UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                     For the Quarter ended December 31, 1998

[   ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                           THE SECURITIES AND EXCHANGE ACT OF 1934

              For the transition period from _____________________

                           Commission File No. 0-12116

                           ComTec International, Inc.
                 (Name of Small Business Issuer in its charter)

         New Mexico                                                   75-2456757
         (State or other jurisdiction of                        (I.R.S. Employer
         incorporation or organization                       Identification No.)

            9350 East Arapahoe Road, Suite 340, Englewood, Co. 80112
                    (Address of principal executive offices)

                                 (303) 662-1198
                 (Issuer's Telephone Number Including Area Code)

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

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

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

                                 Yes      No   x
                                    ----     ----

      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Sections 12, 13 or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court.

                                  Yes  x  No
                                     ----    ----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date:

     As of July 20,  1999,  46,070,019  shares of Common Stock ($.001 par value)
were outstanding

           Transitional Small Business Disclosure Format (check one):
                                  Yes     No x
                                     ----   ----



<PAGE>



                               TABLE OF CONTENTS

            FORM 10-QSB REPORT - FOR QUARTER ENDED DECEMBER 31, 1998

                           ComTec International, Inc.

PART I

     Item 1.   Financial Statements
               Condensed Consolidated Balance Sheets -
               December 31, 1998 (unaudited) and June 30, 1997 (audited)       3

               Condensed Consolidated Statements of Operations                 4
               Six Months ended December 31, 1998 and 1997
               and  from inception (unaudited)

               Condensed Consolidated Statements of Operations                 5
               Three Months ended December 31, 1998 and 1997
               and  from inception (unaudited)

               Condensed Consolidated Statements of Cash Flows                 6
               Six Months ended December 31, 1998 and 1997
               and  from inception (unaudited)

               Notes to Financial Statements                                   7

     Item 2.   Management's Discussion and Analysis or Plan of Operation       8

PART II

     Item 1.   Legal Proceedings                                              11
     Item 2.   Change in Securities                                           12
     Item 3.   Defaults Upon Senior Securities                                12
     Item 4.   Submission of Matters to a vote of Security Holders            13
     Item 5.   Other Information                                              13
     Item 6.   Exhibits  and Reports on Form 8-K                              13

SIGNATURE PAGE                                                                14


                                       2
<PAGE>



                                     PART I

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                   ComTec International, Inc. and Subsidiaries
                        (a Development Stage Enterprise)
                      Consolidated Condensed Balance Sheets

<CAPTION>
                                                    December 31, 1998 June 30, 1998
                                                       (unaudited)      (audited)

                                                      ------------    ------------
<S>                                                   <C>             <C>
Assets

Current Assets

Cash and equivalents
(includes restricted funds
of $500,000)                                          $    480,413    $    667,800

Accounts Receivable, less allowance
For doubtful collections of $28,900                         81,124          13,500

LED Equipment held for resale                            1,314,272       1,324,300

Other current assets                                          --            45,000
                                                      ------------    ------------

Total Current Assets                                     1,875,809       2,050,600


Property and Equipment, net                              1,356,622       1,478,600
License Rights                                           1,390,700       1,390,700
Other Assets                                                 5,671           5,700
                                                      ------------    ------------

         Total Assets                                 $  4,628,802    $  4,925,600
                                                      ============    ============

LIABILITIES

Current Liabilities

Current Portion of Long Term Debt                           99,813          13,400
Accounts Payable                                            16,014         254,400
Notes Payable                                            1,581,820       1,184,200
Accrued Liabilities                                        606,614         399,700
                                                      ------------    ------------

Total Current Liabilities                                2,304,261       1,851,700
                                                      ------------    ------------

Long Term Debt, less current portion                     1,442,344       1,432,900
                                                      ------------    ------------


STOCKHOLDER'S  EQUITY
Common  Stock,  .001 par  value;
Authorized  100,000,000 shares;
39,697,196 and shares issued
June 30, 1998 and December 31, 1998                         44,313          39,700

Capital in Excess of Par                                13,321,974      13,326,600
Deficit accumulated during the
development stage                                      (12,484,090)    (11,725,300)
                                                      ------------    ------------

                                                           882,197       1,641,000
                                                      ------------    ------------

         Total  Liabilities and Stockholders Equity   $  4,628,802    $  4,925,600
                                                      ============    ============


</TABLE>

                                       3
<PAGE>

<TABLE>


                   ComTec International, Inc. and Subsidiaries
                        (a Development Stage Enterprise)
                 Consolidated Condensed Statements of Operations

