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 March 31, 2002

            |_| 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 June 17, 2002.

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 March 31,
                                                                            2002                      2001
REVENUES:                                                                                        (Restated - see
                                                                                                     Note 1)
<S>                                                                           <C>                       <C>

Communications                                                               $ 1,604,918          $ 1,734,106
Video compression                                                                923,474              711,555
Satellite transmission technology                                              1,038,377              651,233
                                                                     --------------------    -----------------
TOTAL REVENUES                                                                 3,566,769            3,096,894
                                                                     --------------------    -----------------

COSTS AND EXPENSES:
Communications                                                                   669,312              726,488
Video compression                                                                316,610              157,301
Satellite transmission technology                                                424,899              411,309
                                                                     --------------------    -----------------
Gross Margin                                                                   2,155,948            1,801,796
Selling, general and administrative                                            3,494,594            2,612,680
Research and development                                                         180,346              187,390
                                                                     --------------------    -----------------
LOSS FROM OPERATIONS                                                          (1,518,992)            (998,274)
Interest expense - net                                                          (134,212)            (184,838)
                                                                     --------------------    -----------------
LOSS BEFORE TAXES                                                             (1,653,204)          (1,183,112)
Income tax benefit                                                               362,052              259,575
                                                                     --------------------    -----------------
NET LOSS                                                                    $ (1,291,152)          $ (923,537)
                                                                     ====================    =================

BASIC LOSS PER SHARE                                                             $ (0.06)             $ (0.04)

DILUTED LOSS PER SHARE                                                           $ (0.06)             $ (0.04)

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING, BASIS AND DILUTED                                              21,214,294           21,090,922

Dilutive effect of:
Employee stock options                                                        -                    -
Warrants                                                                      -                    -
Weighted average of common shares outstanding,
  assuming dilution                                                          21,214,294            21,090,922
<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                                                                         2002                     2001
                                                                            (Unaudited)
<S>                                                                             <C>                     <C>

CURRENT ASSETS:
  Cash                                                                            $167,787              $268,731
  Accounts receivable - net                                                      2,803,583             3,810,809
  Inventories - net                                                              1,505,454             1,572,944
  Prepaid expenses and other assets                                                809,792               541,962
                                                                         ------------------      ----------------
        Total current assets                                                     5,286,616             6,194,446

DEPOSITS & OTHER ASSETS                                                            289,849               289,849
PROPERTY - net                                                                     453,392               487,402
CAPITALIZED SOFTWARE - net                                                         219,955               234,871
GOODWILL - net                                                                   5,434,138             5,434,138
PATENT - net                                                                    13,186,339            13,607,983
                                                                         ------------------      ----------------

TOTAL                                                                          $24,870,289           $26,248,689
                                                                         ==================      ================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                              $2,550,064            $2,746,200
  Accrued expenses                                                               1,680,133             1,015,982
  Deferred Revenue                                                                 879,444             2,052,838
  Current portion of notes payable                                                 279,533             6,685,065
                                                                         ------------------      ----------------
        Total current liabilities                                                5,389,174            12,500,085

DEFERRED REVENUE                                                                 2,155,683             1,570,613
DEFERRED TAX LIABILITY                                                           4,184,971             4,364,333
NOTES PAYABLE                                                                    6,599,955                     -

STOCKHOLDERS' EQUITY:
    Convertible preferred series B stock, no par value: 1,000,000
    shares authorized, 351 shares issued, liquidation
    preference $10,000 per share                                                 3,512,500             3,512,500
  Common stock, no par value; 100,000,000 shares authorized,
    21,261,627 and 21,201,627 shares issued and outstanding
    at 2002 and 2001, respectively                                              22,298,750            22,280,750
  Accumulated deficit                                                          (19,270,744)          (17,979,592)
                                                                         ------------------      ----------------
        Total stockholders' equity                                               6,540,506             7,813,658
                                                                         ------------------      ----------------

TOTAL                                                                          $24,870,289           $26,248,689
                                                                         ==================      ================
<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,
                                                                     2002                   2001
Operating activities:                                                                 (Restated - see
                                                                                          Note 1)
<S>                                                                     <C>                <C>

