|**UNITED STATES**                                                                     
|--------------------------------------------------------------------------------------
|**SECURITIES AND
    EXCHANGE COMMISSION**                                            
|**Washington, DC
    20549**                                                          
|                                                                                      
|Form 10-QSB                                                                           
|(Mark one                                                                             
|[ X ] QUARTERLY REPORT UNDER SECTION 13 OR
    15 (d) OF THE                          
|SECURITIES EXCHANGE ACT OF 1934                                                       
|                                                                                      
|For the quarterly period ended: September
    30, 2000                                
|                                                                                      
|[    ] TRANSITION REPORT
    UNDER SECTION 13 OR 15 (d) OF THE                        
|SECURITIES EXCHANGE ACT OF 1934                                                       
|                                                                                      
|For the transition period from ____________
    to _____________                      
|                                                                                      
|Commission file number: 0-28175                                                       
|                                                                                      
|**AFFORDABLE TELECOMMUNICATIONS
    TECHNOLOGY CORP.**                                
|(Exact name of small
    business issuer as specified in its charter)                 
|                                                                                      
|TEXAS                                                                                 
|(State or other
    jurisdiction of incorporation or organization)                    
|                                                                                      
|6227 SW Freeway, Houston, TX                                                          
|(Address of principal executive offices)                                              
|                                                                                      
|713-988-8884                                                                          
|(Issuers telephone
    number)                                                       
|_____________________________________________________________                         
|(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 12, 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
    report (s), and (2) has been subject to such filing requirements for the past 90 days. Yes
    [ X ] No [  ]
|APPLICABLE ONLY TO CORPORATE ISSUERS                                                                                                                                                                                                                                                                                                            

|State the number of shares outstanding of
    each of the issuers classes of common equity, as of the latest practicable date:
|-------------------------------------------------------------------------------------------------------------------------------
|Common Stock, $.001 par
    value, 23,623,338 shares outstanding as of November 20, 2000.                                      
|Transitional Small Business Disclosure
    Format: Yes __ No X                                                                 
|Page 1 of 13                                                                                                                   





|PART I. FINANCIAL INFORMATION                                   | Page
|--------------------------------------------------------------- | ----
|Item 1. Financial Statements (Unaudited)                        | 3   
|Item 2. Managements Discussion and
    Analysis                | 7   
|                                                                |     
|PART II. OTHER INFORMATION                                      |     
|Item 1. Legal Proceedings                                       | 12  
|Item 2. Changes in Security                                     | 12  
|Item 3. Default 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  



PART I FINANCIAL INFORMATION

Item 1. Financial Statements

|                                                                                                                 | Page
|---------------------------------------------------------------------------------------------------------------- | ----
|Balance Sheets as of   September 30, 2000
    (Unaudited) and December 31, 1999.                                 | 3   
|Statements of Operations for the Three and
    Nine Month Periods ended September 30, 2000 and 1999 (Unaudited). | 4   
|Statements of  Cash Flows for the Nine
    Month Periods ended September 30, 2000 and 1999 (Unaudited).          | 5   
|Notes to Financial Statements                                                                                    | 6   





















|**AFFORDABLE
    TELECOMMUNICATIONS TECHNOLOGY CORPORATION**              
|--------------------------------------------------------------------------
|Balance Sheets as of September 30, 2000 (Unaudited) and December 31, 1999.
