U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

   Quarterly Report Section 13 or 15(d) of the Securities Exchange Act of 1934

                    For the quarter ended September 30, 2002

                          Commission File No. 000-26213

                             ARC COMMUNICATIONS INC.

        (Exact name of small business issuer as specified in its charter)



            A New Jersey Corporation                             22-3201557
(State or other jurisdiction of incorporation                 (I.R.S. Employer
                or organization)                             Identification No.)

                              788 Shrewsbury Avenue
                         Tinton Falls, New Jersey 07724
                    (Address of principal executive offices)


                    Issuer's telephone number: (732) 219-1766

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No [ ]

The number of shares  outstanding of the Issuer's common stock as of November 8,
2002 was 14,984,449.



<PAGE>

                            ARC COMMUNICATIONS, INC.



INDEX

PART 1.  FINANCIAL INFORMATION

         Item 1. Financial Statements (Unaudited)

         a)      Consolidated Balance Sheets as of September 30, 2002..... 3

         b)      Consolidated Statements of Operations for the Three
                      and Nine Months Ended September 30, 2002 and 2001... 4

         c)      Consolidated Statements of Cash Flows for the
                 Nine Months Ended September 30, 2002 and 2001 ........... 5

         d)      Notes to Consolidated Financial Statements ............ 6 to 7


         Item 2. Management's Discussion and
                 Analysis of Financial Condition
                 and Results of Operations ............................. 8 to 9

         Item 3. Controls And Procedures................................

 PART II - OTHER INFORMATION

              Item 6 - Exhibits And Reports On Form 8-K.................

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

<PAGE>

<TABLE>
<CAPTION>
                        ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                               CONSOLIDATED BALANCE SHEETS

                                        UNAUDITED

                                         ASSETS
                                                                             SEPTEMBER 30,
                                                                                  2002
                                                                             -------------
<S>                                                                           <C>
CURRENT ASSETS
     Cash and Cash Equivalents                                                $    61,000
     Accounts Receivable-Net of Allowances for Doubtful Accounts
        of $52,000                                                                225,000
     Inventory                                                                      1,000
     Prepaid Expenses                                                               6,000
     Other Receivables                                                              2,000
                                                                              -----------
        Total Current Assets                                                      295,000
                                                                              -----------

PROPERTY AND EQUIPMENT-NET                                                        180,000
                                                                              -----------

OTHER ASSETS
     Security Deposits                                                             15,000
                                                                              -----------

        Total Other Assets                                                         15,000
                                                                              -----------

TOTAL ASSETS                                                                  $   490,000
                                                                              ===========

<CAPTION>

                          LIABILITIES AND STOCKHOLDERS' EQUITY

<S>                                                                           <C>
CURRENT LIABILITIES
     Line of Credit                                                           $   295,000
     Accounts Payable and Accrued Expenses                                        259,000
     Billings in Excess of Costs                                                   52,000
     Stockholders Loans                                                            75,000
                                                                              -----------
        Total Current Liabilities                                                 681,000
                                                                              -----------

COMMITMENTS AND CONTINGENCIES

     Preferred Stock, Stated Value $.20; 5,000,000 Shares Authorized;
        720,000 Shares Issued and Outstanding in 2002
                                                                                  144,000
     Common Stock, $.001 Par Value, Authorized 45,000,000 Shares, Issued
        and Outstanding 14,984,449 in 2002                                         15,000
     Additional Paid in Capital                                                 1,435,000
     Retained Earnings (Accumulated Deficit)                                   (1,785,000)
                                                                              -----------
STOCKHOLDERS' EQUITY                                                             (191,000)
                                                                              -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $   490,000
                                                                              ===========

</TABLE>

                                       3

<PAGE>

<TABLE>
<CAPTION>
                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                    UNAUDITED

                                                  9 Months Ended     9 Months Ended    3 Months Ended      3 Months Ended
                                                   September 30,      September 30,     September 30,      September 30,
                                                       2002               2001               2002               2001
                                                       ----               ----               ----               ----

<S>                                                <C>                <C>                <C>                <C>
NET SALES                                          $  1,568,000       $  1,901,000       $    468,000       $    514,000

