UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---

FORM 10-Q

| | [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the quarterly period ended March 31, 2002 | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------ | 

OR

| | [  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the transition period from ____________ to ________________ | 
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | 

Commission File No.: 0-22693

SYSCOMM INTERNATIONAL CORPORATION(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction ofincorporation or organization) | 11-2889809(I.R.S. EmployerIdentification No.)
|--------------------------------------------------------------------- | ---------------------------------------------

7 Kingsbridge Road, Fairfield, New Jersey 07004
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code:  (973) 227-8772

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

The number of shares outstanding of each class of our common equity as of May 7,
2002 is as follows:

|Class of Common EquityCommon Stock, par value $.01 | Number of Shares4,895,998
|-------------------------------------------------- | -------------------------

SYSCOMM INTERNATIONAL CORPORATIONTABLE OF CONTENTS

|Item      | Description                                                                           | Page | 
|--------- | ------------------------------------------------------------------------------------- | ---- | 
|          | PART I  FINANCIAL INFORMATION                                                        |      | 
|1.        | Financial Statements                                                                  |      | 
|          | Consolidated Balance Sheets                                                          |      | 
|          | March 31, 2002 (unaudited) and September 30, 2001
(unaudited)                         | 3    | 
|          | Consolidated Statements of Operations                                                |      | 
|          | Three and Six Months ended March 31, 2002 and 2001 (unaudited)                        | 4    | 
|          | Consolidated Statement of Stockholders Equity                                        |      | 
|          | Six Months ended March 31, 2002 (unaudited)                                           | 5    | 
|          | Consolidated Statements of Cash Flows                                                |      | 
|          | Six Months ended March, 2002 and 2001 (unaudited)                                     | 6    | 
|          | Notes to Consolidated Financial Statements (unaudited)                                | 7    | 
|2.        | Managements Discussion and Analysis of Financial
Condition and Results of Operations | 10   | 
|3.        | Quantitative and Qualitative Disclosures About Market
Risk                            | 14   | 
|          | PART II  OTHER INFORMATION                                                           |      | 
|4.        | Submission of Matters to a Vote of Security Holders                                   | 15   | 
|6.        | Exhibits and Reports on Form 8-K                                                      | 15   | 
|          |                                                                                       |     
|SIGNATURE | 16                                                                                    |     
|EXHIBITS  | 17                                                                                    |     

2

PART I     FINANCIAL INFORMATION
     ITEM 1.     FINANCIAL STATEMENTS

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                       
|(In thousands except par value)(Unaudited)        

---

|                                                                               | Assets                                                                                | March 31, 2002 |        | September 30, 2001 |       
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | -------------- | ------ | ------------------ | ------
|                                                                               |                                                                                       |                |        |                    |       
|Current Assets                                                                 |                                                                                       |                |        |                    |       
|Cash and cash equivalents                                                      |                                                                                       | $              | 4,760  |                    | $     
|Accounts receivable (net of allowance for doubtful accounts of                 |                                                                                       | 3,755          |        |                    | 9,409 
|                                                                               | $425 at March 31, 2002 and $414 at September 30, 2001)                                |                |        |                    |       
|Inventories                                                                    |                                                                                       |                | 764    |                    |       
|Notes receivable                                                               |                                                                                       |                | 62     |                    |       
|Deferred tax asset                                                             |                                                                                       |                | 171    |                    |       
|Other current assets                                                           |                                                                                       |                | 374    |                    |       
|                                                                               |                                                                                       |                |        |                    |       
|                                                                               | Total Current Assets                                                                  |                |        | 9,886              |       
|Property And Equipment, net                                                    |                                                                                       |                | 636    |                    |       
|Goodwill, net                                                                  |                                                                                       |                | 2,154  |                    |       
|Deferred Tax Asset                                                             |                                                                                       |                | 980    |                    |       
|Other Assets                                                                   |                                                                                       |                | 452    |                    |       
|                                                                               |                                                                                       |                |        |                    |       
|Total Assets                                                                   |                                                                                       | $              | 14,108 |                    | $     
|                                                                               |                                                                                       |                |        |                    |       
|                                                                               | Liabilities and Stockholders' Equity                                                  |                |        |                    |       
|Current Liabilities                                                            |                                                                                       |                |        |                    |       
|Current maturities of long-term debt and capital lease obligations             | $                                                                                     | 17             |        | $                  | 1,007 
|Current amounts due to Parent Company                                          |                                                                                       | 2,765          |        |                    | 947   
|Accounts payable                                                               |                                                                                       |                | 1,229  |                    |       
|Accrued expenses                                                               |                                                                                       |                | 1,669  |                    |       
|                                                                               |                                                                                       |                |        |                    |       
|                                                                               | Total Current Liabilities                                                             |                |        | 5,680              |       
|Note Payable - Parent Company                                                  |                                                                                       |                | -      |                    |       
|Long-Term Debt and Capital Lease Obligations                                   |                                                                                       | 37             |        |                    | 42    
|                                                                               |                                                                                       |                |        |                    |       
|                                                                               | Total Liabilities                                                                     |                |        | 5,717              |       
|                                                                               |                                                                                       |                |        |                    |       
|Commitments And Contingencies                                                  |                                                                                       |                | -      |                    |       
|Stockholders Equity                                                           |                                                                                       |                |        |                    |       
|Preferred shares:                                                              |                                                                                       |                |        |                    |       
|Authorized 5,000 shares at March 31, 2002 and 5,000 shares at September 30,    |                                                                                       |                |        |                    |       
|2001, no par value; none issued                                                |                                                                                       |                | -      |                    |       
|Common shares:                                                                 |                                                                                       |                |        |                    |       
|Authorized 80,000 shares at March 31, 2002 and September 30, 2001, of $.01     |                                                                                       |                |        |                    |       
|par value; 5,757 shares issued at March 31, 2002 and September 30, 2001; 4,896 |                                                                                       |                |        |                    |       
|shares outstanding at March 31, 2002 and September 30, 2001                    |                                                                                       | 58             |        |                    | 58    
|Additional paid-in capital                                                     |                                                                                       |                | 6,653  |                    |       
|Retained earnings                                                              |                                                                                       |                | 2,598  |                    |       
|                                                                               | Treasury stock (carried at cost, 861 shares at March 31, 2002 and September 30, 2001) |                |        | (918)              |       
|                                                                               |                                                                                       |                |        |                    |       
|                                                                               | Total Stockholders Equity                                                            |                |        | 8,391              |       
|                                                                               |                                                                                       |                |        |                    |       
|Total Liabilities and Stockholders' Equity                                     | $                                                                                     | 14,108         |        | $                  | 19,071
|                                                                               |                                                                                       |                |        |                    |       

---

See the accompanying notes to consolidated financial statements.

