capital leases..........................            (27)              --
                                                                        ------------       ----------
     Net cash (used in) provided by financing activities.............            (13)             502
                                                                        ------------       ----------
Net decrease in cash and cash equivalents ...........................         (4,310)          (4,398)
Cash and cash equivalents, beginning of period ......................          5,454           11,819
                                                                        ------------       ----------
Cash and cash equivalents, end of period ............................   $      1,144       $    7,421
                                                                        ============       ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the nine months for income taxes                      $          2       $        2
                                                                        ============       ==========
 Non-cash investing and financing activities:
  Capital lease obligation incurred for equipment
     purchases                                                          $         65       $       --
                                                                        ============       ==========

  Decrease in note receivable from Boundless as an offset
     for payment against the minimum purchase guarantee
     and accounts payable to Boundless                                  $        562       $       --
                                                                        ============       ==========
</TABLE>


           See notes to condensed consolidated financial statements.


                                      -5-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Basis of Presentation and Going Concern

The condensed consolidated financial statements include the accounts of
Inprimis, Inc. and subsidiaries (the "Company") and have been prepared in
accordance with the rules and regulations of the Securities and Exchange
Commission regarding interim financial reporting; accordingly, they do not
include all of the information and disclosures required by accounting principles
generally accepted in the United States of America ("generally accepted
accounting principles") for complete financial statements. In the opinion of
management, the condensed consolidated financial statements contain all
adjustments (consisting of normal recurring accruals) necessary to present
fairly the financial position of the Company as of September 30, 2001, the
results of its operations for the three and nine month periods ended September
30, 2001 and 2000, and its cash flows for the nine month periods ended September
30, 2001 and 2000. These results have been determined on the basis of generally
accepted accounting principles and practices applied consistently with those
used in the preparation of the Company's 2000 audited consolidated financial
statements.

The accompanying condensed consolidated financial statements have been prepared
on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business; and, as a
consequence the financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or the amounts
and classifications of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company has experienced net operating
losses since 1997 and as of September 30, 2001, had an accumulated deficit of
$39.1 million. Cash used in operations for the nine months ended September 30,
2001 was $4.3 million. An unfavorable outcome of the legal contingencies (see
"Commitments and Contingencies") would also have an adverse affect on the
Company's cash flow. Such conditions raise substantial doubt that the Company
will be able to continue as a going concern for a reasonable period of time. The
Company has attempted to bring the Company's expense structure in line with the
reduced revenue levels being achieved and revenue levels that are forecasted. In
April 2001, the Company further reduced its number of employees from 53 to 37.
In July 2001 the Company implemented a 20% salary reduction for its management
personnel and a 10% salary reduction for other positions. In September 2001 the
Company further reduced its work force to 32 and additional temporary salary
reductions were implemented. The Company has also taken steps to increase
customer proposal activity in order to improve sales. There can be no assurances
that the Company will return to profitable operations in the near term and
therefore it is likely the Company's operations will continue to consume cash
over the foreseeable future. The Company has very limited cash resources and
therefore the Company must reduce its negative cash flows in the near term to
continue operating.

 In April 2001, the Company hired an investment banker to seek additional
capital or potential acquisitions or merger candidates that could bring
financing or profitable revenues to the combined companies. On October 12, 2001
the Company and Cash Card Communications Corp. Ltd. ("C-4"), a Bermuda
corporation, entered into a Share Exchange Agreement under which C-4 and another
party have agreed to transfer to the Company all of their common shares of
DataWave Systems, Inc. (OTCBB: DWVSF) in exchange for common shares of the
Company. C-4 currently holds approximately 36% of the issued and outstanding
common stock of DataWave, and the other transferor in the share exchange holds
approximately 4.5% of its stock.


                                      -6-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Simultaneous with entering into the Share Exchange Agreement, and pursuant to
its terms, Eduard Will, President and CEO of the Company, C-4 and another
investor entered into a Private Placement Agreement under which the Company
will, subject to certain conditions, issue 4,000,000 shares of a newly created
class of Series A Preferred Stock in consideration of an aggregate purchase
price of $500,000 which will be used as working capital. The closing of the
private placement is subject to the granting of an exemption by Nasdaq from its
rule that an issuer receive shareholder approval of any issuance that is greater
than 20% of the voting power of its outstanding stock at the time of issuance,
or, in the alternative, receipt of such shareholder approval. On October 25,
2001 the Company received notice from Nasdaq that the Company's shares would be
de-listed effective the next day. On October 26, 2001 the Company shares were
quoted on the OTC Bulletin Board. The OTC Bulletin Board exchange does not have
a requirement that the Company must receive shareholder approval of any issuance
that is greater than 20% of the voting power of its outstanding stock. Therefore
the conditions have been met for the closing of the Private Placement Preferred
Stock, but closing and receipt of the money has not occurred. However, even with
the additional working capital, there can be no assurances that the Company will
succeed in achieving its goals, and its failure to do so in the near term will
have a material adverse effect on its business, prospects, financial condition
and operating results and the Company's ability to continue as a going concern.
As a consequence, the Company may be forced to seek protection under the
bankruptcy laws. In that event, it is unclear whether the Company could
successfully reorganize its capital structure and operations, or whether the
Company could realize sufficient value for its assets to satisfy fully its
debts. Accordingly, should the Company file for bankruptcy, there is no
assurance that any value would be received by the Company's shareholders.

The accompanying condensed consolidated financial statements should be read in
conjunction with the Company's most recent audited consolidated financial
statements and notes thereto for the year ended December 31, 2000. The results
of operations for the three and nine month periods ended September 30, 2001 are
not necessarily indicative of the results to be expected for the full year.

Certain prior year amounts have been reclassified to conform to the current
period presentation.

Recent Developments:

Nasdaq De-Listing

The Company received noticed from Nasdaq o7n October 25, 2001 that the Company's
shares would be de-listed effective the next day. As of October 26, 2001, the
Company's shares were quoted on the OTC Bulletin Board under the ticker symbol
INPM. The OTC Bulletin Board is a regulated quotation service that displays
real-time quotes, last-sale prices and volume information in over-the counter
(OTC) equity securities. OTC Bulletin Board securities are traded by a community
of registered market makers that enter quotes and trade reports.

Agreement between the Company, C-4, and Datawave

On October 12, 2001, the Company and Cash Card Communications Corp. Ltd.
("C-4"), a Bermuda corporation, entered into a Share Exchange Agreement under
which C-4 and another party have agreed to transfer to Inprimis all of their
common shares of DataWave Systems, Inc.


                                      -7-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

(CDNX: DTV.V, Nasdaq OTC Bulletin Board: DWVSF), a company organized under the
Business Corporations Act of the Yukon Territory, Canada ("DataWave") in
exchange for common shares of the Company. C-4 currently holds approximately 36%
of the issued and outstanding common stock of DataWave, and the other transferor
in the share exchange holds approximately 4.5% of its stock. Under the Share
Exchange Agreement, the Company will potentially issue common shares to C-4 and
the other transferor that will represent approximately 70% of the Company's then
issued and outstanding common stock in exchange for C-4's and the other
transferor's DataWave shares.

Simultaneously with the entering into of the Share Exchange Agreement, and
pursuant to its terms, Eduard Will, President and CEO of the Company, C-4 and
another investor entered into a Private Placement Agreement under which the
Company will, subject to certain conditions, issue 4,000,000 shares of a newly
created class of Series A Preferred Stock in consideration of an aggregate
purchase price of $500,000.

 The Share Exchange Agreement contemplates that C-4, the Company, and DataWave
will enter into a Plan of Arrangement under which all of DataWave's shareholders
will become shareholders of the Company and DataWave will become a wholly owned
subsidiary of the Company. Simultaneously with the entering into of the Share
Exchange Agreement, DataWave, C-4 and the Company entered into a non-binding
Letter of Intent under which DataWave, C-4 and the Company agree in principle to
the Plan of Arrangement. Certain other holders of shares of DataWave,
representing approximately 6.5% of its issued and outstanding common stock, have
entered into lock-up agreements under which they agree to vote their shares in
favor of the Plan of Arrangement.

The Share Exchange

Under the Share Exchange Agreement, C-4 and another holder of DataWave's shares
which together hold an aggregate of 17,759,000 common shares of DataWave
representing 40.472% of the issued and outstanding common stock of DataWave will
transfer all of their shares to the Company in exchange for 26,638,500 of the
Company's common shares representing 70% of its then issued and outstanding
common stock (the "Share Exchange"). The rate of exchange will be one DataWave
share for one and one-half (1 1/2) of the Company's shares.