<CAPTION>
                                                   For the Six Months Ended
                                                     December     December
                                                     31, 1998     31, 1997      Cumulative
                                                   (unaudited)   (unaudited)   Amounts from
                                                                                 Inception
                                                                                (unaudited)
                                                   ----------     ----------    -----------
<S>                                                <C>            <C>           <C>
Revenues
   Sales                                           $  135,594     $   19,295    $   135,594
   Cost of Sales                                      105,290         30,775        105,290
                                                   ----------     ----------    -----------
   Gross Profit                                        30,304        (11,480)        30,304

Expenses
   Selling, General and Administrative                331,462        505,050      3,555,262
   Compensation in the form of common stock               --             --       3,655,000
   Management fees- related party                         --             --          65,000
                                                   ----------     ----------    -----------
Loss before other income (expense)                   (301,158)      (516,530)    (7,275,262)
                                                   ----------     ----------    -----------

Other Income (expense)

Interest and Dividend Income                           13,490          1,066         47,490
Interest expense                                     (125,502)         6,500       (997,502)
Rental and Other Income                               (24,370)        13,933        153,930
Loan Origination Fees                                (292,308)           --        (292,308)
Prepaid Calling Card services, less revenues              --         (58,783)      (575,800)
Loss on investments, foreclosures and disposals       (28,927)        23,471       (880,227)
Write-down of intangible                                  --             --      (2,674,300)
                                                   ----------     ----------    -----------
Total Other Income (Expense)                         (457,617)       (13,813)    (5,218,717)
                                                   ----------     ----------    -----------

Net Loss                                             (758,775)      (530,343)   (12,463,675)
                                                   ==========     ==========    ===========

Weighted Average Common Shares Outstanding         39,697,196      8,857,079      8,866,064
                                                   ==========     ==========    ===========

Net Loss per Common Share                               (0.02)         (0.06)         (1.41)
                                                   ==========     ==========    ===========

</TABLE>





                                       4
<PAGE>

<TABLE>


                   ComTec International, Inc. and Subsidiaries
                        (a Development Stage Enterprise)
                 Consolidated Condensed Statements of Operations

<CAPTION>
                                                  For the Three Months Ended
                                                    December      December
                                                    31, 1997      31, 1996
                                                  (unaudited)    (unaudited)
                                                  -----------    -----------
<S>                                               <C>            <C>
Revenues
   Sales                                          $    54,640    $    19,295
   Cost of Sales                                       31,402         30,775
   Gross Profit                                        23,238        (11,480)
                                                  -----------    -----------

Expenses
   Selling, General and Administrative                163,476        219,523
   Compensation in the form of common stock               --             --
   Management fees- related party                         --             --
                                                  -----------    -----------

Loss before other income (expense)                   (140,238)      (231,003)
                                                  -----------    -----------

Other Income (expense)

Interest and Dividend Income                           12,593          1,767
Interest expense                                      (74,571)           --
Rental and Other Income                               (24,370)        13,933
Loan Origination Fees                                 (38,462)           --
Prepaid Calling Card services, less revenues              --         (52,878)
Loss on investments, foreclosures and disposals       (72,854)           --
Write-down of intangible
                                                  -----------    -----------

Total Other Income (Expense)                         (197,664)       (37,178)
                                                  -----------    -----------

Net Loss                                             (337,902)      (268,181)
                                                  ===========    ===========

Weighted Average Common Shares Outstanding         39,697,196      8,857,079
                                                  ===========    ===========

Net Loss per Common Share                               (0.01)         (0.03)
                                                  ===========    ===========

</TABLE>




                                       5
<PAGE>

<TABLE>


                   ComTec International, Inc. and Subsidiaries
                        (a Development Stage Enterprise)
                      Consolidated Statements of Cash Flows

<CAPTION>
                                                               For the Six Months Ended
                                                                December       December
                                                                31, 1998       31, 1997     Cumulative
                                                               (unaudited)    (unaudited)  Amounts from
                                                                                             inception
                                                                                            (unaudited)
                                                               ----------     ----------   ------------
<S>                                                            <C>            <C>          <C>
Operating activities:
  Net Loss                                                     $ (758,775)    $ (530,343)  $(12,463,675)
                                                               ----------     ----------   ------------
  Adjustments to reconcile net loss to
   net cash used by operating activities:
      Depreciation expense                                        107,369         22,087        370,569
      Services and Interest exchanged for stock                      --             --        3,304,200
      Gain on Sale of Marketable Securities                          --             --          (10,000)
      Write Down of Intangible                                       --             --        2,674,300
      Losses on investments, foreclosure and disposal              28,927        (23,471)       706,127

Changes in assets and liabilities:
      Accounts receivable                                         (67,624)        31,148       (106,424)
      Deposits and other                                           45,000        (16,806)        42,500
      (Increase) decrease in other current assets                   4,357        (22,671)       (29,543)
      Increase (decrease) in account payable &  liabilities         3,359        (71,635)     1,399,959
      Other Assets                                                   --             --           40,000
                                                               ----------     ----------   ------------
  Net cash used in operating activities                          (637,387)      (611,691)    (4,071,987)
                                                               ----------     ----------   ------------