3

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATONS              
|(In thousands except per share data)(Unaudited)   

|                                                   |   | For The Three Months |  |   | For The Six Months | 
|-------------------------------------------------- | - | -------------------- |  | - | ------------------ | 
|                                                   |   | Ended March 31,      |  |   | Ended March 31,    | 
|                                                   |   |                      |  |   |                    | 
|                                                   |   | 2002                 |  |   | 2001               | 
|                                                   |   |                      |  |   |                    | 
|Product revenue                                    | $ | 9,694                |  | $ | 8,380              | 
|Service revenue                                    |   | 811                  |  |   | 860                | 
|                                                   |   |                      |  |   |                    | 
|Total revenue                                      |   | 10,505               |  |   | 9,240              | 
|                                                   |   |                      |  |   |                    | 
|Product cost of goods sold                         |   | 8,734                |  |   | 7,145              | 
|Service costs of goods sold                        |   | 406                  |  |   | 429                | 
|                                                   |   |                      |  |   |                    | 
|Cost of product and services sold                  |   | 9,140                |  |   | 7,574              | 
|                                                   |   |                      |  |   |                    | 
|Gross profit                                       |   | 1,365                |  |   | 1,666              | 
|Selling, general and administrative expenses       |   | 1,184                |  |   | 1,555              | 
|Depreciation and amortization                      |   | 74                   |  |   | 152                | 
|Other income                                       |   | (1)                  |  |   | (19)               | 
|Interest expense                                   |   | 71                   |  |   | 88                 | 
|                                                   |   |                      |  |   |                    | 
|Income (loss) before income tax expense (benefit)  |   | 37                   |  |   | (110)              | 
|Income tax expense (benefit)                       |   | 16                   |  |   | (10)               | 
|                                                   |   |                      |  |   |                    | 
|Net income (loss) available to common stockholders | $ | 21                   |  | $ | (100)              | 
|                                                   |   |                      |  |   |                    | 
|                                                   |   |                      |  |   |                    | 
|Net income (loss) per common share  basic         | $ | 0.00                 |  | $ | (0.02)             | 
|                                                   |   |                      |  |   |                    | 
|Net income (loss) per common share  diluted       | $ | 0.00                 |  | $ | (0.02)             | 
|                                                   |   |                      |  |   |                    | 
|                                                   |   |                      |  |   |                    | 
|Weighted average number of common                  |   |                      |  |   |                    | 
|shares outstanding  basic                         |   | 4,896                |  |   | 4,696              | 
|                                                   |   |                      |  |   |                    | 
|Weighted average number of common                  |   |                      |  |   |                    | 
|shares outstanding  diluted                       |   | 4,896                |  |   | 4,696              | 
|                                                   |   |                      |  |   |                    | 

---

See the accompanying notes to consolidated financial statements.

4

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES                                          
|--------------------------------------------------------------------------------------------
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITYFor the Six Month Period Ended March 31, 2002
|(In Thousands)(Unaudited)                                                                   

---

|                            | Preferred Stock |          | Common Stock |        | AdditionalPaid-In Capital |  | RetainedEarnings |  | Treasury Stock |  | Total Stockholders'Equity
|--------------------------- | --------------- | -------- | ------------ | ------ | ------------------------- |  | ---------------- |  | -------------- |  | -------------------------
|                            | Number          | Amount   |              | Number | Amount                    |  |                  |  |                |  | Number                   
|Balance, September 30, 2001 |                | $       |              | 5,757  | $      58                 |  | $      6,653     |  | $      2,857   |  | (861)                    
|Net loss                    |                |         |              |       |                          |  |                 |  | (259)          |  |                         
|Balance, March 31, 2002     |                | $       |              | 5,757  | $      58                 |  | $      6,653     |  | $      2,598   |  | (861)                    
|                            |                 |          |              |        |                           |  |                  |  |                |  |                          

---

See the accompanying notes to consolidated financial statements.

5

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS             
|(In Thousands)(Unaudited)                         

---

|                                                                           |   | For The Six MonthsEnded March 31, |        
|-------------------------------------------------------------------------- | - | --------------------------------- | -------
|                                                                           |   |                                   |        
|                                                                           |   |                                   | 2002   
|Cash flows from operating activities                                       |   |                                   |        
|Net loss                                                                   | $ | (259)                             |        
|Adjustments to reconcile net loss to cash provided by operating activities |   |                                   |        
|Depreciation and amortization                                              |   | 137                               |        
|Deferred tax benefit                                                       |   | (171)                             |        
|Change in assets and liabilities:                                          |   |                                   |        
|Decrease in accounts receivable                                            |   | 5,654                             |        
|(Increase) decrease in inventories                                         |   | (269)                             |        
|Decrease (increase) in other current assets                                |   | 128                               |        
|Decrease in other assets                                                   |   | 4                                 |        
|Decrease in accounts payable and accrued expenses                          |   | (3,200)                           |        
|                                                                           |   |                                   |        
|Net cash provided by operating activities                                  |   |                                   | 2,024  
|                                                                           |   |                                   |        
|Cash flows from investing activities                                       |   |                                   |        
|Payments for costs of business acquisitions                                |   |                                   | -      
|Payments for property and equipment                                        |   |                                   | (36)   
|Payments received on notes receivable                                      |   |                                   | 25     
|Proceeds from disposition of property and equipment                        |   |                                   | 2,441  
|                                                                           |   |                                   |        
|Net cash provided by (used in) investing activities                        |   |                                   | 2,430  
|                                                                           |   |                                   |        
|Cash flows from financing activities                                       |   |                                   |        
|Payments on long-term debt                                                 |   |                                   | (995)  
|Net payments on Parent Company line of credit                              |   |                                   | (510)  
|Sale of common stock                                                       |   |                                   | -      
|Purchase of treasury stock                                                 |   |                                   | -      
|                                                                           |   |                                   |        
|Net cash used in financing activities                                      |   |                                   | (1,505)
|                                                                           |   |                                   |        
|Net increase in cash and cash equivalents                                  |   |                                   | 2,949  
|Cash and cash equivalents - beginning of period                            |   |                                   | 1,811  
|                                                                           |   |                                   |        
|Cash and cash equivalents - end of period                                  |   | $                                 | 4,760  
|                                                                           |   |                                   |        
|                                                                           |   |                                   |        
|Supplemental Schedules of Noncash Financing Activities                     |   |                                   |        
|Acquisition of business:                                                   |   |                                   |        
|Notes payable issued for acquisition                                       |   | $                                 | -      

