<PAGE>
================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                  FORM 10-QSB/A

                                 Amendment No. 1

(MARK ONE)

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

                  For the quarterly period ended: June 30, 2001

                                       OR

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

      For the transition period from _________________ to ________________

                       Commission file number: 0000796655

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

                               ANTS SOFTWARE INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                                      13-3054685
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or Organization)

 801 Mahler Rd, Suite G, Burlingame, CA                   94010
(Address of principal executive offices)                (Zip Code)


                                 (650) 692-0240

              (Registrant's Telephone Number, including area code)

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

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

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

              15,234,888 shares of common stock as of June 30, 2001

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

-==============================================================================



<PAGE>


                                EXPLANATORY NOTE

     On January 11, 2001, the Company entered into an agreement with a former
officer in connection with which the Company agreed to pay such former officer
the sum of $300,000, payable $75,000 per year for four (4) years on August 4 of
each year (the "Agreement"). The Form 10-QSB filed by the Company on August 14,
2001 did not reflect such Agreement. Therefore, the Company files this amendment
on Form 10-QSB/A to reflect the Company's obligation to pay the former officer
the sum of $300,000.

     To more clearly reflect the operation of the business, we have reclassified
as research and development expenses, certain expenses originally classified as
general and administrative. Note that while the subtotals have changed, total
expenses have not. The Company files this amendment on Form 10-QSB/A to reflect
these reclassifications.


                                TABLE OF CONTENTS

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


                          PART I. Financial Information

Item 1.  Financial Statements  ...........................................  3-7
Item 2.  Management's Plan of Operation  .................................  8-9

                           PART II. Other Information

Item 1.  Legal Proceedings  ..............................................    9
Item 2.  Changes in Securities  ..........................................   10
Item 3.  Defaults Upon Senior Securities..................................   10
Item 4.  Submission of Matters to a Vote of Security Holders..............   10
Item 5.  Other Matters ...................................................   10
Item 6.  Exhibits and Reports on Form 8-K ................................   10
Risk Factors  ............................................................11-13
Signatures  ..............................................................   14



                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                               ANTs software inc.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               June 30, 2001            December 31, 2000
                                                                (Unaudited)                 (Audited)
                                                             -----------------         -----------------
<S>                                                          <C>                       <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                 $       1,761,225         $       2,609,084
   Interest and other receivables                                       24,769                     4,860
   Prepaid expenses                                                    360,550                   102,947
                                                             -----------------         -----------------
     Total current assets                                            2,146,544                 2,716,891
                                                             -----------------         -----------------

PROPERTY AND EQUIPMENT:
   Computers and software                                              605,838                   565,110
   Office furniture and fixtures                                        26,372                    26,372
   Less accumulated depreciation                                      (127,404)                  (65,278)
                                                             -----------------         -----------------
     Property and equipment, net                                       504,806                   526,204
                                                             -----------------         -----------------

OTHER ASSETS                                                             3,700                     3,700
                                                             -----------------         -----------------
     Total assets                                            $       2,655,050         $       3,246,795
                                                             =================         =================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued expenses                     $         147,313         $         231,052
   Accrued legal fees                                                   40,073                   258,742
   Notes payable                                                       220,733                    29,981
 Notes payable - former officer, current portion                        75,000                      --
   Other liabilities                                                   125,000                      --
                                                             -----------------         -----------------
     Total current liabilities                                         608,119                   519,775
                                                             -----------------         -----------------
   Notes payable - former officer, net of current portion              225,000                      --
                                                             -----------------         -----------------
     Total liabilities                                                 833,119                   519,775
                                                             -----------------         -----------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Common stock, $.0001 par value; 100,000,000 authorized;
   15,234,888 and 13,082,038 shares issued and outstanding
   respectively                                                          1,523                    13,082
   Common stock subscribed                                             400,000                 1,815,000
   Treasury Stock                                                         --                    (121,078)
   Notes receivable from officers for stock purchases                 (180,000)                 (180,000)
   Additional paid-in capital                                       22,304,716                18,804,974
   Accumulated deficit                                             (20,704,308)              (17,604,958)
                                                             -----------------         -----------------
     Total stockholders' equity                                      1,821,931                 2,727,020
                                                             -----------------         -----------------
     Total liabilities and stockholders' equity              $       2,655,050         $       3,246,795
                                                             =================         =================
</TABLE>