Investing activities:
  Proceeds from sale of marketable securities                        --             --          267,500
  Proceeds from acquisition                                          --             --           22,100
  License rights - Centennial SMR assets                             --       (3,035,697)      (424,300)
  Marketable securities                                              --          248,400       (255,600)
  Non-Operating assets                                               --             --          (25,000)
  Related Party                                                      --           40,000        (39,000)
  Purchase of property, plant and equipment                          --             --       (1,699,800)
  Other                                                              --            7,668        (85,200)
                                                               ----------     ----------   ------------
  Net cash used in investing activities                              --       (2,739,629)    (2,239,300)
                                                               ----------     ----------   ------------
Financing activities:
  Advances from related party                                        --             --          184,500
  Proceeds: private place of common stock                            --             --        1,138,900
  Proceeds: short term notes                                      450,000        364,147      1,745,100
  Warrants                                                           --             --           30,000
Convertible Debentures                                               --        1,600,000      4,100,000
  Payments on notes payable                                          --             --         (397,800)
  Long-term notes payable                                            --        1,390,707         (9,000)
                                                               ----------     ----------   ------------

  Net cash provided by financing activities                       450,000      3,354,854      6,791,700
                                                               ----------     ----------   ------------


Increase (Decrease) in cash                                      (187,387)         3,534        480,413
Beginning cash balance                                            667,800        630,000           --
                                                               ----------     ----------   ------------
Ending cash balance                                               480,413        633,534        480,413
                                                               ==========     ==========   ============



</TABLE>

                                       6
<PAGE>



                   ComTec International, Inc. and Subsidiaries
                        (a Development Stage Enterprise)
                 Notes to the Consolidated Financial Statements

Note 1.

a) The summary of the Issuer's significant  accounting policies are incorporated
by reference to the Company's SEC Form 10-KSB as of June 30, 1997.  The notes to
the audited financial statements presented with the Company's SEC Form 10-KSB as
of June  30,  1998  are an  integral  part of the  audited  balance  sheet  data
presented herein.

b)  The  accompanying  unaudited  condensed  financial  statements  reflect  all
adjustments  which,  in the  opinion of  management,  are  necessary  for a fair
presentation  of the results of operations,  financial  position and cash flows.
The results of the interim period are not necessarily  indicative of the results
for the full year.


Note 2.

On March 28, 1997 the  Shareholders  of the Company  approved a proposal to give
the Company's Board of Directors authority to institute a reverse stock split of
from 3 for 1 to 100 for 1 at the  discretion  of the  Board of  Directors  until
December  31,  1997.  On December 26, 1997 the Board of Directors of the Company
acted  pursuant  to  shareholder  authority  granted  at the  Annual  Meeting of
Shareholders  held March 28th,  1997,  to declare a one for five  reverse  stock
split of the Company's .001 par value common stock effective 12:01 A.M.  January
31st,  1998.  All share data and per share data is stated to reflect the reverse
stock split.



                                       7
<PAGE>







ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

Overview

     ComTec  international Inc. was incorporated on July 6, 1983 in the State of
New  Mexico,  originally  under the name of Nisus  Video,  Inc.  The Company has
undergone many changes to date as a result of certain reorganizations and recent
change of management.  Historical  changes are more fully  disclosed in prior 34
Act filings and the most recent  changes,  including  changes in management  are
described in the Company's  10-KSB for the year ended June 30, 1998. The Company
is currently authorized to issue 100,000,000 common shares, $0.001 par value and
10,000,000 preferred shares,  $0.001 par value. The Company has one wholly owned
operating subsidiary, American Wireless Network, Inc. ("AWN") and three inactive
subsidiaries.

     American  Wireless  Network,  Inc. ("AWN") a wholly owned subsidiary of the
Company was incorporated  under the laws of the State of Colorado on December 3,
1996, to act as the wireless  communications  operating  entity for the Company.
The Company's  wireless  specialized mobile radio "SMR" operations are conducted
through AWN.

     During the fiscal year ended June 30, 1998 and  through  the  present,  the
Company  continued  as a  developmental  stage  entity  focused on managing  its
wireless  specialized mobile radio "SMR" business plan. Prior to December,  1997
activities  had been  concentrated  on  creating  and  executing  the  Company's
strategic  business plan,  raising private  financing,  efforts to acquire other
entities and  operations,  developing a management  and support staff to execute
its business  plan, and  maintaining  reporting  compliance for various  federal
government agencies,  such as the SEC and FCC. On December 5, 1997 AWN completed
the initial  phase of a purchase  agreement  and on July 6, 1998  completed  the
terms of an agreement  whereby AWN  purchased  seven  operating  SMR systems for
$3,035,700.  The wireless communications assets and associated business acquired
from  Centennial  Communications  Corp.  lay within the  following  seven MTA's:
Birmingham,   Alabama;  Knoxville,  Tennessee;  Memphis,  Tennessee;  Nashville,
Tennessee;  New Orleans,  Louisiana;  Oklahoma City, Oklahoma;  Tulsa, Oklahoma.
During  the  quarter  ended  December  31,  1998  AWN  operated  the  seven  SMR
communications systems from its office in Englewood, Colorado.