 Because the Company's Articles of Incorporation do not presently authorize a
sufficient number of its common shares to effect the exchange, the Company will,
immediately upon the closing of the share exchange, issue 11,400,000 shares
(representing 43% of the new shares) to C-4 and the other transferor and will
give to C-4 an interest-free subordinated promissory note in the amount of
$4,571,550 that will convert into the balance of 15,238,500 shares on or prior
to the close of business on July 1, 2002, provided the Company's shareholders
approve the necessary increase of its authorized common stock.

 Upon the closing of the Share Exchange Agreement, the agreement provides that
the Company shall use its best efforts to reconstitute its board of directors to
consist of nine persons, with six directors appointed by C-4 and three directors
being retained from the existing board.


                                      -8-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

The Share Exchange Agreement provides that, until the earlier of the closing of
the Plan of Arrangement and the termination of the Share Exchange Agreement by
its terms, the Company and its representatives, without the consent of C-4 or as
required to comply with the Company's' directors' fiduciary duty, shall refrain
from initiating or discussing or otherwise facilitating any inquiries or
proposals for the sale, consolidation or similar transaction relating to all or
any part of its business operations or for 20% or more of its outstanding
capital stock, other than in connection with the Plan of Arrangement.

The Company has received an opinion of DeLisi & Ghee, Inc., valuation
consultants, that the Share Exchange is fair to its shareholders.

Lock-Up Agreements

Pursuant to the Share Exchange Agreement, certain other shareholders of
DataWave, representing 6.5% of its voting stock, have entered into lock-up
agreements under which they agree to vote their shares of DataWave in favor of
the Plan of Arrangement. If the Plan of Arrangement is not completed, each of
these Datawave shareholders have agreed to exchange each of their Datawave
common shares for one and one-half (1 1/2) of the Company's common shares.

The Private Placement

Under the Private Placement Agreement, Ed Will, C-4 and another investor have
subscribed for 2,000,000, 1,600,000 and 400,000 shares, respectively, of a newly
created class of Series A Preferred Stock, par value $0.01 per share, at a price
of $0.125 per share. The aggregate proceeds from the private placement of
$500,000 are intended for the Company's current working capital needs.

The Series A Preferred Shares will have the same voting rights as the common
stock of the Company. Contingent on approval by the Company's shareholders of
sufficient authorized common stock of the Company, the Series A Preferred Shares
will be convertible into the Company's common shares (at a conversion rate of
one for one) at the Company's election at any time on or prior to the close of
business on July 1, 2002. Alternatively, at any time on or prior to the close of
business on July 1, 2002, (and subject to the legal availability of funds
therefor) the Company may, at its option, redeem any or all of such shares in
exchange for $0.125 (U.S.) per Preferred Share and, for every two such shares to
be redeemed, a one-year warrant for the purchase of a share of common stock of
the Company at an exercise price of $0.20 (U.S.). Immediately following the
close of business on July 1, 2002, any such shares issued and outstanding will
automatically convert into common stock of the Company at a conversion rate of
one for one, except that any such shares that may not be so converted due to
insufficient authorized and unissued common stock of the Company shall be
mandatorily redeemed on the terms described above.

Certain Voting Arrangements with respect to Shares Received in the Share
Exchange and Private Placement


                                      -9-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Upon the consummation of the share exchange and the private placement, C-4, the
other transferor in the share exchange, Ed Will and the other investor in the
private placement will hold approximately 57% of the voting stock of the
Company, and the Company will hold approximately 40% of the voting stock of
DataWave. Assuming conversion of the entire principal balance of the
subordinated promissory note, C-4, the other transferor in the share exchange,
Ed Will and the other investor in the private placement will hold approximately
73% of the voting stock of the Company.

Under the Share Exchange Agreement, the investors in the private placement agree
to vote all of the shares of the Company's Series A Preferred Stock received by
them in favor of any increase in the authorized common stock of the Company
necessary to facilitate the conversion of the subordinated promissory note and
the Series A Preferred Shares.

The Share Exchange Agreement also provides that the Company will vote all of the
DataWave shares received by it in the share exchange in favor of the Plan of
Arrangement at the meeting of DataWave shareholders called to approve the
transaction.

The Plan of Arrangement

The Letter of Intent contemplates that DataWave and the Company will negotiate
and execute a formal Plan of Arrangement agreement substantially on the terms
set forth in the Letter of Intent. The Letter of Intent provides that at the
closing of the Plan of Arrangement: (i) all current holders of DataWave common
shares will transfer their shares to a subsidiary of the Company in exchange for
freely trading shares of common stock of the Company at the rate of exchange of
one DataWave share for one and one-half (1 1/2) of the Company's shares and (ii)
all current holders of warrants and options for the purchase of DataWave common
shares will exchange such warrants and options for warrants and options on
substantially similar terms to purchase shares of common stock of the Company,
with each such warrant or option for the purchase of a DataWave common share
entitling the holder thereof to a warrant or option, as applicable, for the
purchase of one and one-half (1 1/2) shares of the Company's common stock.

Upon completion of the Plan of Arrangement, it is anticipated that the current
holders of DataWave shares will hold 84.99% of the outstanding Company's shares
(81.6% on a fully diluted basis), making current DataWave shareholders majority
owners of the Company.

The Letter of Intent contemplates that, upon the closing of the formal Plan of
Arrangement, the Company shall be governed by a board of directors consisting of
nine directors, and that, for one year following the closing, six directors
shall be appointed by the management of Datawave and three directors shall be
appointed by the current management of the Company.

The Letter of Intent provides that until the earlier of: the closing of the Plan
of Arrangement or termination of the Letter of Intent by its terms, the Company
and Datawave shall (i) refrain from discussing the acquisition or sale of all or
any part of its business operations, except among each other or as required by
law and (ii) without the written consent of the other, issue any securities,
enter into contracts or otherwise act outside of the normal course of business,
make payments to any related party except in the normal course of business, sell
or negotiate to sell material assets


                                      -10-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

of their business, or take any other action that would be considered by a
prudent businessperson to materially and adversely affect the Company or
DataWave, as applicable.

Closing of the Plan of Arrangement will be conditioned upon:

   *   receipt by the boards of directors of the Company and DataWave,
       respectively, of an opinion of valuation consultants that the transaction
       is fair to their respective shareholders;

   *   the adoption of the Plan of Arrangement by the boards of directors of the
       Company and DataWave, respectively;

   *   the approval of the Plan of Arrangement by the requisite vote of the
       shareholders of DataWave;

   *   the approval of a majority of the shareholders of the Company of
       additional authorized common stock sufficient to effect the Plan of
       Arrangement;

   *   receipt of all necessary material consents of third parties to the
       Arrangement and the absence of any legal impediments to completing the
       Plan of Arrangement on its terms;

   *   receipt of a ruling from a court of competent jurisdiction that the Plan
       of Arrangement is fair to the parties and their shareholders; and,

   *   neither the Company nor DataWave, having filed for bankruptcy, becomes
       the subject of an involuntary bankruptcy proceeding or other insolvency
       proceeding or has a receiver appointed for its assets.

Provided all conditions to the merger are satisfied, the parties anticipate that
the transactions contemplated by the Plan of Arrangement will be consummated
during January 2002.

The Company hired an investment banker in April 2001 to seek additional capital
or potential acquisitions or merger candidates that could bring financing or
profitable revenues to the combined companies. The Company signed a letter of
intent on March 27, 2001 to acquire iDVDBox, Inc. This letter of intent expired
and the Company is no longer in negotiations to acquire iDVD Box, Inc.