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


                                       3
<PAGE>

                               ANTs software inc.
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                  Three months ended June 30,          Six months ended June 30,
                                                    2001             2000                2001              2000
                                                (Unaudited)       (Unaudited)        (Unaudited)        (Unaudited)
                                               --------------    --------------    --------------    ---------------
<S>                                            <C>               <C>               <C>               <C>
REVENUES                                       $         --      $         --      $         --      $          --
OPERATING EXPENSES:
   General and administrative expenses                941,268         1,059,754         2,503,222          1,710,110
   Research and development expenses                  277,297           206,728           636,756            321,814
                                               --------------    --------------    --------------    ---------------
     Loss from operations                          (1,218,565)       (1,266,482)       (3,139,978)        (2,031,924)
                                               --------------    --------------    --------------    ---------------

OTHER INCOME:
   Interest income, net                                12,713            75,932            36,458            126,445
   Other income                                         5,655              --               4,170               --
                                               --------------    --------------    --------------    ---------------
     Other income, net                                 18,368            75,932            40,628            126,445
                                               --------------    --------------    --------------    ---------------
     NET LOSS                                  $   (1,200,197)   $   (1,190,550)   $   (3,099,350)   $    (1,905,479)
                                               ==============    ==============    ==============    ===============
BASIC AND DILUTED LOSS PER COMMON SHARE        $        (0.08)   $        (0.09)   $        (0.22)   $         (0.15)
                                               ==============    ==============    ==============    ===============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING         14,907,221        12,581,264        14,398,759         12,560,965
</TABLE>


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

                                       4
<PAGE>

                               ANTs software inc.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                              Six months ended June 30,
                                                                                             2001                    2000
CASH FLOWS FROM OPERATING ACTIVITIES:                                                    (Unaudited)              (Unaudited)
                                                                                     -----------------       ----------------
<S>                                                                                  <C>                     <C>
     Net Loss                                                                        $      (3,099,350)      $     (1,905,479)
                                                                                     -----------------       ----------------
     Adjustments to reconcile net loss
     to net cash used by operating activities:
        Depreciation                                                                            62,864                  5,546
        Lawsuit settlement                                                                     137,235                   --
        Compensation expense recognized on exercise of options                                  46,800                   --
        Gain on sale of fixed assets                                                             2,985                   --
        Compensation expense recognized in form of notes payable to former officer             300,000                   --
     Changes in operating assets and liabilities:
        Prepaid expenses                                                                      (257,603)              (277,447)
        Accounts payable & Accrued expenses                                                     41,260                 43,082
        Other receivables                                                                      (19,909)               (22,265)
        Notes payable                                                                          190,753                205,131
        Accrued legal fees                                                                     (59,443)              (250,775)
        Security deposits                                                                         --                  (12,365)
                                                                                     -----------------       ----------------
          Net cash used in operating activities                                             (2,654,408)            (2,214,572)
                                                                                     -----------------       ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment, net                                                  (44,451)              (281,562)
                                                                                     -----------------       ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Proceeds from private placements                                                        1,730,000                   --
     Proceeds from exercise of warrants                                                        121,000                150,000
                                                                                     -----------------       ----------------
         Net cash provided by financing activities                                           1,851,000                150,000
                                                                                     -----------------       ----------------
NET DECREASE IN CASH                                                                          (847,859)            (2,346,134)
CASH, BEGINNING OF PERIOD                                                                    2,609,084              4,882,212
                                                                                     -----------------       ----------------
CASH, END OF PERIOD                                                                  $       1,761,225              2,536,078
                                                                                     =================       ================
</TABLE>

NON-CASH FINANCING ACTIVITY:
On February 23, 2001, the Company issued 400,000 shares of stock as settlement
of a lawsuit claim. See Note 5.