COSTS AND EXPENSES
     Operating Costs                                    100,000            238,000             41,000            112,000
     Selling, General and Administrative              1,569,000          2,064,000            495,000            596,000
     Depreciation and Amortization                       78,000            108,000             26,000             36,000
                                                   ------------       ------------       ------------       ------------

        Total Costs and Expenses                      1,747,000          2,410,000            562,000            744,000
                                                   ------------       ------------       ------------       ------------

OTHER INCOME (EXPENSES)
     Interest Income                                      2,000              4,000                  0              1,000
     Interest Expense                                   (24,000)           (20,000)           (10,000)            (6,000)
                                                   ------------       ------------       ------------       ------------

        Total Other Expense                             (22,000)           (16,000)           (10,000)            (5,000)
                                                   ------------       ------------       ------------       ------------


NET INCOME(LOSS)                                   $   (201,000)      $   (525,000)      $   (104,000)      $   (235,000)
                                                   ============       ============       ============       ============

BASIC AND DILUTED
INCOME PER COMMON SHARE                            $      (0.01)      $      (0.04)      $      (0.01)      $      (0.02)
                                                   ============       ============       ============       ============


Weighted Average Number of Shares Outstanding        14,984,449         13,721,000         14,984,449         13,721,000

</TABLE>

See Notes to Consolidated Financial Statements.

                                       4

<PAGE>
                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                 SEPTEMBER 30,  SEPTEMBER 30,
                                                                    2002            2001
                                                                    ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                               <C>             <C>
     Net Income (Loss)                                            $(201,000)      $(525,000)
     Adjustments to Reconcile Net Income or Loss to Net Cash
        Provided by Operating Activities:
            Depreciation and Amortization                            77,000         108,000
            Issuance of Treasury Stock                                    0               0
            Additional Paid in Capital                               (8,000)              0
            Bad Debt                                                      0
            Issuance of common stock as compensation                      0               0

     Increase (Decrease) in Cash from Changes in:
        Accounts Receivable                                         680,000         166,000
        Inventory                                                         0               0
        Prepaid Expenses & Other Current Assets                       2,000         (25,000)
        Other Receivable                                                  0           6,000
        Costs in Excess of Billings                                       0          67,000
        Security Deposits                                                 0               0
        Goodwill                                                          0               0
        Accounts Payable and Accrued Expenses                        43,000         (31,000)
        Billings in Excess of Costs                                (497,000)        (49,000)
        Deferred Revenue                                                  0               0
                                                                  ---------       ---------

            Total Adjustments                                       297,000         242,000
                                                                  ---------       ---------

            Net Cash Used by Operating Activities                    96,000        (283,000)
                                                                  ---------       ---------


CASH FLOWS FROM INVESTING ACTIVITIES

     Expenditures for Property and Equipment                         (9,000)        (20,000)
                                                                  ---------       ---------

            Net Cash Used in Investing Activities                    (9,000)        (20,000)
                                                                  ---------       ---------


CASH FLOWS FROM FINANCING ACTIVITIES
     Stockholder loans                                               75,000
     Proceeds from Line of Credit                                         0           4,000
     Repayment to Line of Credit                                   (144,000)              0
                                                                  ---------       ---------

            Net Cash Used by Financing Activities                   (69,000)          4,000
                                                                  ---------       ---------

NET INCREASE IN CASH                                                 18,000        (299,000)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     44,000         358,000
                                                                  ---------       ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                        $  62,000       $  59,000
                                                                  =========       =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash Paid for Interest                                          24,000          20,000

</TABLE>

See Notes to Consolidated Financial Statements.

                                       5

<PAGE>

                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                               September 30, 2002


1.   Basis of Presentation
     ---------------------

     In the opinion of the  Company,  the  accompanying  consolidated  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
adjustments)  necessary to fairly present the Company's  financial  position and
its  results of  operations  and cash flows as of the dates and for the  periods
indicated.

     Certain  information  and  footnote   disclosures   normally  contained  in
financial  statements  prepared in accordance with generally accepted accounting
principles have been omitted.  These condensed consolidated financial statements
should be read in conjunction  with the audited  December 31, 2001  consolidated
financial  statements  and  related  notes  included in the  Company's  year end
certified  financial  statement.  The results of operations for the three months
are not necessarily indicative of the operating results for the full year.