|                                                                          
|                                                                          
|ASSETS                                                                    
|CURRENT ASSETS                                                            
|Cash                                                                      
|Accounts receivable                                                       
|Inventory                                                                 
|Loans and exchanges                                                       
|Prepaid expenses                                                          
|TOTAL
    CURRENT ASSETS                                                  
|                                                                          
|PROPERTY AND EQUIPMENT                                                    
|                                                                          
|OTHER ASSETS                                                              
|Security deposits                                                         
|Acquisition deposits                                                      
|Goodwill                                                                  
|Organization expense, at
    cost-net                                     
|TOTAL
    OTHER ASSETS                                                    
|TOTAL ASSETS                                                              
|                                                                          
|LIABILITIES AND
    STOCKHOLDERS' EQUITY (DEFICIT)                        
|                                                                          
|LIABILITIES                                                               
|Bank loan payable                                                         
|Current portion of
    long-term debt and capital leases                  
|Deferred income                                                           
|Accounts payable,
    accrued expenses and taxes payable                  
|TOTAL
    CURRENT LIABILITIES                                             
|                                                                          
|LONG-TERM LIABILITIES                                                     
|Long-term debt and
    capital leases                                     
|Loans
    payable-officers'                                               
|TOTAL LONG-TERM LIABILITIES                                               
|                                                                          
|SHARE ISSUANCE IN EXCESS OF
    AUTHORIZED SHARES                         
|                                                                          
|STOCKHOLDERS' EQUITY (DEFICIT)                                            
|Common stock, $.01
    par value, 20,000,000 and shares authorized;       
|20,000,000 and 7,133,536 shares issued and outstanding                    
|Additional paid-in
    capital                                            
|Accumulated deficit                                                       
|Treasury stock                                                            
|TOTAL
    STOCKHOLDERS' EQUITY (DEFICIT)                                  
|TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY (DEFICIT)                  
|See accompanying notes.                                                   



|**AFFORDABLE TELECOMMUNICATIONS TECHNOLOGY CORPORATION**                                                        
|----------------------------------------------------------------------------------------------------------------
|Statements of Operations for the Nine and Three Month Periods ended September 30, 2000 and
    1999 (Unaudited).
|                                                                                                                
|                                                                                                                
|                                                                                                                
|                                                                                                                
|REVENUES                                                                                                        
|Sales                                                                                                           
|Cost of sales                                                                                                   
|GROSS
    MARGIN                                                                                                
|                                                                                                                
|EXPENSES                                                                                                        
|Contract labor                                                                                                  
|Professional  
    fees                                                                                         
|Bad Debts                                                                                                       
|Fees-other                                                                                                      
|Equipment rental                                                                                                
|Insurance                                                                                                       
|Donated services                                                                                                
|Rents                                                                                                           
|Security                                                                                                        
|Repairs and
    maintenance                                                                                     
|Office expense                                                                                                  
|Miscellaneous                                                                                                   
|Automobile expense                                                                                              
|Depreciation                                                                                                    
|Utilities                                                                                                       
|Telephone                                                                                                       
|Contributions                                                                                                   
|Travel and
    entertainment                                                                                    
|Advertising                                                                                                     
|Miscellaneous taxes                                                                                             
|Amortization expenses                                                                                           
|TOTAL
    EXPENSES                                                                                              
|                                                                                                                
|(LOSS) FROM OPERATIONS                                                                                          
|                                                                                                                
|OTHER INCOME (EXPENSE)                                                                                          
|Interest expense-net                                                                                            
|                                                                                                                
|(LOSS) BEFORE PROVISION FOR
      INCOME TAXES                                                                  
|                                                                                                                
|PROVISION FOR INCOME TAXES                                                                                      
|                                                                                                                
|NET (LOSS)                                                                                                      
|                                                                                                                
|WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                                                        
|(BASIC AND DILUTED)                                                                                             
|                                                                                                                
|BASIC NET LOSS PER SHARE (BASIC
    AND DILUTED)                                                                
|See accompanying notes.                                                                                         



|**AFFORDABLE
    TELECOMMUNICATIONS TECHNOLOGY CORPORATION**                                          
|------------------------------------------------------------------------------------------------------
|Statements
    of Cash Flows for the Nine Month Periods ended September 30, 2000 and 1999 (Unaudited).
