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

                                   FORM 10-KSB

[x]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

       For the fiscal year ended September 30, 2003

[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

       For the transition period from __________________ to __________________

Commission file number: 000-30405

                    Universal Communication Systems, Inc.
                    ----------------------------------------
                 (Name of small business issuer in its charter)

               Nevada                                 860887822
               ------                                 ---------
   (State or other jurisdiction of        (I.R.S. Employer Identification No.)
   incorporation or organization)

407 Lincoln Road, Ste 12F, Miami Beach, Florida                         33139
-------------------------------------------                             -----
   (Address of principal executive offices)                          (Zip Code)

407 Lincoln Road, Ste 6K, Miami Beach, Florida                          33139
------------------------------------------------                        -----
   (Address of former principal executive offices)                   (Zip Code)

Issuer's telephone number: (305) 672-6344

Name of each exchange on which registered:  OTC Bulletin Board under the trading
                                              symbol UCSY

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $.001 par value per share
                                (Title of class)

         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 [ ].

         Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10KSB. [ ]

Issuer's revenues for its most recent fiscal year:  $0

Aggregate market value of voting stock held by non-affiliates of the issuer as
of December 30, 2002: $5,670,640

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 103,123,070 shares of common stock as
of December 30, 2003.

Documents incorporated by reference:        None.

Transitional Small Business Disclosure Format:  Yes [ ]  No  [X]


<PAGE>
                    Universal Communication Systems, Inc.

                                 Index to Annual
                              Report on Form 10-KSB
                  For The Fiscal Year Ended September 30, 2003

                                                                            Page

ITEM 1.    DESCRIPTION OF BUSINESS.............................................3

ITEM 2.    DESCRIPTION OF PROPERTY.............................................6

ITEM 3.    LEGAL MATTERS.......................................................7

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................7

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS............8

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.........11

ITEM 7.    FINANCIAL STATEMENTS...............................................16

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL DISCLOSURE.............. ..........................16

ITEM 8A.    CONTROLS AND PROCEDURES...........................................16

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT ...............17

ITEM 10.   EXECUTIVE COMPENSATION.............................................19

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....19

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................20

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K...................................21

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.............................22

SIGNATURES....................................................................23




                                      -2-
<PAGE>

                                     PART I

Introductory Statement
----------------------

         All statements contained herein that are not historical facts,
including but not limited to, statements regarding the Company's current
business strategy, the Company's projected sources and uses of cash, and the
Company's plans for future development and operations, are based upon current
expectations. These statements are forward-looking in nature and involve a
number of risks and uncertainties. Actual results may differ materially. Among
the factors that could cause actual results to differ materially are the
following: the availability of sufficient capital to finance our business plans
on terms satisfactory to us; competitive factors; changes in labor, equipment
and capital costs; changes in regulations affecting our business; future
acquisitions or strategic partnerships; general business and economic
conditions; and factors described from time to time in the reports filed by us
with the Securities and Exchange Commission. Readers are cautioned not to place
undue reliance on any such forward-looking statements, which statements are made
pursuant to the Private Litigation Reform Act of 1995 and, as a result, are
pertinent only as of the date made.

         All of the share price information presented herein has been adjusted
to reflect the 1 for 1,000 reverse split of our outstanding common stock
effective August 23, 2002.

ITEM 1.  DESCRIPTION OF BUSINESS

Introduction

         In February of 1997, Worldwide Wireless, Inc., a Nevada corporation,
was formed to coordinate the operations of TSI Technologies, Inc., a Nevada
corporation, and National Micro Vision Systems, Inc., a Nevada corporation. Its
purpose was to complete the development of its patented advanced distributed
wireless telephone and network designs and to finance, manufacture, and market
these units and systems. TSI Technologies, Inc. was the research and development
company formed for the purpose of creating and developing the distributed
wireless call processing system. National Micro Vision Systems, Inc. was formed
to operate a network of wireless Internet sites. In April of 1998, Worldwide
Wireless, Inc., TSI Technologies, Inc. and National Micro Vision Systems, Inc.
acquired Upland Properties, Inc., a Nevada corporation, for stock and
transferred their assets to Upland Properties, Inc. Upland Properties, Inc. then
changed its name to World Wide Wireless Communications, Inc. and began trading
on the OTC Bulletin Board (OTC:BB)under the symbol WLGS.

         During the fiscal year ended September 30, 2002, we moved our offices
from Oakland, California to Miami Beach, Florida and changed our name to
Universal Communication Systems, Inc. We then changed our OTC:BB symbol to UCSI
(and after our one-to-one-thousand reverse stock split, to UCSY).

                                      -3-
<PAGE>

         On November 1, 2001, we changed management. On March 21, 2003, we
acquired exclusive worldwide rights to patents held by J.J. Reidy & Co.,
relating to water production/generation system. In connection with this
activity, two subsidiaries were formed, AirWater Corporation, to produce and
market the system and AirWater Patents Corporation, to hold our licensed patent
rights.

         We completed an agreement to purchase all of the stock of Millennium
Electric T.O.U. Ltd., ("Millenium") an Israeli company, on September 29, 2003.
Millenium specializes in development and installation of solar power systems
worldwide. In connection with the Millenium acquisition, a new U. S. subsidiary,
Solar One Corporation, was formed to market solar power products and systems.