2.   Principles of Consolidations
     ----------------------------

     The consolidated  financial statements included the accounts of the Company
and all of its subsidiaries in which a controlling  interest is maintained.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.  For those  consolidated  subsidiaries where Company ownership is
less than  100%,  the  outside  stockholders'  interests  are shown as  minority
interests.  Investments  in  affiliates  over which the Company has  significant
influence but not a controlling interest are carried on the equity basis.

3.   Revenue Recognition
     -------------------

     The  Company  recognized  revenue  from  sales at the date the  product  is
shipped and as professional services are performed. Revenue from custom software
development is recognized based on its percentage of completion. Revenue from
continuing professional education courses is recognized upon the scoring of the
related test. Revenue from the seminars is recognized upon the completion of the
seminar.

                                       6

<PAGE>


                                   ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                   Unaudited

September 30, 2002




4.   Segment Information

<TABLE>
<CAPTION>
                                                    9 Months Ended    9 Months Ended
                                                     September 30,     September 30,
                                                          2002             2001
                                                          ----             ----

<S>                                                   <C>               <C>
     Revenue
         Multi-Media                                  $   874,000       $ 1,077,000
         Continuing professional education                694,000           824,000
                                                      -----------       -----------
            Total Consolidated Revenue                $ 1,568,000       $ 1,901,000
                                                      -----------       -----------

     Net Income (Loss)
         Multi-Media                                  $  (234,000)      $  (584,000)
         Continuing professional education                 33,000            59,000
                                                      -----------       -----------
            Total Consolidated Net Income (Loss)      $  (201,000)      $  (525,000)
                                                      -----------       -----------

     Assets
         Multi-Media                                  $   463,000       $   726,000
         Continuing professional education                 31,000           152,000
                                                      -----------       -----------
            Total Consolidated Net Assets             $   494,000       $   878,000
                                                      -----------       -----------
</TABLE>

                                       7
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Plan of
     Operation

           Nine Months Ended September 30, 2002 and September 30, 2001

     Arc's net sales for the nine months ended  September 30, 2002 and 2001 were
$1,568,000  and  $1,901,000  respectively,  a decrease of 17  percent.  In Arc's
multi-media segment, sales for the nine months ended September 30, 2002 and 2001
were  $874,000 and  $1,077,000  respectively,  a decrease of 19 percent.  In its
continuing education segment, sales for the nine months ended September 30, 2002
and 2001 were $694,000 and $824,000 respectively, a decrease of 16 percent.

     The decrease in the multi-media segment is a result of (1) full interactive
multi-media  development decreasing $238,000 (or 27 %) and, (2) decline in print
and  professional  services  revenue of $32,000  (or 100%)  which was  partially
offset by a $67,000 increase in web site development revenue.

     The decrease in revenue for continuing  professional education, is a result
of (1) seminar revenue  decreasing by $127,000 (or 19 %) and, (2)  Institutional
CE  Accreditation  sales  decreasing  by $24,000  (or 41 %) which was  partially
offset by a $21,000 increase in Home Study examination sales.

     Operating  costs for the nine months ended September 30, 2002 and 2001 were
$100,000 and $238,000  respectively.  The decrease is due to the overall revenue
declines across Arc's core businesses.

     Selling,  general and  administrative  expenses  for the nine months  ended
September  30,  2002 and  2001  were  $1,569,000  and  $2,064,000  respectively.
Selling,  general and administrative expenses for 2002 decreased $495,000 (or 24
%). This decrease was  primarily  due to reductions in selling  expenses such as
commissions and travel expenses as a result of the decline in revenues.

     Depreciation and amortization  expenses for the nine months ended September
30,  2002 and 2001 were  $78,000  and  $108,000  respectively,  a decrease of 28
percent.

     Net (loss) for the nine months ended  September  30, 2002 and 2001 amounted
to ($201,000) and ($525,000)  respectively.  Reduction in costs and expenses was
the primary factor for the decrease in net (loss). As a result, (loss) per share
were ($0.01) for the nine months ended  September  30, 2002  compared to $(0.04)
for the nine months ended September 30, 2001.

