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

                               Amendment No. 2 to
                                  FORM 10-QSB/A

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

                  For the quarterly period ended March 31, 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: 21,090,922 shares of common stock as
of May 11, 2001.

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





PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

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

                                                    Three Months Ended March 31,
                                                      2001                    2000
REVENUES:                                         (As restated            (As restated
                                                  see Note 1 )            see Note 1)

<S>                                                  <C>                        <C>

Communications                                        $ 1,734,106            $ 1,840,421
Video compression                                         711,555                715,745
Satellite transmission technology                         651,233              1,020,778
                                                ------------------      -----------------
TOTAL REVENUES                                          3,096,894              3,576,944
                                                ------------------      -----------------

COSTS AND EXPENSES:
Communications                                            726,488                782,289
Video compression                                         157,301                155,567
Satellite transmission technology                         411,309                636,248
                                                ------------------      -----------------
Gross Margin                                            1,801,796              2,002,840
Selling, general and administrative                     2,612,680              2,701,185
Research and development                                  187,390                253,285
                                                ------------------      -----------------
LOSS FROM OPERATIONS                                     (998,274)              (951,630)
Interest expense - net                                   (184,838)              (296,008)
                                                ------------------      -----------------
LOSS BEFORE TAXES                                      (1,183,112)            (1,247,638)
Income tax benefit                                        259,575               275,728
                                                ------------------      -----------------
LOSS BEFORE CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE               (923,537)              (971,910)
Cumulative effect on prior years
(to December 31, 1999)of changing
method of revenue recognition - net                                             (333,275)

                                                ------------------      -----------------
NET LOSS                                               $ (923,537)          $ (1,305,185)
                                                ==================      =================


BASIC AND DILUTED EARNINGS PER SHARE:
Loss before cumulative effect of a
change in accounting principle                          $ (0.04)               $ (0.05)
Cumulative effect on prior years of
changing method of revenue recognition
 - net                                                                          $ (0.01)

                                               ------------------      -----------------
LOSS PER COMMON SHARE                                   $ (0.04)               $ (0.06)
                                               ==================      =================



WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING                                          21,090,922             20,782,388
Dilutive effect of:
Employee stock options                                         -                      -
Warrants                                                       -                      -
Weighted average of common
shares outstanding,
  assuming dilution                                    21,090,922             20,782,388


<FN>

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

<PAGE>

<TABLE>
<CAPTION>


ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS



                                                     March 31,              December 31,
                                                  -----------------       ------------------
ASSETS                                                 2001                     2000
                                                    (Unaudited)
CURRENT ASSETS:                                      Restated (See
                                                     Note 1)
<S>                                                   <C>                        <C>

  Cash                                                     $83,833                   $2,089
  Restricted cash                                          123,874                  152,099
  Accounts receivable - net                              2,985,078                3,263,327
  Inventories - net                                      1,510,494                1,361,075
  Prepaid expenses and other assets                      1,436,389                1,328,931
                                                  -----------------       ------------------
        Total current assets                             6,139,668                6,107,521

PROPERTY - net                                             554,623                  574,912
CAPITALIZED SOFTWARE - net                                 363,086                  345,654
GOODWILL - net                                           8,434,532                8,663,958
PATENT - net                                            14,927,885               15,209,135
                                                  -----------------       ------------------

TOTAL                                                  $30,419,794              $30,901,180
                                                  =================       ==================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                      $1,777,526               $1,563,886
  Accrued expenses                                       1,088,978                1,386,610
  Current portion of deferred revenue                      800,000
  Current portion of notes payable                       4,849,207                5,571,388
                                                  -----------------       ------------------
        Total current liabilities                        8,515,711                8,521,884

DEFERRED REVENUE                                           572,561
NOTES PAYABLE                                            3,104,094                3,115,831
DEFERRED TAX LIABILITY                                   6,260,526                6,373,026

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, 21,090,922 shares
issued and outstanding at 2001 and 2000                 22,220,750               22,220,750
Accumulated deficit                                    (14,016,348)             (13,092,811)
                                                  -----------------       ------------------
        Total stockholders' equity                      11,966,902               12,890,439
                                                  -----------------       ------------------