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


                                       5
<PAGE>

                               ANTs software inc.
                          NOTES TO FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

     The accompanying unaudited financial statements are presented in accordance
     with the requirements for Form 10-QSB and Item 310(b) of Regulation S-B.
     Accordingly, they do not include all the disclosures normally required by
     generally accepted accounting principles. Reference should be made to the
     ANTs software inc. (the "Company") Form 10-KSB for the eight months ended
     December 31, 2000, for additional disclosures including a summary of the
     Company's accounting policies, which have not significantly changed.

     The information furnished reflects all adjustments (all of which were of a
     normal recurring nature) which, in the opinion of management, are necessary
     to fairly present the financial position, results of operations, and cash
     flows on a consistent basis. Operating results for the three months and six
     months ended June 30, 2001, are not necessarily indicative of the results
     that may be expected in the future.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Reclassification - To more clearly reflect the operation of the business,
     we have reclassified as research and development expenses certain
     historical expenses originally classified as general and administrative.
     Beginning January 1, 2000, the subtotals for general and administrative and
     research and development expenses have changed. Note that while the
     subtotals have changed, total expenses have not.

     Basic Net Loss Per Share - Basic net loss per share is calculated using the
     weighted-average number of common shares outstanding during the period.
     Diluted net loss per share is computed using the weighted-average number of
     common and dilutive common equivalent shares outstanding during the period.

     The following table presents the calculation of basic and diluted net loss
     per share:

<TABLE>
<CAPTION>
                                                 Three Months Ended June 30,     Six Months Ended June 30,
                                                ----------------------------    ----------------------------
                                                   2001             2000           2001            2000
                                                ----------------------------    ----------------------------
<S>                                             <C>             <C>             <C>             <C>
     Net loss                                   $ (1,200,197)   $ (1,190,550)   $ (3,099,350)   $ (1,905,479)
     Weighted  average shares of common stock
     outstanding - basic and dilutive             14,907,221      12,581,264      14,398,759      12,560,965
                                                ----------------------------    ----------------------------
     Basic and diluted net loss per share       $      (0.08)   $      (0.09)   $      (0.22)   $      (0.15)
</TABLE>

     As of June 30, 2001 outstanding options and warrants for the purchase of
     6,537,724 shares of common stock at prices ranging from $0.25 to $11.63
     were anti-dilutive, and therefore, not included in the computation of
     diluted loss per share.

3.   EQUITY TRANSACTIONS

     In the three month period ended June 30, 2001, warrants to purchase a total
     of 7,000 shares were exercised for $21,000, and we completed the sale,
     through a private offering, of 782,500 units, 200,000 of which were
     subscribed but not yet issued as of June 30, 2001, at a price of $2 per
     unit, each unit consisting of (i) One (1) share of Common Stock of the
     Company, and (ii) a warrant to purchase up to One (1) share of Common Stock
     of the Company at a per share price of Four Dollars ($4.00), exercisable
     until December 31, 2001. The Company reclassified $121,078 of Treasury
     Stock to Additional Paid-In Capital. Additionally, a former employee
     exercised an option to purchase 12,000 shares and the Company realized a
     compensation expense of $46,800.

     In December 2000 the Company re-incorporated from Nevada to Delaware and
     changed its name from ANTs software.com to ANTs software inc. As part of
     the re-incorporation the Company's common stock

                                       6
<PAGE>

     par value was changed from $0.001 to $0.0001 and the authorized common
     stock was increased from 20,000,000 to 100,000,000 shares.


4.   WARRANTS AND STOCK OPTIONS

     As of June 30, 2001, the Company had outstanding warrants to purchase
     4,493,269 shares of common stock and options to purchase 2,044,455 shares
     of common stock. These securities give the holder the right to purchase
     shares of the Company's common stock in accordance with the terms of the
     instrument.