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|                                                                                                      
|CASH FLOWS FROM OPERATING
    ACTIVITIES                                                              
|Net loss                                                                                              
|Adjustments to
    reconcile net (loss) to net                                                        
|cash (used in)
    operating activities:                                                              
|Depreciation and amortization expense                                                                 
|(Increase) decrease in accounts receivable                                                            
|(Increase)  in loans and exchanges                                                                    
|(Increase) in inventory                                                                               
|(Increase) decrease in deposits and prepaid expense                                                   
|(Increase) in security deposits                                                                       
|(Increase)
    decrease in acquisition deposits                                                       
|(Increase) in goodwill                                                                                
|Increase
    in deferred income                                                                       
|Increase (decrease) accounts payable, accrued expenses and taxes payable                              
|NET
    CASH (USED IN) OPERATING ACTIVITIES                                                           
|                                                                                                      
|CASH FLOWS FROM INVESTING
    ACTIVITIES                                                              
|Purchase of property
    and equipment                                                                
|NET
    CASH (USED IN) INVESTING ACTIVITIES                                                           
|                                                                                                      
|CASH FLOWS FROM FINANCING
    ACTIVITIES                                                              
|Proceeds from
    issuance of  common stock                                                           
|Proceeds from
    issuance of shares in excess of authorized shares                                   
|(Decrease) in loans
    payable                                                                       
|Increase in loan
    payable-officers'                                                                
|NET
    CASH PROVIDED BY FINANCING ACTIVITIES                                                         
|                                                                                                      
|NET INCREASE (DECREASE)  
    IN CASH                                                                 
|                                                                                                      
|CASH - BEGINNING  OF
    PERIOD                                                                       
|                                                                                                      
|CASH - ENDING  OF PERIOD                                                                              
|                                                                                                      
|SUPPLEMENTAL DISCLOSURES                                                                              
|Cash paid during the period for:                                                                      
|Income
    tax                                                                                        
|Interest
    paid                                                                                     
|                                                                                                      
|In addition to amounts reflected
    above, common stock was issued for:                              
|Shares
    issued for services                                                                        
|Settlement of debt                                                                                    
|See accompanying notes.                                                                               



|NOTES TO FINANCIAL STATEMENTS FOR THE
    PERIOD ENDED SEPTEMBER 30, 2000
    Note 1 - Basis of Presentation:
    The financial information included herein is unaudited; however, such information
    reflects all adjustments (consisting solely of normal recurring adjustments) which are, in
    the opinion of management, necessary for a fair statement of results for the interim
    periods. The results of operations for the nine months and three months ended September
    30, 2000 are not necessarily indicative of the results to be expected for the full year.
    Note 2 - Material Events:
    During the three months ended September 30, 2000 the following events occurred: The
    Company issued and sold 6,245,000 shares of its common stock to private investors and
    received proceeds of $1,037,306 . Additionally, the Company issued 300,000 shares for
    current and future services, and issued 1,800,000 shares in a non-cash transaction in
    settlement of debt.
    Note 3 - Other  Events:
    (1) During the quarter ended September 30, 2000
    the Company settled a legal action between the Company, Information Leasing Corporation
    and Eagle Wireless International related to the equipment used in the Company's Automatic
    Meter Reading business. The settlement involved the issuance of 1,800,000 restricted
    shares having a value of $ 424,006at the
    date of issuance.
    (2) During the three month period ended September
    30, 2000, the Company  issued a total of 8,345,000 shares that were not registered
    under the Act. 6,245,000 shares were issued in sales to private investors, 300,000 shares
    were issued to consultants for current and future services and 1,800,000 shares were
    issued in settlement of debt. As a result of these transactions and after September 30,
    2000 the Company had issued and outstanding 3,623,338 shares in excess of its authorized
    20,000,000 shares of common stock. The Company is calling a special meeting of
    shareholders to approve, among other proposals, an increase in the number of 
    authorized shares of common stock.
    (3) Subsequent to September 30, 2000 the Company issued an additional 2,689,600 shares
    of its common stock and received proceeds of $145,000. As a result of the issuance of
    3,626,338 shares in excess of  the Company's authorized common stock of 20,000,000
    shares, the Company has a liability of $62,894.
    Item 2.