The Company embarked upon a plan in early 2000 to transition from being
primarily a data communications products manufacturer to its new focus on
providing engineering services. The Company announced in July 2000 that it no
longer would offer data communications products to the marketplace. In
conjunction with this transition, the Company changed its name from Boca
Research, Inc. to Inprimis, Inc. The Company's data communications sales were
insignificant in the nine months ended September 30, 2001. The Company has
eliminated its purchase orders for new data communications products from
Boundless Manufacturing Services, Inc. ("Boundless"), the manufacturing
subcontractor utilized by the Company. Procurement of new data communications
products was discontinued as of September 30, 2000 and any sales of data
communications products since then have been out of inventory. The Company
previously announced in July 2000 the sale of certain assets to Zoom
Telephonics, Inc. ("Zoom"), which provided the Company with a smooth, customer
oriented transition out of the analog modem business. These actions resulted in
the Company's determining that the goodwill and tradename/marketing assets
related to the data communications business had been impaired as of June 30,
2000, and the Company recorded a charge to operations of $2.7 million in the
second quarter of 2000. The Company does not currently have goodwill or other
intangible assets on its


                                      -11-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

books. The elimination of new purchase orders to Boundless resulted in the
Company's falling short of the guaranteed purchase commitments under the Supply
Agreement (the "Supply Agreement") between the Company and Boundless. This
shortfall was charged to expense in the year ended December 31, 2000. Although
purchases by Zoom from Boundless of the Company's products relating to the
analog business would have mitigated the shortfall (see "Agreement between
Inprimis, Inc. and Zoom Telephonics" and "Commitments and Contingencies"), Zoom
did not make any commitments to manufacture the Company's products at Boundless.
As of March 31, 2001 the shortfall was satisfied.

The charges to operations relating to impairment of goodwill and
tradename/marketing assets and the shortfall for the guaranteed purchase
commitment were recorded under "Asset impairment and other charges" in the
Condensed Consolidated Statements of Operations. These charges occurred in June
2000. The Company will continue to discharge its warranty obligation on all
products sold. The warranty obligation is included within the caption "Accrued
expenses and other current liabilities" in the condensed consolidated balance
sheets.

Agreement between Inprimis, Inc. and Zoom Telephonics

As previously reported, on July 28, 2000, the Company concluded a definitive
agreement with Zoom (the "Agreement") pursuant to which Zoom acquired certain of
the Company's assets, including selected trademarks such as Global Village(TM),
rights to Global Village and Boca Research branded products, and certain Web
domain names. Under the Agreement, the Company continues to support all the
products it has already shipped or will ship and remains responsible for
warranty, returns and technical support for these products, although technical
support has been outsourced to Zoom in order to provide customers with a single
point of contact. Zoom, acting as a master distributor, had the right to sell
products from the Company's inventory, utilizing the Global Village and Boca
Research brand names. Zoom has the right to introduce new products within both
product lines. In general, except for minor royalty payments, no payments were
received except that the Company is entitled to be paid a purchase price based
on the sales performance schedule as follows: $500,000 if sales by Zoom of the
Company's existing product lines over an initial 12 month period exceed $12
million; $1.0 million if sales by Zoom of the Company's existing product lines
over the subsequent 12 month period exceed $19 million; and $2.0 million if
sales by Zoom of the Company's existing product lines over the subsequent and
final 12 month period exceed $24 million. The determination of the purchase
price was arrived at by negotiation among the parties. Zoom has not to date
offered any of the Company's previous data communications products; therefore,
it is unlikely that the Company will receive any purchase price payment under
the performance schedule above. If Zoom had manufactured the Company's products
at Boundless, the Company would have received credit against the Company's
minimum guaranteed purchase commitment. As of September 30, 2001, Zoom had not
made any commitments to manufacture the Company's products at Boundless and the
minimum requirement is no longer in effect.

Revenue Recognition

        Revenue from engineering services contracts is recognized as the work is
performed. With time-and-material type contracts, revenue is calculated by
multiplying the number of hours worked by the contractually agreed upon rate per
hour. Contracts are either time-and-material or fixed-price


                                      -12-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

in nature. With fixed-price type contracts, revenue is calculated by applying
the percentage of completion method, which is based on the ratio of total hours
incurred to date to the total estimated hours. Revenue recognition must satisfy
several factors depending on the nature of the contract. These factors include
the completion of certain contractual milestones, which is verified by the
customer before revenue is recognized, and a calculation of the costs incurred
and an estimated cost to complete to determine if costs are in excess of
potential revenue. Contracts generally allow for modification of the number of
hours or the stated deliverables via change orders based upon the actual work
required to complete a project and upon agreement between the Company and its
customer(s). The Company records a loss in the current period during which a
loss on a project is probable. The amount of such loss is the reasonably
estimated loss on the project and is recorded immediately upon determination
that the loss is probable. The Company is doing business with a number of start
up companies. Generally accepted accounting principles require that
collectibility must be reasonably assured before revenue is recognized. The
Company evaluates each of its customers who are in a start up mode and assesses
its ability to pay and the customer's recent history of payments before the
Company recognizes revenue for services performed. Revenue from product
licensing is recognized as earned pursuant to the terms of the related contract,
which generally occurs when the Company ships equipment in conjunction with such
license. Amounts received but unearned as of September 30, 2001 are recorded as
deferred revenue at September 30, 2001.The deferred revenue as of September 30,
2001 consisted of advances for both engineering services and products. The
deferred revenue related to products was $290,000 and the amount related to
engineering services was $109,000. The Company earns a minimal amount of gross
profit on product sales, which therefore will have an insignificant contribution
towards the Company's operating expenses. All the revenue recorded for the nine
months ended September 30, 2001 was from engineering and prototype service
contracts.

The majority of the revenue for the nine months ended September 30, 2000 was
from product sales. The Company recognizes revenue from product sales upon
shipment, when the title passes. Under specified conditions, certain customers
were allowed to return product for credit. Also, under the terms of some of the
agreements, in the event the Company reduced its selling prices, the customer
received credit for the difference between the original purchase price and the
Company's reduced price for product remaining in the customer's inventory.

Trade Receivables

Trade receivables are presented net of an allowance for doubtful accounts of
$12,000 and $580,000 as of September 30, 2001 and December 31, 2000,
respectively, and net of the allowance for sales returns and price protection of
$0 and $100,000 as of September 30, 2001 and December 31, 2000, respectively.


                                      -13-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Segment information

The Company operates in only one business segment but has two major product
categories. Sales by major product category are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                           Three Months                    Nine Months
                                                                        Ended September 30,            Ended September 30,
                                                                       --------------------            -------------------
                                                                          2001      2000                  2001       2000
                                                                          ----      ----                  ----       ----
<S>                                                                      <C>       <C>                   <C>        <C>
Data communications, PC peripherals, and others                          $ 0.0     $ 2.2                 $ 0.0      $ 9.2
Engineering Services including prototype product sales                   $ 0.9     $ 2.0                 $ 2.9      $ 3.1
</TABLE>

The Company does not have the information to break down profitability (loss) by
major product types.

Comprehensive Income (Loss)

Comprehensive income (loss) includes all changes in equity during a period
except those resulting from investment by owners and distributions to owners.
The Company's comprehensive income (loss) equals its net loss for the three and
nine months ended September 30, 2001 and 2000.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, trade receivables, accounts
payable, and accrued expenses and other current and non-current liabilities
approximates fair value.

Capital Leases

The Company capitalizes leases that meet at least one of the following criteria:
(a) the lease transfers ownership of the property by the end of its lease term;
(b) the lease contains a bargain purchase option; (c) the lease term is equal to
75% or more of the estimated economic life of the leased property or (d) the
present value at the beginning of the lease term of the minimum lease payments
equals or exceeds 90% of the fair value of the leased property. All other leases
are accounted for as operating leases.

Net Loss per Share

The Company computes net loss per share under Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share," which requires a dual
presentation of basic and diluted earnings per share on the face of the
statement of operations. Basic earnings per share excludes dilution and is
computed by dividing income or loss attributable to common shareholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were converted into common
stock, but such securities or contracts are excluded if their effects would be
anti-dilutive. The Company excluded stock options to purchase 1,842,979 and
1,770,152 common shares from the weighted-average shares


                                      -14-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

outstanding calculation for the three and nine months ended September 30, 2001
and 2000, respectively, as their effect was anti-dilutive.

Commitments and Contingencies

On March 3, 2000, the Company completed the sale of certain of its assets (the
"Purchased Assets") relating to its manufacturing operations at 1377 Clint Moore
Road for the manufacture of products, including modems, to Boundless
Manufacturing Services, Inc. ("Boundless"), a wholly owned subsidiary of
Boundless Corporation, for $1.7 million in cash and notes (the "Boundless
Transaction"). The sale was part of the Company's efforts to improve gross
margins and resulted in a gain of $277,000. In accordance with the terms of the
Asset Purchase Agreement between the Company and Boundless Technologies, Inc.,
which was assigned to Boundless on the closing of the transaction, Boundless
paid the Company $700,000 in cash and Boundless issued to the Company a 6%
promissory note (the "Note") in the principal amount of $1,000,000 to be paid in
eight equal installments of $125,000 plus accrued interest commencing on June 1,
2000, and on the first business day of every third month thereafter, until paid
in full. Boundless Technologies, Inc. and Boundless Corporation guaranteed the
obligations of Boundless under the Note. As of June 30, 2001 the note receivable
was fully satisfied by offsetting the amount due from Boundless with the amount
due to Boundless under a minimum guaranteed purchase commitment. This offset
provision was provided for under the terms of the contract. Additionally,
concurrent with the closing of the Boundless Transaction, the Company entered
into a Supply Agreement with Boundless (the "Supply Agreement") pursuant to
which the Company agreed to outsource the manufacture of certain products to
Boundless for a period of two years.