TOTAL                                                  $30,419,794              $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)


                                                                      Three months ended March 31,
                                                                     2001                   2000
                                                                    Restated (see          Restated
                                                                    Note 1)
<S>                                                                   <C>                   <C>

Operating activities:
Net loss                                                              $(923,537)           $(1,305,185)
  Adjustments to reconcile net income
  to net cash provided by (used in) operating activities:
    Loss on disposal of property                                          7,531
    Deferred tax benefit                                               (112,500)              (108,104)
    Depreciation and amortization                                       604,784                708,446
    Issuance of stock warrant                                                                   82,170
Changes in assets and liabilities:
    Restricted cash                                                      28,225
    Accounts receivable, net                                            278,249              1,028,480
    Inventories, net                                                   (149,419)              (100,515)
    Prepaid expenses and other assets                                  (107,458)              (109,044)
    Accounts payable and accrued expenses                               (83,992)              (791,562)
    Deferred revenue                                                  1,372,561

                                                               -----------------      -----------------
Net cash provided by (used in) operating activities                     914,444               (595,314)
                                                               -----------------      -----------------

Investing activities:
   Capitalized software                                                 (32,875)
   Capital expenditures                                                 (65,907)               (81,231)

                                                               -----------------      -----------------
Net cash used in investing activities                                   (98,782)               (81,231)
                                                               -----------------      -----------------

Financing activities:
  Proceeds from line of credit                                           50,000                655,000
  Cash received from stock options exercised                                                    90,380
  Principal payments on notes payable                                  (783,918)              (369,316)

                                                               -----------------      -----------------
Net cash (used in) provided by financing activities                    (733,918)               376,064
                                                               -----------------      -----------------

Net increase (decrease) in cash                                          81,744               (300,481)

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

Cash at end of period                                                  $ 83,833              $ 557,153
                                                               =================      =================

<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 months ended
March 31, 2001 and 2000 are unaudited and have been prepared in accordance  with
generally accepted accounting  principles 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  generally  accepted   accounting
principles 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 months ended March 31, 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.

Restatement. This amendment to ARCOMS' quarterly report on Form 10-QSB/A for the
three  month  period  ended  March 31,  2001 is being  filed for the  purpose of
amending and  restating  Items 1 and 2 of Part I of our original  Form 10-QSB to
reflect  the  restatement  of  our  consolidated   financial  statements.   This
restatement   relates  to  certain   capitalized   software  costs  and  revenue
recognition of one particular licensing agreement.

Subsequent  to the issuance of our  consolidated  financial  statements  for the
quarter ended March 31, 2001, we determined that certain  software  products for
which costs had been  capitalized  had not met the  definition of  technological
feasibility as provided in Statement of Financial  Accounting  Standards No. 86.
Accordingly,  we are  restating  our  financial  statements  for this quarter to
reflect the  presentation  of such costs as research  and  development.  The
restatement  results in an  increase  in research  and  development  expenses of
$126,697 for the quarter ended March 31, 2001.

In addition, subsequent to the issuance of our consolidated financial statements
for the quarter  ended March 31,  2001,  we  determined  that it would have been
preferable  to  recognize one time based license fee ratably  over the term of
the  agreement based on guidance  provided by Staff Accounting  Bulleting No.101
issued by the U.S. Securities and Exchange Commission,  rather than recognizing
the entire fee upon  receipt.  The  amount  of the  fee  was  $1,200,000  all of
which  we had recognized in the quarter ended March 31, 2001.  The term of the
agreement is 18 months.  The  restatement  results  in  a  decrease  to
satellite  transmission technology revenue of $1,133,333 for the quarter ended
March 31, 2001.

New  Accounting  Pronouncements.  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 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.

The Company  recorded sales of  communication  equipment of $96,025 in the first
quarter of 2000. The Company  initially  recognized  those sales 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 to
December 31, 1999, which was recorded in 2000, of changing its method of revenue
recognition  was  $(333,275)  or $(0.01) per share.  However,  the effect on the
quarter ended March 31, 2000  increased  revenue by $264,415,  increased cost of
goods sold by $129,864 and decreased loss before  cumulative effect of change in
accounting principle by $88,804, compared to the results previously reported for
the quarter ended March 31, 2000, which have been restated accordingly.