    Managements Discussion and Analysis
    Forward-Looking Statements; Market Data
    The discussion in this report on Form 10-QSB
    contains forward-looking statements that involve risks and uncertainties. The statements
    contained in this Report that are not purely historical are 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, including statements regarding our
    expectations, beliefs, intentions or strategies regarding the future. All forward-looking
    statements included in this document are based on information available to us on the date
    hereof, and we assume no obligation to update any such forward-looking statements. Our
    actual results could differ materially from those described in our forward-looking
    statements. Factors that could cause or contribute to such differences include, but are
    not limited to, our unproven business model and a limited operating history in a new and
    rapidly evolving industry; our ability to implement our business plan; and our ability to
    manage our growth, retain and grow our customer base and expand our service offerings.
    We make forward-looking statements in the "Managements
    Discussion and Analysis of Financial Condition and, Results of Operations" in this
    Quarterly Report. These forward-looking statements include, but are not limited to,
    statements about our plans, objectives, expectations, intentions and assumptions and other
    statements that are not historical facts. We generally intend the, words
    "expect", anticipate", "intend", "plan",
    "believe", "seek", "estimate" and similar expressions to
    identify forward-looking statements.
    This
    Quarterly Report contains certain estimates and plans related to us and the wireless
    telecommunications industry in which we operate, which assumes certain events, trends and
    activities will occur and the projected information based on those assumptions. We do not
    know all that our assumptions are accurate. In particular, we do not know what level of
    growth in the wireless telecommunications and digital equipment industry, and particularly
    in those markets in which we operate and shall seek to expand. If our assumptions are
    wrong about any events, trends and activities, then our estimates for future growth for
    wireless telecommunications and our business may also be wrong. There can be assurances
    that an of our estimates as to our business growth will be achieved.
    Results of Operations
    During the three and nine month periods ended
    September 30, 2000 we had revenues of $545,088 and $925,061, respectively, compared to
    revenues of $92,178 and $212,531 for the comparable three and nine month periods of 1999.
    The increase in revenues during the three and nine month periods ended September 30, 2000
    as compared to September 30, 1999 is principally the result of our acquisition of the
    business of Beeper Boutique and its nine retail locations, the acquisition of digital
    imaging equipment business of Camera's Etc., and the increase in our line of products and
    services.
    We incurred a net loss of
     $372,027 ($0.02 per share) and $869,763 ($0.07 per share) during the three month and
    nine month periods ended September 30, 2000  compared to a net loss of $38,838 ($0.01
    per share) and $262,927 ($0.04 per share)  for the comparable three and nine month
    periods of 1999. The primary reasons for the net losses during the three and nine month
    periods ended September 30, 2000 compared to the same periods of 1999 is the result of the
    acquisition of the business of Beeper Boutique and the integration of its operations and
    the increased professional fees in connection with the acquisition. The expansion of our
    business also resulted in the substantial increase in the use of contract labor. Our
    contract labor expense for the three and nine month periods ended September 30, 2000 were
    $253,799 and $483,520 compared to $65,811 and $203,041 for the three and nine month
    periods ended September 30, 1999. Our increase in contract labor relates directly to our
    increase in revenues and the expansion in our operations.
    There are no known trends, events or
    uncertainties that have had or that are reasonably expected to have a material adverse
    impact on the revenues or anticipated income from our continuing operation. There is an
    increasing trend toward use of wireless telecommunications equipment and services,
    including cellular telephones, pagers and other wireless equipment, by all segments of the
    population, including prepaid and regular use. We expect to benefit from this trend in the
    Texas Gulf Coast market which includes areas in both Southwest Texas and Louisiana. We
    also expect continued increased revenues as a result of the completion of the acquisition
    of the business and operations Beeper Boutique and certain economies resulting from our
    consolidation of the corporate offices and back office operations of Beeper Boutique into
    those of the Company at 6227 Southwest Freeway, Houston, TX.  We continue to evaluate
    new locations for our retail stores and may move certain stores to higher traffic
    locations to take advantage of the increased consumer awareness of our business and name
    in our markets. The wireless communications business is not subject to any seasonal
    aspects.