         We are currently focusing our operations on the design, manufacture
and sale of water production and generation systems along with solar power
systems.

Our strategy

         We will require short-term outside investment on a continuing basis to
finance our current operations and capital expenditures. If we do not obtain
short term financing we may not be able to continue as a viable concern. We do
not have a bank line of credit and there can be no assurance that any required
or desired financing will be available through bank borrowings, debt, or equity
offerings, or otherwise, on acceptable terms. If future financing requirements
are satisfied through the issuance of equity securities, investors may
experience significant dilution in the net book value per share of common stock.

         Under the auspices of new management, we have made considerable
progress in restructuring prior obligations and removing debt. We have actively
engaged in a number of efforts to revise our business plan to develop new
revenue sources and direction for the Company. We have minimized our
participation in the wireless internet market, disposed of assets for
cash and we continue our negotiations with creditors to compromise, extend,
convert and/or forgive debt prior to the new management.

         On February 10, 2000 we acquired all of the shares of Digital Way,
S.A., a Peruvian telecommunications company. In June of 2001, we received a
notice of default from the sellers of Digital Way, claiming a breach of the
terms of our purchase agreement. On May 10, 2002, we executed a settlement
agreement with those sellers. Under the terms of the agreement, we re-aligned
the stock ownership of Digital Way, by returning 73% of the common shares owned
by us to the former owners. In addition, we retained a 50% interest in the first
$6.2 million of equity value of Digital Way, in the event of a sale or other
disposition. Any value beyond the first $6.2 million will be divided based on
shareholdings. Our chairman, Michael Zwebner, remains on the Board of Directors
of Digital Way, S. A. The settlement agreement fully cancels all debts, claims
and counter claims between us and the sellers, and allows for future co-
operation in the ongoing development or sale of Digital Way. Although we have
reached this settlement, management of Digital Way has not provided the
necessary financial information for Digital Way to be included in our financial
reporting, and the results of the Company's investment in Digital Way is unclear
at this time. The Company has fully impaired this investment. Management is now
actively seeking a third party buyer for our 23% interest in Digital Way SA.


                                      -4-
<PAGE>


         Although we initiated negotiations with businesses in Puerto Rico and
Portugal in 1999, no further negotiations or affiliations are currently pending
in those areas. On July 20, 2001, WSI, Inc., a Puerto Rican corporation, and
its principal officer and shareholder Howard Hager, filed suit against the
Company in the U.S. District Court in Puerto Rico for breach of contract and
damages in the amount of $4,675,000. The claims arise out of an alleged
agreement on the part of the Company to acquire WSI and provide it with
substantial financing. A default judgment was entered in WSI's favor. On
November 26, 2002 a settlement agreement was reached with Mr. Hager and the
trustee in bankruptcy for WSI. Under the agreement, we issued $200,000 in value
of shares of common stock. In addition to the stock, $50,000 was paid to the
trustee of WSI and a two year consulting contract, valued at $120,000, was
executed with Mr. Hager. The settlement had a total cost of $370,000.

         On April 30, 2003 we executed a letter of intent to acquire
CinemaElectric, Inc., a Los Angeles based multimedia messaging service company
for a purchase price of $10 million. On August 12th, 2003, and by mutual
agreement, we withdrew from this Letter Of Intent. We withdrew our letter of
intent so that Brenex Oil Corporation could issue their letter of intent to
acquire CinemaElectric, Inc., which they did on August 12, 2003. Under the
proposed transaction, we will receive 10% of the entity resulting from the
acquisition of CinemaElectric by Brenex Oil Corporation. Our Board of Directors
is evaluating distributing these shares to our shareholders.

         Early in 2003, we identified a new business venture and adopted a new
business plan. We formed a wholly owned subsidiary, AirWater Corporation, whose
purpose and mission is to design, build and market machines that produce
drinkable water from the air. The first step in the endeavor was to obtain
licensing rights to the technology. To that end, we acquired four patents by
agreement dated March 24, 2003, relating to this technology from J. J. Reidy
Company of Holden, Massachusettes. Under the terms of the agreement, we paid
$400,000, and we are obligated to pay a royalty payment of between 5 to 7.5% on
all sales of equipment which uses the patented technology. Of $400,000, the
company paid $100,000 in cash, and the balance of $300,000 was settled by the
issuance of restricted common shares.

         From March 2003 through August 2003, we entered into various
consulting, marketing and sales agreements with several international entities,
in the US, France, Brazil and Israel. The activities covered by these agreements
include, product design, electrical and mechanical engineering, systems
integration, research and development, conceptual designs, global contacts,
mergers and acquisitions, product and company publicity, marketing, sales and
general business consulting.

         In certain global areas where electricity and or gas power sources are
either not available or in short supply, there is a need for a power alternative
to conventional sources. As previously mentioned, on September 29, 2003 we
completed the acquisition of Millennium Electric T.O.U., Ltd. to fulfill this
technological need of providing Photo Voltaic (PV) Electric Energy to provide
the necessary power for the air-water system.