Under the Supply Agreement, the Company guaranteed that it would purchase
products resulting in proceeds to Boundless exclusive of costs of materials, of
at least $3.8 million during the first year of the term of the Supply Agreement.
To the extent the Company fell short of the cumulative prorated amount
guaranteed in any of the four 90 day periods subsequent to March 3, 2000, the
amount of the shortfall would be due within 30 days after the end of the 90 day
period in which the shortfall occurred. As noted under "Recent Developments,"
the Company eliminated its purchase of data communications products from
Boundless as of September 30, 2000 and charged an estimated shortfall of $1.9
million to operations in the quarter ended June 30, 2000.

The calculation of the shortfall in the purchase commitment took into
consideration the Company's final purchase requirements for data communications
products through September 30, 2000, the use of Boundless to fulfill the
Company's obligations for warranty repairs, and other opportunities to satisfy
the purchase requirements that are afforded by the contract with Boundless. The
minimum guaranteed purchase commitment expired as of March 3, 2001 and all
obligations under the minimum guaranteed purchase commitment have been
satisfied. The Supply Agreement provided that any amounts due under the minimum
guaranteed purchase commitment could be offset against the Note Receivable,
which the Company did as of March 31, 2001. There is no minimum purchase
obligation during the second year of the Supply Agreement.


                                      -15-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

The Company receives communications from time to time alleging various claims.
These claims include, but are not limited to, allegations that certain of the
Company's products infringe the patent rights of other third parties. The
Company cannot predict the outcome of any such claims or the effect of any such
claims on the Company's operating results, financial condition, or cash flows.

In 1999, the Company was named a co-defendant in an action brought in the United
States District Court for the District of Massachusetts, by NEC Technologies,
Inc. ("NEC"). The suit alleged that the Company supplied modem hardware to NEC,
which was combined by NEC with software supplied by another co-defendant, Ring
Zero Systems, Inc. ("Ring Zero"), causing NEC to be sued for patent infringement
by PhoneTel Communications, Inc. ("PhoneTel"), allegedly as a result of NEC's
combination of modem hardware and software supplied by the vendors in its
personal computer products. NEC alleged that the Company and Ring Zero were
obligated to indemnify NEC for NEC's costs of defense and settlement of the
PhoneTel suit, in the amount of $327,000. The lawsuit brought against the
Company was dismissed without prejudice on April 25, 2000 for procedural
reasons, and to date there has been no resolution of the substantive dispute.
While NEC has the option of refiling this action in an appropriate jurisdiction,
it has not done so in the interim since the dismissal in April 2000, and the
Company therefore believes that this claim will not have a material adverse
effect on the Company's operating results, financial condition, or cash flows.

The Company and its Boca Global, Inc. subsidiary were named as co-defendants in
an action brought in the United States District Court for the District of South
Dakota, by Gateway, Inc. ("Gateway"). Global Village, Inc. had contracted to
supply its FaxWorks software to be bundled with Gateway PCs. Gateway's complaint
against the Company and Boca Global, Inc. alleges that either or both of these
entities assumed the liabilities of Global Village, Inc. with respect to the
FaxWorks product. Gateway seeks indemnification for payment in the amount of
approximately five million dollars which it paid to settle patent infringement
litigation brought by PhoneTel. In addition to the Company and Boca Global Inc.,
another unrelated co-defendant was named as a party to the action. On January
19, 2001, a motion to dismiss was granted with respect to the Company, but,
Boca Global, Inc. remains as a defendant in the action. While the Company
believes that Boca Global, Inc. will be able to assert numerous defenses to
liability, the Company is currently negotiating a settlement of Gateway's claim,
and does not believe at this time that the claim will have a material adverse
effect on the Company's operating results, financial condition, or cash flows.

The Company is committed through 2002 for rents under noncancelable operating
leases for use of its offices. The aggregate minimum payments under such leases
for the period October 1, 2001 to December 31, 2001 and for the year 2002 are
$99,342 and $231,798, respectively.

Stockholders' Equity

During the nine month period ended September 30, 2001, 22,816 shares were issued
in connection with purchases by employees through the Employee Stock Purchase
Plan. The aggregate proceeds received from these exercises were $13,717.


                                      -16-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Stock Option Plan

During the nine month period ended September 30, 2001, the Company granted
options to purchase 828,500 shares to employees and 250,000 were granted to the
President and Chief Executive Officer, pursuant to his employment agreement, and
options to purchase 900,288 shares were canceled as a result of employees who
were terminated. The Company cancelled 531,946 previously granted options and
re-priced these options on April 25, 2001. The price of these options was $.56.
The Company on September 21, 2001 cancelled options in the amount of 1,217,946
and re-priced these options at $.135. The vesting period on the re-priced
options remained the same as the original options. Additional outstanding
options in the amount of 457,033 were not re-priced. Therefore the total
employee stock options that were outstanding as of September 30, 2001 were
1,674,979. The Board of Directors', outstanding options were 168,000 as of
September 30, 2001. The 1,217,946 re-priced options will have variable plan
accounting treatment. Therefore if the price of the Company's common stock is
greater than the option price, the Company will record compensation expense
resulting in a charge to earnings. The Company did not record any compensation
expense for the three and nine month periods ended September 30, 2001 because
the exercise price was equal to the fair market value at the date of grant and
the Company's stock price has substantially declined. The Company will evaluate
re-priced stock options each quarter and will record compensation expense if
required. The vesting period for the current outstanding employee options are as
follows. The 250,000 options issued to the President and Chief Executive Officer
vest 20% on April 12, 2002, 20% on April 12, 2003, and 60% on April 12, 2004.
The 531,946 options granted on April 25, 2001 had a three month vesting period.
A former employee holds 150,000 options, which have not expired and are fully
vested. The balance of the outstanding options retain their original grant date
and vest over a three-year period from the date of grant

On October 11, 2001 the Company issued 150,000 options to its investment banker
for services performed at a nominal value and an immediate vesting period. These
options were immediately exercised and 150,000 shares of common stock were
issued on October 11, 2001. Options granted for services result in a charge to
earnings for the difference in the option price and the fair value of the common
stock on October 11, 2001. This will result in a charge to earnings of $27,000
in the fourth quarter of 2001.

On November 9, the Company's Board of Directors authorized the re-pricing of all
options at the fair market value on this date.

Recently Issued Accounting Pronouncements and Interpretations:

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") No.101 "Revenue Recognition" which provides guidance
on the recognition, presentation and disclosure of revenue in financial
statements. Based on management's current analysis of SAB No.101, management
believes it has met all conditions of SAB No. 101 regarding revenue recognition.

Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133 "Accounting for Derivative Instruments and Hedging
Activities" as amended


                                      -17-
<PAGE>

                        INPRIMIS, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities." The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivatives' fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. The effects of
applying SFAS Nos. 133 and 138 were not material to the Company's financial
statements.

In June 2001, the Financial Accounting Standards Board ("FASB") issued two new
pronouncements: Statement of Financial Accounting Standards ("SFAS") No 141,
"Business Combinations," and SFAS No.142, "Goodwill and Other Intangible
Assets." SFAS No. 141 is effective as follows: a) use of the pooling-of-interest
method is prohibited for business combinations initiated after June 30, 2001;
and b) the provisions of SFAS 141 apply to all business combinations accounted
for by the purchase method that are completed after June 30, 2001 (that is, the
date of the acquisition is July 2001 or later). There are also transition
provisions that apply to business combinations completed before July 1, 2001,
that were accounted for by the purchase method. SFAS No. 142 is effective for
fiscal years beginning after December 15, 2001 for all goodwill and other
intangible assets recognized in an entity's statement of financial position at
that date, regardless of when those assets were initially recognized. SFAS No.
142 specifies that goodwill and some intangible assets will no longer be
amortized but instead will be subject to periodic impairment testing. Adopting
SFAS Nos. 141 and 142 will not impact the Company's financial statements,
although future acquisitions would be affected by these statements.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 143 requires entities to
record the fair value of a liability for an asset retirement obligation in the
period in which it is incurred and a corresponding increase in the carrying
amount of the related long-lived asset. Subsequently, the asset retirement cost
should be allocated to expense using a systematic and rational method over its
useful life. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002. SFAS No. 144 addresses financial accounting and reporting for the
impairment of long-lived assets and for long-lived assets to be disposed of. It
supersedes, with exceptions, SFAS No 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" and is effective
for fiscal years beginning after December 15, 2001. The Company is currently
assessing the impact of SFAS No. 143 and No. 144 and therefore, at this time,
cannot reasonably estimate the effect of these statements on its financial
condition, results of operations and cash flows.