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        
|(In thousands, except per share data)(Unaudited)  

##### 1.      Basis of Presentation

The  accompanying  unaudited  consolidated  financial  statements of SysComm  International  Corporation  (the
Company)  as of March 31, 2002 and  September  30, 2001 and for the three and six months ended March 31, 2002 and
2001 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-Q and Article 10 of Regulation S-X
under the Securities  Exchange Act of 1934.  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 the
Company's management,  all adjustments  (consisting of only normal recurring  adjustments)  considered necessary to
present fairly the consolidated financial statements have been made.

The  consolidated  statement  of  operations  for the  three  and six  months  ended  March  31,  2002 are not
necessarily  indicative of the results that may be expected for the entire year.  These  statements  should be read
in conjunction with the consolidated  financial  statements and related notes thereto included in our Annual Report
on Form 10-K for the year ended September 30, 2001.

Accounting Changes

Effective  October 1, 2001, the Company adopted  Statement of Financial  Accounting  Standard No. 142 Goodwill
and Other  Intangible  Assets (FAS 142).  FAS 142  requires  that  goodwill  and certain  intangibles  no longer be
amortized,  but  instead  tested for  impairment  at least  annually.  There was no  impairment  of  goodwill  upon
adoption of FAS 142.

Net  loss and loss per  share  for the  three  and six  months  ended  March  31,  2001  adjusted  to  exclude
amortization expense is as follows:

|                      | For The ThreeMonths EndedMarch 31, 2001 |  | For The SixMonths EndedMarch 31, 2001
|--------------------- | --------------------------------------- |  | -------------------------------------
|Net loss:             |                                         |  |                                      
|Net loss as reported  | $   (100)                               |  | (451)                                
|Goodwill amortization | 58                                      |  | 68                                   
|                      |                                         |  |                                      
|Adjusted net loss     | $     (42)                              |  | (383)                                
|                      |                                         |  |                                      

|Basic and diluted loss per share:                  |            |  |           
|-------------------------------------------------- | ---------- |  | ----------
|Net loss per share, basic and diluted, as reported | $   (0.02) |  | $   (0.09)
|Goodwill amortization                              | 0.01       |  | 0.01      
|                                                   |            |  |           
|Adjusted net loss per share, basic and diluted     | $   (0.01) |  | $   (0.08)
|                                                   |            |  |           

##### 2.     Principles of Consolidation

The  financial  statements  include  the  accounts  of the  Company  and its  wholly-owned  subsidiaries.  All
significant intercompany accounts and transactions have been eliminated in consolidation.

7

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        
|(In thousands, except per share data)(Unaudited)  

##### 3.     Inventory

Inventory at March 31, 2002 and September 30, 2001 consists of:

|                                      | March 31, 2002 |  | September 30,2001
|------------------------------------- | -------------- |  | -----------------
|Finished goods                        | $     881      |  |                  
|Allowance for excess and obsolencence | (117)          |  |                  
|                                      | $     764      |  |                  

##### 4.     Income (Loss) Per Share

The following is a reconciliation of the numerator and denominator of basic and diluted loss per share:

|                                                                        |   | Three Months EndedMarch 31, |       |  | Six Months EndedMarch 31, |  
|----------------------------------------------------------------------- | - | --------------------------- | ----- |  | ------------------------- | -
|                                                                        |   |                             |       |  |                           |  
|                                                                        |   |                             | 2002  |  |                           |  
|Numerator:                                                              |   |                             |       |  |                           |  
|Net income (loss) available to common stockholders                      |   | $                           | 21    |  |                           | $
|                                                                        |   |                             |       |  |                           |  
|Denominator:                                                            |   |                             |       |  |                           |  
|Denominator for basic income (loss) per share - Weighted-average shares |   |                             | 4,896 |  |                           |  
|                                                                        |   |                             |       |  |                           |  
|Denominator for diluted income (loss) per share(1)                      |   |                             | 4,896 |  |                           |  
|                                                                        |   |                             |       |  |                           |  
|Basic income (loss) per share                                           | $ |                             | 0.00  |  | $                         |  
|                                                                        |   |                             |       |  |                           |  
|Diluted income (loss) per share                                         | $ |                             | 0.00  |  | $                         |  
|                                                                        |   |                             |       |  |                           |  

|(1) | The weighted  average  shares of employee  stock  options of 0 and 63 for the three and six months ended March
     31, 2002 and 2001,  respectively,  were not included in the  computation  of diluted loss per share because to
     do so would have been anti-dilutive for the periods presented.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

##### 5.     Mergers and Acquisitions

The following represents acquisitions which occurred in the first six months of fiscal 2001:

|                               | Date ofAcquisition | PercentAcquired | AcquisitionPrice | CashConsideration | NotesIssued | BusinessDescription                               
|------------------------------ | ------------------ | --------------- | ---------------- | ----------------- | ----------- | --------------------------------------------------
|First Quarter 2001 Acquisition |                    |                 |                  |                   |             |                                                   
|Info Tech USA,Fairfield, NJ    | 12/15/2000         | 100%            | $4,550           | $1,899            | $2,652      | Systems integratorand networkingsolutions provider

On December  14,  2000,  we acquired  fifty-one  percent  (51%) of the  outstanding  shares of common stock of
InfoTech USA (formerly  Information  Products Center,  Inc.), a New Jersey corporation  ("InfoTech"),  from Applied
Digital  Solutions,  Inc.  ("ADSX").  The purchase  price for the shares of InfoTech was $2,075,  payable $1,821 in
cash and $254 by  promissory  note. On December 15, 2000,  we acquired the  remaining  forty-nine  percent (49%) of
the  outstanding  shares of common stock of InfoTech for  approximately  $2,400,  payable by promissory  note.  The
purchase  price of  InfoTech  was  assigned  to the assets  acquired  and the  liabilities  assumed  based on their
estimated fair values at the acquisition date, which approximated  their book values,  using the purchase method of
accounting.  Based upon such  allocations,  the aggregate  purchase  price exceeded the estimated fair value of the
net assets  acquired  resulting  in goodwill  of  approximately  $2,339 in value,  which was being  amortized  on a
straight-line  basis over 10 years through  September 30, 2001.  On October 1, 2001,  the Company  adopted FAS 142,
which  resulted in no  impairment  of goodwill.  See Note 1 for further  description  of the effects of adoption of
FAS 142.

