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

                                   FORM 10-QSB

            |X| Quarterly Report Pursuant to Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934

                     For the quarterly period ended September 30, 2001

            |_| TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               For the transition period from __________ to ___________

                         Commission File Number 0-11038



                  ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
       (Exact name of small business issuer as specified in its charter)

         California                                               33-0644381
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)

              10675 Sorrento Valley Road, Suite 200, San Diego, CA 92121
                    (Address of Principal Executive Offices)

                                 (858) 450-7600
                           (Issuer's telephone number)


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



                       APPLICABLE ONLY TO CORPORATE FILERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 21,261,627 shares of common stock as
of November 11, 2001.

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






<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                                                       Three Months Ended September 30,       Nine Months Ended September 30,
                                                          2001               2000               2001             2000
                                                          ----               ----               ----             ----
REVENUES:                                                                (As restated                        (As restated
                                                                           see Note 1)                         see Note 1)
<S>                                                      <C>                <C>                 <C>             <C>
Communications                                          $ 1,613,115         $ 1,954,262         4,994,938       $ 5,585,170
Video compression                                           707,546             979,993         1,823,891         2,705,545
Satellite transmission technology                         1,452,113             976,177         5,556,591         3,187,645
                                                      --------------    ----------------   ---------------  ----------------
TOTAL REVENUES                                            3,772,774           3,910,432        12,375,420        11,478,360
                                                      --------------    ----------------   ---------------  ----------------

COSTS AND EXPENSES:
Communications                                              626,384             803,351         2,050,620         2,372,676
Video compression                                           181,047             231,847           453,655           648,932
Satellite transmission technology                           904,596             662,154         2,173,148         2,097,831
                                                      --------------    ----------------   ---------------  ----------------
Gross margin                                              2,060,747           2,213,080         7,697,997         6,358,921
Selling, general and administrative                       2,515,591           2,528,955         7,668,698         8,087,907
Research and development                                     42,796             340,132           140,354           853,299
                                                      --------------    ----------------   ---------------  ----------------
LOSS FROM OPERATIONS                                       (497,640)           (656,007)         (111,055)       (2,582,285)
Interest expense - net                                      103,393             200,515           478,343           701,668
                                                      --------------    ----------------   ---------------  ----------------
LOSS BEFORE TAXES                                          (601,033)           (856,522)         (589,398)       (3,283,953)
Income tax benefit                                           91,772             177,777            82,777           774,079
                                                      --------------    ----------------   ---------------  ----------------
LOSS BEFORE CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE                 (509,261)           (678,745)         (506,621)       (2,509,874)
Cumulative effect of a change in accounting principle       -                  -                  -                (333,275)

                                                      --------------    ----------------   ---------------  ----------------
NET LOSS                                                 $ (509,261)         $ (678,745)       $ (506,621)     $ (2,843,149)
                                                      ==============    ================   ===============  ================

BASIC AND DILUTED EARNINGS PER SHARE:
Loss before cumulative effect of a change in
accounting principle                                        $ (0.02)            $ (0.03)          $ (0.02)          $ (0.12)
Cumulative effect on prior years of a change in
accounting principle                                        -                  -                  -                 $ (0.02)

                                                      --------------    ----------------   ---------------  ----------------
LOSS PER COMMON SHARE                                       $ (0.02)            $ (0.03)          $ (0.02)          $ (0.14)
                                                      ==============    ================   ===============  ================


WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - basic and diluted                        21,198,637          21,085,050        21,135,126        20,926,151


<FN>


See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS



                                                                 September 30,           December 31,
                                                                -----------------     -----------------
ASSETS                                                               2001                  2000
------                                                               ----                  ----
                                                                  (Unaudited)
CURRENT ASSETS:
<S>                                                                 <C>                 <C>

  Cash                                                                  $211,243              $2,089
  Restricted cash                                                       -                     28,225
  Accounts receivable - net                                            3,129,622           3,263,327
  Contract receivable                                                  2,000,000           -
  Inventories - net                                                    1,480,600           1,361,075
  Prepaid expenses and other assets                                    1,886,165           1,328,931
                                                                -----------------     ---------------
        Total current assets                                           8,707,630           5,983,647

RESTRICTED CASH                                                          230,874             123,874
PROPERTY - net                                                           497,311             574,912
CAPITALIZED SOFTWARE - net                                             1,242,141             345,654
GOODWILL - net                                                         7,975,679           8,663,958
PATENT - net                                                          14,365,385          15,209,135
                                                                -----------------     ---------------

                                                                     $33,019,020         $30,901,180
                                                                -----------------     ---------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                    $2,574,936          $1,563,886
  Accrued expenses                                                     2,086,226           1,075,149
  Deferred revenue                                                     1,300,811             311,461
  Current portion of notes payable                                     3,311,707           5,571,388
                                                                -----------------     ---------------
        Total current liabilities                                      9,273,680           8,521,884