Net loss                                                            $(1,291,152)        $ (923,537)
  Adjustments to reconcile net income
  to net cash provided by (used in) operating activities:
    Issuance of common stock for services rendered                       18,000                  -
    Loss on disposal of property                                              -              7,531
    Deferred tax benefit                                               (179,362)          (112,500)
    Depreciation and amortization                                       508,044            604,784
Changes in assets and liabilities:
    Restricted cash                                                           -             28,225
    Accounts receivable, net                                          1,007,226            278,249
    Inventories, net                                                     67,490           (149,419)
    Prepaid expenses and other assets                                  (267,830)          (107,458)
    Accounts payable and accrued expenses                               468,015            (83,992)
    Deferred revenue                                                   (588,324)         1,372,561
                                                               -----------------   ----------------
Net cash (used in) provided by operating activities                    (257,893)           914,444
                                                               -----------------   ----------------

Investing activities:
   Capitalized software                                                       -            (32,875)
   Capital expenditures                                                 (37,474)           (65,907)

                                                               -----------------   ----------------
Net cash used in investing activities                                   (37,474)           (98,782)
                                                               -----------------   ----------------

Financing activities:
  Proceeds from line of credit                                                -             50,000
  Increase in notes payable                                             194,423                  -
  Principal payments on notes payable                                                     (783,918)

                                                               -----------------   ----------------
Net cash provided by (used in) financing activities                     194,423           (733,918)
                                                               -----------------   ----------------

Net increase (decrease) in cash                                        (100,944)            81,744

Cash at beginning of period                                             268,731              2,089
                                                               -----------------   ----------------
Cash at end of period                                                 $ 167,787           $ 83,833
                                                               =================   ================

SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Covenant not to complete, net reclassified to deposits                 $ 57,865
and other assets from goodwill, net
<FN>

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


<PAGE>


                  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, 2002 and 2001 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 months ended March 31, 2002 are not necessarily indicative
of the results that may be expected for any other interim period or for the year
ending December 31, 2002.

Restatement - ARCOMS' quarterly report on Form 10-QSB for the three month period
ended  March 31,  2001 was  amended  to  restate  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 restated our financial  statements  for this quarter to reflect
the  presentation  of such costs as research and  development.  The  restatement
resulted in an increase in research and development expenses of $126,697 for the
three months 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 three months ended March 31, 2001.

Business  Conditions -  Management's  Plan to Continue as a going  concern - The
accompanying  consolidated  financial  statements  have been prepared on a going
concern basis,  which contemplates the realization of assets and satisfaction of
liabilities  in the ordinary  course of business.  As shown in the  accompanying
consolidated  financial  statements,  the  Company  has  incurred  net losses of
$1,291,152 for the quarter ended March 31, 2002 and  additionally had net losses
of $4,850,555,  $9,111,425,  and $926,288 for the years ended December 31, 2001,
2000, and 1999, respectively. The loss for the years ended December 31, 2001 and
December  31,  2000  included  non-cash  impairment  charges of  $2,300,000  and
$6,000,000,  respectively,  related  to  goodwill  recorded  as a result  of the
acquisition of Enerdyne.  In addition,  during 2001, 2000, and 1999, the Company
undertook significant research and development efforts and refined its marketing
and manufacturing processes,  all of which contributed  significantly to its net
losses for those  years.  At March 31,  2002,  the  Company  had an  accumulated
deficit of $19,270,744  and at December 31, 2001, the Company had an accumulated
deficit of $17,979,592.  Working capital was negative $102,558 at March 31, 2002
and  negative  $6,305,639  at  December  31,  2001,   partially  the  result  of
classifying  borrowings from the sellers of Enerdyne as a current  liability and
an  accrual in the  amount of  $500,000  relating  to  settlement  of a "minimum
purchase  requirement"  dispute with  Qualcomm.  At March 31 2002,  the debt was
reclassified to a long-term liability (see Note 6).

Reclassification  - Certain balances in the prior quarter have been reclassified
to conform to the presentation adopted in the current quarter.

Use of estimates - In preparing the financial statements, we have made estimates
and assumptions that affect the following:
         Reported amounts of assets and liabilities at the date of the financial
         statements; Disclosure of contingent assets and liabilities at the date
         of the  financial  statements;  and  Reported  amounts of revenues  and
         expenses during the period.
Actual amounts could differ from those estimates.