8

|SYSCOMM INTERNATIONAL CORPORATION AND SUBSIDIARIES
|--------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        
|(In thousands, except per share data)(Unaudited)  

Unaudited  pro forma results of operations  for the six months ended March 31, 2001 are included  below.  Such
pro forma information assumes that the above transaction occurred as of October 1, 2000.

|                                |                                |              | 
|------------------------------- | ------------------------------ | ------------ | 
|                                | Six Months EndedMarch 31, 2001
|Revenues                        |                                | $   22,403   | 
|Net loss                        |                                | $      (397) | 
|Loss per common share - basic   |                                | $     (0.08) | 
|Loss per common share - diluted |                                | $     (0.08) | 

##### 6.      Change in Control

On December 14, 2000, ADSX acquired  approximately 55% of our issued and outstanding common shares,  resulting
in a change in control of the Company.  ADSX  acquired the shares for $4,500 by issuing  approximately  1.7 million
shares of its common stock,  valued at  approximately  $2,750,  to the selling  shareholders and upon payment of an
aggregate amount of cash equal to approximately $1,750 to the selling shareholders.

##### 7.      De-Listing From Nasdaq Small Cap Market

On  September  5, 2000,  we received a notice that  NASDAQ  intended to de-list our stock from  trading on the
NASDAQ  SmallCap  Market,  where it had previously  been listed,  because we had not maintained a minimum bid price
for our stock of $1.00  over the prior 30  consecutive  trading  days.  The  matter  was  considered  by the NASDAQ
Listing  Qualifications  Panel at a hearing on December 14, 2000.  The Panel was unwilling to grant us an extension
of time to satisfy the  minimum  bid  requirement,  and the  delisting  became  effective  on January 9, 2001.  Our
Common Stock is now traded on the OTC Bulletin Board.

9

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

This discussion  should be read in conjunction with the  accompanying  consolidated  financial  statements and
related notes in Item 1 of this report as well as our Annual  Report on Form 10-K for the year ended  September 30,
2001. Certain  statements made in this report may contain  forward-looking  statements.  For a description of risks
and uncertainties relating to such forward-looking  statements,  see the Forward-Looking  Statements and Associated
Risk section later in this Item.

##### RECENT DEVELOPMENTS

##### Sale of Assets

On January 28, 2002, we sold our 40,000 square foot facility  including  approximately 7.4 acres located at 20
Precision Drive,  Shirley,  New York, for a purchase price of $2,500,000.  The sale generated cash of approximately
$1,300,000  after repaying the related  mortgage and other  transaction  fees. We have  centralized all back office
and warehousing operations in our Fairfield, New Jersey location, which has become our new corporate headquarters.

##### Resignation of Directors

On January 11,  2002  Garrett A.  Sullivan  retired and  resigned as our  Chairman of the Board.  Our Board of
Directors  elected  Jerome C.  Artigliere to fill the vacancy  created on the Board of Directors as a result of Mr.
Sullivan's resignation.

On February 27, 2002,  Donald H. Swift resigned as our director.  Our Board of Directors is currently  seeking
a replacement to fill the vacancy left by Mr. Swift.

##### New Chief Executive Officer Appointed

On April 12, 2002, our Board of Directors  named Kevin  McLaughlin as Chief Executive  Officer  replacing Anat
Ebenstein.  Additionally, the Board of Directors appointed Kevin McLaughlin to the Board of Directors.

##### Vice President of Sales and Marketing Resigned

On February 8, 2002, John C. Spielberger resigned as our Vice President of Sales and Marketing.  We are in the
process of seeking a replacement for his position.  Mr. Spielberger was the account manager for 2 of our major accounts and
while we continue to work with these accounts, we could experience a temporary adverse affect on our sales volume.

BUSINESS DESCRIPTION(in $'000 unless otherwise noted)

We are a Delaware  corporation  incorporated in 1997. Through our two wholly-owned  subsidiaries,  Information
Technology  Services,  Inc.,  and InfoTech  USA, Inc.  (formerly  Information  Products  Center,  Inc.),  which was
acquired  in December  2000,  we provide  professional  services  in the area of systems  integration,  information
technology  (IT)  procurement  and logistics,  and technology  strategy.  Doing business as "InfoTech",  we provide
integrated  eBusiness strategy and technology  implementation  services on a regional basis to enterprise and small
to  medium  businesses  who  want to fully  leverage  eBusiness  technologies  as part of  their  overall  business
strategy.  Our service offering includes technology  strategy and due diligence  consulting,  systems  architecture
and design, application and technology infrastructure  deployment,  enterprise security, IT product procurement and
logistics,  and provisioning.  Our services are designed to improve a client's  competitive and financial  position
and increase  efficiency  through the development of pragmatic and innovative  business  strategies  enabled by the
integration of emerging and existing technologies.

As described  above under Note 6, Change in Control,  on December 14, 2000,  Applied Digital  Solutions,  Inc.
acquired  approximately  55% of our  issued  and  outstanding  common  shares,  resulting  in a change in  control.
Simultaneously,  we acquired from Applied Digital Solutions  fifty-one  percent (51%) of the outstanding  shares of
common  stock of InfoTech  USA. The purchase  price for the shares of InfoTech  USA was $2,075,  payable  $1,821 in
cash and $254 by  promissory  note. On December 15, 2000,  we acquired the  remaining  forty-nine  percent (49%) of
the  outstanding  shares of common stock of InfoTech  USA.  The  purchase  price for the shares of InfoTech USA was
approximately $2,400, payable by promissory note.