DEFERRED REVENUE                                                       2,166,671           -
NOTES PAYABLE                                                          3,096,325           3,115,831
DEFERRED TAX LIABILITY                                                 6,035,526           6,373,026
                                                                -----------------     ---------------
        Total liabilities                                             20,831,798          18,010,741

STOCKHOLDERS' EQUITY:
Convertible preferred series B stock, no par value: 1,000,000
   shares authorized, 376.25 shares issued, liquidation
   preference $10,000 per share                                        3,762,500           3,762,500
Common stock, no par value; 100,000,000 shares authorized,
   21,261,627 and 21,090,922 shares issued and outstanding            22,283,750          22,220,750
   at 2001 and 2000, respectively
Accumulated deficit                                                  (13,599,432)        (13,092,811)
                                                                -----------------     ---------------
        Total stockholders' equity                                    12,446,818          12,890,439
                                                                -----------------     ---------------

                                                                     $33,019,020         $30,901,180
                                                                -----------------     ---------------
<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                                  Nine months ended September 30,
                                                                     2001                     2000
                                                                     ----                     ----
<S>                                                                  <C>                      <C>
                                                                                            (As restated
Operating activities:                                                                        see Note 1)
Net loss                                                              $ (506,621)            $ (2,843,149)
  Adjustments to reconcile net loss
   to net cash provided by (used in) operating activities:
    Loss on disposal of property                                           7,531                -
    Deferred tax benefit                                                (337,500)                (378,851)
    Depreciation and amortization                                      1,802,064                2,131,441
    Issuance of common stock and stock warrants and options               53,000                  139,125
Changes in assets and liabilities:
    Restricted cash                                                      (78,775)               -
    Accounts receivable, net                                             133,705                1,132,254
    Inventories, net                                                    (119,525)                (317,656)
    Prepaid expenses and other assets                                   (557,234)                (128,592)
    Deferred revenue                                                   1,156,021                -
    Accounts payable and accrued expenses                              2,022,127               (1,154,490)
                                                               ------------------       ------------------
Net cash provided by (used in) operating
activities                                                             3,574,793               (1,419,918)
                                                               ------------------       ------------------

Investing activities:
   Capitalized software                                                 (948,184)               -
   Capital expenditures                                                 (148,268)                (138,849)

                                                               ------------------       ------------------
Net cash used in investing activities                                 (1,096,452)                (138,849)
                                                               ------------------       ------------------

Financing activities:
  Proceeds from line of credit                                           450,000                1,705,000
  Payments on line of credit                                            (150,000)                (755,000)
  Issuance of series B preferred stock                                 -                          762,500
  Issuance of common shares, net                                          10,000                  425,897
  Cash received from stock options exercised                           -                          154,972
  Principal payments on notes payable                                 (2,579,187)              (1,474,142)

                                                               ------------------       ------------------
Net cash (used in) provided by financing activities                   (2,269,187)                 819,227
                                                               ------------------       ------------------

Net increase (decrease) in cash                                          209,154                 (739,540)

Cash at beginning of period                                                2,089                  857,634
                                                               ------------------       ------------------

Cash at end of period                                                  $ 211,243                $ 118,094
                                                               ------------------       ------------------

SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:

  Conversion of Series A Preferred Stock into Series B                        -               $ 3,000,000
  Increase in account receivables due to deferred revenue             $2,000,000                    -

<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>











                  ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The  accompanying  consolidated  financial  statements  as of the three and nine
months ended September 30, 2001 and 2000 are unaudited and have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim  financial  information  and with the  instructions  to Form
10-QSB.  Accordingly,  they do not include all of the  information and footnotes
required by  accounting  principles  generally  accepted in the United States of
America for complete  financial  statements.  In the opinion of management,  all
adjustments  considered  necessary for a fair  presentation  have been included.
Operating results for the three and nine months ended September 30, 2001 are not
necessarily indicative of the results that may be expected for any other interim
period or for the year ending December 31, 2001.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101, Revenue Recognition in Financial  Statements.  SAB No.
101 provides guidance in applying  accounting  principles  generally accepted in
the United  States of America to revenue  recognition  in financial  statements,
including  the  recognition  of  non-refundable  up-front  payments  received in
conjunction  with  contractual   arrangements  that  have  multiple  performance
elements and require continuing involvement. SAB No. 101 requires that such fees
be recognized as products are delivered or services are performed that represent
the culmination of a separate earnings process.