                                      -18-
<PAGE>

Item 2.
                         INPRIMIS, INC. AND SUBSIDIARIES

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

This report on Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 23E of the
Securities Act of 1934, as amended. These statements relate to future events or
future financial performance. Any statements contained in this report that are
not statements of historical fact may be deemed forward-looking statements. In
some cases, forward-looking statements can be identified by terminology such as
"may," "will," "should," "expect," "plan," "anticipate," "intend", "believe,"
"estimate," "predict," "potential" or "continue," or the negative of such terms
or other comparable terminology. These statements are only predictions. Actual
events or results may differ materially.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company, nor any other entity, assumes responsibility for the accuracy and
completeness of the forward-looking statements. The Company is under no
obligation to update any of the forward-looking statements after the filing of
this Form 10-Q to conform such statements to actual results or to changes in the
Company's expectations.

The following discussion should be read in conjunction with the Company's
condensed consolidated financial statements, related notes and the other
financial information appearing elsewhere in this Form 10-Q. Readers are also
urged to carefully review and consider the various disclosures made by the
Company, which attempt to advise interested parties of the factors which affect
the Company's business, including without limitation, the disclosures made under
the caption "Certain Factors That May Affect Future Performance."


                                      -19-
<PAGE>

As an aid to reviewing the Company's results of operations for the three and
nine months ended September 30, 2001, the following table sets forth the
financial information as a percentage of net sales and the percentage change
from the comparable period in 2000.

<TABLE>
<CAPTION>
                                                  Three Months ended                    Nine Months ended
                                                    September 30,         Percent         September 30,            Percent
                                                  2001         2000       Change        2001         2000          Change
                                               -----------  -----------  ----------  ----------  ------------   -------------
<S>                                            <C>          <C>          <C>         <C>         <C>            <C>
Net sales                                         100.0  %     100.0  %   (78.9)  %     100.0 %      100.0  %       (76.6) %
Cost of goods sold                                 92.2         68.0      (71.4)        131.6         89.3          (65.6)
                                                  -----        -----                    -----        -----
   Gross profit (loss)                              7.8         32.0      (94.8)        (31.6)        10.7            *
                                                  -----        -----                    -----        -----
Operating expenses:
 Research and development                          22.6         10.4      (54.0)         17.5         16.3          (74.9)
 Selling, general and administrative               33.8         42.0      (83.1)         71.6         73.3          (77.2)
 Asset impairment and other charges                 0.0          0.0         *            0.0         37.8         (100.0)
                                                  -----        -----                    -----        -----
   Total operating expenses                        56.4         52.4      (77.3)         89.1        127.4          (83.6)
                                                  -----        -----                    -----        -----
Loss from operations                              (48.6)       (20.4)     (49.9)       (120.7)      (116.7)         (75.8)
Non-operating income, net                           1.0         10.6      (98.0)          6.0         15.1          (90.6)
                                                  -----        -----                    -----        -----
Loss before income taxes                          (47.6)        (9.8)       1.7        (114.7)      (101.6)         (73.6)
Income taxes                                        0.0          0.0        *             0.0          0.0            *
                                                  -----        -----                    -----        -----
Net loss                                          (47.6) %      (9.8) %     1.7  %     (114.7) %    (101.6) %       (73.6) %
                                                  =====        =====                    =====        =====
</TABLE>

* Not applicable


Results of Operations


Net Sales: The Company's net sales decreased by 78.9% to $.9 million in the
three- month period ended September 30, 2001 from $4.2 million for the three
months ended September 30, 2000. For the nine months ended September 30, 2001
net sales decreased by 76.6% to $2.9 million from $12.3 million for the nine
months ended September 30, 2000. Sales in the three and nine month periods ended
September 30, 2001 versus the comparable period in 2000 are shown by product
category as follows:

<TABLE>
<CAPTION>
                                                                                Three Months           Nine Months
                                                                                   Ended                  Ended
                                                                                September 30,         September 30,
                                                                              ----------------        ---------------
                                                                              2001        2000        2001       2000
                                                                              ----        ----        ----       ----

                         Product Categories                                   (In Millions)           (In Millions)
                         ------------------
<S>                                                                           <C>         <C>         <C>        <C>

Data Communications .............................................               --       $ 1.6          --     $  7.1
Custom Manufacturing ............................................               --          --          --        0.1
I/O, IDE, & Multiport ...........................................               --         0.4          --        1.7
Internet Access Device, Thin Client .............................               --         0.2          --        0.3
Engineering Services including prototype product sales                       $  .9         2.0       $ 2.9        3.1
                                                                             -----       -----       -----      -----
                                                                             $  .9       $ 4.2       $ 2.9     $ 12.3
                                                                             =====       =====       =====     ======
</TABLE>


                                      -20-
<PAGE>

The sales decrease was primarily attributable to data communications products,
which the Company is no longer offering to the marketplace. Engineering service,
including prototype product sales, revenues decreased to $0.9 million in the
three months ended September 30, 2001 from $2.0 million in the comparable period
in 2000. For the nine month period engineering service, including prototype
product sales, revenues decreased to $2.9 million from $3.1 million for the
comparable period in 2000.

Engineering services revenue for the three months ended September 30, 2001,
consisted primarily of $0.7 million for contract engineering and $0.2 million
from prototype and product sales arising from engineering contracts. For the
three months ended September 30, 2000 engineering service revenue consisted of
$1.3 million from contract engineering and $0.4 million in royalties from
licensing the Company's Internet appliance reference design and $0.3 million
from prototype and product sales arising from engineering contracts. Engineering
service revenue for the nine months ended September 30, 2001 consisted of $2.3
million for contract engineering and $0.6 million for prototype and product
sales arising from engineering contracts. For the nine months ended September
30, 2000 engineering service revenues consisted of $2.2 million from contract
engineering and $0.6 million in royalties from licensing the Company's Internet
appliance reference design and $0.3 million from prototype and product sales
arising from engineering contracts. The product sales, which are included as
engineering services, are shown in the statement of operations under product
sales. These product sales are not comparable to the data communication product
sales in the previous year. The Company earned insignificant royalties from its
Internet appliance reference design for the nine months ended September 30,
2001.

International sales were insignificant for the three months ended September 30,
2001 compared to $0.2 million the three months ended September 30, 2000.
International sales were insignificant for the nine months ended September 30,
2001 compared to $1.2 million for the nine months ended September 30, 2000.

Gross Profit (Loss): The Company recorded a gross profit of $0.1 million for the
three months ended September 30, 2001 as compared to a gross profit of $1.3
million for the three months ended September 30, 2000. For the nine months ended
September 30, 2001 the Company recorded a gross profit (loss) of ($.9) million
compared to a gross profit of $1.3 million in the comparable period in 2000. The
Company's negative gross profit for the nine months ended September 30, 2001 was
the result of engineering costs being charged to projects that exceeded
recognized revenue for the project. This situation can be caused by a number of
factors such as under-pricing of the project, inefficiency of the engineers, and
difficulties encountered in the project. The Company decreased its engineering
staff in the second quarter to partially rectify the situation where the
workload has diminished. This has resulted in the Company's achieving a positive
gross margin of $0.2 million in the three months ended June 30, 2001 and a
positive gross margin of $0.1 million in the three months ended September 30,
2001. The lower margin in the third quarter of this year compared to the second
quarter is primarily the result of a decrease in sales for engineering services.
The majority of sales for the nine months


                                      -21-
<PAGE>

ended September 30, 2000 were data communications products as noted in the table
above.