##### RESULTS OF OPERATIONS

We operate in a highly  competitive  industry,  which in turn places constant  pressures on maintaining  gross
profit margins.  Many of our sales are high volume equipment  sales,  which produce lower than average gross profit
margins, but are often accompanied by a service arrangement that yields higher than average gross profit margins.

10

The following table sets forth,  for the periods  indicated,  the percentage  relationship to total revenue of
certain items in our consolidated statements of operations.

|                                                   | Relationship to Revenue     | 
|-------------------------------------------------- | --------------------------- | 
|                                                   | Three Months EndedMarch 31, | 
|                                                   | 2002                        | 
|                                                   | %                           | 
|Product revenue                                    | 92.3                        | 
|Service revenue                                    | 7.7                         | 
|                                                   |                             | 
|Total revenue                                      | 100.0                       | 
|                                                   |                             | 
|Product cost of goods sold                         | 83.1                        | 
|Service costs                                      | 3.9                         | 
|                                                   |                             | 
|Total cost of goods sold                           | 87.0                        | 
|                                                   |                             | 
|Gross profit                                       | 13.0                        | 
|Selling, general and administrative expenses       | 11.3                        | 
|Depreciation and amortization                      | 0.7                         | 
|Other income                                       | (0.0)                       | 
|Interest expense                                   | 0.7                         | 
|                                                   |                             | 
|Income (loss) before benefit for income taxes      | 0.3                         | 
|Benefit for income taxes                           | 0.1                         | 
|                                                   |                             | 
|Net income (loss) available to common stockholders | 0.2                         | 
|                                                   |                             | 

Three Months Ended March 31, 2002 Compared to the Three Months Ended March 31, 2001(in $'000 unless otherwise noted)

Revenue for the second  quarter of 2002  increased  $1,265,  or 13.7%,  to $10,505  from $9,240 for the second
quarter of 2001.  The  increase in revenue was due to strong  product  sales  resulting  from large orders from our
major  customers.  Product  revenue for the three  months ended March 31, 2002  increased  $1,314 or 15.7% over the
same period last year.  This was somewhat offset by a slight decrease in service revenue of $49.

Gross  profit was $1,365 for the  quarter  ended  March 31,  2002 a decrease  of $301,  or 18.1%,  compared to
$1,666 in the second  quarter of 2001.  Product gross profit  percentage  declined to 9.9% in the second quarter of
2002 compared to 14.7% in 2001.  The decrease in product  gross profit and product  gross profit  percentage in the
second  quarter  of 2002 was due to high  volume  lower  margin  sales to major  customers.  Service  gross  profit
percentage  remained  strong in the second quarter of 2002.  The service gross profit  percentage was 49.9% for the
second quarter of 2002 compared to 50.1% in the second quarter of 2001.

Selling,  general and  administrative  expenses were $1,184 for the quarter ended March 31, 2002, down $371 or
23.9%,  from the $1,555  reported  for the same period last year.  The  reduction in expense was  primarily  due to
layoffs,  the elimination of expenses  related to the Shirley,  New York facility,  which was sold in January 2002,
and other cost control programs.

Depreciation  and  amortization  expense for the current  quarter was $74, a decrease of $78 or 51.3% over the
$152 for the quarter ended March 31, 2001.  The decrease was  primarily due to the adoption of FAS 142,  which took
effect  October 1, 2001.  The  adoption  of FAS 142  requires  the  testing of  goodwill  for  impairment  at least
annually  eliminating  the need for monthly  amortization  of  goodwill.  Accordingly,  the  goodwill  amortization
associated  with the  acquisition of InfoTech USA was not recorded  during the current  fiscal year.  Additionally,
depreciation on the land,  building and equipment of our Shirley  facility ceased September 30, 2001 as a result of
management's  decision  to cease use of that  facility  and offer it for sale.  The  assets  were  impaired  in the
fourth quarter of 2001 when the Company  determined  that the net book value of the land,  building,  and equipment
to be offered for sale exceeded its fair value,  less costs to sell. The carrying  value of these assets,  prior to
impairment,  was  approximately  $2.5  million.  At the time the expected  sales  proceeds  were  estimated at $2.4
million.  This resulted in an asset  impairment of $95 being charged to operations in the fourth  quarter of fiscal
year 2001.

Other  income  for the  second  quarter  of 2002 was $1  compared  to $19 in 2001,  down $18,  or 94.7%.  The
decrease was  primarily a result of  miscellaneous  credits that were booked in 2001.  Interest  expense was $71 in
2002  compared to $88 in 2001, a decrease of $17, or 19.3%.  The decrease in interest  expense was primarily due to
the elimination of the mortgage  interest  associated with the Shirley,  New York facility that was sold in January
2002.

11

Income  before  income taxes for the second  quarter of 2002 was $37  compared to a loss of $110 in 2001.  The
improved  results were  largely due to the efforts made to reduce  selling,  general and  administrative  expenses.
Our  effective  tax rate for the second  quarter of 2002 was 43.2%  compared to 9.1% in 2001.  Income taxes expense
was $16 in the second quarter of 2002 compared to an income tax benefit of $10 for the same quarter last year.

Our net  income for the  quarter  ended  March 31,  2002 was $21  compared  to a net loss of $100 for the same
period last year.

Six Months Ended March 31, 2002 Compared to the Six Months Ended March 31, 2001(in $'000 unless otherwise noted)

Revenue  for the six months  ended March 31, 2002  decreased  $823 or 4.9% to $15,846  from  $16,669 for the same period
last year.  The small  decrease was mainly due to very soft market  conditions  during the first  quarter of fiscal
year 2002.  Product  revenue  fell $973 or 6.4%.  This was  somewhat  offset by an increase  in service  revenue of
$150 or 10.7%.  The increase in service  revenue was primarily due to a major service  contract that was active for
the entire six month period of fiscal 2002, and was only active for one month during the same period last year.