(a) Plan of Operation:

     FORWARD-LOOKING STATEMENTS


     The securities of the Company are  speculative and involve a high degree of
risk, including, but not necessarily limited to, the factors affecting operating
results  described  in the Form 10KSB for the year ended June 30, 1998 and other
filings with the SEC. The statements which are not historical facts contained in
this  report,   including  statements   containing  words  such  as  "believes,"
"expects," "intends,"  "estimates,"  "anticipates," or similar expressions,  are
"forward looking  statements" (as defined in the Private  Securities  Litigation
Reform Act of 1995) that involve risks and uncertainties.

     The foregoing and subsequent  discussion  contains certain  forward-looking
statements  within  the  meaning  of  Section  27A  of the  Securities  A of the
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934,
which are  intended to be covered by the safe  harbors  created  thereby.  These
forward-looking  statements  include the plans and  objectives of management for
future  operations,  including  plans and  objectives  relating to the  possible
further  capitalization and future acquisitions of  telecommunication,  computer
related or other cash flow business.  The  forward-looking  statements  included
herein  are  based on  current  expectations  that  involve  numerous  risks and
uncertainties.  Assumptions  relating to the foregoing  involve  judgments  with
respect  to,  among  other  things,  future  economic,  competitive  and  market
conditions  and  future  business  decisions,  all of  which  are  difficult  or
impossible to predict accurately and many of which are beyond the control of the
Company.  Although the Company  believes  that the  assumptions  underlying  the
forward-looking  statements  are  reasonable,  any of the  assumptions  could be
inaccurate and,  therefore,  there can be no assurance that the  forward-looking
statements included in this Form 10- QSB will prove to be accurate.  In light of
the significant uncertainties inherent in the

                                       8
<PAGE>


forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.


     Since May 10, 1995, the Company's  strategic  business plan has, aside from
terminated  venture in the LED screens and the divested  TTI prepaid  phone card
investment,  been concentrated on wireless  telecommunications.  Currently,  the
Company's  only  business is the recently  commenced  operation of basic two-way
communications  services.  The  Company  has  been  and  continues  to be in the
development  stage.  The  Company  remains  in the  development  stage  and from
inception (March 15, 1994) has only generated  auxiliary  revenues to defray the
cost of its planned operations, with only limited success in implementing actual
operations. The Company has financed its operations during the development stage
from the sale of its common stock and from issuance of short and long-term debt.

     During the  quarter  ended  December  31,  1998 and through the present the
Company  continued as a  developmental  stage entity  focused on developing  its
wireless  SMR  business  plan.  During the  quarter  ended  December  31,  1998,
activities consisted of operating the SMR systems, control of which was acquired
in December,  1997,  developing  alternative strategic plans, efforts to acquire
financing, developing a management plan and maintaining reporting compliance for
various federal government agencies, such as the SEC and FCC.

Current Status and Operations

     During the fiscal year ended June 30,  1998 and  through  May of 1999,  the
Company  continued  as a  developmental  stage  entity  focused on managing  its
wireless  specialized mobile radio "SMR" business plan. Prior to December,  1997
activities  had been  concentrated  on  creating  and  executing  the  Company's
strategic  business plan,  raising private  financing,  efforts to acquire other
entities and  operations,  developing a management  and support staff to execute
its business  plan, and  maintaining  reporting  compliance for various  federal
government agencies,  such as the SEC and FCC. On December 5, 1997 AWN completed
the initial phase of a purchase  agreement whereby AWN purchased seven operating
SMR systems for $3,035,700.  The wireless  communications  assets and associated
business acquired from Centennial  Communications Corp. lay within the following
seven MTA's: Birmingham,  Alabama;  Knoxville,  Tennessee;  Memphis,  Tennessee;
Nashville,  Tennessee; New Orleans,  Louisiana;  Oklahoma City, Oklahoma; Tulsa,
Oklahoma.  During the quarter ended December 31, 1998 AWN operated the seven SMR
communications  systems  from its  office  in  Englewood,  Colorado.  AWN's  SMR
communication  services were sold to individual customers through an independent
dealer  network  of  local  two-way  radio   communications   equipment  vendors
("Dealers").  The Dealers maintain the local  relationships  with the customers.
AWN acts as the direct billing  provider of SMR  communications  to the customer
base provided by the Dealers.  AWN is  responsible  for local  telephone  lines,
equipment maintenance,  tower site rentals, customer loading, coding and billing
and  all  customer  service  and  financial  relationships.  AWN  also  has  all
responsibility  for maintaining its SMR licenses,  making payments to the FCC on
its  licenses  and  funding all  equipment  additions  and system  improvements.
Expenses of operating the system  significantly exceed revenues from the systems
during the quarter ended December 31, 1998 and preceding periods.