     As of June 30, 2001, outstanding warrants include warrants immediately
     exercisable into 1,644,334 restricted shares of common stock. All other
     shares of common stock covered by warrants and stock options were
     registered on a Form S-8 filed on September 27, 2000 and a Form S-8 filed
     on June 4, 2001.


5.   LEGAL SETTLEMENT

     The Company entered into a Settlement Agreement effective as of February
     23, 2001 with the law firm Hughes Hubbard & Reed LLP ("HHR") pursuant to
     which the Company agreed to issue 400,000 shares of common stock, for which
     the Company recognized an expense of $137,195. In addition, the settlement
     satisfied accrued legal expenses of $159,267, which had been recorded in
     prior periods. HHR had filed suit against the Company in the California
     Superior Court claiming that the Company breached a June 1988 contract by
     failing to deliver certificates representing shares earned as a premium for
     legal work performed between 1993 and 1996.


6.   SETTLEMENT WITH FORMER OFFICER

     The Company entered into an agreement (the "Agreement") with a former
     officer, effective as of January 11, 2001, in connection with which the
     Company agreed that a note receivable from the former officer would be
     forgiven in five increments of $45,000 plus all accrued interest, starting
     on August 4, 2001 and on each year anniversary thereafter. The aggregate
     amount receivable at June 30, 2001 is $180,000.

     The Company also agreed, pursuant to the Agreement, to pay the former
     officer the sum of $300,000, payable in four $75,000 installments, starting
     on August 4, 2001 and on each year anniversary thereafter, without
     interest. The aggregate amount payable at June 30, 2001 is $300,000.




                                       7
<PAGE>

ITEM 2. MANAGEMENT'S PLAN OF OPERATION

     Certain statements contained in this Form 10-QSB constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements herein are based on current expectations that involve
a number of risks and uncertainties. Such forward-looking statements are based
on assumptions that the Company will have adequate financial resources to fund
the development and operation of its business, and there will be no material
adverse change in the Company's operations or business. The foregoing
assumptions are based on judgments with respect to, among other things,
information available to the Company, future economic, competitive and market
conditions and future business decisions. All are difficult or impossible to
predict accurately and many of which are beyond the Company's control.
Accordingly, although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any such assumption could prove to be
inaccurate and therefore there can be no assurance that the results contemplated
in the forward-looking statements will be realized. There are a number of risks
presented by the Company's business and operations which could cause the
Company's financial performance to vary markedly from prior results or results
contemplated by the forward-looking statements. Such risks include failure of
the ANTs technology to work properly, failure to develop commercially viable
products or services from the ANTs technology, delays or failure in fundraising
efforts, delays in or lack of market acceptance, failures to recruit adequate
personnel, and problems with protection of intellectual property, among others.
Management decisions, including budgeting, are subjective in many respects and
periodic revisions must be made to reflect actual conditions and business
developments, the impact of which may cause the Company to alter its capital
investment and other expenditures, which may also adversely affect the Company's
results of operations. In light of significant uncertainties inherent in
forward-looking information included in this quarterly Report on Form 10-QSB,
the inclusion of such information should not be regarded as a representation by
the Company that the Company's objectives or plans will be achieved.

Overview

     We are engaged in the development and marketing of a proprietary software
technology that is intended to significantly improve the speed at which
computers can access data. Our operations currently consist of research and
development of our proprietary software technology ("ANTs technology"),
marketing our technology to potential customers and partners, personnel
recruiting, and capital raising. We have not realized any revenues to date.

Plan of Operation

     Our operations over the next six months will primarily consist of continued
research and development of our proprietary software technologies and
development of our marketing program. Research and development will be focused
initially upon developing a prototype system utilizing and demonstrating the
capabilities of our technology. We anticipate this prototype system to be
completed during the third quarter of calendar 2001. Thereafter, research and
development will be directed towards developing initial customer applications
utilizing our technology. General commercial applications utilizing our
technology are expected to be available by the end of calendar 2001. There is no
assurance that our plans will be realized.