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS

Effective  January 1, 2002, the Company adopted Financial  Accounting  Standards
Board Statement of Accounting Standards (SFAS) 141, Business Combinations,  SFAS
142, Goodwill and Intangible Assets and SFAS 144,  Accounting for the Impairment
or  Disposal  of  Long-Lived  Assets.  SFAS 142 sets  forth the  accounting  for
goodwill and intangible  assets already  recorded.  Commencing  January 1, 2002,
goodwill is no longer being amortized. Goodwill will be tested for impairment by
comparing  the assets' fair value to the carrying  value.  Management  is in the
process of conducting  preliminary  valuations  of its reporting  units and will
finalize the analysis in the second  quarter of 2002.  With the adoption of SFAS
142, the Company reassessed the useful lives and residual values of all acquired
intangible  assets to make any necessary  amortization  period  adjustments.  No
amortization period adjustments were necessary.
                                           As of March 31, 2002
                              Gross Carrying Amount     Accumulated Amortization
Amortized Intangible Assets
      Patent                            $18,299,990           $5,113,651

      Non-compete Agreements              125,000               67,135

      TOTAL                             $18,424,990           $5,180,786

Unamortized Intangible Asset
      Goodwill                          $ 9,102,022           $3,667,884


        Aggregate Amortization Expense:
            For the quarter ended March 31, 2002       $428,589


            Estimated Amortization Expense:
            For year ending December 31, 2002         $1,714,356
            For year ending December 31, 2003         $1,714,356
            For year ending December 31, 2004         $1,688,881
            For year ending December 31, 2005         $1,689,376
            For year ending December 31, 2006         $1,686,576


The following  table  reflects the  reconciliation  of reported net loss and net
loss  per  share  to  the  amounts   adjusted  for  the  exclusion  of  goodwill
amortization:

                                                  Three Months Ended March 31,
                                                2002                  2001
   Net Loss                                  $(1,291,152)           $(923,537)
   Add Back: Goodwill Amortization                      0             222,481
   Adjusted Net Loss                          $(1,291,152)          $(701,056)

   Basic and Diluted Loss Per Share:              $(.06)             $(.04)
   Add Back:  Goodwill Amortization                   0                .01
   Adjusted Net Loss                              $(.06)             $(.03)

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
March 31  2002,  the  adoption  of SFAS No.  144 did not have an  effect  on the
Company's consolidated financial statements.

NOTE 3 - BALANCE SHEET DETAILS

                                                3/31/2002        12/31/2001
                                             ----------------  ----------------

 Accounts receivable                            $2,928,818          $3,936,044
    Less allowance for doubtful accounts          (125,235)           (125,235)
                                             ----------------  ----------------
                                                $2,803,583          $3,810,809
                                             ----------------  ----------------
 Inventory:
      Raw materials                               $927,675            $927,575
      Work in progress                             220,956         956 270,242
      Finished goods                               444,882             463,186
                                             ----------------  ----------------
                                                $1,593,513          $1,661,003
     Less allowance for obsolete inventory         (88,059)            (88,059)
                                             ----------------  ----------------
                                                $1,505,454          $1,572,944
                                             ----------------  ----------------
 Property:

     Computers and equipment                    $1,395,090          $1,357,615
     Furniture and fixtures                        219,953             219,953
     Leasehold improvements                         84,531              84,531
                                             ----------------  ----------------
                                                 1,699,574           1,662,099
         Less accumulated depreciation          (1,246,182)         (1,174,697)
                                             ----------------  ----------------
                                                  $453,392            $487,402
                                             ----------------  ----------------

 Goodwill                                       $9,102,022          $9,102,022
     Less accumulated amortization              (3,667,884)         (3,667,884)
                                             ----------------  ----------------
                                                $5,434,138          $5,434,138
                                             ----------------  ----------------

 Patent                                        $18,299,990         $18,299,990
      Less accumulated amortization             (5,113,651)         (4,692,007)
                                             ----------------  ----------------
                                               $13,186,339         $13,607,983
                                             ----------------     -------------


NOTE 4 - LINE OF CREDIT AND NOTES PAYABLE

On January 29, 2002,  the Company  signed a Change in Terms  Agreement  with its
bank,  extending  the maturity date to April 30, 2002 from January 31, 2002 on a
line  of  credit.  On May  29,  2002  the  Company  signed  a Loan  Modification
Agreement" (the  "Agreement")  extending the maturity date on the line of credit
to May 30, 2003. The Agreement also required a payment of $750,000  bringing the
principal  balance to $1,500,000 and the interest rate was changed to prime plus
one and one-half percent, but in no event less than 6.5%. In addition,  the line
of credit was converted from a revolving to a  non-revolving  term loan facility
and the Company has no right to further draws or disbursements.