On March 3, 2000, the Company completed the sale of certain of its assets (the
"Purchased Assets") relating to its manufacturing operations at 1377 Clint Moore
Road for the manufacture of products, including modems, to Boundless, a wholly
owned subsidiary of Boundless Corporation, for $1,700,000 in cash and notes (the
"Boundless Transaction"). The sale was part of the Company's efforts to improve
gross margins and resulted in a gain of $277,000. In accordance with the terms
of the Asset Purchase Agreement between the Company and Boundless Technologies,
Inc., which was assigned to Boundless on the closing of the transaction,
Boundless paid the Company $700,000 in cash and Boundless issued to the Company
a 6% promissory note (the "Note") in the principal amount of $1,000,000 to be
paid in eight equal installments of $125,000 plus accrued interest commencing on
June 1, 2000, and on the first business day of every third month thereafter,
until paid in full. The obligations of Boundless under the Note were guaranteed
by Boundless Technologies, Inc. and Boundless Corporation. As of June 30, 2001
the note receivable was fully satisfied by offsetting the amount due from
Boundless with the amount due to Boundless under a minimum guaranteed purchase
commitment. This offset provision was provided for under the terms of the
contract. Additionally, concurrent with the closing of the Boundless
Transaction, the Company has entered into a Supply Agreement with Boundless (the
"Supply Agreement") pursuant to which the Company agreed to outsource the
manufacture of certain products to Boundless for a period of two years.

Under the Supply Agreement, the Company guaranteed that it would purchase
products resulting in proceeds to Boundless exclusive of costs of materials, of
at least $3.8 million during the first year of the term of the Supply Agreement.
To the extent the Company fell short of the cumulative prorated amount
guaranteed in any of the four 90 day periods subsequent to March 3, 2000, the
amount of the shortfall would be due within 30 days after the end of the 90 day
period in which the shortfall occurred. The Company eliminated its purchase of
data communications products from Boundless as of September 30, 2000 and
estimated that there would be a shortfall in meeting its contractual purchase
commitment of $1.9 million. This amount was charged to operations in the second
quarter ended June 30, 2000.

Research and Development Expenses: Research and development expenses decreased
to $0.2 in the three months ended September 30, 2001 from $0.4 million in the
three months ended September 30, 2000. For the nine month period ended September
30, 2001, research and development costs decreased to $0.5 million from $2.0
million for the comparable period in 2000. Research and development expenses
decreased because the majority of the engineering department is now allocated to
cost of sales, where, in the products business, it was categorized as research
and development. The portion of the engineering department allocated to research
and development in the current year is for those projects that the Company is
internally funding and for which there is no customer contract.


                                      -22-
<PAGE>

Selling, General and Administrative Expenses: Selling, general and
administrative expenses decreased to $0.3 million in the three months ended
September 30, 2001 from $1.8 million in the three months ended September 30,
2000. Selling, general and administrative expenses as a percentage of net sales
decreased to 33.8% in the three months ended September 30, 2001 from 42.0% in
the three months ended September 30, 2000. Selling, general and administrative
expenses decreased to $2.1 million in the nine months ended September 30, 2001
from $9.0 million for the nine month period ended September 30, 2000. Selling,
general and administrative expenses as a percentage of net sales in the nine
months ended September 30, 2001 was 71.6% versus 73.3% in the comparable period
in 2000. The decreases in expenses in 2001 versus the comparable period in 2000
primarily was the result of the Company's efforts to reduce expenses as it
transitioned from a products company to a service company.

Selling, general and administrative expenses as a percentage of net sales will
continue to fluctuate and will be influenced by the level of sales. Selling,
general and administrative expenses are likely to be different for a service
business than for a products business. The Company is adjusting this expense to
support the anticipated sales level of the new business. Certain selling,
general and administrative expenses have a fixed nature, thus a reduction in net
sales may result in an increase in selling, general and administrative expenses
as a percentage of net sales.

Asset Impairment and Other Charges: As discussed above, the Company previously
announced the sale of certain assets to Zoom during 2000, which sale was
intended to provide the Company with a smooth and customer oriented transition
out of the analog modem business. These actions resulted in the Company's
determining that the goodwill and tradename/marketing assets related to the data
communications business had been impaired as of June 30, 2000, and the Company
recording a charge to operations of $2.7 million in the second quarter of 2000.
The elimination of new purchase orders to Boundless resulted in the Company's
falling short of the guaranteed purchase commitments under the Supply Agreement
with Boundless. The Company estimated this shortfall to be $1.9 million and this
amount was charged to operations during the second quarter of 2000. As of June
30, 2001, the Company's estimated shortfall had been satisfied by payments to
Boundless and by the offset of the note receivable from Boundless. The condensed
consolidated statement of operations reflects the above charges of $2.7 million
and $1.9 million under the caption of asset impairment and other charges for the
three and nine months ended September 30, 2000. As of September 30, 2001, Zoom
had not made any commitments to manufacture the Company's products at Boundless.
Also, the minimum guaranteed purchase commitment had expired with Boundless and
there are no future obligations.

LIQUIDITY AND CAPITAL RESOURCES

During the period from December 31, 2000, through September 30, 2001, the
Company's working capital decreased by $2.8 million. This decrease was primarily
the result of a $4.3 million decrease in cash, $1.1 million decrease in accounts
receivable


                                      -23-
<PAGE>

and a decrease in prepaid expenses and other current assets in the amount of
$0.4 million, offset by a net decrease in accrued expenses, and other current
liabilities, accounts payable and deferred revenue of $3.0 million. The
Company's operations used cash of $4.3 million for the nine months ended
September 30, 2001. Working capital as of September 30, 2001 was a negative
($0.2) million compared to $2.6 million as of December 31, 2000.

The Company had a two-year collateralized revolving line of credit agreement
which was terminated early on October 6, 2000. During fiscal 2000, the Company
did not have any borrowings under the revolving line of credit.

The Company has incurred substantial operating losses in 1997, 1998, 1999, 2000,
and in the first nine months of 2001 and it is likely that cash flow from
operations will be negative in the foreseeable future. An unfavorable outcome of
the legal contingencies (see "Commitments and Contingencies") would also have an
adverse affect on the Company's cash flows. Such conditions raise substantial
doubt that the Company will be able to continue as a going concern for a
reasonable period of time. Management has attempted to take steps to bring the
Company's expense structure in line with the reduced revenue levels being
achieved. In April 2001, the Company reduced the number of employees from 53 to
37. In July 2001 the Company implemented a 20% salary reduction for its five
management personnel and a 10% salary reduction for other positions. In
September 2001, the Company implemented additional salary reductions. The
Company will continue to use its best efforts to reduce costs to match
forecasted revenues. The Company believes that since the engineering service
business does not require large amounts of working capital, which were required
in the products business, the alignment of sales and expenses is the key to cash
flow and to preserving the Company's limited cash resources. As is customary in
the engineering service business, the Company will pursue advance payment on
engineering service contracts to further reduce the working capital requirements
for carrying accounts receivables.

 On October 12, 2001 the Company and Cash Card Communications Corp. Ltd.
("C-4"), a Bermuda corporation, entered into a Share Exchange Agreement under
which C-4 and another party have agreed to transfer to the Company all of their
common shares of DataWave Systems, Inc. (OTCBB: DWVSF) in exchange for common
shares of the Company. C-4 currently holds approximately 36% of the issued and
outstanding common stock of DataWave, and the other transferor in the share
exchange holds approximately 4.5% of its stock. Simultaneous with the entering
into of the Share Exchange Agreement, and pursuant to its terms, Eduard Will,
President and CEO of the Company, C-4 and another investor entered into a
Private Placement Agreement under which The Company will, subject to certain
conditions, issue 4,000,000 shares of a newly created class of Series A
Preferred Stock in consideration of an aggregate purchase price of $500,000
which will be used as working capital. The closing of the private placement was
subject to the granting of an exemption by Nasdaq from its rule that an issuer
receive shareholder approval of any issuance of greater than 20% of the voting
power of its outstanding stock at the time of issuance, or, in the alternative,
receipt of such shareholder approval. On October 26, 2001 the Company shares
were


                                      -24-
<PAGE>

delisted and are presently quoted on the OTC Bulletin Board. The OTC Bulletin
Board exchange does not have a requirement that requires the Company to receive
shareholder approval of any issuance of greater than 20% of the voting power of
its outstanding stock. Therefore the conditions have been met for the closing of
the Private Placement Preferred Stock, but closing and receipt of the money has
not occurred.