     On April 15, 1999,  and as amended on July 14, 1999,  AWN executed an Asset
Acquisition Agreement with CMRS Systems, Inc. an unaffiliated  corporate entity.
The purpose of the Asset Acquisition  Agreement is to facilitate the future sale
by American  Wireless  Network,  Inc.  to CMRS  Systems,  Inc.  of  specifically
identified 900 MHz Licenses and American Wireless Network,  Inc.'s customer base
and customer lists associated with the specified 900 MHz licenses.  The sale and
an associated lease of SMR related equipment owned by AWN, is subject to certain
conditions and events,  including final and  unappealable  regulatory  approvals
relating to the transfer of the licenses to the Buyer. In consideration  for the
sale,  the Buyer is to assume  approximately  $1,400,000  of  American  Wireless
Network,  Inc.'s debt to the Federal  Communications  Commission  related to the
licenses.  AWN will retain a seven and one half percent interest in the specific
operating  assets  sold to CMRS  Systems,  Inc.  which  assets  will be operated
through a division of CMRS  Systems,  Inc. to be known as the S.E. 900 Division.
During the pendancy of the license transfer application, Effective June 1, 1999,
CMRS will operate the SMR systems under a management agreement. As an additional
provision of the agreement,  CMRS Systems, Inc. and AWN entered into a five year
lease  agreement  whereby AWN will lease SMR related  equipment to CMRS Systems,
Inc.

New Funding Efforts:

     In May 1998,  the Company paid a deposit to Sigma  Finance  Corporation  in
connection  with a  nonbinding  financing  proposal  for  up to a  $200  million
ten-year  bond issue to be  collateralized  by all of the Company's  assets.  In
September 1998, the Board of Directors approved the preliminary  requirements of
the proposed  tentative  financing  arrangement and management was authorized to
take all necessary action to pursue and finalize the

                                       9
<PAGE>


transaction if the opportunity  arises.  The  significant  terms approved by the
Board in anticipation of potential financing include an allowance for the lender
of a minimum of two seats on the Company's Board of Directors, the power of veto
over future capital  expenditures and other significant matters, and issuance of
unrestricted shares of common stock equal to 20% of the Company's equity, with a
non-dilution  agreement  which would have the effect of maintaining  the lenders
20%  holding  at no cost to the  lender  whatever  additional  issues  of equity
capital was  proposed or made during the life of the bond.  In addition to legal
fees to effect the financing, the Company will be required to pay an origination
fee of 10% of the loan proceeds should the financing materialize.  Neither Sigma
Finance  Corporation nor any other person or entity is obligated to make an loan
or provide financing to the Company under any terms.

     Should the Company be successful in obtaining  substantial  additional debt
financing,  management  plans to seek merger with or acquisitions of more mature
telecommunication  or  computer  related  businesses  or other  cash  generating
enterprises  that would generate  sufficient cash flow to maintain debt service.
There  can  be no  assurances  that  the  Company  will  be  successful  in  the
implementation of its plan for expansion and its overall business plan

Pending Acquisitions:

     Currently there are no letters of intent or other formalized  agreements to
acquire  any  entity or  assets.  The only  acquisition  which the  Company  has
accomplished  to date  is the  purchase  completed  July 6,  1998,  whereby  AWN
purchased  seven   operating  SMR  systems  for   $3,035,697.   from  Centennial
Communications Corp.

Sale of LED Screen Assets:

     On December 31, 1998 the Company  disposed of six (6) giant  light-emitting
diode  (LED)  screens  by sale  to  Lanstar  Computer  Products,  Inc.,  a Texas
Corporation, located in Dallas, Texas. The giant LED screens are used to provide
computer active light presentation programs, adaptable for indoor or outdoor use
for sporting events,  advertising  displays and other  theatrical  applications.
Pursuant to the Purchase  Agreement entered into between the Company and Lanstar
Computer Products, Inc., the LED screens were sold to Lanstar Computer Products,
Inc.  (which may be  considered  an  affiliate of the Company) in exchange for a
Promissory Note payable to the Company in the amount of two million four hundred
thousand  dollars  ($2,400,000).  The  promissory  note is to be  secured  by an
agreement  utilizing the assets sold as security for the  promissory  note.  The
entire principal of the promissory note is due December 31, 1999. The promissory
note, a general  obligation of Lanstar  Computer  Products,  Inc.,  bears simple
interest at the rate of eight  percent  (8%) per annum  payable  quarterly.  The
Buyer, Lanstar Computer Products,  Inc., is a Texas Corporation located at 13707
Gamma Road, Dallas, Texas 75244. Prior to this disposition, neither the Company,
nor any of its subsidiaries,  directors, officers or persons associated with the
Company's  officers and directors  had any  relationship  with Lanstar  Computer
Products, Inc. or any of its officers or directors. Lewis D. Rowe, who is not an
officer or director of the  Company,  but who is listed as an  affiliate  of the
Company in the Company's  June 30, 1997 and 1998 Form 10KSB as a person known by
the Company to own  beneficially  more than 5% of the  Company's  .001 par value
common stock,  may also be considered an to be an affiliate of Lanstar  Computer
Products, Inc., a non-pubic company. The LED Screens had been on consignment for
sale  since  August  1998.  No  determination  as to the  collectability  of the
promissory note has been made.