The  interest  rate at March 31,  2002 was 6.5% and the  balance  on the line of
credit was  $2,250,000.  The  Company is required  to meet  certain  restrictive
financial and operating  covenants under the line of credit. The Company was not
in compliance  with the debt  covenants on December 31, 2001 nor March 31, 2002.
Pursuant  to the  Agreement  dated May 29,  2002 the bank  waived  the  existing
defaults so the debt which was previously classified as current was reclassified
as long term.  In addition the bank replaced  certain of the existing  covenants
with new  covenants.  The bank has also  prohibited  making  principal  payments
totaling  approximately  $1,031,000  on the senior notes and $1.1 million on the
subordinated  notes to the two  former  owners of  Enerdyne  Technologies,  Inc.
through  March 31,  2002 and  further  prohibited  making any  future  principal
payments on either of the notes until the balance of the line of credit has been
fully paid.  The maturity of the  subordinated  notes has been extended  through
January 1, 2004 and the holders of the senior notes and the  subordinated  notes
have permanently waived the all events of default through May 29, 2002.

On May 16 2002, the Company entered in a secured  promissory note with a private
company in the amount of $500,000  accruing  interest at prime plus 3.25%.  This
note was converted into preferred stock on May 31, 2002. See Note 6.

NOTE 5 - 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").  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 March 31, 2002 is set
forth below.
<TABLE>
<CAPTION>

                       Commun-               Video               Satellite
                       Ications            Compression            Technology              Consolidated
                   ----------------     ----------------      -----------------      ---------------------
<S>                     <C>                   <C>                     <C>                   <C>

Revenues              $1,604,918              $923,474             $1,038,377              $3,566,769
Income (loss) from
operations             $(267,901)          $(1,021,656)             $(229,435)            $(1,518,992)
Interest expense, net   $(17,234)              $(9,714)              $(107,264)            $(134,212)
Depreciation and
amortization             $28,503              $460,111                $19,430                $508,044

Total assets          $2,001,238           $16,052,157             $6,816,894             $24,870,289
</TABLE>


Information by business segment for the three months ended March 31, 2001 is set
forth below.
<TABLE>
<CAPTION>

                       Commun-               Video               Satellite
                      ications            Compression           Technology              Consolidated
                     -------------     ----------------     ------------------     ---------------------
<S>                        <C>                    <C>                  <C>                    <C>

Revenues                $1,734,106              $711,555              $651,233              $3,096,894
Income (loss) from
operations                $198,993             $(614,774)            $(582,493)              $(998,274)
Interest expense, net
                           $19,890              $157,828                $7,120                $184,838
Depreciation and
amortization               $64,104              $381,517              $159,163                $604,784

Total assets            $3,211,686           $20,623,599            $6,584,509             $30,419,794
</TABLE>


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.  The
financial  position and results of  operations of our foreign  subsidiaries  are
generally   determined  using  the  U.S.  dollar  as  the  functional  currency.
Transactional  gains and losses are included in  determining  net income for the
period in which the exchange rate changes. Such amounts have remained immaterial
on the  aggregate.  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:

<TABLE>
<CAPTION>

                        Three months ended 3/31/02                   Three months ended 3/31/01
                                            Long                                           Long
                   Revenues             Lived Assets               Revenues            Lived Assets
<S>                  <C>                     <C>                      <C>                    <C>

United States      $2,892,731              $14,149,007              $2,330,980         $15,839,878
International         674,038                      528                 765,914              5,716

                -----------------    --------------------    ---------------------   ---------------
Total              $3,566,769              $14,149,535              $3,096,894        $15,845,594
                -----------------    --------------------    ---------------------   ---------------

</TABLE>

NOTE 6 - SUBSEQUENT EVENTS

Recapitalization Arrangement
On May 31, 2002,  the Company  entered into an  agreement  (the "Stock  Purchase
Agreement")  with two  private  companies  (the  "Purchasers").  Under the Stock
Purchase Agreement,  the Company sold an aggregate of 10,667 shares of two newly
designated  classes of the Company's  preferred stock,  having a total aggregate
purchase price of $4,000,000 to the Purchasers  pursuant to a private  placement
exempt from registration under the Securities Act. As part of the total purchase
price,  $500,000 was paid through  cancellation/conversion  of a promissory note
that was  entered  into on May 16, 2002 (see Note 4). In  addition,  the Company
plans to offer all existing  holders of its Series B Preferred Stock to exchange
such shares for shares of a third newly designated class of its preferred stock.
The holders of all classes of the preferred stock are entitled to receive,  when
and if  declared  by the  Board of  Directors,  cumulative  cash  dividends,  in
preference  and priority to  dividends on any junior stock at 10% per annum.  In
addition,  each  share of the newly  designated  classes of  preferred  stock is
convertible into common stock at various  conversion  prices and may be adjusted
for certain recapitalization events.