Prior  to the  adoption  of  SAB  No.  101,  the  Company  recognized  sales  of
communication  equipment  at the time the  equipment  was shipped to  customers.
However,  under the  provisions of SAB No. 101, the delivery of equipment by the
Company is not  considered  the  culmination  of an earnings  process  until the
related  messaging  service is  provided by the  Company to its  customers.  The
Company  implemented  SAB No. 101 in the  fourth  quarter of 2000 as a change in
accounting  principle,   retroactive  to  January  1,  2000,  by  deferring  and
recognizing  these up-front  payments over the estimated period of the messaging
services.  The cumulative effect of this change through December 31, 1999, which
was  recorded  in 2000,  of  changing  the  method of  revenue  recognition  was
$(333,275)  or  $(0.01)  per  share.  However,  the  effect  on the  results  of
operations  for the three and nine months ended  September 30, 2000,  which have
been restated in accordance with SAB 101, was an increase in revenue of $198,413
and  $692,477  respectively,  an  increase  in cost of goods sold by $93,388 and
$336,316,  and a  decrease  of  loss  before  cumulative  effect  of  change  in
accounting  principle of $69,320 and $235,069 compared to the results previously
reported for the three and nine months ended September 30, 2000, respectively.

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
No. 141,  Business  Combinations,  and  Statement  No. 142,  Goodwill  and Other
Intangible Assets. Statement 141 requires that the purchase method of accounting
be used for all business  combinations  initiated after June 30, 2001 as well as
all  purchase  method  business  combinations  completed  after  June 30,  2001.
Statement 141 also specifies  criteria  intangible assets acquired in a purchase
method business  combination  must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce may
not be accounted  for  separately.  Statement 142 will require that goodwill and
intangible  assets with  indefinite  useful  lives no longer be  amortized,  but
instead  tested  for  impairment  at  least  annually  in  accordance  with  the
provisions of Statement  142.  Statement  142 will also require that  intangible
assets with definite useful lives be amortized over their  respective  estimated
useful lives to their estimated  residual values, and reviewed for impairment in
accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of.

The Company is required to adopt the  provisions of Statement  141  immediately,
except with regard to business combinations  initiated prior to July 1, 2001 and
Statement 142 effective January 1, 2002. Goodwill and intangible assets acquired
in  business  combinations  completed  before  July 1, 2001 will  continue to be
amortized prior to the adoption of Statement 142.

Statement  141 will require upon  adoption of  Statement  142,  that the Company
evaluate its existing  intangible  assets and goodwill  that were  acquired in a
prior purchase business combination, and to make any necessary reclassifications
in order to conform with the new criteria in Statement 141 for recognition apart
from  goodwill.  Upon adoption of Statement 142, the Company will be required to
reassess the useful lives and residual values of all intangible  assets acquired
in purchase business  combinations,  and make any necessary  amortization period
adjustments  by  the  end  of the  first  interim  period  after  adoption.  Any
impairment  loss will be measured as of the date of adoption and  recognized  as
the cumulative  effect of a change in accounting  principle in the first interim
period.

In connection with the transitional goodwill impairment evaluation, Statement
142 will  require the Company to perform an  assessment  of whether  there is an
indication  that goodwill is impaired as of the date of adoption.  To accomplish
this the Company must  identify its  reporting  units and determine the carrying
value of each reporting unit by assigning the assets and liabilities,  including
the existing goodwill and intangible  assets, to those reporting units as of the
date of  adoption.  The Company will then have up to six months from the date of
adoption to determine  the fair value of each  reporting  unit and compare it to
the reporting unit's carrying amount.  To the extent a reporting unit's carrying
amount exceeds its fair value,  an indication  exists that the reporting  unit's
goodwill  may be impaired  and the Company  must  perform the second step of the
transitional  impairment  test. In the second step, the Company must compare the
implied fair value of the reporting  unit's  goodwill,  determined by allocating
the  reporting   unit's  fair  value  to  all  of  it  assets   (recognized  and
unrecognized) and liabilities in a manner similar to a purchase price allocation
in accordance with Statement 141, to its carrying amount, both of which would be
measured  as of the  date  of  adoption.  This  second  step is  required  to be
completed  as  soon as  possible,  but no  later  than  the  end of the  year of
adoption. Any transitional  impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's statement of
earnings.

As of the date of adoption,  the Company expects to have unamortized goodwill in
the amount of approximately $7.7 million,  unamortized  identifiable  intangible
assets in the amount of  approximately  $14 million which will be subject to the
transition provisions of Statements 141 and 142. Amortization expense related to
goodwill was  $1,359,522  and $688,279 for the year ended  December 31, 2000 and
the nine months ended September 30, 2001, respectively. Because of the extensive
effort  needed  to  comply  with  adopting  Statements  141 and  142,  it is not
practicable to reasonably  estimate the impact of adopting  these  Statements on
the Company's financial statements at the date of this report, including whether
any  transitional  impairment  losses will be required to be  recognized  as the
cumulative effect of a change in accounting principle.