                                      -5-
<PAGE>

         This company and its president, Mr. Ami Elazari, are one of Israel's
foremost entities operating in the latest high technology field of solar energy,
solar panels, and solar powered consumer products. The company and Mr. Elazari
are the holders of more than 21 international patents relating to both Photo
Voltaic ("PV") and solar energy systems and products. They have for many years
been involved in multi million dollar projects on a world wide basis.

         For the six months prior to year end, we have worked to design,
research and develop as well as source the manufacture of our AirWater machines.
The result of this search has concluded with manufacturing and licensing
agreements with entities in Israel and Brazil, and more recently in Australia.
We have now embarked on a worldwide sales and marketing program.

         On September 17, 2003, we announced that we have entered into a letter
of intent to acquire a 51% interest in GiraSOLAR, BV, a Dutch company that
operates and specializes in the photo voltaic solar energy industry. This Dutch
group is made up of two separate operating subsidiaries, with projected combined
sales in excess of $25 million. As of December 30, 2003, both parties are
conducting due diligence in connection with this acquisition.


Patents/Intellectual Property

         We currently hold a patent for our distributed wireless call processing
system. We are looking to license this technology to a third party developer in
order to potentially create a royalty stream of income. However, we cannot
guarantee that we will enter into such an agreement.

         As previously mentioned, we hold the exclusive global patent and
licensing rights to four air to water patents under an agreement with J.J. Reidy
Company, relating to atmospheric extraction of water and its purification
process. Further, through our Millenium subsidiary, we own 21 international
patents in the photo voltaic solar power and energy system area. Employees

         As of December 31, 2003, we had no full time employees in the
United States.

ITEM 2.  DESCRIPTION OF PROPERTY

         We own no real estate. Effective February 1, 2002, we leased a 1400
square foot corporate and administrative office facility at 407 Lincoln Road,
Suite 6K, Miami Beach, FL 33139. The lease provides for a three-year term. The
lease provided for cancellation with ninety days notice after the first year. On
November 1, 2002 we exercised this provision and we currently rent on a month to
month basis with the landlord at the same address. On October 1, 2003 we moved
our office to suite 12F in the same building.


         Millenium Electric T.O.U., Ltd., rents administration and manufacturing
offices in the Herzliah Industrial zone in Israel under a lease which ends in
2005. The minimum remaining payments under this lease are $60,180 for 2004 and
$55,165 for 2005.


                                      -6-
<PAGE>

ITEM 3.  LEGAL MATTERS

         On August 26, 1999, we filed suit against Credit Bancorp, in U.S.
District Court in San Francisco, regarding improprieties on the part of Credit
Bancorp relating to a loan. The case was settled on October 11, 1999. As part of
the settlement agreement, Credit Bancorp agreed to convert the original loans
granted to us to a convertible debenture in the amount of $740,000. On October
11, 1999, we issued a convertible unsecured debenture for $740,000 to Credit
Bancorp in settlement of this obligation. The terms of this convertible
unsecured debenture are 7% interest per annum payable, semiannually on the last
day of February and September, with the principal due September 30, 2002. All
amounts of unpaid principal and accrued interest of this debenture are
convertible at any time at the conversion price of $1,600 per share of
unregistered, restricted shares of our common stock. Credit Bancorp has agreed
to convert principal and accrued interest owing on the debenture into 483
shares of our common stock.

         In November 1999, the SEC filed suit against Credit Bancorp alleging
violations of various securities laws in connection with its actions in relation
to us and others, and seeking various forms of relief including disgorgement of
its illegal gains. A receiver has been appointed to administer the affairs of
Credit Bancorp. We have been informed that the appointed receiver denies that
such a conversion request was made and the Company may be subject to further
liability. We currently carry the 483 share obligation in our equity under
escrowed shares.

         On August 7, 2003, Electric Gas & Technology of Dallas, Texas ("ELGT"),
published a press announcement claiming that a complaint and $60 million lawsuit
had been filed in Federal court in Texas. Their press release stated that we had
infringed on their patents. Counsel has advised us that the claims lack
substance. On November 24, 2003, the court granted our motion for dismissal due
to lack of Texas jurisdiction. ELGT has similar suits filed against other
companies in the same industry. We have filed counter claims in the US District
Court of Southern Florida, disputing ELGT's claims of patent infringement and as
a result of statements made by ELGT, we have filed a claim for $118 million in
damages for false, defamatory and libelous statements. Our counter claims and
damage lawsuits are still ongoing.


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

         No matters were submitted during the fourth quarter of the fiscal year
covered by this report to a vote of the security holders through the
solicitation of proxies or otherwise.


                                      -7-
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Prior to April 3, 2002, our common stock was traded on the over the
counter Bulletin Board market under the symbol "WLGS". From April 4, 2002
through August 22, 2002 our common stock was traded on the over the counter
Bulletin Board market under the symbol "UCSI". From August 23, 2002 to the
present, our common stock is trading on the over the counter Bulletin Board
market under the symbol "UCSY".

         The following table sets forth the range of high and low closing bid
prices for each period indicated as reported by the National Association of
Securities Dealers composite feed or other qualified interdealer quotation
medium. The quotations provided reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions. All
of the share price information presented below has been adjusted to reflect the
1 for 1,000 reverse split of our outstanding common stock effective August 23,
2002.