    In addition, we are also endeavoring to commence
    operations in the business of automatic meter reading ("AMR"), which involves
    use of our existing wireless technology for the purpose of reading utility meters for
    residential and business customers. This is a new area of growth, we believe, in the South
    Texas and Louisiana Gulf Coast market. However, the  business of AMR is developing at
    a modest rate and a the Public Utilities Commission in Texas plans public hearings related
    to among other issues rates consumers will pay and amounts utilities may recover. We
    understand that the Texas Public Utilities Commission will consider and evaluate how other
    states have proceeded on the deregulation of utilities. While there can be no assurance
    with we will be successful in developing an AMR business in our market, we consider this
    business to be part of our long-term growth plan. We may consider whether to proceed with
    an AMR business by acquisition or through internal development, based upon our evaluation
    of the growth potential and the resources available to us.
    Liquidity and Capital Resources
    At September  30, 2000 we had current assets
    of $656,481 compared to current assets of $84,813 at December 31, 1999, an increase of
      674%. The increase in current assets is primarily the result of an increase in cash
    of  $126,422 and an increase in inventory of $172,192. The increase in inventory is
    the result of our acquisition of the assets of Beeper Boutique and its nine retail store
    locations and our overall increase in product lines. We expect that this increase in
    inventory, which had a negative impact on our cash flow during the quarter ended September
    30, 2000, will support our increase in sales during the fourth quarter and subsequent
    periods.  In addition, prepaid expenses increased by $143,611 and loans and exchanges
    increased by $100,000.
    Our current liabilities at September 30, 2000
    were $614,346, a decrease of $255,997 from current liabilities of $870,343 at June 30,
    2000 and an increase of $301,518 from current liabilities of  $312,828 at December
    31, 1999. The decrease from June 30, 2000 to September 30, 2000 is the principally the
    result of the reduction of our current portion of the capital lease obligations.
    We have completed the acquisition of Beeper
    Boutique, a transaction that is likely to adversely impact our liquidity in the short
    term. The acquisition of the assets and business of Beeper Boutique and its nine retail
    stores and the positive cash flow that we anticipate from this acquisition should in the
    future improve our cash flow from operations. However, we are obligated to fund our
    purchase of the Beeper Boutique with cash and securities as well as pay the ongoing
    operating expenses.
    During the three months ended September 30, 2000
     we raised $2,261,298 through the sale of  shares to private investors, which
    shares were not registered under the Securities Act of 1933, as amended (the
    "Act"). The proceeds from such sales were utilized principally for working
    capital and to pay capital lease obligations. In addition, during the quarter ended
    September 30, 2000 we issued 1,800,000 restricted shares to a third party in exchange for
    shares of another public company unrelated to us. These shares were sold and the proceeds
    were used to settle a legal proceeding involving the Company, Information Leasing
    Corporation and Eagle Wireless International. Our issuance the 1,800,000 restricted shares
    was also based upon the exemption provided in Section 4 (2) under the Act.
    During and subsequent to the end of the quarter
    ended September 30, 2000 we issued and sold restricted shares to private investors and
    issued shares to settle a legal proceeding. As a result of these transactions and through
    inadvertence, we issued approximately  3,623,338 shares in excess of our authorized
    capital stock of 20,000,000 shares of common stock. See Item 4, Part II below with respect
    to our filing of a proxy statement on Schedule 14A under the Exchange Act for a special
    meeting of shareholders in December 2000 for among other purposes approving an increase in
    our authorized shares of common stock. The affirmation vote by shareholders at the special
    meeting will result in the ratification of the issuance of shares in excess of our
    authorized capital stock, and will also provide additional shares of common stock for our
    corporate purposes including potential future acquisitions. Also see the Notes to
    Financial Statements.