NOTE 2 - BALANCE SHEET DETAILS

                                          3/31/2001             12/31/2000
                                      ----------------       ----------------
Accounts receivable                       $3,042,599               $3,320,947
Less allowance for doubtful
accounts                                      57,521                   57,620
                                       ----------------       ----------------
                                          $2,985,078               $3,263,327
                                       ----------------       ----------------
Inventory:
  Raw materials                             $811,770                 $693,568
  Work in progress                           233,667                  204,790
  Finished goods                             505,057                  502,717
                                        ----------------      ----------------
                                          $1,550,494               $1,401,075
Less allowance for
  obsolete inventory                          40,000                   40,000
                                       ----------------       ----------------
                                          $1,510,494               $1,361,075
                                       ----------------       ----------------
Property:
    Computers and equipment               $1,485,497               $1,428,178
    Furniture and fixtures                   271,100                  268,310
    Leasehold improvements                    56,975                   88,832
                                       ----------------       ----------------
                                           1,813,572                1,785,320
    Less accumulated depreciation          1,258,949                1,210,408
                                       ----------------      ----------------
                                            $554,623                 $574,912
                                       ----------------       ----------------

 Capitalized software                       $378,529                 $345,654
  Less accumulated amortization               15,443                        0
                                       ----------------       ----------------
                                            $363,086                 $345,654
                                       ----------------       ----------------

Goodwill                                 $11,481,272              $11,481,272
 Less accumulated amortization             3,046,740                2,817,314
                                       ----------------       ----------------
                                          $8,434,532               $8,663,958
                                       ----------------       ----------------

Patent                                   $18,000,000              $18,000,000
 Less accumulated amortization             3,072,115                2,790,865
                                       ----------------       ----------------
                                         $14,927,885              $15,209,135
                                       ----------------       ----------------
 Accrued expenses:
     Taxes payable                          $102,093                 $269,586
     Other accrued expenses                  986,885                1,117,024
                                       ----------------       ----------------
                                          $1,088,978               $1,386,610
                                       ----------------       ----------------


Depreciation  expense was $78,665 and $87,316 for the three  months  ended March
31, 2001 and 2000, respectively.  Amortization expense was $526,119 and $621,130
for the three months ended March 31, 2001 and 2000, respectively.

NOTE 3 - NOTES PAYABLE

On  February  28,  2000 the  Company  signed a Change  in Terms  Agreement  (the
"Agreement")  with a bank  increasing  the  line of  credit  to  $1,750,000  and
extending  the expiry date to December 29,  2001.  On March 13, 2001 the Company
signed a second Change in Terms Agreement  increasing the interest rate to equal
the lender's prime,  currently at eight percent,  plus one percent.  The Company
has  negotiated a change in the covenants with the bank such that the Company is
in  compliance  with the  covenants as of March 31,  2001.  This third Change in
Terms  Agreement  was signed on May 18, 2001.  The new  agreement  increases the
interest  rate to equal the  lender's  prime plus two  percent  and  changes the
financial  and  operating  covenants  under the bank debt. At March 31, 2001 the
balance on the line of credit was  $1,600,000.  Pursuant to the  Agreement,  the
bank has prohibited principal payments totaling  approximately $710,000 on notes
payable,  which  were due April 1,  2001 to the two  former  owners of  Enerdyne
Technologies, Inc. One former owner is a director of the Company.

NOTE 4 - 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 industry segment for the three months ended March 31, 2001 is
set forth below.