Price Range for Common Stock
----------------------------

FISCAL YEAR SEPT 30, 2004           High                Low
                                  --------           --------
   First Quarter                   $ 0.115             $0.060

FISCAL YEAR SEPT 30, 2003           High                Low
                                  --------           --------
   First Quarter                   $ 0.170             $0.100
   Second Quarter                    0.100              0.045
   Third Quarter                     0.230              0.030
   Fourth Quarter                    0.115              0.060

FISCAL YEAR SEPT 30, 2002           High                Low
                                  --------           --------
   First Quarter                   $21.000             $5.599
   Second Quarter                   14.000              2.000
   Third Quarter                    10.000              0.799
   Fourth Quarter                    2.700              0.100


                                      -8-
<PAGE>

         Since our shares began trading on the OTC Bulletin Board in 1997, the
prices for our shares have fluctuated widely. There may be many factors which
may explain these variations, but we believe that the following are some of
these factors:

         o        the demand for our common stock;

         o        the number of market makers for our common stock;

         o        developments in the market for broadband Internet access and
                  wireless transmission in particular; and

         o        changes in the performance of the stock market in general.

         In recent years, the stock market has experienced extreme price and
volume fluctuations that have had a substantial effect on the market prices for
many telecommunications, Internet and emerging growth companies such as ours,
which may be unrelated to the operating performances of the specific companies.
Companies that have experienced volatility in the market price of their stock
have been the object of securities class action litigation. If we become the
object of securities class action litigation, it could result in substantial
costs and a diversion of our management's attention and resources and have an
adverse effect on our business, financial condition and results of operations.
In addition, holders of shares of our common stock could suffer substantial
losses as a result of fluctuations and declines in the stock price.

         There are approximately 495 holders of record and an estimated 8,000
holders in street name of our common stock as of September 30, 2003.

         The trading of our shares is subject to limitations set forth in Rule
15g-9 of the Securities Exchange Act. This rule imposes sales practice
requirements on broker-dealers who sell so-called penny stocks to persons other
than established customers, accredited investors or institutional investors.
Accredited investors are generally defined to include individuals with a net
worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouses during the previous two years and expected annual
income of that amount during the current year. For sales of shares to other
persons, broker-dealers must make special suitability determinations, and obtain
the written consent of the purchaser to the sale prior to consummating the sale
and are generally prohibited from making cold-calls or other unsolicited
inquiries to purchasers without complying with these rules. These rules may
adversely affect the ability of broker-dealers and others to sell our shares or
to sell shares in the secondary market.

         No cash dividends have been declared to date on our Company's common
stock. We expect that all earnings, if any, will be retained to finance the
growth of our Company and that no cash dividends will be paid for the
foreseeable future.

         On May 21, 2002, stockholders approved a measure to increase the number
of authorized common shares from 300 million to 800 million.

                                      -9-
<PAGE>

Sales of Unregistered Securities
--------------------------------

              We have issued and sold unregistered securities that have
not previously been reported as set forth below. An underwriter was not utilized
in any of these transactions. The recipients of securities in each transaction
represented their intention to acquire the securities without a view to
distribution. All the issued securities were restricted securities under Rule
144, Reg. D or Reg. S regulations, and appropriate restrictive legends were
affixed to the securities in each transaction.

         On April 9 - 11, 2003, we issued 4,253,847 shares of common stock under
private placement subscriptions at $0.04 per share, based on the average closing
price for the three days prior to April 8, 2002, at a 25 percent discount. These
securities were issued in transactions exempt from registration under the
Securities Act of 1933 in reliance on Sections 4(2) and 4(6) of the Securities
Act of 1933.

         On April 11, 2003, we issued 575,000 shares of common stock under
private placement subscriptions at $0.035 per share. These securities were
issued in a transaction exempt from registration under the Securities Act of
1933 in reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

         On July 3, 2003, we issued 2,350,043 shares of common stock under
private placement subscriptions at prices ranging from $0.028 per share to
$0.055 per share. These securities were issued in transactions exempt from
registration under the Securities Act of 1933 in reliance on Sections 4(2) and
4(6) of the Securities Act of 1933.

         On July 7, 2003, we issued 1,905,625 shares of common stock under
private placement subscriptions at prices ranging from $0.042 per share to $0.05
per share. These securities were issued in transactions exempt from registration
under the Securities Act of 1933 in reliance on Sections 4(2) and 4(6) of the
Securities Act of 1933.

         On July 9, 2003, we issued 1,410,647 shares of common stock under
private placement subscriptions at prices ranging from $0.042 per share to
$0.055 per share. These securities were issued in transactions exempt from
registration under the Securities Act of 1933 in reliance on Sections 4(2) and
4(6) of the Securities Act of 1933.

         On July 10, 2003, we issued 525,577 shares of common stock under
private placement subscriptions at prices ranging from $0.026 per share to $0.05
per share. These securities were issued in transactions exempt from registration
under the Securities Act of 1933 in reliance on Sections 4(2) and 4(6) of the
Securities Act of 1933.

         On July 15, 2003, we issued 714,096 shares of common stock under
private placement subscriptions at prices ranging from $0.042 per share to $0.05
per share. These securities were issued in transactions exempt from registration
under the Securities Act of 1933 in reliance on Sections 4(2) and 4(6) of the
Securities Act of 1933.