Three Months Ended September 30, 2002 and September 30, 2001

     Arc's  net  sales  for the  three  months  ended  September  30,  2002 were
$468,000,  a decrease of $46,000 or 9 % from $514,000 of net sales for the three
months ended  September 30, 2001. In Arc's  multi-media  segment,  sales for the
three  months  ended  September  30, 2002 and 2001 were  $284,000  and  $311,000
respectively,  a decrease of 8 percent.  In its  continuing  education  segment,
sales for the three months ended  September  30, 2002 and 2001 were $184,000 and
$202,000 respectively, a decrease of 9 percent.

     Operating costs for the three months ended September 30, 2002 and 2001 were
$41,000 and $112,000,  respectively.  The decrease is due to the overall revenue
declines across Arc's core businesses.

     Selling,  general and  administrative  expenses  for the three months ended
September 30, 2002  decreased to $495,000,  a decrease of $101,000 or 17 %, from
the $596,000 of expenses for the three months  ended  September  30, 2001.  This
decrease was primarily due to reductions in selling expenses such as commissions
and travel expenses as a result of the decline in revenues.

     Depreciation and amortization expenses for the three months ended September
30,  2002 and 2001 were  $26,000  and  $36,000  respectively,  a decrease  of 28
percent.

                                       8
<PAGE>

     Net (loss) for the three  months  ended  September  30, 2002 of  ($103,000)
represents  a decrease of $132,000  from the net (loss)  reported  for the three
months ended September 30, 2001. Reduction in costs and expenses was the primary
factor  for the  decrease  in net  (loss).  As a result,  (loss)  per share were
($0.01) compared to $(0.02) for the same period in 2001.


Liquidity and Capital Resources

     Cash flow  provided by operations  for the nine months ended  September 30,
2002 amounted to $96,000.  We believe that our present client base will generate
sufficient  revenue to maintain an  appropriate  level of liquidity for the near
term.  If revenues  continue to decline the company may have to seek  additional
financing.  To this end the company has secured a signed  agreement  with a high
net worth investor for working capital as needed up to $250,000.

     The Company has completed a settlement  with  Sovereign  Bank regarding its
Line of Credit.  The Company  reduced its outstanding  balance to $295,000.  The
Company has agreed to make interest payments at an interest rate of 7% per annum
with the outstanding balances due April 1, 2003.

     Cash flow from investing  activities was negative for the nine months ended
September 30, 2002.  Net cash used in investing  activities  for the nine months
ended September 30, 2002 was $9,000 utilized for capital expenditures.

ITEM 3.  Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms, and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Operating Officer, to allow timely decisions
regarding required disclosure. In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.

Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of our management, including
the Chief Executive Officer and the Chief Operating Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our Chief Executive Officer and Chief
Operating Officer concluded that our disclosure controls and procedures were
effective.

There have been no significant changes in our internal and disclosure controls
or in other factors that could significantly affect the internal or disclosure
controls subsequent to the date we completed our evaluation.


PART II  - OTHER INFORMATION

ITEM 6 - Exhibits and Reports on Form 8-K

       (a)        Exhibits:    None

       (b) The following current reports on Form 8-K were filed during the
quarter ended September 30, 2002:

          (i) On October 2, 2002, the Company filed a Current Report on Form 8-K
          in connection with the execution of a stipulation  with Sovereign Bank
          relating to the Line of Credit.
                                       9
<PAGE>

                                   SIGNATURES

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





Date: November 14, 2002                            ARC COMMUNICATIONS INC.




                                                 BY: /s/ Michael Rubel
                                                     ---------------------------
                                                        Michael Rubel
                                                        Chief Operating Officer


                                 CERTIFICATIONS

I, Steven Meyer, Chief Executive Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Arc  Communications
     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 have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

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 functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  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 13, 2002                                 /s/ Steven Meyer
                                                        ----------------------
                                                        Steven Meyer
                                                        Chief Executive Officer

                                 CERTIFICATIONS

I, Michael Rubel, Chief Operating Officer, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Arc  Communications
     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 have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

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 functions):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly  report  whether  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 13, 2002
                           /s/ Michael Rubel
                           ----------------------
                           Michael Rubel
                           Chief Operating Officer (principal financial officer)