(b) Liquidity and Capital Resources

     The Company  reported a net loss (unaudited) of $758,775 for the six months
ended  December 31, 1998 and has reported net losses from  inception  (March 15,
1994) to December 31, 1998 of  $12,463,675.  The Company had  deficient  working
capital at December 31, 1998 of $428,452.  As of December 31, 1998,  the Company
reported  shareholder  equity of $882,197.  To date,  these losses and cash flow
deficiencies have been financed principally through the sale of common stock and
warrants and issuance of short and long-term debt which  includes  related party
debt.  Additional  capital and/or  borrowings will be necessary in order for the
Company to continue in existence until attaining profitable operations. Although
a portion of  convertible  debt was  liquidated  through the  issuance of common
stock, no assurances can be given that the sources of borrowings would continue.
The  Company  is highly  leveraged  and a number of  developments  over the past
quarter  had  material  adverse  effects  on  the  Company.  The  Company  has a
significant  investment in license rights  obtained  through the  acquisition of
assets from Centennial  Communications,  Corp., the  recoverability  of which is
dependent upon the success of future events.

     Management  has  continued  to develop a strategic  business  plan to raise
private financing,  develop a management team, maintain reporting compliance and
seek new expansive areas in telecommunications. In order to

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<PAGE>



reduce  negative  cash flow the  Company  entered an  agreement  to sell its FCC
licenses to satisfy debt requirements and in a plan anticipated to generate cash
flows, has entered into an agreement to lease its SMR equipment.

     From  August 1, 1999 to the end of fiscal  year  ended June 30,  2000,  the
Company  estimates  its cash  needs to  maintain  operations  under its  current
negative cash flow situation is approximately  $550,000. This amount is composed
of $550,000 for working capital assuming that current operations continue in its
present status.  These amounts  include offsets for anticipated  amounts of cash
generated from operations, but does not consider possible proceeds from interest
income or sales of assets.

     The Company has limited  capitalization and is dependent on the proceeds of
private or public  offerings to continue as a going concern and  implementing  a
business  plan. As of December 31, 1998,  the  unaudited  results of the Company
indicated deficit working capital of $428,452. All during fiscal 1998 and to the
date of this filing,  the Company has had and  continues  to have a  substantial
need for  working  capital for normal  operating  expenses  associated  with the
Company continuing as a going concern.  This lack of cash has slowed its ability
to develop SMR assets and initiate revenue producing operations. Any activity in
the wireless industry requires adequate  financing and on-going funding sources.
The  Company  has entered  this  industry  with  limited  financing  and funding
sources.


     At December 31, 1998  (unaudited),  the  following  contingent  stock issue
requirements and warrants were outstanding:

     -  Shares reserved for the Company's incentive stock option plan  (900,000)
     -  Shares reserved for issuance in accordance  with  outstanding  warrants
        issued June 30, 1997  (4,242,923)  exercisable at $4.50 per share,
        expiring June 30, 2000.
     -  Shares  reserved  for  contingent  issue with  respect  to  outstanding
        warrants  exercisable at $2.90 per share associated with converted  debt
        and LED Screens  (7,083,333), expiring in March  2001.  Shares  reserved
        for contingent issue with  respect to  outstanding warrants  exercisable
        at $2.90 per share  associated  with  converted  debt related to the SMR
        Asset purchase  (17,600,000),  expiring in March 2001.
     -  On February 16, 1998, the Company  entered  into a letter agreement with
        the Company,  which  remains  to  be  formalized,  by which James Krejci
        became  employed  as  Chief  Operations  Officer  of  the  Company   and
        President and CEO of AWN. The letter agreement  calls for a  three  year
        employment  agreement  with the  opportunity  for  Mr. Krejci to obtain,
        through common stock option  agreements,  up to ten percent (10%) of the
        outstanding  common stock of the Company  over  a three year period. The
        preliminary  agreement calls for Mr. Krejci  to  receive  stock  options
        vesting in monthly increments to equal to a total of 5% of the Company's
        outstanding common shares over a three year period. Options to obtain an
        additional 5% of the Company's outstanding common shares are conditioned
        upon the Company  reaching  certain  financial  and administrative  goal
        within established  timelines.  The strike price of all of the potential
        options, as modified (reprised) by Board of Director action on   October
        7, 1998, is $.056 per share,  representing  80% of the bid  price of the
        Company's  common  stock  on  September  2nd,  1998,  (closing bid price
        $.07) Mr. Krejci's actual  appointment  date as President and CEO of the
        Company.