         On July 18, 2003, we issued 2,304,944 shares of common stock under
private placement subscriptions at prices ranging from $0.026 per share to
$0.055 per share. These securities were issued in transactions exempt from
registration under the Securities Act of 1933 in reliance on Sections 4(2) and
4(6) of the Securities Act of 1933.

         On July 23, 2003, we issued 172,591 shares of common stock under
private placement subscriptions at prices ranging from $0.05 per share to $0.055
per share. These securities were issued in transactions exempt from registration
under the Securities Act of 1933 in reliance on Sections 4(2) and 4(6) of the
Securities Act of 1933.

                                      -10-
<PAGE>

         On August 13, 2003, we issued 155,000 shares of common stock under a
private placement subscription at a price of $0.045 per share. These securities
were issued in transactions exempt from registration under the Securities Act of
1933 in reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

         On August 14, 2003, we issued 1,600,000 shares of common stock under a
private placement subscription at a price of $0.10 per share. These securities
were issued in transactions exempt from registration under the Securities Act of
1933 in reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

         On September 3, 2003, we issued 1,000,000 shares of common stock under
a private placement subscription at a price of $0.10 per share. These securities
were issued in transactions exempt from registration under the Securities Act of
1933 in reliance on Sections 4(2) and 4(6) of the Securities Act of 1933.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         The following should be read in conjunction with the "Risk Factors" and
the "Financial Statements" and the Notes thereto.

New Business Activities and Plan of Operations
----------------------------------------------

         We will require short-term outside investment on a continuing basis to
finance our current operations and capital expenditures. If we do not obtain
short term financing we may not be able to continue as a viable
concern. We do not have a bank line of credit and there can be no assurance that
any required or desired financing will be available through bank borrowings,
debt, or equity offerings, or otherwise, on acceptable terms. If future
financing requirements are satisfied through the issuance of equity securities,
investors may experience significant dilution in the net book value per share of
common stock.

         During this fiscal year, we identified a new industry sector for us to
focus our activities. Since February, 2003 we have pursued the design,
manufacture, sale, licensing and distribution of equipment that extracts and
purifies water from the atmosphere.

         The availability and safety of drinking water has become a global
problem, in the United States as well as countless other areas of the world.
Current attempts to meet this need have created a $7.1+ billion bottled water
market, a $60+ Billion point-of-use water treatment industry, and wherever
practical, incredibly expensive desalination plants with huge infrastructures
and severe geographical restrictions. All of these methods require traditional
sources of water and each has inherent weaknesses and disadvantages. Even
existing municipal water systems experience repeated shortages and contamination
problems.

         At any given moment the earth's atmosphere contains 4,000 cubic miles
of water, which is just .000012% of the 344 million cubic miles of water on
earth. Nature maintains this ratio by accelerating or retarding the rates of
evaporation and condensation (the Hydrologic Cycle), irrespective of the
activities of man. It is the sole source and means of regenerating wholesome
water for all forms of life on earth.

                                      -11-
<PAGE>

         Man has been extracting water vapor from the air for generations. Most
often it is intentional and the water collected is treated as wastewater, such
as with dehumidifiers and air conditioners. The common mechanics include
traditional refrigerant systems, but other technologies are available such as
thermo-electrics (Peltier) and thermo acoustics.

         While all these technologies are used for extracting water vapor from
the air and are common knowledge, the subsequent methods employed to produce
potable water from tapping into nature's hydrologic cycle are unique and are
patented in the USA and in other nations. The technology used in the AirWater
Series of variously sized models is the result of 13 years of research and
field-testing and involves many United States and a number of international
patents.

         The AirWater System, regardless of the model size, sterilizes each drop
of water within 5-6 seconds of its formation by exposure to ultra-violet light.
UV light waves fracture the DNA strands within bacteria, virus, and other
microorganisms, which kills them instantly.

         This sterilized water is then passed through a unique patented 1-micron
activated carbon water filter. (The average size of bacteria is 5 microns). This
filter removes any possible solid particles, toxic chemicals, volatile organics,
and other contaminates as well as any odors, taste, or discoloration. This
filtration is followed by a 2nd UV exposure and sterilization.

         The same bulb bathes the exit port, also patented, in UV light creating
a sterile exit. The AirWater System maintains an enclosed sterile environment
throughout its water treatment, from the first drop in to the last drop out --
into a water tank or removable container. It is imperative to any marketing
success that this water be handled safely and aesthetically, which no other
method can do.

         We have coupled this water extraction system with the photo voltaic
systems developed by our wholly owned subsidiary, Millenium Electric T.O.U.,
Ltd., to create a self sustaining system. Our equipment, by combining these two
technologies, has been of great interest to governmental and humanitarian
organizations. Further, we have developed a unit specifically aimed at the
boating and recreational vehicle industry.