     The majority of our operating expenses and costs over the next three to six
months are expected to be for and in connection with existing and additional
personnel. We currently have eighteen employees and two consultants, and we are
recruiting additional personnel. We view the recruitment of additional qualified
technical personnel as essential to the further development and
commercialization of our proprietary technology. Should we be successful in our
recruitment efforts, we expect that personnel and other operating costs will
increase.

     To more clearly reflect the operation of the business, we have reclassified
as research and development expenses, certain historical expenses originally
classified as general and administrative. Beginning January 1, 2000, the
Statements of Operations subtotals for general and administrative and research
and development expenses have changed. Note that while the subtotals have
changed, total expenses have not.

     We believe that additional sources of financing can be secured to enable us
to complete the development and commercialization of our proprietary
technologies, although there is no assurance of our ability to do so.


                                       8
<PAGE>

General and Administrative

     General and administrative expenses decreased from $1,059,754 during the
three months ended June 30, 2000 to $941,268 during the three months ended June
30, 2001. General and administrative expenses increased from $1,710,110 during
the six months ended June 30, 2000 to $2,503,222 during the six months ended
June 30, 2001. Components of general and administrative expense for the 2nd
quarter of 2001 include: salaries and benefits (27%), insurance (18%), legal
(18%), other professional services (16%) and other (21%). We expect overall
general and administrative expenses to increase moderately over the next three
to six months.

Research and Development

     Research and development expenses increased from $206,728 during the three
months ended June 30, 2000 to $277,297 during the three months ended June 30,
2001. Research and development expenses increased from $321,814 during the six
months ended June 30, 2000 to $636,756 during the six months ended June 30,
2001. These expenses are related to the research, testing and product
development of our proprietary software. We expect that our research and
development expenses will continue to increase as additional staff is recruited.
We intend to continue to focus significant resources on recruiting additional
personnel for engineering, and technical development roles. There can be no
assurances that we will be able to recruit the appropriate personnel necessary
for the development of our products.

Capital and Liquidity Resources

     We anticipate increasing expenditures over the coming months as we continue
to develop our technology. We do not expect to realize any revenues through
calendar year 2001. Our cash balance as of June 30, 2001 was $1,761,225, which
we believe will be adequate to fund our activities through October 2001 at our
current rate of spending. There can be no assurance that our continued product
development and infrastructure development will not require a much higher rate
of spending. There can also be no assurance that we will be able to obtain
additional capital on acceptable terms. During the second quarter of 2001, we
entered into a $331,000 financing arrangement to provide for an annual insurance
policy with interest and principal payments on the note due quarterly at a 4%
interest rate.

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We were a defendant in a case entitled Hubert P. Lauffs v. Mosaic Multisoft
Corporation, in which the plaintiff asserted a cause of action against us for
breach of fiduciary duty. The plaintiff purported to base his cause of action on
allegations that we and others caused the shareholders of Mosaic Multisoft
Corporation ("Mosaic") to elect outside directors to its board of directors who
subsequently voted to remove Mosaic's president from office, thus interfering
with Mosaic's ability to raise capital and causing Mosaic to be unable to repay
its debt to the plaintiff. In March 2000, we won this case on summary judgment.
In April 2000, the plaintiff filed an appeal of the summary judgment ruling. We
believe the appeal to be without merit, but there can be no assurance that the
appellate court will not reverse the lower court's ruling and require a trial.
We have filed an action for malicious prosecution against the lawyer and the
plaintiff in this case. Since May 4, 2000, the malicious prosecution action has
been stayed pending resolution of the appeal. With respect to the appeal, the
plaintiff filed an opening brief on December 19, 2000, we filed a responsive
brief on April 4, 2001, and the plaintiff filed his reply brief on May 25, 2001.
The court of appeals has scheduled oral arguments for September 11, 2001.