In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets," which addresses financial accounting and reporting for the impairment
or disposal of long-lived assets.  While SFAS No. 144 supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be disposed Of," it retains many of the fundamental provisions of SFAS No. 121,
including the recognition and measurement of the impairment of long-lived assets
to be held and used, and the measurement of long-lived assets to be disposed of
by sale.  SFAS No. 144 also supersedes the accounting and reporting provisions
of Accounting Principles Board Opinion No. 30 (APB No. 30), "Reporting the
Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions," for the disposal of a segment of a business.  However, it retains
the requirement in APB No. 30 to report separately discontinued operations and
extends that reporting to a component of an entity that either has been disposed
of (by sale, abandonment, or in a distribution to owners) or is classified as
held for sale.  SFAS No. 144 is effective for fiscal years beginning after
December 15, 2001.  At this time, the Company does not anticipate that the
adoption of SFAS No.144 will have a material effect on the Company's
consolidated financial statements.

NOTE 3 - BALANCE SHEET DETAILS

                                              9/30/2001       12/31/2000

                                           ----------------  ----------------
Accounts receivable                           $2,124,628         $3,185,722
Accounts receivable - unbilled                 1,087,515            135,225
                                           ----------------  ----------------
                                               3,212,143         $3,320,947
Less allowance for doubtful
accounts                                         (82,521)           (57,620)
                                           ----------------  ----------------
                                              $3,129,622         $3,263,327
                                           ----------------  ----------------
Inventory:
Raw materials                                   $827,862           $693,568
Work in progress                                 243,708            204,790
Finished goods                                   449,030            502,717
                                           ----------------  ----------------
                                              $1,520,600         $1,401,075
Less allowance for obsolete inventory            (40,000)           (40,000)
                                           ----------------  ----------------
                                              $1,480,600         $1,361,075
                                           ----------------  ----------------
Property:
Computers and equipment                       $1,520,121         $1,428,178
Furniture and fixtures                           219,953            268,310
Leasehold improvements                            83,573             88,832
                                           ----------------  ----------------
                                               1,823,647          1,785,320
Less accumulated depreciation                 (1,326,336)        (1,210,408)
                                           ---------------   ----------------
                                                $497,311           $574,912
                                          ----------------  ----------------

Capitalized software                          $1,293,838           $345,654
Less accumulated amortization                    (51,697)                 -
                                          ----------------  ----------------
                                              $1,242,141           $345,654
                                          ----------------  ----------------

Goodwill                                     $11,481,272        $11,481,272
 Less accumulated amortization                (3,505,593)        (2,817,314)
                                          ----------------  ----------------
                                              $7,975,679         $8,663,958
                                          ----------------  ----------------

 Patent                                       $18,000,000        $18,000,000
 Less accumulated amortization                 (3,634,615)        (2,790,865)
                                          ----------------  ----------------
                                              $14,365,385        $15,209,135
                                          ----------------  ----------------
 Accrued expenses:
 Taxes payable                                   $796,586           $269,586
 Other accrued expenses                         1,289,640            805,563
                                          ----------------  ----------------
                                               $2,086,226         $1,075,149
                                          ----------------  ----------------


NOTE 4 - SIGNIFICANT CONTRACTS

During the second quarter of 2001, the Company received $1 million in connection
with the  termination  of a license  agreement  with a  customer  of  Innovative
Communications  Technologies,  Inc. (ICTI). As this fee represented, in part, an
agreed-upon amount in lieu of future guaranteed  royalty payments  contractually
due under the  original  agreement,  the Company has  recorded the $1 million as
satellite transmission technology revenue in the second quarter.

On June 22, 2001,  ICTI entered into a new exclusive  license  agreement for the
use of technology. The initial term of the exclusive license is through November
2004.  Upon  execution  of the  agreement  in the second  quarter,  the  Company
received  a $1.5  million  cash  payment,  which  represents  the  first of four
guaranteed  royalty  payments  totaling  $3.5  million to be  recorded  over the
license term. The Company will recognize the guaranteed payments  systematically
over the license  period.  Revenue of $83,333 and $250,000 was recognized in the
second and third quarters respectively, reducing the balance of deferred revenue
related to this  license  agreement  to  $3,166,667.  Included  in the long term
contract receivable on the consolidated balance sheet is $2 million representing
the remaining  guaranteed  royalty payments due under the license  agreement. In
October  2001,  the Company  signed an agreement  that  satisfied  the remaining
guaranteed  payments due under this license  agreement.  See Note 7 - Subsequent
Event.

NOTE 5 - NOTES PAYABLE

On August 13,  2001,  the Company  signed a Change in Terms  Agreement  with its
bank,  increasing  the line of credit to $2  million  from  $1.750  million  and
decreasing  the interest rate to equal the lender's  prime plus one and one half
percent from the  lender's  prime plus two  percent.  At September  30, 2001 the
balance on the line of credit,  expiring December 31, 2001, was $2 million.  The
Company  is  required  to  meet  certain  restrictive  financial  and  operating
covenants under the line of credit.  The Company was in compliance with the debt
covenants  on  September  30,  2001.  Pursuant  to the  Agreement,  the bank has
prohibited  principal  payments  totaling  approximately   $1,700,000  on  notes
payable,  which were due over twelve months  through  October 1, 2001 to the two
former owners of Enerdyne  Technologies,  Inc. One former owner is a director of
the Company.