         Millennium Electric TOU Inc., one of Israel's leading technology
companies, is an enterprise focusing on practical applications of solar energy.
Millennium is an expert in designing, developing, installing and providing solar
energy related products and services. The sophisticated solar energy devices are
economical, clean and an environment friendly source of energy/power with a wide
variety of practical applications in many fields. Millennium's skills encompass
planning, design, construction and installation services and applications not
connected to the electric power grid. Millennium's fully computerized systems
serve remote housing, villages, street lighting installations, computerized
irrigation, communication and various military systems. The company's total
system capabilities have been proven in large- scale projects performed for
Israel's Ministries of Energy, Housing and Defense. The company's mission is to
continue to design and establish solar systems for communities on a worldwide
basis, based on the "MSS," a unique patented system that utilizes advanced
photovoltaic and storage technology combined with flat-plate solar water

                                      -12-
<PAGE>

collectors to provide electricity and hot air/water and air-conditioning for
residential and industrial buildings. Being modular, the average basic system
can provide from 1kw up to 100 Megawatt of useful power utilizing solar energy
products and services, for a more economical, cleaner, and safer environment.

         With the acquisition of Millenium and the company's new industry focus,
we have been able to obtain private placement funding to finance our activities
in these fields. We anticipate continuing to receive operating funds from these
private placements until such time as sales are sufficient to support the
organization, however no assurances can be made that we will be able to find
willing investors.

         The business of AirWater Corporation is that of extracting (drinkable)
water from the air, the manufacturing of the machines and systems that
facilitate this, and the global marketing and distribution of the patented
technology, systems and products. We will pursue these activities with a focus
on large scale government sales of the water from air technology and through
Millenium, the sale of the technology and consulting on the implimentation and
utilization of Photovoltaic solar systems.

Results of Operations
---------------------

         We did not generate any revenues during fiscal 2003 and 2002. However,
our Peruvian subsidiary had revenues which are not reported as a result of a
lack of cooperation from our subsidiary's management.

         On November 1, 2001, we signed a non-binding letter of intent
to acquire Hard Disc Cafe, Inc., a privately held Florida corporation
which intended to develop and license themed internet cafes. On August 4, 2002,
Hard Disc Caf, Inc. ceased all operations. All parties agreed to unwind the
transaction. In connection with this transaction, we had advanced a total of
$146,154 to Hard Disc Caf, Inc. Of this amount, we received $35,456 and
accordingly we recorded a loss of $110,698 on these advances in 2002.

         General and administrative expenses totaled $1,583,931 in the fiscal
year ended September 30, 2003 and $807,033 in the fiscal year ended September
30, 2002. The increase in expenses resulted from activities associated with the
entrance into the air-water technology industry.

         General and administrative expenses for the fiscal years ended
September 30, 2003 and 2002 were comprised of the following items:

                                                  2003             2002
                                              ----------        ----------

Abandoned acquisitions and fees               $  171,397        $        -
Consultants and outside services                 659,977           484,843
Depreciation                                       5,690            22,036
FCC licensing and site expenses                        -             1,338
Financing costs and fund raising expense         120,804             5,501
Legal expense                                    228,661            85,059
Miscellaneous and other expenses                  67,478            33,568
Professional fees                                136,154            91,570
Rent                                              27,650            37,462
Salaries                                               -            14,614
Travel                                            72,620            31,042
                                              ----------        ----------
                                              $1,490,431        $  807,033
                                              ==========        ==========

Liquidity and Capital Resources
-------------------------------

         As of September 30, 2003 our total working capital was deficient in
the amount of $1,390,556. This represents a $760,729 decrease over our September
30, 2002 deficiency of $2,151,285. Until revenues commence from the sale of our
AirWater equipment, we will need to obtain funding from external sources to
finance our current operations. We anticipate revenues in the second quarter of
fiscal year September 30, 2004.

                                      -13-
<PAGE>

         Since we began operations, we have generated minor revenues and
have incurred substantial expenditures and operating losses. In view of this
fact, our auditors have stated in their report for the fiscal year ended
September 30, 2003 and 2002 that there is substantial doubt about our ability to
continue as a going concern, dependent upon our ability to meet our future
financing requirements, and the success of our future operations, the outcome of
which cannot be determined at this time. In order to finance our working capital
requirements, we have and continue to negotiating equity investments with
several sophisticated investors, but there can be no assurance that we will
obtain this capital in the future, or that it will be obtained on terms
favorable to us. If we do not obtain short term financing we may not be able to
continue as a viable concern. We do not have a bank line of credit and there can
be no assurance that any required or desired financing will be available through
bank borrowings, debt, or equity offerings, or otherwise, on acceptable terms.
If future financing requirements are satisfied through the issuance of equity
securities, investors may experience significant dilution in the net book value
per share of common stock.

         On June 6, 2003,  we defaulted on the January 6, 2003 12% notes in the
amount of $60,000, which came due on that date. The  holders  of the  Notes, who
also hold a portion of the convertible debentures,  did  not  take  action  to
foreclose on the Notes.  These notes have been included in a proposed negotiated
settlement whereby the notes and the debentures will be converted into shares of
common stock at a fixed conversion price.

         During the fiscal years ended September 30, 2003 and 2002, we received
equity investments and advances of $1,054,577 and $383,291 respectively. These
investments and advances were in the form of issuance of our common stock in
various private placements.


