##### Table of Contents

---

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

---

FORM 10-QSB

|xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|-----------------------------------------------------------------------------------
|                                                                                   
|For the quarterly period ended September 30, 2002                                  
|                                                                                   
|-OR-                                                                               
|                                                                                   
|oTRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 0-21738

---

GLOBAL EPOINT, INC.(Name of small business issuer as specified in its charter)

---

|NEVADA                                                           |  | 33-0423037                       
|---------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction of incorporation or organization)   |  | (IRS Employer identification No.)
|                                                                 |  |                                  
|1370 W. SAN MARCOS BLVD. SUITE 100, SAN MARCOS, CALIFORNIA 92069
|(Address of principal executive offices)                        
|                                                                
|(760) 510-4900                                                  
|(Issuers telephone number)                                     
|                                                                 |  |                                  

---

Check whether the issuer (1)
filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding twelve months, and (2) has been subject to such filing requirements for the past 90 days.

|Yes | x | No | o
|--- | - | -- | -

As of October 22, 2002, there were 4,305,584 shares of Common Stock ($.03 par value) outstanding.

---



---

##### Table of Contents

INDEX

|                               |                                                                                                                     | Page
|------------------------------ | ------------------------------------------------------------------------------------------------------------------- | ----
|                               |                                                                                                                     |     
|Part I.  FINANCIAL INFORMATION |                                                                                                                    
|                               |                                                                                                                    
|                               | Item 1.  Financial Statements                                                                                       |     
|                               |                                                                                                                     |     
|                               | Condensed Consolidated Balance Sheet September 30, 2002 (Unaudited)                                                 | 3   
|                               |                                                                                                                     |     
|                               | Condensed Consolidated Statements of Operations Three and Nine Months Ended September 30, 2002 and 2001 (Unaudited) | 4   
|                               |                                                                                                                     |     
|                               | Condensed Consolidated Statements of Cash Flows Nine Months Ended September 30, 2002 and 2001 (Unaudited)           | 5   
|                               |                                                                                                                     |     
|                               | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                    | 6   
|                               |                                                                                                                     |     
|                               | Item 2.  
Managements Discussion and Analysis of Financial Condition and Results of Operations                     | 7   
|                               |                                                                                                                     |     
|                               | Item 3.  
Evaluation of Disclosure Controls and Procedures                                                          | 9   
|                               |                                                                                                                     |     
|Part II.  
OTHER INFORMATION   | 9                                                                                                                  
|                               |                                                                                                                    
|                               | Item 1.  
Legal Proceedings                                                                                         | 9   
|                               |                                                                                                                     |     
|                               | Item 6.  
Exhibits and Reports on Form 8-K                                                                          | 10  
|                               |                                                                                                                     |     
|SIGNATURES                     | 10                                                                                                                 
|                               |                                                                                                                    
|CERTIFICATIONS                 | 11                                                                                                                 
|                               |                                                                                                                     |     

All items which are not applicable or to which the answer is negative have been omitted from the index.

2



---

##### Table of Contents

Global ePoint, Inc. and SubsidiariesCondensed Consolidated Balance Sheet(Unaudited)