Gross  profit was $2,277 for the six months  ended March 31,  2002  compared to $3,327 a decrease of $1,050 or
31.6%.  Gross  profit  percentage  was 14.4% in 2002  compared to 20.0% in 2001.  The  decrease in gross profit and
gross profit  percentage  was due to a combination  of a soft market and high volume lower margin  product sales to
major  customers  in the first six months of fiscal  year 2002  compared  to the first six months of 2001.  Product
gross profit was $1,495 for the six months  ended March 31, 2002  compared to $2,470 in 2001, a decrease of $975 or
39.5%.  Product  gross  profit  percentage  was  10.5% in 2002  compared  to 16.2% in 2001.  Service  gross  profit
decreased $75 or 8.8% to $782 in 2002 from $857 for the same period in 2001.

Selling,  general and  administrative  expenses  were $2,412 for the six months  ended March 31,  2002,  down
$1,095 or 31.2%,  from  $3,507 for the same  period  last year.  The  reduction  in expense  was  primarily  due to
layoffs,  the elimination of expenses  related to the Shirley,  New York facility,  which was sold in January 2002,
and other cost control programs.

Depreciation  and  amortization  expense for the six months  ended March 31, 2002 was $137, a decrease of $110
or 44.5% over the $247 for the same period last year.  The decrease was  primarily  due to the adoption of FAS 142,
which took effect  October 1, 2001.  The adoption of FAS 142 requires  the testing of goodwill  for  impairment  at
least annually eliminating the need for monthly amortization of goodwill.  Accordingly,  the goodwill  amortization
associated  with the  acquisition of InfoTech USA was not recorded  during the current  fiscal year.  Additionally,
depreciation on the land,  building and equipment of our Shirley  facility ceased September 30, 2001 as a result of
management's  decision  to cease use of that  facility  and offer it for sale.  The  assets  were  impaired  in the
fourth quarter of 2001 when the Company  determined  that the net book value of the land,  building,  and equipment
to be offered for sale exceeded its fair value,  less costs to sell. The carrying  value of these assets,  prior to
impairment,  was  approximately  $2.5  million.  At the time the expected  sales  proceeds  were  estimated at $2.4
million.  This resulted in an asset  impairment of $95 being charged to operations in the fourth  quarter of fiscal
year 2001.

Other  income was $1 for the six months ended March 31,  2002,  down $45, or 97.8%,  from $46 the same period
last year.  The decrease was primarily a result of  miscellaneous  credits that were booked in the six months ended
2001.  Interest  expense was $159 in 2002 compared to $123 in 2001,  an increase of $36, or 29.3%.  The increase in
interest  expense was primarily due to the debt  associated  with the acquisition of InfoTech USA in December 2000.
This was  somewhat  offset by the  elimination  of the mortgage  interest  associated  with the  Shirley,  New York
facility that was sold in January 2002.

Loss before  income taxes for the six months ended March 31, 2002  decreased  $74, or 14.7%,  to $430 compared
to $504 in 2001.  The reduction in the loss before income taxes was primarily due to reduced  selling,  general and
administrative  expenses.  The benefit of the reduced  expenses  was  largely  offset by lower gross  profit in the
first six months of 2002  compared to 2001.  Our  effective  tax rate for the six months ended March 31, 2002 was
39.8% compared to 10.5% in 2001.

Our net loss for the six months  ended March 31, 2002  decreased to $259 from $451 in 2001  primarily  due
to  substantially  reduced SG&A expense,  however this was largely offset by lower gross profit in 2002 compared to
2001.

##### Liquidity and Capital Resources

Our current ratios at March 31, 2002 and September 30, 2001 were 1.7 and 1.6,  respectively.  Working  capital
at March 31,  2002 was  $4,206,  a  decrease  of $288 from the $4,494 at  September  30,  2001.  The  decrease  was
primarily a result of the $2,398 loan due to Applied  Digital  Solutions  on December  15,  2002,  moving from long
term to current.  This was largely  offset by the sale of the facility in Shirley,  New York in January  2002.  The
sale resulted in net proceed of  approximately  $1,300 and eliminated the current  portion of the mortgage that was
due on the facility.

12

Cash provided by operating  activities  in the first six months of 2002 was $2,024  compared to $5,042 of cash
provided  by  operating  activities  in the first six months of 2001.  The cash  provided by  operating  activities
during 2002 and 2001 was a result of reductions in accounts  receivable  and was somewhat  offset by the reductions
in accounts payable and accrued  expenses.  The large reduction in accounts  receivable was a result of lower sales
volume at the end of the March 31, 2002 period  compared to the sales volume at the end of the  September  30, 2001
period,  and the  collection  of large  accounts  receivable  balances  that resulted from the high sales volume in
September  2001.  The offset  resulting  from  reductions  in accounts  payable,  stemmed from payments made to our
suppliers, and net losses incurred during the six months ended March 31, 2002 and 2001.

Cash  provided by investing  activities  was $2,430 for the six months  ended March 31, 2002  compared to cash
used in investing  activities of $2,037 in 2001.  The cash provided by investing  activities for 2002 was primarily
due to the  sale of the  facility  in  Shirley,  New  York.  The use of cash in  investing  activities  in 2001 was
primarily to acquire our interest in InfoTech USA.

Net cash used in  financing  activities  was $1,505 and  $1,616 in 2002 and 2001,  respectively.  The net cash
used in  financing  activities  in 2002 was a  combination  of paying off the  mortgage  on the  Shirley,  New York
facility  and  InfoTech  USA paying  down its line of credit to  Applied  Digital  Solutions.  The net cash used in
financing  activities  in 2001 was  primarily  due to  InfoTech  USA paying  down its line of credit  with  Applied
Digital Solutions.

Under our financing  arrangement with IBM Credit Corporation,  as of March 31, 2002, we were able to borrow up
to 85% of our eligible  accounts  receivable and 100% of our eligible  inventory,  up to a maximum of $3,350. As of
March 31, 2002,  interest on the  outstanding  borrowings for IBM Credit  Corporation  were payable  monthly at the
prime rate, or prime rate plus 6.5% should we fail to meet certain collateral  requirements.  As of March 31, 2002,
there were no borrowings  outstanding under the IBM Credit Corporation facility.  Additionally,  advances under our
Agreement  for  Wholesale  Financing  from IBM Credit  Corporation  totaling  $1,241 and $3,179  were  included  in
accounts  payable at March 31, 2002 and  September  30,  2001,  respectively,  and were offset  against the maximum
credit available at that time from IBM Credit Corporation.