                                      -14-
<PAGE>

Risk Factors
------------

-We will require additional capital in the short term to remain a going concern

         We will require short term outside investment on a continuing basis to
finance our current operations and any expansion of activities. Since we began
operations, we have generated virtually no revenues and have incurred
substantial expenditures. We expect to continue to experience losses from
operations while we develop our new revenue source, consummate acquisitions and
develop other technologies. In view of this fact, our auditors have stated in
their report for the period ended September 30, 2003 that our ability to meet
our future financing requirements, and the success of our future operations,
cannot be determined at this time. In order to finance our working capital
requirements we are negotiating existing equity investments and new investments,
but there can be no assurance that we will obtain this capital or that it will
be obtained on terms favorable to us. If we do not obtain short term financing
we may not be able to continue as a viable concern. We do not have a bank line
of credit and there can be no assurance that any required or desired financing
will be available through bank borrowings, debt, or equity offerings, or
otherwise, on acceptable terms. If future financing requirements are satisfied
through the issuance of equity securities, investors may experience significant
dilution in the net book value per share of common stock.

-We are dependent on the services of key individuals and the loss of any of
these individuals could significantly affect our ability to operate our business

-We may be unable to protect our intellectual property rights

         Our success depends in part on our ability to protect our proprietary
technologies. We rely on a combination of patent, copyright and trademark laws,
trade secrets and confidentiality and other contractual provisions to establish
and protect our proprietary rights. We have received one patent from the United
States Patent and Trademark Office pertaining to the distributed wireless call
processing system and may file for additional patents in the future. However,
our patents may not be of sufficient scope or strength, others may independently
develop similar technologies or products, duplicate any of our products or
design around our patents, and the patents may not provide us competitive
advantages. Litigation, which could result in substantial costs and diversion of
effort by us, may also be necessary to enforce any patents issued or licensed to
us or to determine the scope and validity of third-party proprietary rights. Any
such litigation, regardless of outcome, could be expensive and time consuming,
and adverse determinations in any such litigation could seriously harm our
business.

-We may not be able to successfully market and develop the air from water
systems required by the market we are focusing our sales efforts on. Governments
and humanitarian organizations are subject to political influences which can
change without notice. Needs, as defined by these groups, may also change. If we
cannot design, build and modify the systems to meet with these changes, our
marketing efforts may not be productive.

                                      -15-
<PAGE>

-Other risk issues

         We have pursued, are currently pursuing and, in the future may pursue,
new technologies and businesses internally and through acquisitions and
combinations which involve significant risks. Any such acquisition or
combination may involve, among other things, the issuance of equity securities,
the payment of cash, the incurrence of contingent liabilities and the
amortization of expenses related to goodwill and other intangible assets, and
transaction costs, which have adversely affected, or may adversely affect, our
business' results of operations and financial condition. Our ability to
integrate and organize any new businesses and/or products, whether internally
developed or obtained by acquisition or combination, will likely require
significant expansion of our operations. There is no assurance that we will have
or be able to obtain the necessary resources to satisfactorily effect such
expansion, and the failure to do so could have a material adverse effect on our
business, financial condition and results of operations. In addition future
acquisitions and or combinations by the Company involve risks of, among other
things, entering markets or segments in which we have no or limited prior
experience, the potential loss of key employees of the acquired company and/or
difficulty, delay or failure in the integration of the operations, management,
personnel and business of any such new business with our business and operating
and financial difficulties of any new or newly combined operations, any of which
could have a materially adverse effect on our business, financial condition and
results of operations. Moreover, there can be no assurance that the anticipated
benefits of any specific acquisition or of any internally developed new business
segment or business combination will be realized.

Other Matters
-------------

         Subsequent to September 30, 2003, a majority of the debenture holders
have tentatively agreed to convert their holdings into shares of common stock
at various amounts and under various terms. It is our intention to reach
agreements with the debenture holders in order to equitize the outstanding
debentures and associated interest on those debentures.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See Index to Financial Statements on page F-1.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         There have been no changes in or disagreements with our independent
auditors regarding accounting and financial disclosure required to be reported
under this item.

ITEM 8A. CONTROLS AND PROCEDURES

         Our management carried out an evaluation pursuant to Rule 13a-15 of the
Securities Exchange Act of 1934, as amended, under the supervision and with the
participation of our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
as of the end of the period covered by this Report. Based upon that evaluation,
our chief executive officer and chief financial officer concluded that our
disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in reports that we file or furnish under the
Exchange Act are recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms.

         During the period covered by this report on Form 10-KSB, there has been
no change in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

                                      -16-
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Our executive officers and directors and their ages as of December 30,
2003 are as follows:
<TABLE>
<CAPTION>
Name                       Age   Position                  Period of Service
-----                      ---   --------                  -----------------
<S>                        <C>                             <C>
Michael J. Zwebner......   51    Chairman of the Board     November 2001-present
                                   and CEO
Curtis Orgil...........    51    CFO and Director          November 2001-present
Ramsey Sweis............   37    Director                  May 1998-present
Alexander Walker, Jr. ..   76    Director                  November 2001-present
Ami R. Elazari..........   51    Director                  October 2003-present

</TABLE>

         Certain biographical information concerning the Directors and executive
officers of the Company as of December 30, 2003 is set forth below. Such
information was furnished by them to the Company.