|(Thousands of dollars, except share amounts)      |                                                                                                     | September 30 2002 |        
|------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ----------------- | -------
|                                                  |                                                                                                     |                   |        
|Assets                                            |                                                                                                     |                   |        
|Current assets:                                   |                                                                                                     |                   |        
|                                                  | Cash and cash equivalents                                                                           |                   | $      
|                                                  | Accounts receivable, net                                                                            |                   |        
|                                                  | Other current assets                                                                                |                   |        
|                                                  |                                                                                                     |                   |        
|Total current assets                              |                                                                                                     |                   | 4,549  
|                                                  |                                                                                                     |                   |        
|Plant, property and equipment, net                |                                                                                                     |                   | 90     
|Card dispensing equipment used in operations, net |                                                                                                     |                   | 195    
|Card dispensing equipment in inventory, net       |                                                                                                     |                   | 3,386  
|Parts inventory, net                              |                                                                                                     |                   | 550    
|Other assets                                      |                                                                                                     |                   | 576    
|                                                  |                                                                                                     |                   |        
|Total assets                                      |                                                                                                     | $                 | 9,346  
|                                                  |                                                                                                     |                   |        
|Liabilities and shareholders equity              |                                                                                                     |                   |        
|Current liabilities:                              |                                                                                                     |                   |        
|                                                  | Accounts payable                                                                                    |                   | $      
|                                                  | Accrued expenses and other liabilities                                                              |                   |        
|                                                  |                                                                                                     |                   |        
|Total current liabilities                         |                                                                                                     |                   | 1,094  
|                                                  |                                                                                                     |                   |        
|Shareholders equity:                             |                                                                                                     |                   |        
|                                                  | Preferred stock, no par value, 2,000,000 shares authorized, no shares issued or outstanding         |                   |        
|                                                  | Common stock, $.03 par value, 13,333,334 shares authorized, 4,305,584 shares issued and outstanding |                   |        
|                                                  | Amount of shares to be issued                                                                       |                   |        
|Additional paid-in capital                        |                                                                                                     |                   | 33,124 
|Accumulated deficit                               |                                                                                                     |                   | (25,951
|                                                  |                                                                                                     |                   |        
|Total shareholders equity                        |                                                                                                     |                   | 8,252  
|                                                  |                                                                                                     |                   |        
|Total liabilities and shareholders equity        |                                                                                                     | $                 | 9,346  
|                                                  |                                                                                                     |                   |        

See accompanying notes to condensed
consolidated financial statements

3



---

##### Table of Contents

Global ePoint, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(Unaudited)

|                                                        |                                     | Nine Months Ended September 30 |        | Three Months Ended September 30 |  
|------------------------------------------------------- | ----------------------------------- | ------------------------------ | ------ | ------------------------------- | -
|                                                        |                                     |                                |        |                                 |  
|(Thousands of dollars/shares, except per share amounts) |                                     | 2002                           |        | 2001                            |  
|                                                        |                                     |                                |        |                                 |  
|Revenues:                                               |                                     |                                |        |                                 |  
|                                                        | Sales                               |                                | $      | 138                             |  
|                                                        | Interest income                     |                                |        | 101                             |  
|                                                        | Other  income                       |                                |        | 141                             |  
|                                                        |                                     |                                |        |                                 |  
|Total revenues                                          |                                     |                                | 380    |                                 |  
|                                                        |                                     |                                |        |                                 |  
|Operating expenses:                                     |                                     |                                |        |                                 |  
|                                                        | Cost of sales                       |                                |        | 122                             |  
|                                                        | Selling, general and administrative |                                |        | 553                             |  
|                                                        | Interest expense                    |                                |        |                                 |  
|                                                        | Restructuring costs                 |                                |        | 436                             |  
|                                                        | Costs of abandoned projects         |                                |        | 350                             |  
|                                                        |                                     |                                |        |                                 |  
|Total operating expenses                                |                                     |                                | 1,461  |                                 |  
|                                                        |                                     |                                |        |                                 |  
|Loss from continuing operations                         |                                     |                                | (1,081 | )                               |  
|Discontinued operations:                                |                                     |                                |        |                                 |  
|                                                        | Income                              |                                |        |                                 |  
|                                                        | Gain on sale                        |                                |        |                                 |  
|                                                        |                                     |                                |        |                                 |  
|Income from discontinued operations                     |                                     |                                |        |                                 |  
|                                                        |                                     |                                |        |                                 |  
|Net income (loss)                                       |                                     | $                              | (1,081 | )                               | $
|                                                        |                                     |                                |        |                                 |  
|Earnings  (loss) per share  Basic and Diluted:         |                                     |                                |        |                                 |  
|                                                        | Loss from continuing operations     |                                | $      | (.23                            | )
|                                                        | Income from discontinued operations |                                |        |                                 |  
|                                                        |                                     |                                |        |                                 |  
|                                                        | Net income (loss)                   |                                | $      | (.23                            | )
|                                                        |                                     |                                |        |                                 |  
|Weighted average shares                                 |                                     |                                | 4,622  |                                 |  
|                                                        |                                     |                                |        |                                 |  

See accompanying notes to condensed
consolidated financial statements.