     On or about August 14, 2001, we have entered into a tentative agreement
with the staff of the Pacific Regional Office of the Securities and Exchange
Commission (the "SEC") that would close an SEC inquiry under way since early
last year. The tentative agreement must be approved by the SEC Commissioners in
Washington, D.C. before it is final. Under the terms of the tentative agreement,
the SEC will allege in a civil injunctive action that we violated the periodic
reporting requirements of the federal securities laws. We will simultaneously
settle the case, without admitting or denying the SEC's allegations, by
consenting to an injunction prohibiting us from future violations of the
periodic reporting requirements of the federal securities laws. The agreement
does not require us to pay a monetary fine.

                                       9
<PAGE>

     The information is hereby incorporated by reference from the Form 10-QSB
filed on May 15, 2001. There have been no other material developments in the
period covered by this report.

ITEM 2. CHANGES IN SECURITIES

     From May 1, 2001 through June 30, 2001, we sold to accredited investors,
through a private offering, 782,500 units, at a price of $2.00 per unit (the
"Units"), of which 200,000 have not yet been issued as of June 30, 2001, for a
value of $400,000, with each Unit consisting of (i) One (1) share of Common
Stock of the Company, and (ii) a warrant to purchase up to One (1) share of
Common Stock of the Company at a per share price of Four Dollars ($4.00),
exercisable until December 31, 2001. In connection with this offering, we paid a
commission of $57,000 to Berry-Shino Securities, Inc., and a commission of
$5,000 to Spencer Edwards, Inc. for services rendered as placement agents. The
gross proceeds of the offering were $1,565,000. The proceeds will be used for
general working capital purposes. The sales of these securities were made in
reliance upon Rule 506 and Section 4(2) of the Securities Act of 1933.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     No changes during the period covered by this report.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The annual Shareholder Meeting of the Company was held on April 24, 2001.
Proxies for the meeting were solicited pursuant to Regulation 14A under the
Exchange Act. On the proposal to elect 2 Class 1 Directors of the Company,
10,145,524 shares of the Company's voting securities voted on the matter, of
which 10,044,948 shares were voted for Mr. Richard J. Lee and 10,046,998 shares
were voted for Mr. Thomas Holt. The Class 2 and Class 3 directors and the Class
2 and Class 3 director positions were not up for re-election at the Shareholder
Meeting. Clive G. Whittenbury, Ph.D. and Homer G. Dunn are Class 2 directors and
their term will expire at the annual meeting following the close of the 2001
fiscal year. Francis K. Ruotolo, Papken S. Der Torossian and John R. Gaulding
are Class 3 directors and their term will expire at the annual meeting following
the close of the 2002 fiscal year. On the proposal to amend the Company's 2000
Stock Option Plan by increasing the shares reserved under the plan by an
additional 1,950,000 shares of Common Stock, 23,770 shares of the Company's
voting securities were abstaining, 5,048,749 shares voted for the proposal,
464,869 shares voted against the proposal and there were 4,608,136 broker
non-votes. On the proposal to ratify the selection of Burr, Pilger & Mayer, LLP,
as independent public accountants for the Company for the fiscal year ending
December 31, 2001, 36,559 shares of the Company's voting securities were
abstaining, 10,032,977 shares voted for the proposal and 75,988 shares voted
against the proposal.

ITEM 5. OTHER MATTERS

Appointment of Officer

     Mr. Kenneth Ruotolo was appointed Executive Vice President of Finance and
Operations by the Board of Directors at a meeting held on June 22, 2001.

Compensation Committee

     A Compensation Committee consisting of Richard J. Lee, Homer G. Dunn and
John R. Gaulding was formed by the Board of Directors of the Company at a
meeting held on June 22, 2001.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         3.1   Amended and Restated Certificate of Incorporation of the Company
               as listed in Exhibit 3.1 to the Company's 10-KSB filed on March
               22, 2001, is hereby incorporated by reference.
         3.2   Amended and Restated Bylaws of the Company, as listed in Exhibit
               3.2 to the Company's 10-KSB filed on March 22, 2001, are hereby
               incorporated by reference.