NOTE 6 - GEOGRAPHIC AND BUSINESS SEGMENT INFORMATION

The Company operates three reportable business segments:  communications,  video
compression  and satellite  transmission  technology.  The Company's  reportable
segments  are  strategic  business  units  that  offer  different  products  and
services.  They are managed separately based on fundamental differences in their
operations.

The  communications  segment  consists of the  operations of Boatracs,  Boatracs
Gulfport   ("Gulfport"),   ARCOMS  Europe   ("Europe")  and  OceanTrac   Limited
("OceanTrac").  The communications  segment has exclusive distribution rights in
the  United  States  for  marine  application  of  the  OmniTRACS(R)  system  of
satellite-based  communication  and tracking  systems  manufactured  by QUALCOMM
Incorporated ("QUALCOMM"). In addition, the Company's wholly owned subsidiaries,
Europe  and  OceanTrac,  have  agreements  with  QUALCOMM's  authorized  service
providers in Europe and Canada for marine  distribution of OmniTRACS(R) in parts
of Europe and  Canada.  Gulfport  is a provider  of  software  applications  and
service  solutions  to  the  commercial  work  boat  and  petroleum  industries,
including customers of Boatracs.

The  video   compression   segment   consists  of  the  operations  of  Enerdyne
Technologies,  Inc.  ("Enerdyne")  which  the  Company  acquired  in July  1998.
Enerdyne is a provider of versatile,  high performance digital video compression
products and multiplexing equipment to government and commercial markets.

The satellite  transmission  technology  segment  consists of the  operations of
ICTI.  ICTI  is  engaged  in  designing  and  implementing  bandwidth  efficient
multimedia  satellite  networks and develops  customized  software  solutions to
manage and allocate available satellite  power/bandwidth resources to optimize a
satellite system's lifecycle costs.

Corporate overhead expenses have been allocated based on revenue percentages of
each segment to total revenues.

Information by business segment for the three months ended September 30, 2001 is
set forth below.

                    Commun-       Video        Satellite
                    ications    Compression    Technology       Consolidated
                  -----------   ------------  -------------     ------------
Revenues           $1,613,115      $707,546     $1,452,113        $3,772,774
Income (loss)
from operations      $304,211     $(570,052)     $(231,799)        $(497,640)
Interest expense,
net                   $10,915       $82,767         $9,711          $103,393
Depreciation and
amortization          $53,375      $396,282       $152,933          $602,590

Information by business segment for the nine months ended September 30, 2001 is
set forth below.

                     Commun-         Video        Satellite
                     ications     Compression    Technology     Consolidated
                    -----------  -------------  ------------  --------------
Revenues          $4,994,938       $1,823,891     $5,556,591    $12,375,420
Income (loss)
from operations     $868,973      $(1,787,919)      $807,891      $(111,055)

Interest expense,
net                  $42,033         $389,249        $47,061       $478,343

Depreciation and
amortization        $161,242       $1,172,402       $468,420     $1,802,064

Total assets      $2,547,468      $20,927,949     $9,543,603    $33,019,020



Information by business segment for the three months ended September 30, 2000 is
set forth below. The segment information has been restated from the amounts
previously reported (see Note 1).

                    Commun-         Video       Satellite
                   ications      Compression    Technology       Consolidated
                  -------------- -----------   -----------     --------------
Revenues           $1,954,262        $979,993     $976,177        $3,910,432
Income (loss)
from operations      $382,145       $(595,049)   $(443,103)        $(656,007)
Interest expense,
net                   $16,146        $176,156       $8,213          $200,515
Depreciation and
amortization          $72,375        $491,366     $148,866          $712,607

Information by business segment for the nine months ended September 30, 2000 is
set forth below. The segment information has been restated from the amounts
previously reported (see Note 1).

                     Commun-       Video         Satellite
                    ications    Compression      Technology     Consolidated
                  -----------  -------------   -------------   --------------
Revenues          $5,585,170    $2,705,545       $3,187,645     $11,478,360
Income (loss)
from operations     $713,463   $(2,185,458)     $(1,110,290)    $(2,582,285)
Interest expense,
net                  $87,981      $563,076          $50,611        $701,668
Depreciation and
amortization        $215,597    $1,469,687         $446,157      $2,131,441

Total assets      $3,256,851   $27,331,158       $6,204,235     $36,792,244


The Company has two foreign subsidiaries: Europe and OceanTrac. Europe is
located in the Netherlands and provides communication services to the European
market. OceanTrac provides communication services in Eastern Canada. In
addition, Enerdyne and ICTI have foreign sales. The following tables present
revenues and long lived assets for each of the geographical areas in which the
Company operates:

                     Three months ended 9/30/01      Three months ended 9/30/00
                         --------------------           --------------------
                                       Long                               Long
                    Revenues       Lived Assets       Revenues      Lived Assets


United States       $2,301,909    $24,309,024        $3,251,738      $31,046,285
International        1,470,865          2,366           658,694           32,941
                  ------------------------------  --------------   -------------
Total               $3,772,774    $24,311,390        $3,910,432      $31,079,226
                  ------------------------------  --------------   -------------

                 Nine months ended        Nine months ended
                      9/30/01                  9/30/00
                      -------                  -------
                     Revenues                  Revenues
United States         $6,692,728                $9,170,607
International          5,682,692                 2,307,753
                 -------------------        ------------------
Total                $12,375,420               $11,478,360
                  ------------------        ------------------

NOTE 7 - SUBSEQUENT EVENTS

In October, 2001 the Company received approximately $1.4 million,  satisfying an
obligation for it to be paid future  guaranteed  royalty payments  totaling $2.0
million.  These future  guaranteed  royalty  payments had been due to be paid at
specified dates in 2003 and 2004. See Note 4 - Significant Contracts. The amount
received of $1.4  million may be applied by the payer  against any  royalties or
other fees owed to the Company up to the  original  amount of future  guaranteed
royalty payments of $2 million,  adjusted for interest.

On October 31, 2001,  the Company  announced  that it has entered into a letter
of  intent  regarding  the  potential  sale of the assets of its Boatracs
business  unit  to  Qualcomm  Wireless Business Solutions, a division of
Qualcomm Incorporated.

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

Overview

The Company has three business segments:
1.  Boatracs, the communications segment,
2. Enerdyne  Technologies,  Inc.  ("ENERDYNE"),  the video compression segment,
a wholly owned subsidiary, and
3. Innovative  Communications  Technologies, Inc.("ICTI"),the satellite
technology segment, a wholly owned subsidiary.

Statements  within  this  10-QSB  which  are  not  historical  facts,  including
statements  about  strategies and  expectations  for new and existing  products,
technologies,  and opportunities,  are  forward-looking  statements that involve
risks and  uncertainties.  The  Company  wishes to  caution  readers to the risk
factors inherent to the business  including,  but not limited to, the continuing
reliance  upon  QUALCOMM,  one of the major  suppliers of equipment  sold by the
Boatracs business segment,  reliance upon QUALCOMM's Network Management Facility
through which the Boatracs' business segment message transmissions are formatted
and processed,  the  development of more advanced  technology by competitors and
continuing  technological  innovation by the Company.  These and other risks are
more fully described in the Company's  Annual Report on Form 10-KSB for the year
ended December 31, 2000.

For the three months ended September 30, 2001 and 2000

Total  revenues for the quarter ended  September 30, 2001,  were  $3,772,774,  a
decrease of $137,658 or 4%  compared  to total  revenues of  $3,910,432  for the
quarter ended September 30, 2000.

Communications  revenues,  which  consist of revenues  from the sale of Boatracs
systems, software and data transmission and messaging, were $1,613,115 or 43% of
total revenues for the quarter ended  September 30, 2001, a decrease of $341,147
or 17% compared to  $1,954,262  or 50% of total  revenues for the quarter  ended
September 30, 2000.  Revenues for the quarter ended September 30, 2000 have been
restated  for SAB No. 101 (see Note 1). The decrease in  communication  revenues
was  caused by lower  system and  software  sales and a small  decrease  in data
transmission and messaging revenues.

Video  compression  revenues  were  $707,546  or 19% of total  revenues  for the
quarter  ended  September  30, 2001, a decrease of $272,447 or 28%,  compared to
$979,993 or 25% of total  revenues  in the prior  comparable  quarter.  This was
caused by delays in the development of product software applications.

Revenues from satellite transmission  technology were $1,452,113 or 38% of total
revenues  for the  quarter  ended  September  30,  2001  compared to revenues of
$976,177 or 25% of total  revenues in the third quarter of 2000. The increase in
revenues  of  $475,936  or  49%  is  due  primarily  to an  increase  in  system
integration projects during the quarter and increased royalty payments.

Communications  expenses were $626,384 or 39% of communications revenues for the
quarter  ended  September  30, 2001, a decrease of $176,967 or 22%,  compared to
$803,351  which  represented  41% of  communications  revenue in the  comparable
quarter of the prior year. Gross margin for  communications  increased 2% in the
quarter ended September 30, 2001 to 61% from 59% in the same period of the prior
year due to an increase in the margins on the sale of Boatracs  systems,  offset
by a decline in the margin on software revenues.