4



---

##### Table of Contents

Global ePoint, Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows(Unaudited)

|                                                                             |                                                                                   | Nine months ended September 30 |      
|---------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------ | -----
|                                                                             |                                                                                   |                                |      
|(Thousands of dollars)                                                       |                                                                                   | 2002                           |      
|                                                                             |                                                                                   |                                |      
|Cash flows from operating activities:                                        |                                                                                   |                                |      
|                                                                             | Loss from continuing operations                                                   |                                | $    
|                                                                             | Income from discontinued operations                                               |                                |      
|                                                                             | Adjustments to reconcile income (loss) to net cash used for operating activities: |                                |      
|                                                                             | Depreciation and amortization                                                     |                                |      
|                                                                             | Issuance of options and warrants for services provided                            |                                |      
|                                                                             | Costs of abandoned projects                                                       |                                |      
|                                                                             | Changes in assets and liabilities:                                                |                                |      
|                                                                             | Accounts receivable                                                               |                                |      
|                                                                             | Parts inventory                                                                   |                                |      
|                                                                             | Other current assets                                                              |                                |      
|                                                                             | Accounts payable                                                                  |                                |      
|                                                                             | Accrued expenses and other liabilities                                            |                                |      
|                                                                             |                                                                                   |                                |      
|Net cash used for operating activities                                       |                                                                                   |                                | (738 
|                                                                             |                                                                                   |                                |      
|Cash flows from investing activities:                                        |                                                                                   |                                |      
|                                                                             | Purchases of plant, property and equipment                                        |                                |      
|                                                                             | Net investment in sales-type leases                                               |                                |      
|                                                                             | Net proceeds from sale of discontinued operations, including gain of $2,744       |                                |      
|                                                                             | Investment in short-term financial instruments                                    |                                |      
|                                                                             | Decrease in other assets                                                          |                                |      
|                                                                             |                                                                                   |                                |      
|Net cash provided by (used for) investing activities                         |                                                                                   |                                | (183 
|                                                                             |                                                                                   |                                |      
|Cash flows from financing activities:                                        |                                                                                   |                                |      
|                                                                             | Repayments of line of credit, net                                                 |                                |      
|                                                                             | Repayments of notes payable, net                                                  |                                |      
|                                                                             |                                                                                   |                                |      
|Net cash used for financing activities                                       |                                                                                   |                                |      
|                                                                             |                                                                                   |                                |      
|Increase (decrease) in cash and cash equivalents                             |                                                                                   |                                | (921 
|                                                                             |                                                                                   |                                |      
|Cash and cash equivalents at beginning of period                             |                                                                                   |                                | 5,389
|                                                                             |                                                                                   |                                |      
|Cash and cash equivalents at end of period                                   |                                                                                   | $                              | 4,468
|                                                                             |                                                                                   |                                |      
|Supplemental cash flow information, cash paid during the period for interest |                                                                                   | $                              |     
|                                                                             |                                                                                   |                                |      
|                                                                             |                                                                                   |                                |      

See accompanying notes to condensed consolidated financial statements.