                      Commun-       Video        Satellite
                     ications    Compression     Technology    Consolidated
                     -------------------------  -------------- --------------
 Revenues            $1,734,106      $711,555        $651,233    $3,096,894

 Income (loss)from     $198,993     $(614,774)      $(582,493)    $(998,274)
 operations
 Interest income         $1,131        $1,056          $1,169        $3,356
 Interest expense       $21,021      $158,884          $8,289      $188,194

 Depreciation and       $64,104      $381,517        $159,163      $604,784
 amortization
 Total assets        $3,211,686   $20,623,599      $6,584,509   $30,419,794

Information by industry segment for the three months ended March 31, 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              $1,840,421         $715,745     $1,020,778     $3,576,944
Income (loss) from      $175,795        $(836,365)     $(291,060)     $(951,630)
operations
Interest income           $4,645           $1,320         $4,937        $10,902
Interest expense         $42,278         $190,096        $74,536       $306,910

Depreciation and         $72,655         $487,632       $148,159       $708,446
amortization

Total assets          $3,553,920      $27,933,704     $6,976,141    $38,463,765


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  table presents
revenues for each of the geographical areas in which the Company operates:

                            3/31/01                               3/31/00
                                   Long                              Long
                 Revenues      Lived Assets        Revenues      Lived Assets


United States    $2,330,980   $15,839,878         $2,706,288     16,704,036
International       765,914         5,716            870,656         47,846
               ---------------------------  ------------------ --------------
Total            $3,096,894   $15,845,594         $3,576,944     $16,751,882
               ----------------------------  ------------------ --------------



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

Overview

The Company has three business segments:
1.  Boatracs,
2.  Enerdyne Technologies, Inc. ("ENERDYNE"), a wholly owned subsidiary, and
3.  Innovative Communications Technologies, Inc. ("ICTI"), 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 March 31, 2001 and 2000

Total  revenues for the quarter  ended March 31, 2001,  were  $3,096,894,  a
decrease of $480,050 or 13% compared to total  revenues of $3,576,944 for the
quarter ended March 31, 2000.

Communications  revenues,  which  consist of revenues  from the sale of Boatracs
systems, software and data transmission and messaging, were $1,734,106 or 56% of
total  revenues for the quarter  ended March 31, 2001, a decrease of $106,315 or
6% compared to $1,840,421  or 51% of total  revenues for the quarter ended March
31, 2000.  Revenues for the quarter  ended March 31, 2000 have been restated for
SAB No. 101 (see Note 1). The decrease in communication revenues was caused by a
combination  of lower  system  sales and  software  which were  greater than the
increase in data transmission and messaging revenues.

Video  compression  revenues  were  $711,555  or 23% of total  revenues  for the
quarter ended March 31, 2001, a decrease of $4,190,  or 1%, compared to $715,745
or 20% of total revenues in the prior comparable quarter.

Revenues from satellite  transmission  technology  were $651,233 or 21% of total
revenues for the quarter ended March 31, 2001 compared to revenues of $1,020,778
or 29% of total  revenues in the first quarter of 2000. The decrease in revenues
of $369,545 or 36% is due primarily to a decrease in system integration revenues
in the first quarter.

Communications  expenses were $726,488 or 42% of communications revenues for the
quarter ended March 31, 2001, a decrease of $55,801 or 7%,  compared to $782,289
which represented 43% of communications revenue in the comparable quarter of the
prior year.  Gross  margin for  communications  remained  constant at 58% in the
quarter ended March 31, 2001 from 57% in the same period of the prior year.

Video compression expense was $157,301 or 22% of video compression  revenues for
the  quarter  ended  March 31,  2001,  an  increase  of $1,734 or 1% compared to
$155,567  or 22% of video  compression  revenues in the same period of the prior
year. Gross margin remained constant at 78% in the first quarter compared to the
prior year.

Satellite  transmission  technology  expenses  were $411,309 or 63% of satellite
transmission  technology  revenues  for the  quarter  ended  March 31,  2001,  a
decrease  of  $224,939  or  35%,  compared  to  $636,248  or  62%  of  satellite
transmission  technology  revenues  in the prior  first  quarter.  Gross  margin
remained constant.