In May 1999,  Applied Digital  Solutions  entered into a Term and Revolving  Credit  Agreement with IBM Credit
Corporation.  The IBM  Agreement,  as amended and  restated on March 27,  2002,  provides  for interest at 17%. The
IBM  Agreement  contains  standard  covenants  relating  to Applied  Digital  Solutions's  financial  position  and
performance,  as well as  restrictions  on Applied Digital  Solutions's  declaration  and payment of dividends.  In
addition,  Applied  Digital  Solutions's  shares  of our  common  stock  are  pledged  as  collateral  for  the IBM
Agreement.  The  exercise by IBM Credit  Corporation  of its rights with  respect to those  shares upon an event of
default  could  result in a change of control of the Company.  IBM Credit  Corporation  has a security  interest in
our  receivables  and  inventory,  up to the amount  advanced  from  Applied  Digital  Solutions  under the line of
credit.  The loan  bears  interest  at the same rate as paid by  Applied  Digital  Solutions.  The loan,  including
interest,  is repayable as funds are available.  Applied Digital Solutions is unable to borrow  additional  amounts
from IBM  Credit  Corporation,  or other  lenders,  under  the terms of the IBM  Agreement.  In  addition,  Applied
Digital  Solutions  is under  no  obligation  to  advance  any  funds to us.  Due to  these  circumstances,  future
borrowings may not be available from Applied Digital Solutions.

We are actively  seeking a new credit  facility,  which will adequately  serve our financing  needs. We are in
the  process of  negotiating  a proposal  with a major  finance  company  for a credit  facility  totaling  $7,500.
Applied  Digital  Solutions is working with us to obtain a new credit  facility,  however,  the change in financing
arrangements  requires the consent of IBM Credit  Corporation.  There can be no  assurances  that this consent will
be given,  or that we will be  successful  in our  negotiations  for a new credit  facility.  Our inability to have
continuous  access to such  financing at  reasonable  costs would  materially  and  adversely  impact our financial
condition, results of operations and cash flows.

We believe that our present  Agreement  for  Wholesale  Financing  with IBM Credit  Corporation,  current cash
position,  projected  positive cash flow and financing  provided by other credit parties will be sufficient to fund
our operations and capital expenditures for at least twelve months.

On December 15, 2001, a payment of $254 was due to Applied  Digital  Solutions on a promissory note related to
the  acquisition  of InfoTech  USA. The payment was not made and the interest  rate has  increased  from 8% to 11%.
Additionally,  a payment of $2,398 is due December 15, 2002 to Applied Digital  Solutions on a promissory note also
related to the  acquisition  of  InfoTech  USA.  We may be unable to pay this note  without  additional  sources of
financing.  If we are unable to pay the note on its due date,  we will seek to  renegotiate  its terms with Applied
Digital Solutions.

##### FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISK

Certain statements in this report, constitute  "forward-looking  statements" within the meaning of Section 27A
of the  Securities  Act of 1933,  Section 21E of the  Securities  Exchange  Act of 1934 and the Private  Securities
Litigation  Reform Act of 1995.  We intend  that such  forward-looking  statements  be subject to the safe  harbors
created  thereby.  Such  forward-looking  statements  involve  known and  unknown  risks,  uncertainties  and other
factors  which may cause our actual  results,  performance  or  achievements  to be materially  different  from any
future  results,  performance  or  achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors  include,  among  others,  the  following:  our  continued  ability to sustain our growth  through  product
development and future business  acquisitions;  the successful  completion and integration of future  acquisitions;
the ability to hire and retain key personnel;  the continued  development of our  technical,  sales,  marketing and
management  capabilities;  relationships  with and dependence on third-party  suppliers;  anticipated  competition;
uncertainties  relating  to  economic  conditions  where we  operate;  uncertainties  relating  to  government  and
regulatory policies;  uncertainties  relating to customer plans and commitments;  rapid technological  developments
and  obsolescence in the industries in which we operate and compete;  potential  performance  issues with suppliers
and customers;  governmental  export and import  policies;  global trade policies;  worldwide  political  stability
and  economic  growth;  the  highly  competitive  environment  in  which  we  operate;   potential  entry  of  new,
well-capitalized  competitors  into our  markets;  our  ability to maintain  available  sources of  financing;  and
changes in our capital structure and cost of capital.  The words "believe",  "expect",  "anticipate",  "intend" and
"plan" and similar  expressions  identify  forward-looking  statements.  Readers are  cautioned  not to place undue
reliance on these forward-looking statements, which speak only as of the date the statement was made.

13

##### ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We presently do not use any derivative  financial  instruments  to hedge our exposure to adverse  fluctuations
in interest rates,  foreign  exchange  rates,  fluctuations  in commodity  prices or other market risks,  nor do we
invest in speculative  financial  instruments.  For Information  Technology  Services,  Inc.,  borrowings under the
financing  agreement with IBM Credit  Corporation  are at zero percent  interest for the first 30 days,  thereafter
the interest rate is the prime rate plus 6.5%.  For InfoTech USA,  borrowings  under the financing  agreement  with
IBM Credit  Corporation  are at zero percent  interest for the first 10 days,  thereafter  the interest rate is the
prime rate plus 6.5%.  Our interest  income is sensitive to changes in the general level of U. S.  interest  rates,
particularly since the majority of our investments are in short-term investments.

Due to the  nature of our  borrowings  and our  short-term  investments,  we have  concluded  that there is no
material market risk exposure and, therefore, no quantitative tabular disclosures are required.