5



---

##### Table of Contents

GLOBAL EPOINT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

| | 1. | Basis of PresentationThe accounting and reporting policies of Global ePoint, Inc. (formerly On-Point Technology Systems, Inc.) and subsidiaries
(collectively referred to as the Company) conform to accounting principles generally accepted in the United States of America.  The condensed consolidated financial statements for the three and nine months ended September 30, 2002
and 2001 are unaudited and do not include all information or footnotes necessary for a complete presentation of financial condition, results of operations and cash flows.  The interim financial statements include all adjustments, consisting
only of normal recurring accruals, which in the opinion of management are necessary in order to make the financial statements not misleading.  These consolidated financial statements should be read in conjunction with the Companys
December 31, 2001 audited financial statements, which are included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2001.  The results of operations for the three and nine months ended September 30, 2002 are
not necessarily indicative of the results to be expected for the entire year ending December 31, 2002.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 2. | Cash and Cash EquivalentsAs of September 30, 2002, cash and cash equivalents on the accompanying consolidated condensed balance sheet included $4 million of
Ford Financial Demand Notes Program, which currently yield interest at 3.4% per annum with market value approximating cost, and included other short-term cash investments with various interest rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 3. | Discontinued OperationsOn June 1, 2001, the Company sold to Interlott Technologies, Inc. (Interlott) those assets used in its then existing
lottery business, relating to the manufacture, sale, lease and service of instant ticket vending machines, including the assignment of the Companys existing lottery contracts pursuant to a definitive agreement executed on February 23, 2001
(the Agreement).  As a result of the sale, the operations related to the lottery assets have been reflected as discontinued operations in the accompanying condensed consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 4. | Restructuring CostsAs a result of the sale of the Companys core business operations on June 1, 2001, the Company is in the process of establishing new
strategic initiatives and transitioning the Company into new business activities.  During the three and nine months ended September 30, 2002, the Company incurred approximately $112 thousand and $436 thousand, respectively, in restructuring
costs.  The restructuring charges include payroll, facilities costs, refurbishment costs and certain other charges incremental to restructuring operations and preparing for new business activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 5. | Costs of Abandoned Projects  Included in operating costs were costs related to the abandonment of the Companys international projects.  The Company
had been pursuing certain international projects as a result of certain strategic initiatives started in 2000.  As a result of the recent changes in the social-political environment in the countries in which the Company was attempting to do
business, we have determined that it was in the best interest of the Company not to continue proceeding with those international projects.  As a result, the Company incurred a non-cash charge of approximately $350 thousand in the nine months
ended September 30, 2002 for costs related to the abandoned projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 6. | ContingenciesIn December 2001, Global ePoint had entered into an international service agreement with Fusion Telecommunications International, Inc.
(Fusion) pursuant to which the Company and Fusion commenced a strategic partnership to provide Voice over Internet Protocol (VoIP) services into a country in Southeast Asia.  The Company and Fusion have determined, as a
result of a contract disagreement with a key entity in the country in Southeast Asia, that it was in the Companys and Fusions best interests not to proceed with providing the telecommunication services.  In September 2002, the
Company received back $50 thousand of the $132 thousand it had funded on behalf of the joint venture.  The $82 thousand balance as of September 30, 2002 has been shown in Other Assets in the accompanying Balance Sheet and was returned to the
Company in October 2002.                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | On April 20, 2000, a shareholder class action was filed against the Company and certain officers and directors in the U.S. District Court, Southern District of California alleging
that the Company violated federal securities laws by the dissemination of materially false and misleading financial statements.  Subsequent cases alleging substantially the same claims, and also filed in the same court, were all consolidated
before the same judge.  The Company and the officers and directors have entered into amended settlement agreements with the class, and the court approved the amended settlement agreements in 2001.  The Company and the other defendants have
denied the liability claims as part of the amended settlements, but believe that settling the cases quickly was in the best interests of the Company in order for management to more effectively proceed with its strategic business plans.  Under
the amended settlement agreement, the Company paid $50 thousand in cash and is permitted to issue shares equal to $950 thousand in value to be determined in January 2003.  The affect of the settlement has already been accrued in the
Companys financial statements.  However,          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