    There is also a trend in the wireless industry
    toward rapid technological change and development, but such trend should not adversely
    impact upon resellers and retail operators. As a result, other than the current portion of
    our long-term and capital leases, we do not know of any trends, events or uncertainties
    that have or are reasonably likely to have a material impact on our short-term or
    long-term liquidity. Our liquidity and ability to fund operations has been the result of
    operating revenues as well as sales of our securities to private investors.
    RECENT ACCOUNTING PRONOUNCEMENTS
    In June 1998, Financial Accounting Standards
    Board (FASB) issued Statement of Financial Accounting Standards No. 133, "Accounting
    for Derivative Instruments and Hedging Activities" (FAS 133). The new standard
    requires companies to record derivatives on the balance sheet as assets or liabilities,
    measured at fair value. Under FAS 133, gains or losses resulting from changes in the
    values of derivatives are to be reported in the statement of operations or as a deferred
    item, depending on the use of the derivatives and whether they qualify for hedge
    accounting. The key criterion for hedge accounting is that the derivative must be highly
    effective in achieving offsetting changes in fair value or cash flows of the hedged items
    during the term of the hedge. The Company is required to adopt FAS 133 in the first
    quarter of 2001. To date, the Company has not engaged in any foreign currency or interest
    hedging activities and does not expect adoption of this new standard to have a significant
    impact on the Company.
    In December 1999, the Securities and Exchange
    Commission issued Staff Accounting Bulletin No. 101 or SAB 101, Revenue Recognition in
    Financial Statements, which provides guidance on the recognition, presentation, and
    disclosure of revenue in financial statements filed with the Commission. SAB 101 outlines
    the basic criteria that must be met to recognize revenue and provides guidance for
    disclosures related to revenue recognition policies. The implementation of SAB 101 did not
    have a material effect on our financial position or results of operations.
    In March 2000, the FASB issued Interpretation No.
    44, "Accounting for Certain Transactions Involving Stock Compensation" an
    interpretation of APB Opinion No. 25 ("FIN 44"). This Interpretation clarifies
    the definition of "employee" for purposes of applying Accounting Practice Board
    Opinion No. 25, Accounting for Stock Issued to Employees (`APB 25'), the criteria for
    determining whether a plan qualifies as a non-compensatory plan, the accounting
    consequence of various modifications to the terms of a previously fixed stock option or
    award, and the accounting for an exchange of stock compensation awards in a business
    combination. This Interpretation is effective July 1, 2000, but certain conclusions in
    this Interpretation cover specific events that occur after either December 15, 1998, or
    January 12, 2000. Management believes that the impact of FIN 44 will not have a material
    effect on the financial position or results of operations of the Company.
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK INTEREST RATE SENSITIVITY
    The primary objective of our investment
    activities is to preserve principal while at the same time maximizing the income we
    receive from our investments without significantly increasing risk. Some of the securities
    that we may invest in may be subject to market risk. This means that a change in
    prevailing interest rates may cause the principal amount of the investment to fluctuate.
    For example, if we hold a security that was issued with a fixed interest rate at the
    then-prevailing rate and the prevailing interest rate later rises, the principal amount of
    our investment will probably decline. To minimize this risk in the future, we intend to
    maintain our portfolio of cash equivalents and short-term investments in a variety of
    securities, including commercial paper, money market funds, government and non-government
    debt securities. In general, money market funds are not subject to market risk because the
    interest paid on such funds fluctuates with the prevailing interest rate. As of June 30,
    2000, all of our cash and cash equivalents were in money market and checking funds.
    OTHER RISK FACTORS
    OUR FAILURE TO MANAGE OUR GROWTH COULD HARM OUR
    ABILITY TO RETAIN AND GROW OUR CUSTOMER BASE AND EXPAND OUR BUSINESS SERVICES.
    We may not be able to install management
    information and control systems in an efficient and timely manner, and our current or
    planned personnel, systems, procedures and controls may not be adequate to support our
    future operations. Failure to manage our future growth effectively could harm our ability
    to retain and grow our customer base and expand our business services  which would
    materially and adversely affect our business, prospects, operating results and financial
    condition.