As part of the transaction  described above, the Chairman of the Company's Board
of  Directors  resigned  his  chairmanship  as well  as the  position  as  chief
executive  officer and president,  and four of the remaining five members of the
Company's Board of Directors resigned their  directorships.  In addition,  three
new directors  were appointed to the Company's  Board of Directors,  one of whom
was also appointed  Chairman of the Company's  Board of Directors.  In addition,
the Stock  Purchase  Agreement  required  modifications  of the  Company's  debt
agreement  with  its  bank as well as its debt  agreements  with the two  former
owners of Enerdyne  Technologies,  Inc.  These  modifications  have extended the
maturity dates of the loans and waived all  violations of the relative  covenant
requirements  through the date of the agreement  (see Note 4). In addition,  the
Stock Purchase  Agreement grants the investors the exclusive right,  exercisable
by  delivery of written  notice to the Company  during the period from August 2,
2002  through  June 1, 2003 to  purchase  the assets of the  Company's  Boatracs
division at a purchase price as defined in the agreement.  In the event that the
investors  exercise their option to purchase  Boatracs' assets,  they may tender
the Series C Preferred Stock toward the purchase price, which shall be valued at
their original purchase price plus accrued but unpaid dividends thereon.

In conjunction with the Stock Purchase Agreement,  the Company also entered into
an employment  contract with the chief  executive  officer,  in accordance  with
which and upon the approval of the Board of Directors,  the Company  granted the
executive  nonstatutory  stock  options  to  purchase  3,000,000  shares  of the
Company's common stock.

Settlement with QUALCOMM
Under a license and distribution  agreement (the  "Distribution  Agreement") the
Company has with Qualcomm, Incorporated ("QUALCOMM"), the Company is required to
comply with "minimum  purchase  requirements"  annually.  In accordance  with an
amendment to the  Distribution  Agreement,  the Company and QUALCOMM agreed that
commencing  January  1,  2000 and  annually  thereafter,  the  required  minimum
purchase  requirements will be mutually agreed upon by QUALCOMM and the Company,
except that for each  subsequent  annual  period  thereafter,  the Company shall
purchase an  additional  number of units equal to at least ten percent  (10%) of
the minimum purchase requirement for the immediately preceding year. On March 7,
2002, QUALCOMM asserted that the Company was in default of the "minimum purchase
requirements"  for  2001.  The  Company  directed  QUALCOMM's  attention  to the
applicable  amendment to the Distribution  Agreement and had invited QUALCOMM to
enter into  negotiations  for the purpose of agreeing upon the minimum  purchase
requirements.  The Company had, also under  protest,  issued a purchase order to
QUALCOMM for a sufficient  number of units to comply with  QUALCOMM's  demand in
order to preserve the  Company's  rights,  which was  rejected by QUALCOMM.  The
Company and QUALCOMM then entered into good faith  negotiations in an attempt to
agree  to  minimum  purchase  requirements  without  prejudice  to the  parties'
respective asserted positions.

On June 3, 2002, the Company executed an amendment to the Distribution Agreement
(the  "Amendment")  and paid  QUALCOMM  $500,000 in order to  reinstate  ARCOMS'
exclusivity  rights  under  the  Distribution  Agreement.  The  exclusivity  was
reinstated   through   September  30,  2002  without  any  additional   purchase
requirements.  In accordance with the Amendment,  ARCOMS  released  QUALCOMM and
waived any existing or future claims,  liabilities,  or arguments contesting the
number of units to be purchased to meet the minimum  purchase  requirements  for
maintaining  exclusivity under the Distribution Agreement for 2003 and all prior
years.  The Amendment  also defined the revised  minimum  purchase  requirements
under the  Distribution  Agreement.  In accordance  with  Statement of Financial
Accounting  Standards No. 5 "Accounting for Contingencies," the Company recorded
the payment of $500,000 to QUALCOMM as a  contingent  liability  as of March 31,
2002 with a  corresponding  increase  to  selling,  general  and  administrative
expenses for the quarter then ended.