6



---

##### Table of Contents

|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | under certain conditions the Company may need to issue additional shares of its common stock for the settlement if its per share price is less than $3 at the time of final
distribution of the stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | In October 2001, Loeb & Loeb, a law firm, initiated arbitration proceedings in Los Angeles, California against Global ePoint alleging an excess of $200,000 in legal fees and
costs owed in connection with a proposed merger transaction.  The Company filed counter claims against Loeb & Loeb in the arbitration proceedings for malpractice and breach of contract.  The Company intends to vigorously litigate the
matter and maintains that Loeb & Loebs alleged fees and costs are without merit.  Hearings on the matter have been rescheduled for arbitration in November 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | In December 2001, a previous supplier to the Companys lottery division, initiated an action against the Company in the State of California Superior Court, El Cajon Division,
alleging approximately $56,000 in costs for goods they contend should have been supplied to the Company.  The Company is in the process of litigating this matter and contends that the claims put forth by the supplier are without merit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | In September 2002, ePlus Group, Inc., formerly known as MLC Group, Inc., initiated an action against the Company in the United States District Court, Eastern District of the
Commonwealth of Virginia, alleging that they are due moneys in excess of $75,000 under a Master Agreement, which was signed in September of 1992.  The Company has not yet responded to the complaint, but intends to vigorously contest the basis
of the complaint.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | In October 2002, A & S, LLC, the property owner for the Companys leased premises, initiated an action against the Company in the State of California Superior Court, County
of San Diego, North County Branch, alleging that the Company failed to reimburse A & S, LLC for additional tenant improvements totaling $82,950 as of August 1, 2002 plus additional reimbursements due under the Lease from September 1, 2002 to the
time of trial according to proof at the time of trial, plus interest from January 1, 1999 to the date of judgment, plus attorneys fees and costs.  The Company has not yet responded to the complaint, but intends to vigorously contest the
basis of the complaint.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 | 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Provisions for Income TaxesNo provisions or benefits for federal or state income taxes have been made for the three and nine month periods ended September
30, 2002 and 2001.  As of December 31, 2001, the Company had approximately $15 million of net operating loss available to offset future taxable income.  (See Note 6 of Notes to Consolidated Financial Statements in the Companys Form
10-KSB for the year ended December 31, 2001).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 | 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Per Share InformationStatement of Financial Accounting Standards(SFAS) No. 128 Earnings per Share establishes standards for
computing and presenting Basic Earnings Per Share (Basic EPS) and Diluted Earnings Per Share (Diluted EPS).  Basic EPS is computed on the basis of the weighted average shares of common stock outstanding plus contingently
issuable shares.  Diluted EPS is computed on the basis of weighted average shares outstanding plus contingently issuable shares and the additional common shares that would have been outstanding if dilutive potential common shares had been
issued, using the treasury stock method.  Included in the computation for Basic and Diluted EPS for the three and nine months ended September 30, 2002 are 316,666 shares, which are contingently issuable pursuant to the settlement agreements for
the class action cases (see Note 6 herein).  For all the periods presented, options and warrants were not factored into the calculation because they were antidilutive or because the Company had a net loss.  The Company had options and
warrants outstanding of approximately 1.5 million and 1.9 million at September 30, 2002 and 2001, respectively.
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 | 9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Shareholders EquityThe decrease in shareholders equity from approximately $9.3 million at December 31, 2001 to approximately $8.3 million at September
30, 2002 was substantially the result of the net loss of approximately $1.1 million for the nine months ended September 30, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|ITEM 2.   
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                 | GeneralThe Company continues to be in the process of a major transition.  We are undergoing a series of actions intended to transform the
Company and to strategically move forward with new market opportunities that we believe can better enhance shareholder value.  The Company had been engaged in the lottery industry over the past 10 years and was one of the largest providers of
vending machines for the sale of instant-winner lottery tickets.                                                                                                                                                                                                                                                                             
|                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                 | As part of this transformation process, on February 23, 2001, we entered into an agreement to sell our lottery assets to Interlott.  The transaction was closed on
June 1, 2001, whereupon all of the Companys lottery assets were transferred to Interlott.  Since our lottery business accounted for substantially all of our business through June 1, 2001, the discussions relating to the results of
operations should be read in this context.  As a result of the sale on June 1, 2001, we have no longer been engaged in the business of manufacturing, selling, leasing and servicing of lottery vending machines and any discussion of our
discontinued operations for 2001 will not relate to our ongoing business activities.