However, in the near term, the Company believes it must achieve the
aforementioned financial goals in order for it to continue to operate. There can
be no assurances, that even if the Company receives the $500,000 of working
capital, the Company will succeed in achieving these short term goals, and its
failure to do so in the near term will have a material adverse affect on its
business, prospects, financial condition, and operating results and the
Company's ability to continue as a going concern. As a consequence, the Company
may be forced to seek protection under the bankruptcy laws. In that event, it is
unclear whether the Company could successfully reorganize its capital structure
and operation, or whether the Company could realize sufficient value for its
assets to satisfy fully its debts. Accordingly, should the Company file for
bankruptcy, there is no assurance that any value would be received by the
Company's shareholders.

The Company regularly evaluates acquisitions of businesses, technologies or
products complementary to the Company's business. In the event that the Company
pursues one or more acquisitions, the Company's limited cash balances may be
utilized to finance such acquisitions and additional sources of liquidity such
as debt or equity financing will in all likelihood be required for such
acquisitions or to meet working capital needs. There can be no assurance that
additional capital beyond the amounts forecasted by the Company will not be
required or that any such required capital will be available on terms acceptable
to the Company, if at all, at such time or times as required by the Company. As
previously reported, the Company had signed a letter of intent to acquire
iDVDBox, Inc. This letter of intent has expired and the Company is no longer in
negotiations to acquire iDVD Box, Inc. In April 2001, the Company hired an
investment banker to seek additional capital or potential acquisitions or merger
candidates that could bring financing or profitable revenues to the combined
companies.

Certain Factors That May Affect Future Performance

In addition to the other information in this Form 10-Q, readers should consider
carefully the following factors that may affect the future performance of the
Company.

Transition of the Company; Unproven Business Plan and Limited Experience

The Company embarked upon a plan in early 2000 to transition from being
primarily a data communication products manufacturer to its new focus on
providing engineering services. Currently, the Company has very limited
experience providing these services, and there can be no assurances that the
Company will succeed in implementing its as-yet unproven business plan. Risks
associated with this transition include:


                                      -25-
<PAGE>

         a.  the existence of a limited number of network operators and
             information appliance manufacturers that have deployed products and
             services using the Company's technology;
         b.  potential delays in deploying high-speed networks and
             internet-enhanced services and applications by the Company's
             customers;
         c.  an unproven business model, which depends on revenues from
             engineering services and royalty fees paid by information appliance
             manufacturers and network operators;
         d.  potential inability of the Company to expand its engineering and
             design staff, increase its sales or marketing activities, and
             invest in its technological infrastructure; and
         e.  the Company's severely distressed financial condition including
             limited liquidity and capital resources.

Uncertainty in Development of an Evolving Industry

The market for intelligent computing devices is emerging and the potential size
of this market and the timing of its development are not known. As a result, the
profitability of the Company is uncertain and anticipated revenues may not
materialize. The Company is dependent upon the broad acceptance by business and
consumers of a wide variety of intelligent computing devices, which depend on
many factors, including:

         a.  the development of content and applications for intelligent
             computing devices;
         b.  the willingness of large numbers of businesses and consumers to use
             devices such as handheld and palm-size PCs and handheld industrial
             data collectors to perform functions currently carried out manually
             or by traditional PCs, including inputting and sharing data,
             communicating among users and connecting to the Internet; and
         c.  the evolution of industry standards that facilitate the
             distribution of content over the Internet to these devices via
             wired and wireless telecommunications systems, satellite, or cable.

There can be no assurances that the Company will succeed in achieving its goals,
and its failure to do so in the near term will have a material adverse effect on
its business, prospects, financial condition and operating results and the
Company's ability to continue as a going concern.

Software Development and Services Market; Low Barriers to Entry

The market for software development and services is becoming increasingly
competitive. Increased competition may result in price reductions, lower gross
margins, and loss of market share, which would harm the Company's planned
business. The Company faces competition from:

         a.  current and potential customers' internal research and development
             departments that may seek to develop their own proprietary
             solutions;


                                      -26-
<PAGE>

         b.  large professional engineering services firms that may enter the
             market;
         c.  established intelligent computing device software and tools
             manufacturers; and
         d.  small and medium-sized engineering service companies.

As the Company assists other companies in developing new products, particularly
products focused on specific industries, they may begin competing with companies
in sectors that have not been identified above. It is also possible that new
competitors will enter the market or that existing competitors will form
alliances that may enable them to rapidly increase their market share. The
barriers to entering the market as software developer or hardware design
consultant for intelligent computing devices are low. New market entrants may
have lower overhead than the Company and therefore be able to offer advantageous
pricing. The Company expects that competition will increase as other established
and emerging companies enter the intelligent computing device market and as new
products and technologies are introduced.

Rapid Pace of Technological Change; Effect On New and Existing Products and
Services

The markets for the Company's products and services are characterized by rapidly
changing technology, evolving industry standards, and short product life cycles.
The Company's success depends upon its ability to enhance its existing products
and services and to introduce new products and services with features that meet
changing end-user requirements. The Information Technology ("IT") sector in
which the Company offers outsourcing and other services is characterized by
rapidly changing technology with continuous improvements in both computer
hardware and software and rapid obsolescence of current systems. The Company's
success will depend in part on its ability to develop solutions that keep pace
with continuing changes in information technology, evolving industry standards
and changing client preferences. Additionally, there can be no assurance that
the Company will be successful in identifying new markets, in developing and
marketing new products and services, or in enhancing its existing products and
services, either internally or through strategic relationships with third
parties. The Company's business would be adversely affected if the Company were
to incur delays in developing new, or enhancing existing, products and services,
due to delays in obtaining any required regulatory approvals for its products or
if any such new products or enhancements did not gain market acceptance. In
addition, there can be no assurance that products or technologies developed by
others will not render the Company's products or technologies noncompetitive or
obsolete.

Potential Significant Fluctuations in Quarterly Results; Effect on Company Stock
Price

The Company's quarterly operating results have varied significantly, and
continue to vary significantly, depending on a number of factors, some of which
could adversely affect the Company's operating results and the trading price of
the Company's Common Stock in the future. These factors include the level of
demand for the Company's products and services, competition, competitive pricing
pressures, and the timing of engineering contracts and completion of the
contracts per the specified terms. There can be no


                                      -27-
<PAGE>

assurance that the Company will be able to achieve growth in revenue or return
to profitability on a quarterly or annual basis. The Company's expense levels
are based, in part, on its expectations as to future revenue. If sales and
revenue levels are below expectations, operating results will continue to be
adversely affected, which will likely have an adverse effect on the trading
price of the Company's Common Stock.

Effect of Potential Acquisitions on Operations, Products, Services, and
Personnel

The Company may from time to time determine to pursue the acquisition of other
companies, assets, technologies, or product lines that would complement or
expand its existing business. Certain of these acquisitions may involve
businesses in which the Company lacks experience. Acquisitions involve a number
of risks that could adversely affect the Company's operating results, including
the diversion of management's attention, the assimilation of the operations,
products and personnel of the acquired companies, the amortization of acquired
intangible assets and the potential loss of key employees of the acquired
companies. There can be no assurance that the Company will be able to identify
businesses that would complement or expand its existing business or such
acquisitions; finance any such acquisitions; manage one or more acquisitions
successfully; or integrate the operations, products, or personnel gained through
such acquisition without a material adverse impact on the Company's business,
financial condition, and results of operations, particularly in the quarters
immediately following such acquisitions.

Effects of Increasing Competition

The Company has entered into new markets, including the Internet TV appliance
industry, and has encountered competition from a number of well-established
companies, most of which have greater financial, technical, product development,
manufacturing and marketing resources and experience than that of the Company.
Further, the markets for the Company's products and services are increasingly
competitive, resulting in increasing pricing pressures. The Company believes
that its ability to compete depends on a number of factors, including price,
quality and reliability, availability, credit terms, name recognition, delivery
time, and post-sale service and support. There can be no assurance that the
Company will be able to continue to compete successfully with respect to these
factors. A variety of companies currently offer products and services that
compete directly with the Company's products and services. These competitors
could introduce additional products and services that are superior to the
Company's, or that achieve greater market acceptance. The introduction of lower
priced competitive products and services or significant price reductions by the
Company's competitors would result in price reductions in the Company's products
and services that could have a material adverse effect on the Company's
operating results.