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, 2001.

For the three months ended March 31, 2002 and 2001

Total revenues for the quarter ended March 31, 2002,  were $3,566,769 a increase
of $469,875  or 15%  compared to total  revenues of  $3,096,894  for the quarter
ended March 31, 2001.

Communications  revenues,  which  consist of revenues  from the sale of Boatracs
systems, software and data transmission and messaging, were $1,604,918 or 45% of
total  revenues for the quarter  ended March 31, 2002, a decrease of $129,188 or
7% compared to $1,734,106  or 56% of total  revenues for the quarter ended March
31, 2001.  The decrease in  communication  revenues was caused by an approximate
decrease of $63,000 or 5% in data transmission and messaging revenues and also a
decrease in system and software sales.

Video  compression  revenues  were  $923,474  or 26% of total  revenues  for the
quarter  ended March 31,  2002,  an  increase  of  $211,919 or 30%,  compared to
$711,555 or 23% of total revenues in the prior comparable quarter.  The increase
was  primarily  due to the  completion  of  engineering  of new  products  and a
stronger focus on sales and marketing and building new channels.

Revenues from satellite transmission  technology were $1,038,377 or 29% of total
revenues for the quarter  ended March 31, 2002  compared to revenues of $651,233
or 21% of total  revenues in the first quarter of 2001. The increase in revenues
of $387,144 or 59% is due primarily to the accretion of deferred revenue under a
time based license arrangement sold in the prior year.

Communications  expenses were $669,312 or 42% of communications revenues for the
quarter ended March 31, 2002, a decrease of $57,176 or 8%,  compared to $726,488
which represented 42% of communications revenue in the comparable quarter of the
prior year. Overall, gross margin for communications remained consistent at 58%.

Video compression expense was $316,610 or 34% of video compression  revenues for
the quarter  ended  March 31 2002 an  increase  of $159,309 or 101%  compared to
$157,301  or 22% of video  compression  revenues in the same period of the prior
year.  Gross margin  decreased 12% to 66% in the first quarter compared to a 78%
margin in the same  quarter of the prior year due to  increased  costs of a long
term project.

Satellite  transmission  technology  expenses  were $424,899 or 41% of satellite
transmission  technology  revenues  for the  quarter  ended March 31,  2002,  an
increase of $13,590 or 3%, compared to $411,309 or 63% of satellite transmission
technology  revenues  in the prior year first  quarter.  The  increase  in gross
margin of 22% to 59% from 37% in the prior year  relates  primarily  to revenues
from the accretion of a time based license recorded in the first quarter of 2002
compared to the prior year, which do not have associated costs of good sold.

Selling,  general and  administrative  expenses were  $3,494,594 or 98% of total
revenues for the quarter  ended March 31, 2002,  an increase of $881,914 or 34%,
compared to $2,612,680 or 84% of total revenues in the prior comparable quarter.
The increase was  primarily  due to a $500,000  contingent  accrual  recorded to
settle distribution  exclusivity issues with Qualcomm (see Note 6). In addition,
salary expense increased to $1.3 million from approximately $840,000,  primarily
due to normal annual salary  increases and a head count  increase in engineering
and  technical  staff  positions at the video  compression  segment.  Accounting
expense  increased by $62,000 or 160% due to costs  associated  with a change in
auditors and the  restatement  of certain  transactions.  These  increases  were
offset by  decreases  in legal  expenses and  marketing  expenses.  Amortization
expense decreased $90,000 to $436,600 due to the implementation  SFAS 141, which
no longer requires the amortization of goodwill.

Research and development  expenses were $180,346 or 5% of total revenues for the
quarter  ended March 31,  2002,  a decrease of $7,044 or 4% compared to research
and  development  expenses  of  $187,390  or 6% of total  revenues  in the prior
comparable  quarter.  The quarter ended March 31, 2001 research and  development
balance has been restated (see note 1).

Interest  expense,  net was $134,212 for the first  quarter of 2002 and $184,838
for the first quarter of 2001, a decrease of $50,626 or 27% due primarily to the
repayment of the Company's term note with a bank in the second quarter of 2001.