Selling,  general and  administrative  expenses were  $2,612,680 or 84% of total
revenues  for the  quarter  ended March 31,  2001,  a decrease of $88,505 or 3%,
compared to $2,701,185 or 76% of total revenues in the prior comparable quarter.
Overall,  accounting,   commissions,  insurance,  consulting,  office  and  rent
expenses increased, offset by a decrease in salary expense. Amortization expense
decreased  $95,145 to $526,119 due to a charge to goodwill in the fourth quarter
of 2000  related to the Enerdyne  acquisition,  decreasing  future  amortization
expense.

Research and development  expenses were $187,390 or 6% of total revenues for the
quarter  ended March 31, 2001, a decrease of $65,895 or 26% compared to research
and  development  expenses  of  $253,285  or 7% of total  revenues  in the prior
comparable quarter.

Interest  expense,  net was $184,838 for the first  quarter of 2001 and $296,008
for the first  quarter of 2000,  a decrease of $111,170 or 38% due  primarily to
the reduction of principal on the Company's term note with a bank.

The income tax  benefit  for the quarter  ended  March 31,  2001 was  $259,575
compared to income tax benefit of $275,728 in the prior comparable quarter.

Liquidity and Capital Resources

The Company's cash balance at March 31, 2001 was $83,833, an increase of $81,744
compared to the  December  31, 2000 cash  balance of $2,089.  At March 31, 2001,
working capital was negative $2,376,043 a decrease of $38,320 from the negative
working  capital of  $2,414,363  at December  31,  2000.  Cash of  $914,444  was
provided  by  operating  activities,  cash of  $98,782  was  used  in  investing
activities  and cash of $733,918 was used in financing  activities  in the first
three months of 2001.

On March 13, 2001, the Company signed a Change in Terms Agreement increasing the
interest rate to equal the lender's prime rate, currently at eight percent, plus
one percent. At March 31, 2001,  $1,600,000 was drawn on the line of credit. The
Company  is  required  to  meet  certain  restrictive  financial  and  operating
covenants  under the bank  debt.  The  Company  has  negotiated  a change in the
covenants  with the bank such that the Company  will be in  compliance  with the
covenants  as of March 31,  2001.  It is  anticipated  that this third Change in
Terms  Agreement  will be  signed  during  the  week of May  21,  2001.  The new
agreement  will increase the interest rate to equal the lender's  prime plus two
percent and change the financial and operating covenants under the bank debt.

During the first quarter ended March 31, 2001 the Company  received $1.2 million
from a license fee. This fee is being amortized to revenues over 18 months,  the
life of the agreement.

Accounts receivable,  net of an allowance for uncollectible accounts,  decreased
by $278,249 to  $2,985,078  at March 31, 2001 from  $3,263,327  at December  31,
2000. Property, net of accumulated depreciation, was $554,623 at March 31, 2001,
a decrease of $20,289  from  December 31, 2000,  due  primarily to  depreciation
expense  and a write off of  leasehold  improvements  in the amount of  $37,655.
Goodwill, net of accumulated  amortization,  decreased by $229,426 to $8,434,532
due to  amortization  expense in the first three months of 2001 and a $6,000,000
write-down of goodwill in the fourth quarter,  2000.  Patent, net of accumulated
amortization,  decreased  by  $281,250 to  $14,927,885  at March 31, 2001 due to
amortization expense in the first three months of 2001.

Accounts  payable were  $1,777,526  at March 31,  2001,  an increase of $213,640
compared to $1,563,886 at December 31, 2000, and accrued  expenses  decreased by
$297,632 March 31, 2001 to  $1,088,978  due to an increase in the tax accrual.
Total notes payable  (short-term  plus long-term) in the amount of $7,953,301 at
March 31, 2001,  decreased  $733,918 due to a reduction of principal compared to
the balance at December 31, 2000.

The Company  anticipates making capital  expenditures of approximately  $300,000
during 2001,  excluding assets which may be acquired in  acquisitions.  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.

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






                             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


May 13,  2002          /s/ MICHAEL L. SILVERMAN
Date                      MICHAEL SILVERMAN
                        PRESIDENT, CHIEF EXECUTIVE OFFICER CHAIRMAN OF THE BOARD



May 13,  2002           /s/  DEAN B. KERNUS
Date                     CHIEF FINANCIAL OFFICER