     During  quarter  ended  December  31,  1998,  the  Company  continued  as a
development stage enterprise.  The Company's financial  statements are therefore
not  indicative of anticipated  revenues  which may be attained or  expenditures
which may be incurred by the Company in future periods. The Company's ability to
achieve profitable  operations is subject to the validity of its assumptions and
risk factors within the industry and pertaining to the Company.

     As a result  of the  operation  of SMR  licenses  and  existing  operations
purchased  from  Centennial  Communications  Corp.,  $54,640  of  revenues  were
generated from the Company's wireless business during the quarter ended December
31, 1998 as compared to $19,295 of revenues  earned  during the initial month of
operating the acquired business in the quarter ended December 31, 1997.

     For the quarter ending December 31, 1998, the Company  incurred General and
Administrative  Expenses of  $163,476,  a decrease  of $56,047  from the quarter
ending December 31, 1997, when the Company incurred  General and  Administrative
expenses of $219,523.  Management has undertaken cost cutting  measures in order
to reduce  overhead and  reoccurring  costs.  The overall  reduction in expenses
reflects   Management's   efforts  at  bringing  the  Company's   operating  and
administrative  costs under  control.  The Company's  Quarter ended December 31,
1998

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<PAGE>



financial  statements reflect adjustments and nonrecurring items of both revenue
and  costs,  as well as  development  stage  costs  and  are not  indicative  of
anticipated revenues which may be attained or expenditures which may be incurred
by the Company in future periods.


                                    Part II

ITEM 1.  LEGAL PROCEEDINGS

     On September  14, 1998 the Company  received by certified  mail a Complaint
filed in Superior  Court of  California,  County of San Diego,  Case No.  723581
entitled  John  Brent,  et al  vs.  ComTec  International,  Inc.,  a New  Mexico
corporation,  et al Defendants.  The Complaint by seven named Plaintiffs alleges
securities  fraud,   improper  sale  of  unregistered   securities,   and  stock
manipulation against the Company and five individual  defendants who were former
officers and/or directors of the Company,  none of whom are currently associated
with the Company. The Company believes that it has meritorious defenses and will
vigorously  defend  against  the  allegations  of  the  Complaint.  Due  to  the
preliminary  stage of the matter,  further  information  is not  available.  The
Company filed its answer to Plaintiffs'  Complaint on July 15, 1999. A motion to
dismiss  Plaintiffs'   complaint  for  failure  to  join  indispensable  parties
initiated by the Company is pending.