The income  tax  benefit  for the  quarter  ended  March 31,  2002 was  $362,052
compared to an income tax benefit of $259,575 the prior comparable quarter.

Liquidity and Capital Resources

The  Company's  cash  balance at March 31,  2002 was  $167,787,  a  decrease  of
$100,944  compared to the December  31, 2001 cash balance of $268,731.  At March
31, 2002,  working capital was negative  $102,558 an increase of $6,203,081 from
the  negative  working  capital of  $6,305,639  at December  31,  2001.  Cash of
$275,893 was used in operating activities, cash of $37,474 was used in investing
activities  and cash of $212,423  was provided by  financing  activities  in the
first three months of 2002.

The Company anticipates making capital  expenditures of at least $200,000 in the
year ended December 31, 2002,  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. The report of independent auditors on
the Company's  December 31, 2001  financial  statements  includes an explanatory
paragraph  indicating there is substantial  doubt about the Company's ability to
continue  as a going  concern.  The  Company  has since  reported an increase in
revenues  for the three  months  ended  March 31, 2002 and have  entered  into a
recapitalization  arrangement  (see  Note  6) as  part  of its  plan  to  secure
additional  financing and restructure  current debt arrangements.  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 will result. If adequate funds are not available in
the future, the Company's business would be adversely affected. See Note 6.

Item 3 Quantitative and Qualitative Disclosures about Market Risk

The primary  objective of our  investment  activities  is to preserve  principal
while at the same time  maximizing  the income we receive from our invested cash
without significantly increasing risk of loss. Our financial instruments include
cash, accounts  receivable,  accounts payable,  accrued liabilities and debt. At
March 31, 2002,  the carrying  value of our financial  instruments  approximated
their  fair  values.  Our  policy  is not to  enter  into  derivative  financial
instruments.  In addition, we do not enter into any futures or forward contracts
and therefore,  we do not have significant  market risk exposure with respect to
commodity  prices.  Our interest  expense is sensitive to changes in the general
level of interest  rates as our credit  facility has  interest  rates based upon
market prime  rates,  as  discussed  in the note to the  Consolidated  Financial
Statements. To-date, we have not experienced significant losses due to increases
in market prime rates. Although we transact our business in U.S. dollars, future
fluctuations   in  the  value  of  the  U.S.   dollar   may   affect  the  price
competitiveness  of our products.  However,  we do not believe that we currently
have any  significant  direct foreign  currency  exchange rate risk and have not
hedged  exposures  denominated  in foreign  currencies  or any other  derivative
financial instruments.


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not aware of any current or pending  legal  proceedings  to which
the Company is a party and which may have an adverse effect on the Company.
..
ITEM 2. CHANGES IN SECURITIES

See Note 6, "Subsequent Events".

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

As of December 31, 2001 the Company was in default under its existing  revolving
credit facility and Subordinated  notes due to failure to meet certain financial
ratio covenants and as such,  balances were classified as current.  In May 2002,
we entered  into an amendment to our credit  facility  and  subordinated  notes,
which, among other provisions,  waived the defaults that existed at December 31,
2001 and reset all  covenants  for 2002 and  subsequent  years and as such,  the
balances were reclassified as long-term and current. For further information see
Note 4 to the condensed consolidated financial statements.

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

None

ITEM 5. OTHER INFORMATION

The Stock Purchase  Agreement referred to in Note 6 - Subsequent Events has been
filed as an attachment to the Companys'  Form 8-K dated June 17, 2002.  The Form
8-K is incorporated by reference to this Form 10-QSB.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibit Index

Exhibit                    Description
10.45 Employment  Agreement  between ARCOMS and Brandon Nixon dated May 30, 2002
(filed herewith).

10.46 Loan Modification Agreement between ARCOMS, Enerdyne and
First National Bank dated May 29, 2002 (filed herewith).

In March 2002,  the Company filed Form 8-K advising the  Securities and Exchange
Commission of a change in the Registrant's  Certifying  Accountants.  Amendments
No. 1, 2 and 3 to the 8-K were filed on April 19 2002,  May 22 2002, and June 11
2002, respectively.

                                   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

June 17  2002                      /s/ BRANDON L. NIXON
Date                                   BRANDON L. NIXON
                                       CHIEF EXECUTIVE OFFICER
                                       CHAIRMAN

June 17 2002                      /s/  DEAN B. KERNUS
Date                                   CHIEF FINANCIAL OFFICER