     (b) Reports on Form 8-K


                                       10
<PAGE>


         The Company did not file any reports on Form 8-K during the quarter for
which this report is filed.

RISK FACTORS

     In addition to other information in this 10-QSB, the following risk factors
should be carefully considered in evaluating our business since we operate in a
highly changing and complex business environment that involves numerous risks,
some of which are beyond our control. The following discussion highlights a few
of these risk factors, any one of which may have a significant adverse impact on
our business, operating results and financial condition. As a result of the risk
factors set forth below and elsewhere in this 10-QSB, and the risks discussed in
our other Securities and Exchange Commission filings, actual results could
differ materially from those projected in any forward-looking statements.

     If we are unable to protect our intellectual property, our competitive
position would be adversely affected. We rely on patent protection, as well as
trademark and copyright law, trade secret protection and confidentiality
agreements with our employees and others to protect our intellectual property.
Despite our precautions, unauthorized third parties may copy our products and
services or reverse engineer or obtain and use information that we regard as
proprietary. We have also filed patent applications and intend to file more. We
do not know if any of our intended future patents will be issued or whether we
will be successful in prosecuting any additional patents. In addition, the laws
of some foreign countries do not protect proprietary rights to the same extent
as do the laws of the United States. Our means of protecting our proprietary
rights may not be adequate and third parties may infringe or misappropriate our
patents, copyrights, trademarks and similar proprietary rights. If we fail to
protect our intellectual property and proprietary rights, our business,
financial condition and results of operations would suffer. We believe that we
do not infringe upon the proprietary rights of any third party, and no third
party has asserted a patent infringement claim against us. It is possible,
however, that such a claim might be asserted successfully against us in the
future. We may be forced to suspend our operations to pay significant amounts to
defend our rights, and a substantial amount of the attention of our management
may be diverted from our ongoing business, which can materially affect our
ability to attain and maintain profitability.

     We face possible competition from large companies. The industry that we are
in is highly competitive. Although we believe that our technology is unique, can
be protected, and, if adopted, will confer benefits that will be otherwise
unavailable for some significant time, we face very large competitors with
greater resources who may adopt various strategies to block or slow our market
penetration, thereby straining our more limited resources. They may also seek to
hinder our operations through attempts to recruit key staff with exceptionally
attractive terms of employment, including signing bonuses, or by offer of highly
competitive terms to potential or newly acquired customers.

     We depend on our key personnel and may have difficulty attracting and
retaining the skilled staff we need to execute our growth plans. Our success
will be dependent largely upon the personal efforts of our Chairman and Chief
Executive Officer, Francis K. Ruotolo, as well as other senior managers. The
loss of key staff could have a material adverse effect on our business and
prospects. To execute our plans, we will need to hire and retain substantially
more staff. We plan to increase our technical personnel in the near term. We are
recruiting personnel to meet this objective. Competition for highly skilled
employees with technical, management, marketing, sales, product development and
other specialized training is intense. We may not be successful in attracting or
retaining such qualified personnel. Specifically, we may experience increased
costs in order to attract and retain skilled employees. If we are unable to
hire, train and manage new skilled and experienced employees as needed, we would
be unable to support our planned growth and future operations.

     We face rapid technological change. The market for our products and
services is characterized by rapidly changing technologies, extensive research
and the introduction of new products and services. We believe that our future
success will depend in part upon our ability to continue to enhance our existing
products and to develop, manufacture and market new products and services. As a
result, we expect to continue to make a significant investment in engineering,
research and development. There can be no assurance that we will be able to
develop and introduce new products and services or enhance our initial intended
products and services in a timely manner to satisfy customer needs, achieve
market acceptance or address technological changes in our target markets.
Failure to develop products and services and introduce them successfully and in
a timely manner could adversely affect our competitive position, financial
condition and results of operations.