Video compression expense was $181,047 or 26% of video compression  revenues for
the quarter  ended  September 30, 2001, a decrease of $50,800 or 22% compared to
$231,847  or 24% of video  compression  revenues in the same period of the prior
year.  Gross margin  declined 2% to 74% in the third  quarter  compared to a 76%
margin in the same quarter of the prior year.

Satellite  transmission  technology  expenses  were $904,596 or 62% of satellite
transmission  technology  revenues for the quarter ended  September 30, 2001, an
increase  of  $242,442  or  37%,  compared  to  $662,154  or  68%  of  satellite
transmission  technology revenues in the prior year third quarter.  The increase
in gross  margin of 6% to 38% from 32% in the prior year  relates  primarily  to
revenues  from royalty  payments  recorded in the third quarter of 2001 which do
not have associated costs of good sold.

Selling,  general and  administrative  expenses were  $2,515,591 or 67% of total
revenues for the quarter ended  September 30, 2001, a decrease of $13,364 or 1%,
compared to  $2,528,955  or 65% of total  revenues in the prior year  comparable
quarter.  Salary,  rent and  office  supplies  increased  in the  third  quarter
compared  to  the  prior  third  quarter  offset  by  decreases  in  accounting,
insurance, legal and marketing expenses.  Amortization expense decreased $86,304
to $534,826  due to an  impairment  charge to goodwill in the fourth  quarter of
2000  related  to  the  Enerdyne  acquisition,  decreasing  future  amortization
expense.

Research and  development  expenses were $42,796 or 1% of total revenues for the
quarter  ended  September  30,  2001,  a decrease of $297,336 or 87% compared to
research  and  development  expenses of $340,132 or 9% of total  revenues in the
prior  comparable  quarter.  The decrease  relates to research  and  development
projects having reached technological  feasibility and the subsequent costs have
been capitalized in accordance with SFAS 86.

Interest  expense,  net was $103,393 for the third  quarter of 2001 and $200,515
for the third quarter of 2000, a decrease of $97,122 or 48% due primarily to the
reduction of principal on the Company's term note with a bank.

The income tax benefit for the quarter ended September 30, 2001 was $91,772
compared to an income tax benefit of $177,777 the prior comparable quarter.

For the nine months ended September 30, 2001 and 2000

Total revenues for the nine months ended September 30, 2001,  were  $12,375,420,
an increase of $897,060 or 8% compared to total revenues of $11,478,360  for the
nine months ended September 30, 2000.

Communications  revenues,  which  consist of revenues  from the sale of Boatracs
systems, software and data transmission and messaging, were $4,994,938 or 40% of
total  revenues  for the nine months  ended  September  30,  2001, a decrease of
$590,232 or 11%  compared to  $5,585,170  or 49% of total  revenues for the nine
months ended  September 30, 2000.  Revenues for the nine months ended  September
30,  2000 have been  restated  for SAB No.  101 (see Note 1).  The  decrease  in
communication  revenues was caused by lower system and software sales  partially
offset by an increase in data transmission and messaging revenues.

Video compression revenues were $1,823,891 or 15% of total revenues for the nine
months ended  September  30, 2001, a decrease of $881,654,  or 33%,  compared to
$2,705,545 or 23% of total  revenues in the prior  comparable  period.  This was
caused by delays in the development of product software applications.

Revenues from satellite transmission  technology were $5,556,591 or 45% of total
revenues for the nine months ended  September  30, 2001  compared to revenues of
$3,187,645 or 28% of total revenues in the  comparable  nine months of 2000. The
increase in revenues  of  $2,368,946  or 74% is due  primarily  to license  fees
recorded in the first and second quarters of 2001 totaling $2.2 million.

Communications  expenses were $2,050,620 or 41% of  communications  revenues for
the nine  months  ended  September  30,  2001,  a decrease  of  $322,056 or 14%,
compared to $2,372,676 which  represented 42% of  communications  revenue in the
comparable  nine  months of the prior  year.  Gross  margin  for  communications
increased  one percent to 59% in the nine months ended  September  30, 2001 from
58% in the comparable nine months of the prior year,  reflecting a higher margin
on Boatracs system sales,  offset by a reduced margin on software revenue.  Data
transmission and messaging revenues remained constant.

Video compression expense was $453,655 or 25% of video compression revenues for
the nine months ended September 30, 2001, a decrease of $195,277 or 30% compared
to $648,932 or 24% of video compression revenues in the same period of the prior
year. Gross margin decreased by one percent to 75%.

Satellite  transmission  technology expenses were $2,173,148 or 39% of satellite
transmission  technology  revenues for the nine months ended September 30, 2001,
an  increase  of $75,317  or 4%,  compared  to  $2,097,831  or 66% of  satellite
transmission  technology revenues in the prior year nine months. The increase in
gross margin of 27% to 61% from 34% in the prior year  relates to revenues  from
license fees in the first and second quarter of 2001 that do not have associated
costs.