Litigation with Former Officer and Director

     On February 1, 1999 Donald Mack, the former CEO,  President and director of
ComTec  International,  Inc. filed a complaint in the District  Court,  City and
County of Denver, State of Colorado,  Civil Action Number 99CV634,  Courtroom 6,
against  ComTec  International,  Inc.  ("ComTec")  as  well  as  two  individual
defendants,  a current  officer and a shareholder  of ComTec.  On March 24, 1999
ComTec  filed  its  Answer  and  extensive  Counterclaims  against  Donald  Mack
("Mack").  Mack  alleges  that he is  entitled  to  continued  compensation  and
benefits  based  upon a  March  31,  1997  addendum  to his  December  26,  1995
employment  contract  (which expired in May of 1998).  Mack further alleges that
although he resigned as an officer in June 1998,  he was  wrongfully  induced to
resign. Mack alleges that he is due salary, car allowance, health plan payments,
life  insurance  payments,  stock  bonuses  and other  items from June 30,  1998
through June 30, 2002.  ComTec's  answer states that the March 31, 1997 addendum
is null and void as a matter of law,  denies any  wrongdoing or  inducement  and
denies  any and all  liability  to  Mack.  ComTec's  answer  further  states  as
affirmative  defenses  that Mack's claims are barred by the doctrine of estoppel
and unclean  hands,  that the March 31,  1997  addendum  was entered  into under
circumstances of fraud and illegality,  that Mack's claims are barred by failure
of consideration, fraud and illegality, waiver, failure to mitigate, that Mack's
alleged claims are setoff by the  counterclaims  of ComTec against Mack and that
Mack's  alleged  damages,  if any, are the result of Mack's own actions.  ComTec
believes it has meritorious and virtuous  defenses and anticipates  that it will
vigorously  and  effectively  defend  against  any and all  claims by Mack.  The
Company filed a number of  Counterclaims  against Mack.  Among the  Counterclaim
allegations of ComTec  against Mack are  allegations  that an agreement  entered
into in May of 1995,  whereby Mack gained control of ComTec through an agreement
for ComTec to purchase the assets of a corporation  controlled by Mack, KeyStone
Holding  Corporation,  was entered  into with  intent to defraud  ComTec and its
shareholders.  Among other allegations,  ComTec alleges that  misrepresentations
and  omissions  of  material  fact  were  made by  Mack  prior  to the  Keystone
transaction,  that Mack used ComTec as an  instrumentality  for his own personal
benefit and affairs,  that Mack acted to conceal material facts regarding Mack's
ultra vires and unauthorized acts in the name of ComTec.  ComTec further alleges
that Mack took  unauthorized  and unearned  bonuses in stock of ComTec and cash,
that the  execution of the  employment  addendum  through which Mack is alleging
amounts are now due him from ComTec was  accompanied by  circumstances  of fraud
and  collusion,  and that  Mack  made  unauthorized  use of  ComTec's  funds and
property.     ComTec's     claims    against    Mack    include:     intentional
misrepresentation/fraudulent  inducement  regarding  the  Keystone  Transaction;
fraudulent   concealment/constructive  fraud;  breach  of  warranty;  breach  of
fiduciary  duty;  conversion;  fraudulent  conveyance;  civil theft  pursuant to
C.R.S.  Section  18-4-401 and 18-4-405 and  securities  fraud pursuant to C.R.S.
Section 11-51-501.  ComTec seeks monetary damages and constructive trust as well
as  Declaratory  Judgment  pursuant  to  C.R.C.P.  57.  ComTec  believes  it has
meritorious  claims and will resolutely  pursue its claims against Mack. A trial
date of April 3, 2000 has been set for the matter.

     Except  for  the   foregoing,   no  litigation  or  other   material  legal
proceedings,  to which the  Company is a party or to which the  property  of the
Company is subject, is pending or is known by the Company to be contemplated.

ITEM 2. CHANGE IN SECURITIES. NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES. NONE


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<PAGE>


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. NONE

ITEM 5. OTHER INFORMATION. NONE

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) & (b) Financial Statements and Schedules. See Financial Statements beginning
on page 3.

(c) Exhibits.  The following documents are filed herewith or incorporated herein
by reference as Exhibits:

Exhibits
--------

2.1      N/A

3.0      Articles of Incorporation of the Company. (incorporated by reference to
         Exhibit  3.1 to the  Company's  Form  S-1  Registration  Statement  No.
         82-88530 dated December 20, 1983).  Amendment Incorporated by Reference
         to Form 8-K dated May 12, 1997.

3.1      By-laws.  (incorporated  by reference  to Exhibit 3.2 to the  Company's
         Form S-1  Registration  Statement No.  82-88530 dated December 20, 1983
         and Exhibit 3.2 to the  Company's  Form 10KSB for the period ended June
         30, 1998).

4.0      Certificate of Designation of Series A Preferred Shares. (1)

4.1      Certificate of Designation of Series B Preferred Shares. (1)

4.2      Certificate of Designation of Series C Preferred Shares. (1)

10.01    Form of Employment Agreement between the Company and its former
         officers. (1)

10.02    Letter Agreement between the Company and James J. Krejci. (2)(3)

11       Not Applicable.

15       Not Applicable.

18       Not applicable.

19       Not applicable.

22       Not Applicable.

23       Not Applicable.

24       Not applicable.

27       Financial Data Schedule

99       Not applicable

d) The Company filed the following reports on Form 8-K:

     Current  Report on Form 8-K was  filed on  October  9,  1998 to report  the
appointment  of an  outside  director.  Current  Report on Form 8-K was filed on
November  23,  1998 to report  debt and equity  securities  issued  pursuant  to
Regulation S exceptions.

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

(1) Incorporated  by  reference  to the  Company's  Form 10-KSB as of June 30,
    1996.
(2) Incorporated  by  reference  to the  Company's  Form 10-KSB as of June 30,
    1997.
(3) Incorporated by reference to the Company's Form 10-KSB as of June 30, 1998.


                                       13
<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Section  13 or 15(d)  of the  Securities
Exchange  Act of 1934,  the Company  has duly  caused this report  signed on its
behalf by the Undersigned, thereunto duly authorized.

                                        COMTEC INTERNATIONAL, INC.

Date:   July 21, 1999                   By:    /s/ James J. Krejci
                                           -------------------------
                                           James J. Krejci, President and
                                           Chief Executive Officer

                                        By:    /s Gordon Dihle
                                           -------------------------
                                           Chief Financial Officer



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