Proprietary Rights; Dependence on Software Licenses

The Company receives from time to time, and may receive in the future,
communications from third parties asserting intellectual property rights
relating to the Company's products


                                      -28-
<PAGE>

(which include services) and technologies. There can be no assurance that in the
future the Company will be able to obtain licenses of any intellectual property
rights owned by third parties with respect to the Company's products or that any
such licenses can be obtained on terms favorable to the Company. If the Company
is unable to obtain licenses of protected technology, it could be prohibited
from developing and marketing products incorporating that technology. The
Company could also incur substantial costs in redesigning its products or in
defending any legal action taken against it. Should the Company be found to
infringe the proprietary rights of others, the Company could be required to pay
damages to the infringed party, which could have a material adverse effect on
the Company's operating results. In certain of its products, the Company
includes software licensed from third parties. The Company's operating results
could be adversely affected by a number of factors relating to this third party
software, including lack of market acceptance, failure by the licensors to
promote or support the software, delays in shipment of the Company's products as
a result of delays in the introduction of licensed software or errors in the
licensed software, or excess customer support costs or product returns
experienced by the Company due to errors in the licensed software. Moreover, any
impairment or termination of the Company's relationship with any licensors of
third party software could have a material adverse effect on the Company's
operating results.

Volatility of Stock Price

      The price of the Company's Common Stock historically has been volatile due
to fluctuations in operating results and other factors relating to the Company's
operations, the market's changing expectations for the Company's growth, overall
equity market conditions relating to the market for technology stocks generally,
and other factors unrelated to the Company's operations, including announcements
by or relating to the Company's competitors. Such fluctuations are expected to
continue. In addition, stock markets have experienced more price volatility in
recent years. This volatility has had a substantial effect on the market prices
of securities issued by many technology companies, often for reasons unrelated
to the operating performance of the specific companies. Investors should be
aware that trading in the Company's stock through market makers and quotation on
the OTC Bulletin Board entails risk. Due in part to the decreased trading price
of our stock, the trading price of the stock may change quickly, and market
makers may not be able to execute trades as quickly as when the stock was listed
on the Nasdaq National Market. Please contact your broker if you have further
questions about executing trades.

Status of Company Common Stock Listing on Nasdaq National Market

Stock traded on The Nasdaq National Market must meet certain listing
requirements, including requirements with respect to a Company's net tangible
assets, the bid price of its stock and the market value of its public float. As
previously announced, the Company received a Nasdaq Staff Determination on June
26, 2001, indicating that the Company did not meet the net tangible assets
requirement for continued listing, and that its stock was, therefore, subject to
delisting from the Nasdaq National Market. Nasdaq also


                                      -29-
<PAGE>

advised the Company that the Company was not in compliance with the $1 minimum
bid requirement and the minimum market value requirement with respect to its
public float. The Company requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination, which was held on August
16, 2001. The Company received notice on October 25, 2001 that the Company's
shares would be de-listed effective the next day. As of October 26, 2001, the
Company's shares were quoted on the OTC Bulletin Board under the ticker symbol
INPM. The OTC Bulletin Board is a regulated quotation service that displays
real-time quotes, last-sale prices and volume information in over-the counter
(OTC) equity securities. OTC Bulletin Board securities are traded by a community
of registered market makers that enter quotes and trade reports.

Dependence on Key Personnel

 The Company is dependent on its executive officers and other key personnel,
certain of whom could be difficult to replace. If certain of these people were
to leave the Company, operating results could be adversely affected. The future
growth and success of the Company also depends in part on its ability to attract
and retain skilled employees. In light of the Company's overall financial
condition, it may be difficult to implement compensation packages sufficient to
attract and retain such skilled employees. All five of the Company's executive
officers have formal employment contracts.

 Liquidity and Capital Resource Difficulties

The Company has incurred substantial operating losses in 1997, 1998, 1999, and
2000. Although cash and cash equivalents were $1.1 million as of September 30,
2001, the Company's net cash used in operating activities was $4.3 million for
the nine months then ended. The Company's working capital was a negative ($.2)
million as of September 30, 2001. Furthermore, it is likely that the Company's
operations will continue to consume cash in the foreseeable future. An
unfavorable outcome of the legal contingencies would also have an adverse affect
on the Company's cash flow. Such conditions give rise to substantial doubt that
the Company will be able to continue as a going concern.

Management has attempted to take steps to bring the Company's expense structure
in line with the reduced revenue levels being achieved. In April 2001, the
Company reduced the number of employees from 53 to 37. In July 2001 the Company
implemented a 20% salary reduction for its five management personnel and a 10%
salary reduction for other positions. In September 2001 the Company implemented
further temporary salary reductions. The Company will continue to use its best
efforts to reduce costs to match forecasted revenues. The Company believes that
since the engineering service business does not require large amounts of working
capital, which were required in the products business, the alignment of sales
and expenses is the key to cash flow and to preserving the Company's limited
cash resources. As is customary in the engineering service business, the Company
will pursue advance payment on engineering service contracts to further reduce
the working capital requirements for carrying accounts receivables.


                                      -30-
<PAGE>

However, in the near term, the Company believes it must achieve the
aforementioned financial goals in order to continue to operate.

On October 12, 2001 the Company and Cash Card Communications Corp. Ltd. ("C-4"),
a Burmuda corporation, entered into a Share Exchange Agreement under which C-4
and another party have agreed to transfer to the Company all of their common
shares of DataWave Systems, Inc. (OTCBB: DWVSF) in exchange for common shares of
the Company. C-4 currently holds approximately 36% of the issued and outstanding
common stock of DataWave, and the other transferor in the share exchange holds
approximately 4.5% of its stock. Simultaneous with the entering into of the
Share Exchange Agreement, and pursuant to its terms, Eduard Will, President and
CEO of the Company, C-4 and another investor entered into a Private Placement
Agreement under which the Company will, subject to certain conditions, issue
4,000,000 shares of a newly created class of Series A Preferred Stock in
consideration of an aggregate purchase of $500,000 which will be used as working
capital.

Management believes that it will be necessary for the Company to return to
profitable operations in the near future in order for existing cash balances,
even with the receipt of the $500,000 private placement and cash generated from
operations, to be sufficient to meet the Company's short term liquidity and
capital needs. Should the Company require additional capital, there can be no
assurance that any such required capital will be available on terms acceptable
to the Company, if at all, at such time or times as required by the Company.
There can be no assurance that the Company will succeed in achieving its goals,
and its failure to do so in the near term will have a material adverse effect on
its business, prospects, financial condition, operating results, and the
Company's ability to continue as a going concern. As a consequence, the Company
may be forced to seek protection under the bankruptcy laws. In that event, it is
unclear whether the Company could successfully reorganize its capital structure
and operations, or whether the Company could realize sufficient value for its
assets to satisfy fully its debts. Accordingly, should the Company file for
bankruptcy, there is no assurance that any value would be received by the
Company's shareholders.


                                      -31-
<PAGE>

PART II.
                         INPRIMIS, INC. AND SUBSIDIARIES
                                OTHER INFORMATION

Item 1.    Legal Proceedings

The information required by this Item is disclosed in the "Commitments and
Contingencies" Note to the Company's Condensed Consolidated Financial Statements
contained in Part I hereof.

Items 2-3.

        Not applicable.

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

        None

Item 5.    Other Information

Blaine Davis and Phil Vachon resigned from the Board of Directors effective
August 21, 2001


Item 6.    Exhibits and Reports on Form 8-K

      (a)  Exhibits:

           Exhibit 11      Statement re computation of per share earnings (loss)

           All information required by Exhibit 11 is presented within the
           Condensed Consolidated Statements of Operations and the Notes to the
           Condensed Consolidated Financial Statements under "Net loss per
           Share" in accordance with the provisions of SFAS No. 128.

      (b)  Reports on Form 8-K:

           Form 8-K filed on October 18, 2001 describing the Company's entering
           into an interim agreement to amalgamate with DataWave and Cash Card
           Communications Corp. Ltd. Included in the filing was the press
           release issued on October 12, 2001 describing the transactions and
           the signed agreements pertaining to the agreement.


                                      -32-
<PAGE>

                         INPRIMIS, INC. AND SUBSIDIARIES




                                   SIGNATURES

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

                                        INPRIMIS, INC.

Dated:  November 10, 2001                By:  /s/ Eduard Will
                -----                         ---------------
                                        Eduard Will
                                        Chief Executive Officer
                                        (Principal Executive Officer)




Dated:  November 10, 2001                By:  /s/ R. Michael Brewer
                -----                         ---------------------
                                        R. Michael Brewer
                                        Senior Vice President of Finance and
                                        Chief Financial Officer
                                        (Principal Financial and
                                        Accounting Officer)


                                      -33-