Selling,  general and  administrative  expenses were  $7,668,698 or 62% of total
revenues for the nine months ended September 30, 2001, a decrease of $419,209 or
5%,  compared to  $8,087,907  or 70% of total  revenues in the prior  comparable
period.  Salary,  travel and  marketing  expenses  declined  for the nine months
offset by  increases  in  commission  and rent  expenses.  Amortization  expense
decreased  $279,665 to $1,583,726 due to an impairment charge to goodwill in the
fourth quarter of 2000 related to the Enerdyne  acquisition,  decreasing  future
amortization expense.

Research and development  expenses were $140,354 or 1% of total revenues for the
nine months ended  September 30, 2001, a decrease of $712,945 or 84% compared to
research  and  development  expenses of $853,299 or 7% of total  revenues in the
prior  comparable nine months.  The decrease relates to research and development
projects having reached technological  feasibility and the subsequent costs have
been capitalized.

Interest  expense,  net was  $478,343  for the  first  nine  months  of 2001 and
$701,668  for the first nine  months of 2000,  a decrease of $223,325 or 32% due
primarily to the reduction of principal on the Company's term note with a bank.

The income tax benefit for the nine months ended September 30, 2001 was $82,777
compared to income tax benefit of $774,079 in the prior comparable period.

Liquidity and Capital Resources

The Company's  cash balance at September  30, 2001 was $211,243,  an increase of
$209,154  compared to the December 31, 2000 cash balance of $2,089. At September
30, 2001, working capital was negative $566,050,  an increase of $1,972,187 from
the  negative  working  capital of  $2,538,237  at December  31,  2000.  Cash of
$3,574,793 was provided by operating activities,  cash of $1,096,452 was used in
investing  activities and cash of $2,269,187 was used in financing activities in
the first nine months of 2001.  During the nine months ended September 30, 2001,
the Company  received  total  payments of $2.5 million  related to two different
license  agreements.  Of this  payment,  $1.8  million  was  used to pay off the
Company's bank term note.

On August 13, 2001,  the Company signed a Change in Terms  Agreement  increasing
the line of credit to $2 million from $1.75 million and  decreasing the interest
rate to equal the lender's prime plus one and one half percent from the lender's
prime plus two percent. At September 30, 2001,  $2,000,000 was drawn on the line
of credit  expiring  December 31, 2001.  The Company is required to meet certain
restrictive  financial and operating  covenants under the bank debt. The Company
was in compliance with the debt covenants on September 30, 2001.

The Company anticipates making capital  expenditures of at least $100,000 in the
fourth  quarter,  2001,  excluding  assets  that  may be  acquired  in  business
combinations.  To date,  the Company has  financed  its  working  capital  needs
through private loans, bank debt, the issuance of common and preferred stock and
cash  generated  from  operations.  Any expansion of the Company's  business may
require a commitment of substantial  funds.  To the extent that the net proceeds
of private financing  activities and internally generated funds are insufficient
to fund  the  Company's  operating  requirements,  it may be  necessary  for the
Company to seek additional funding, either through collaborative arrangements or
through public or private  financing.  There can be no assurance that additional
financing will be available on acceptable terms or at all. When additional funds
are raised by issuing equity securities,  dilution to the existing  shareholders
result.  If  adequate  funds are not  available  in the  future,  the  Company's
business would be adversely affected.

The report of independent  auditors on the Company's December 31, 2000 financial
statements  includes an explanatory  paragraph  indicating  there is substantial
doubt about the Company's  ability to continue as a going  concern.  The Company
believes that going forward, it will be able to continue as a going concern. The
Company  reported an increase in revenues and earnings for the nine months ended
September  30, 2001 and paid off the term debt with its bank.  In addition,  the
Company  received total payments of $2.5 million in the second quarter  relating
to two different  license  agreements.  This payment  resulted in an increase to
cash  provided by operating  activities.  In August,  the Company  negotiated an
increase in its line of credit to $2,000,000  and a reduction in the interest on
the line of credit to  lender's  prime rate plus one and one half  percent.  See
Note 7 - Subsequent Event

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not aware of any current or pending legal proceedings to which it
is a party.

ITEM 2. CHANGES IN SECURITIES

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

None




<PAGE>







                                   SIGNATURES


In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the Undersigned,
thereunto duly authorized.



                                   ADVANCED REMOTE COMMUNICATION SOLUTIONS, Inc.
                                   Registrant


November 14,  2001                 /s/ MICHAEL L. SILVERMAN
------------------                 ------------------------
Date                               MICHAEL SILVERMAN
                                   PRESIDENT, CHIEF EXECUTIVE OFFICER CHAIRMAN
                                   OF THE BOARD



November 14, 2001                  /s/  DEAN B. KERNUS
-----------------                  --------------------------------------
Date                               CHIEF FINANCIAL OFFICER