    BECAUSE OUR CUSTOMER ACQUISITION COSTS ARE HIGH,
    IF WE FAIL TO RETAIN CUSTOMERS LONG ENOUGH TO PAY BACK OUR UP FRONT INVESTMENT, WE MAY NOT
    ACHIEVE AND/OR MAINTAIN PROFITABILITY.
    Our customer acquisition costs comprise a
    significant portion of our operating costs, including advertising, customer care and
    customer service on an on-going basis. Because of our significant up-front investment in
    each customer, if our customers terminate their relationships with us before we recover
    our up front costs, we may fail to generate a profit from such customers. In addition, if
    we fail to reduce our customer acquisition costs, including by increasing the efficiency
    of our customer care organization and reducing the costs associated with the development
    and offering of new services, our operating results will suffer.
    OUR GROWTH DEPENDS ON OUR ABILITY TO HIRE AND
    RETAIN HIGHLY QUALIFIED EMPLOYEES AND EXECUTIVES.
    The loss of the services of any of our management
    team, all but one of whom are at-will employees, or the failure to attract and retain
    additional key employees could harm the continued deployment of our services, the
    marketing of our services and the development of new services, our brand and our strategy.
    Our future growth and ability to sustain this growth depend upon the continued service of
    our officers and other key sales, operations, marketing and support personnel.
    OUR OPERATING RESULTS ARE LIKELY TO FLUCTUATE
    SIGNIFICANTLY FROM PERIOD TO PERIOD WHICH MAY CAUSE OUR STOCK PRICE TO BE EXTREMELY
    VOLATILE. WE MAY ALSO FAIL TO MEET OR EXCEED THE EXPECTATIONS OF INVESTORS, CAUSING OUR
    STOCK PRICE TO DECLINE.
    Our operating results are likely to fluctuate
    significantly in the future on a quarterly and an annual basis due to a number of factors,
    many of which are outside our control. If we experience such fluctuation, we may fail to
    meet or exceed the expectations of  investors, causing our stock price to decline or
    fluctuate from time to time.
    WE MAY BE UNABLE TO RAISE ADDITIONAL CAPITAL IN
    THE FUTURE TO SUPPORT OUR GROWTH, AND EVEN IF WE ARE ABLE TO RAISE ADDITIONAL CAPITAL, IT
    MAY BE ON UNACCEPTABLE TERMS, MAY DILUTE YOUR OWNERSHIP OR MAY RESTRICT OUR FLEXIBILITY IN
    RUNNING OUR BUSINESS.
    We intend to seek additional financing in the
    future to fund the growth of our operations, including funding the significant capital
    expenditures and working capital requirements necessary for us to complete our business
    plan. In order to accomplish this business plan, we must expand our network into
    geographic areas throughout the country, beginning with major markets in Texas, the Gulf
    Coast and elsewhere, establish relationships with local vendors in those areas and launch
    targeted marketing campaigns in those regions. If we are unable to raise additional
    capital or are able to raise capital only on unfavorable terms, we may not be able to
    complete our business plan which presently contemplates further acquisitions of existing
    businesses across the country, develop or enhance our services, take advantage of future
    opportunities or respond to competitive pressures or unanticipated requirements, any or
    all of which could hurt our ability to support our growth.
    THE SCALABILITY, RELIABILITY AND SPEED OF THE
      NETWORKS WE RELY UPON  MAY NOT SATISFY CUSTOMER DEMAND.
    We may not be able to meet our projected customer
    numbers while achieving and maintaining superior performance. This risk will continue to
    exist as long as we expand our services geographically to increasing numbers of customers.
    Our failure to achieve our performance goals, for a number of reasons including the
    reliability and inter-operability of the networks we utilize, would significantly reduce
    customer demand for our services, resulting in decreased revenues and the inability to
    build our business as planned.
    AT PRESENT, WE CANNOT PROVIDE OUR SERVICES UNLESS
    OUR ACCESS PROVIDERS SUPPLY US WITH RELIABLE WIRELESS CONNECTIONS AND COOPERATE WITH US
    FOR THE TIMELY PROVISION OF CONNECTIONS FOR OUR CUSTOMERS.