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<PAGE>

     We will need to manage growth well. We may experience substantial growth in
the size of our staff and the scope of our operations, resulting in increased
responsibilities for management. To manage this possible growth effectively, we
will need to continue to improve our operational, financial and management
information systems and to hire, train, motivate and manage a growing number of
staff. We expect to experience difficulty in filling our needs for qualified
engineers and other personnel. There can be no assurance that we will be able to
effectively achieve or manage any future growth, and our failure to do so could
delay product development cycles and market penetration or otherwise have a
material adverse effect on our financial condition and results of operations.

     We could face information and product liability risks and may not have
adequate insurance. Because we intend to provide middleware solutions to
critical business and Internet applications, we may become the subject of
litigation alleging that our products were ineffective or disruptive in their
treatment of data, or in the compilation, processing or manipulation of critical
business information. Thus, we may become the targets of lawsuits from injured
or disgruntled businesses or other users. We do not presently carry product or
information liability or errors and omissions insurance, and although we intend
to acquire such insurance prior to commencing substantial sales, such insurance
may not be available in an acceptable or affordable form. In the event that we
are required to defend more than a few such actions, or in the event that we
were found liable in connection with such an action, our business and operations
would be severely and materially adversely affected.

     We are dependent on new demand for our products and services. The success
of our business depends upon demand for and use of our technology, products and
services in general and the demand for additional computing power, cost
effectiveness and speed in particular. Our technology introduces a new kind of
middleware, so we may encounter substantial market resistance. In the event
sufficient demand does not develop, our business and results of operations would
be materially adversely affected. We believe that there appears to be increased
demand for computing power, cost effectiveness and speed, but if general
economic conditions decline or hardware and memory advances make such power,
cost effectiveness and speed more readily available, then adoption, use and
sales of our products and services may be materially adversely affected.

     We will need to continue our product development efforts. We believe that
our market will be characterized by increasing technical sophistication. We also
believe that our eventual success will depend on our ability to continue to
provide increased and specialized technical expertise. There is no assurance
that we will not fall technologically behind competitors with greater resources.
Although we believe that we enjoy a significant lead in our product development
and introduction, and are hopeful that our patents provide some protection, we
will likely need significant additional capital in order to continue to enjoy
such a technological lead over competitors with more resources.

     A failure to obtain additional financing could prevent us from executing
our business plan. We anticipate that current cash resources will be sufficient
to fund our operations through October 2001. We believe that additional sources
of financing can be secured to enable us to complete the development and
commercialization of our proprietary technologies, although there is no
assurance of our ability to do so. A failure to obtain additional funding could
prevent us from making expenditures that are needed to allow us to hire
additional personnel and continue development of the technology. If we raise
additional funds by selling equity securities, the relative equity ownership of
our existing investors could be diluted or the new investors could obtain terms
more favorable than previous investors. If we raise additional funds through
debt financing, we could incur significant borrowing costs.

     Market acceptance of our products and services is not guaranteed. We are at
an early stage of development and our earnings will depend upon broad market
acceptance and utilization of our intended products and services. There can be
no assurance that our product and technology development efforts will result in
new products and services, or that they will be successfully introduced.

     Future profitability is not guaranteed. We have not recognized any
operating revenues to date. We expect to begin recognizing revenues from the
sale of products and services in calendar 2002. There is no assurance that our
plans will be realized, that we will be able to generate revenues in 2002 or
that we will achieve profitability in the future.

     Limited market for our common stock. Our common stock is not listed on any
exchange and trades in the over-the-counter (the "OTC") market. As such, the
market for our common stock is limited and is not regulated by


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<PAGE>

the authorities of any exchange. Further, the price of our common stock and its
volume in the OTC market may be subject to wide fluctuations.












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<PAGE>

                                   SIGNATURES

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


                                    ANTs software inc.


Date: May 13, 2002                  By: /s/ Francis K. Ruotolo
                                        ------------------------------
                                        Francis K. Ruotolo, Chairman,
                                        Chief Executive Officer and President





Date: May 13, 2002                  By: /s/ Kenneth Ruotolo
                                        ---------------------------
                                        Kenneth Ruotolo
                                        Chief Financial Officer and Secretary





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