14

##### PART II     OTHER INFORMATION

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

|(a) | An annual meeting of our shareholders was held on March 22, 2002 to:
|--- | --------------------------------------------------------------------

|(i) | Elect Donald H. Swift or his successor and ratify appointment of Jerome C. Artigliere.
|--- | --------------------------------------------------------------------------------------

|(ii) | Ratify the appointment of Rubin,  Brown,  Gornstein & Co. LLP, as independent  auditors of the Company for
                      the year ending September 30, 2002.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | At the meeting,  the  appointment of Jerome C. Artigliere was ratified.  Donald H. Swift,  the nominee for
        director,  resigned  from our Board of  Directors  prior to the annual  meeting.  Our Board of Directors is
        currently  in the  process  of  identifying  a  candidate  to  fill  the  vacancy  created  by Mr.  Swift's
        resignation.  In addition, the terms of Charles L. Doherty,  Scott Silverman,  and Anat Ebenstein continued
        after the meeting.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | The results of the votes were as follows:
|--- | -----------------------------------------

|                        | For       | Against | Abstain
|----------------------- | --------- | ------- | -------
|Election of director    | 2,900,263 | 75,177  | 0      
|Appointment of auditors | 2,957,558 | 17,667  | 215    

##### ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

|(a) | Exhibits (listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K).
|--- | ----------------------------------------------------------------------------------------------

|(b) | We filed a Report on Form 8-K dated January 11, 2002, announcing the retirement and resignation of Garrett
     A. Sullivan, our Chairman of the Board of Directors.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | We filed a Report on Form 8-K dated February 12, 2002, announcing the sale of our property located at 20
     Precision Drive, Shirley, New York.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

15

SIGNATURE

Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|                     | SYSCOMM INTERNATIONAL CORPORATION
|-------------------- | ---------------------------------
|Dated:  May 14, 2002 | By:                              
|                     |                                  



EXHIBITS

|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1           |  | Stock Purchase Agreement by and between Applied Digital Solutions, Inc. and John H.
Spielberger,  Catherine  Spielberger  and Bearpen Limited  Partnership,  dated November 13, 2000
(incorporated  herein by reference to Exhibit 2.1 to the  Company's  Current  Report on Form 8-K
filed with the  Commission on December 22, 2000, as amended by the Company's  Current  Report on
Form 8-K/A filed with the Commission on February 9, 2001).                
|2.2           |  | Amendment No. 1 to Stock Purchase Agreement by and between Applied Digital  Solutions,  Inc. and
John H. Spielberger,  Catherine Spielberger and Bearpen Limited Partnership,  dated December 14,
2000  (incorporated  herein by reference to Exhibit 2.2 to the Company's  Current Report on Form
8-K filed with the  Commission on December 22, 2000, as amended by the Company's  Current Report
on Form 8-K/A filed with the Commission on February 9, 2001).
|2.3           |  | Stock Purchase Agreement by and between the Company and Applied Digital  Solutions,  Inc., dated
November 13, 2000  (incorporated  herein by reference  to Exhibit 2.3 to the  Company's  Current
Report on Form 8-K filed with the  Commission  on December 22, 2000, as amended by the Company's
Current Report on Form 8-K/A filed with the Commission on February 9, 2001).                                                                                  
|2.4           |  | Addendum to Stock Purchase Agreement by and between the Company  Corporation and Applied Digital
Solutions,  Inc.,  dated December 14, 2000  (incorporated  herein by reference to Exhibit 2.4 to
the  Company's  Current  Report on Form 8-K filed with the  Commission  on December 22, 2000, as
amended by the Company's  Current  Report on Form 8-K/A filed with the Commission on February 9,
2001).                                                       
|2.5           |  | Stock Purchase Agreement by and between the Company and Applied Digital  Solutions,  Inc., dated
December 15, 2000  (incorporated  herein by reference  to Exhibit 2.5 to the  Company's  Current
Report on Form 8-K filed with the  Commission  on December 22, 2000, as amended by the Company's
Current Report on Form 8-K/A filed with the Commission on February 9, 2001).                                                                                  
|3.1           |  | Amended and Restated  Certificate of Incorporation, as amended on March 22, 2002                                                                                                                                                                                                                                                                                                                                                                                 
|3.2           |  | Amended and Restated By-Laws  (incorporated  herein by reference to Exhibit 3.2 to the Company's
Registration  Statement on Form S-1 (File No.  333-25593) filed with the Commission on April 22,
1997)                                                                                                                                                                                                                                                          
|10.1          |  | Agreement for Wholesale  Financing  (Security  Agreement),  dated November 27, 2000, between the
Company's  subsidiary,  Information  Technology  Services,  Inc.,  and  IBM  Credit  Corporation
(incorporated  by reference to Exhibit 10.2 to the Company's  Annual Report on Form 10-K for the
fiscal year ended September 30, 2000 filed with the Commission on December 29, 2000)                                                                          
|10.2          |  | Agreement for  Wholesale  Financing  (Security  Agreement),  dated January 5, 2001,  between the
Company's  subsidiary,  Information  Technology  Services,  Inc.,  and  IBM  Credit  Corporation
(incorporated by reference to the Company's  Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001 filed with the Commission on August 13, 2001)                                                                                                   
|10.3*         |  | 1998 Incentive Stock Option Plan, as Amended  (incorporated herein by reference to Exhibit 99 to
the Company's definitive Proxy Statement filed with the Commission on December 27, 1999)                                                                                                                                                                                                                                                                        
|10.4*         |  | 1999  Employee  Stock  Purchase  Plan  (incorporated  herein by  reference  to  Exhibit A to the
Company's definitive Proxy Statement filed with the Commission on December 28, 1998)                                                                                                                                                                                                                                                                            
|10.5*         |  | 2001  Flexible  Stock Plan  (incorporated  herein by  reference  to  Exhibit A to the  Company's
definitive Proxy Statement filed with the Commission on February 28, 2001)                                                                                                                                                                                                                                                                                      
|10.6          |  | Collateralized  Guaranty dated May 23, 2001 between the Company,  its subsidiaries,  Information
Technology  Services,  Inc. and Information  Products Center,  Inc., and IBM Credit  Corporation
(incorporated by reference to the Company's  Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001 filed with the Commission on August 13, 2001)                                                                                                   
|10.7          |  | Contract  of Sale - Office,  Commercial  and  Multi-Family  Residential  Premises by and between
SysComm  International  Corporation  and Parr  Research and  Marketing,  Inc.  (incorporated  by
reference  to the  Company's  Current  Report on Form 8-K dated  January 28, 2002 filed with the
Commission on February 12, 2002)                                                                                                                              
|10.8          |  | Third  Amended and Restated  Term Credit  Agreement  dated March 1, 2002 between  Applied  Digital  Solutions,
Inc.,  Digital  Angel Share Trust and IBM Credit  Corporation  (incorporated  by  reference  to Exhibit 10.2 to the
Applied Digital Solutions, Inc.'s Current Report on Form 8-K filed with the Commission on March 8, 2002)                                                                                                                      

---

|* |  | Management contract or compensatory plan.
|- |  | -----------------------------------------