    We must obtain wireless connections from
    telephone companies and new competitive carriers and have their continuing cooperation for
    the timely provision of wireless connections for our customers in order for us to provide
    our services. Wireless communications service uses the lines provided by local, regional
    and national communications carriers, which are under the control of well-established
    telephone companies and new competitive carriers and requires a special connection from
    our network to the telephone lines. We rely on them to provide us with these connections,
    and if we were unable to use and pay the costs of  these connections, we would not be
    able to provide our customers with our services. An inability to obtain adequate and
    timely access to wireless connections on acceptable terms and conditions from these
    telephone companies and competitive carriers and to gain their cooperation in the timely
    provision of such connections for our customers could harm our business, as could their
    failure to properly maintain the connections we use.
    **PART II. OTHER INFORMATION**
    Item 1. Legal Proceedings
    From
    time to time, we may be involved in litigation that arises in the normal course of our
    business operations. We are presently not a party to any litigation that could have a
    material adverse impact on our operations. During the quarter ended September 30, 2000 we
    settled a legal action between the Company, Information Leasing Corporation and Eagle
    Wireless International related to the equipment used in our Automatic Meter Reading
    business. The settlement involved the issuance of 1,800,000 restricted shares having a
    value of $424,006 at the date of issuance.
    Item 2. Changes in Securities
    During
    the three month period ended September 30, 2000, we issued a total of 8,345,000 shares
    that were not registered under the Act. 6,245,000 shares were issued in sales to private
    investors, 300,000 shares were issued to consultants for services and 1,800,000 shares
    were issued in settlement of debt. We relied upon Section 4(2) under the Act as the basis
    for the exemption from the registration requirements of the Act. See Item 1 of Part II
    above.  Reference is also made to Item 4 below with respect to our intention to call
    a special meeting of shareholders to approve, among other proposals, an increase in our
    number of  authorized shares of common stock. See also Note 3 to the Notes to
    Financial Statements.
    Item 3. Defaults upon Senior
    Securities
    None
    Item 4.
    Submission of Matters to a Vote of Security Holders
    None. However, it is our intention to file a proxy statement on Schedule 14A under the
    Exchange Act with respect to a special meeting of shareholders for among other purposes
    the election of officers, ratification of the appointment of independent auditors and the
    approval of articles of amendment to our articles of incorporation to increase the number
    of our authorized shares of common stock and to authorize the issuance of shares of
    preferred stock. The preliminary proxy statement on Schedule 14A is anticipated to be
    filed with the SEC within ten days of the filing of this Quarterly Report on Form 10-QSB.
    Item 5. Other Information
    None
    Item 6. Exhibits and Reports on
    Form 8-K
    (a) Exhibits:
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|            |                                                                                                                                                                  
|----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. | Document Description                                                                                                                                             
|            |                                                                                                                                                                  
|3(i)        | Articles of Incorporation (filed as Exhibits 3.1, 3.2 and 3.3
    to the Company's Registration Statement on Form 10-SB and incorporated herein by
    reference)
|3(ii)       | Bylaws (filed as Exhibit 3.4 to the Company's Registration
    Statement on Form 10-SB and incorporated herein by reference)                                     
|27          | Financial Data Schedule                                                                                                                                          

|(b) Form 8-K.
    During the quarter ended September
    30, 2000 we did not file any Report on Form 8-K.
    
    SIGNATURES
    In accordance with Section 12 or 15(d) of the Exchange Act, the small business
    issuer has caused this report to be signed on its behalf by the undersigned, thereunto
    duly authorized.
    AFFORDABLE TELECOMMUNICATIONS TECHNOLOGY CORPORATION
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|By: /s/ Steven H. Bethke                                        
|----------------------------------------------------------------
|Steven H. Bethke President, Chief Executive Officer and Director
|Dated: November 20, 2000                                        
|Houston, TX