7



---

##### Table of Contents

| | We are now positioned to proceed with further actions designed to transform the Company into a more diversified company.  In that regard, we have been moving forward
with marketing plans for the redeployment and sale of our existing non-lottery related products (primarily card dispensing machines).  The Companys remaining manufacturing and quality control personnel have been focused on preparing
approximately 2,000 of the Companys existing card dispensing machines for redeployment into the market and restructuring of the Companys operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Management is also reviewing a variety of new market opportunities that would provide the Company with the ability to accelerate the initial development stage generally
required of a new product.  In that respect, management is currently reviewing the possibilities of merging with an established business and/or acquiring a developed product line.  Our goal with respect to securing a new market opportunity
is to identify which opportunities best leverage our management expertise, technological property, international relationships and corporate value, while maximizing our abilities to enhance shareholder value.  We anticipate that if a new
business opportunity is completed, a further restructuring of its operations would result.  The extent of the restructuring and the effect on the Companys financial statements would depend on the particular business
opportunity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Continuing OperationsThe Company had no significant revenue from continuing operations prior to the sale of its lottery business on June 1,
2001.  Although the Company had non-lottery products, substantially all of its focus in that period had been on its lottery-related business.  Subsequent to the sale of the lottery assets on June 1, 2001, the Company has been reviewing and
moving forward with strategies to maximize value from its non-lottery related assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | During the three and nine month periods ended September 30, 2002, the Company generated revenue from continuing operations of $230 thousand and $380 thousand versus
revenue of $218 thousand and $272 thousand, respectively, for the three and nine months ended September 30, 2001.  The increase in revenue was due primarily from the commencement of operations in the third quarter of 2002 from sales of prepaid
phone cards from machines owned by the Company that had been placed in various retail locations.  The Company commenced operations on a small scale in the third quarter in order to further evaluate the prepaid phone card market.  If
successful, the Company plans to expand those operations and use its inventory of machines for such expansion.  Although the initial operations appear positive, no assurances can be given as to the success of these new strategies.  The
Company also plans to begin redeploying and selling its card dispensing equipment during the fourth quarter of 2002 or the first quarter of 2003, depending on its marketing efforts, as part of its plan to generate additional cash flow from its
existing assets.  No assurances can be given as to the success of those sales efforts.                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Total operating expenses decreased in the three and nine month periods ended September 30, 2002, primarily as the result of lower selling, general and administrative
costs and lower interest expense.  Selling, general and administrative costs and expenses for the three and nine months ended September 30, 2002 decreased by $109 thousand and $785 thousand, respectively, from the prior year comparable periods
primarily due to reduced personnel and related expenses subsequent to the sale of the lottery business.  Interest expense decreased by $26 thousand and $292 thousand for the three and nine months ended September 30, 2002, respectively, from the
prior year comparable periods due to the decrease in debt.  The reduced costs and expenses were offset by $112 thousand and $436 thousand of restructuring costs for the three and nine months ended September 30, 2002, respectively, that included
payroll, facilities costs, refurbishment costs and certain other charges incremental to restructuring operations and preparing for new business activities.  Such charges are expected to be substantially completed in early 2003.  The
reduced costs were also offset by increases in costs of sales of $118 thousand and $113 thousand in the three and nine months ended September 30, 2002 as a result of the commencement of phone card operations.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Also included in operating costs were costs related to the abandonment of the Companys international projects.  The Company had been pursuing certain
international projects as a result of certain strategies initiatives started in 2000.  As a result of the recent changes in the social-political environment in the countries in which the Company was attempting to do business, we have determined
that it was in the best interest of the Company not to continue proceeding with these international projects.  As a result, the Company incurred a non-cash charge of approximately $350 thousand in the three and nine months ended September 30,
2002 for costs related to the abandoned projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | As a net result of the above, the Company reported a loss from continuing operations of $199 thousand and $1,081 thousand in the three and nine months ended September 30,
2002, respectively, versus a net loss of $260 thousand and $1,511 thousand in the prior year comparable periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | Discontinued OperationsPrior to the Companys change in business strategy, the Company had been primarily engaged in the lottery
industry.  Because the lottery business was sold on June 1, 2001, the nine month period for 2002 does not include discontinued operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

8



---

##### Table of Contents

| | The results of operations for the nine months ended September 30, 2001 are summarized as follows (in thousands):
| | ----------------------------------------------------------------------------------------------------------------

|                   |  | Nine Months Ended September 30 |      
|------------------ |  | ------------------------------ | -----
|                   |  |                                |      
|Net sales          |  | $                              | 2,944
|                   |  |                                |      
|Gross profits      |  |                                | 610  
|Operating expenses |  |                                | 212  
|                   |  |                                |      
|Net income         |  | $                              | 398  
|                   |  |                                |      

|                             | As a net result of continuing and discontinued operations, the Company reported a net loss of approximately $199 thousand and $1,081 thousand for the three and nine
months ended September 30, 2002, versus net income (loss) in the prior year three months of approximately $(260) thousand and net income in prior year nine months of $1,631 thousand, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | Liquidity and Capital ResourcesAs a result of the proceeds generated by the sale of lottery assets, as of September 30, 2002, the Company had
working capital of approximately $3.5 million and cash and cash equivalents of approximately $4.5 million.  Management believes the Company has sufficient liquidity to fund its existing operations, redeploy and sell its card dispensing
machines, begin its planned new business activities and provide a basis for new business opportunities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | FORWARD LOOKING AND CAUTIONARY STATEMENTSAny forward-looking statements in this report are made pursuant to the safe harbor provisions of the
Private Securities Litigation Act of 1995.  Investors are cautioned that actual results may differ substantially from such forward-looking statements.  Forward-looking statements involve risks and uncertainties including, but not limited
to, the successful completion of proposed equity raises, which may be necessary for the Company to implement its plans to develop new market opportunities, continued acceptance of the Companys products and services in the marketplace,
competitive factors, new products and technological changes, the Companys successful entry into new markets, the Companys ability to increase its customer base, as well as general, political and other uncertainties related to customer
purchases and agreements and other risks detailed in the Companys periodic filings with the Securities and Exchange Commission.
|                            
|                             | ITEM 3.  
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | Our chief executive officer, who is also our principal financial officer, after evaluating the effectiveness of the Companys disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date (the Evaluation Date) within 90 days before the filing date of this quarterly report, has concluded that as of the
Evaluation Date, our disclosure controls report, have concluded that as of the Evaluation Date, our disclosure controls and procedures were adequate and designed to ensure that material information relating to us and our consolidated subsidiaries
would be made known to them by others within those entities. As a result of the evaluation, there were no significant changes in our internal controls or to our knowledge, in other factors that could significantly affect our
disclosure controls and procedures subsequent to the Evaluation Date.                                                                  
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|PART II.  
OTHER INFORMATION
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | ITEM 1. 
LEGAL PROCEEDINGS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | In October of 2001, Loeb & Loeb, LLP, a law firm, instituted arbitration proceedings in Los Angeles, California against Global ePoint alleging in excess of $200,000
in legal fees and costs were owed in connection with a proposed merger transaction.  The Company has filed counter-claims against Loeb & Loeb in the arbitration proceedings for malpractice and breach of contract.  The arbitrator was
recently selected and hearings are scheduled for November 2002.  The Company intends to vigorously litigate the matter and maintains that Loeb & Loebs claims are without merit.                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | In December 2001, a previous supplier to the Companys lottery division, initiated an action against the Company in the State of California Superior Court, El Cajon
Division, alleging approximately $56,000 in costs for goods they contend should have been supplied to the Company.  The Company is in the process of litigating this matter and contends that the claims put forth by the supplier are without
merit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                             | In September 2002, ePlus Group, Inc., formerly known as MLC Group, Inc., initiated an action against the Company in the United States District Court, Eastern District of
the Commonwealth of Virginia, alleging that they are due moneys in excess of $75,000 under a Master Agreement, which was signed in September of 1992. The Company has not yet responded to the complaint, but intends to vigorously contest the basis of
the complaint.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

9



---

##### Table of Contents

| | In October 2002, A & S, LLC, the property owner for the Companys leased premises, initiated an action against the Company in the State of California Superior
Court, County of San Diego, North County Branch, alleging that the Company failed to reimburse A & S, LLC for additional tenant improvements totaling $82,950 as of August 1, 2002 plus additional reimbursements due under the Lease from September
1, 2002 to the time of trial according to proof at the time of trial, plus interest from January 1, 1999 to the date of judgment, plus attorneys fees and costs. The Company has not yet responded to the complaint, but intends to vigorously
contest the basis of the complaint.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ITEM 2.   CHANGES IN SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (a)   None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (b)   None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (c)   None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | None                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ITEM 5.   OTHER INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | N/A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ITEM 6.   
EXHIBITS AND REPORTS ON FORM 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

SIGNATURES

| | In accordance with the requirements of the exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                         | GLOBAL EPOINT, INC.                            
| | ----------------------- | -----------------------------------------------
| |                         |                                                
| |                         |                                                
| | Date: November 12, 2002 | /s/ FREDERICK SANDVICK                         
| |                         |                                                
| |                         | Chief Executive and Principal Financial Officer

10



---

##### Table of Contents



CERTIFICATIONS

I, Frederick Sandvick, certify that:

|1. | I have reviewed this quarterly report on Form 10-QSB of Global ePoint, Inc.;                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|3  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|   | c)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|   | a)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                          
|6. | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

|Date:  November 12, 2002 | /s/ FREDERICK SANDVICK                         
|------------------------ | -----------------------------------------------
|                         |                                                
|                         | Chief Executive and Principal Financial Officer
|                         |