         Michael Zwebner has served as a Director since November, 2001 and is
the Chairman of the Board of Directors. He is the founder of Talk Visual
Corporation and has served as a Director and its Chairman of the Board of
Directors since September, 1998 until March, 2002. Mr. Zwebner is the President
of Card Universal Corporation, a privately held Florida corporation which we
have issued a letter of intent to acquire.  From 1974 to 1986, Mr. Zwebner
founded and ran a travel and tourism company and a charter airline, specializing
in the areas of air charter travel, wholesale ticketing and general business and
tourist travel. From 1986 to 1990, Mr. Zwebner owned and operated several real
estate companies as well as managed a chain of five family restaurants and
related catering services in England. From 1991 to 1997, Mr. Zwebner founded and
served as Vice-President of Cardcall International Holdings
Inc. (USA) and Operating Manager of Cardcall (UK) Ltd. for which he designed and
developed telecommunications and marketing concepts and organized the prepaid
phone card operations. Mr. Zwebner also coordinated corporate finance activities
for Cardcall.

         Mr. Walker has served as a Director of the Company since
November, 2001. Mr. Walker has served as Chairman of the Board of the Nevada
Agency and Trust Company in Reno, Nevada, a licensed and registered trust
company and transfer agent in business since 1903. He received his B.A. from
Waynesburg College in 1950 and his J.D. from the University of Pittsburgh School
of Law in 1952. From 1956 to date, he has maintained a private practice as an
attorney.

         Curtis A. Orgil has served as a Director of the Company since November,
2001. He received his Bachelor of Science degree in 1974 from Brigham Young
University. He worked for Deloitte Haskins & Sells in Salt Lake City, Utah.
Later he transferred to Reno, Nevada where he helped establish their new office.
While in Reno, Mr. Orgil was the Partner-in-Charge of the tax department there
and was the senior tax partner in the state of Nevada. While with Deloitte, Mr.
Orgil was on its National Industry Teams for Qualified Retirement Plans and
Agribusiness. Since 1995, he has been a principal with Bartig, Basler & Ray,
CPA's, Inc., a regional accounting firm with headquarters in Sacramento,

                                      -17-
<PAGE>

California. He is the treasurer of the Northern Nevada International Center and
of the BYU Management Society of Northern Nevada. He has chaired the Taxation
Committee for the Nevada Society of Certified Public Accountants. He is a former
treasurer and board member of the Nevada Museum of Art, the American Lung
Association of Reno, the Economic Development Authority of Western Nevada, and
the Northern Nevada Development Authority. He was a founding board member of the
Nevada World Trade Council and was a member of the Advisory Council for the
University of Nevada, Reno College of Business.

         Ramsey Sweis has served as a Director since May, 1998. He has had
extensive experience in management and in the product design industry. He has
been a leader and developer of high performance teams by enabling, training and
motivating team members. In the recent past he has provided computer and
engineering services to General Motors and Chrysler Corporation. In connection
with those activities Mr. Sweis has developed designs between engineering,
prototype models, tooling and vendor sources. Mr. Sweis resides in Roseville,
Michigan. He currently operates a financial services company. From 1997 to 1999
Mr. Sweis served as a designer for Computer and Engineering Services of Auburn
Hills, Michigan. From 1991 to 1997, Mr. Sweis was a design leader for Megatech
Engineering of Warren, Michigan, contracted to General Motors of Warren,
Michigan.

Director Compensation

         Directors do not have a plan of compensation for serving as directors,
except that the following common stock grants were issued for the fiscal year
ended September 30, 2003:

                         Number of
                           Shares
Name                      Granted
---------------       ---------------
Alex Walker, Jr.           500,000 - for legal services
Curtis Orgil               200,000 - for financial services

Limitation of Liability and Indemnification Matters

         Our Bylaws provide that we may indemnify any director, officer, agent
or employee against all expenses and liabilities, including counsel fees,
reasonably incurred by or imposed upon them in connection with any proceeding in
which they may become involved by reason of their being or having been a
director, officer, employee or agent of our Company. Moreover, our Bylaws
provide that we shall have the right to purchase and maintain insurance on
behalf of any such persons whether or not we would have the power to indemnify
such person against the liability insured against. Insofar as indemnification
may be afforded for liabilities arising under the Securities Act, we have been
informed that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

                                      -18-
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section 16(a) of the Securities Exchange Act of 1934 requires our
Company's officers and directors, and persons who own more than 10% of a
registered class of our Company's equity securities, to file reports of
ownership and changes in ownership with respect to the securities of our Company
with the SEC and to furnish copies of these reports to our Company. We believe
that during fiscal year 2003, Alex Walker, Ramsey Sweis and Curtis Orgil have
not filed the required Form 4s.

ITEM 10. EXECUTIVE COMPENSATION

Employment Agreements

         There are no employment agreements in force at September 30, 2003.

         The Company entered into a three year consulting agreement with
Overseas Communications Limited on November 2, 2001, for the management and
business advisory services provided by Mr. Michael Zwebner, Chairman and CEO of
the Company. The Agreement calls for annual payments of $240,000, payable in
cash or the Company's common stock. For the fiscal year ended September 30,
2003, the Company paid $80,000 in cash and issued 2,574,883 shares of common
stock under this agreement.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of December 30, 2003, by:

         o        each person who is known by us to own beneficially more than
                  5% of the outstanding shares of our common stock;

         o        each of our directors; and

         o        all our directors and executive officers as a group.

         Applicable ownership is based on 106,123,070 shares of common stock
outstanding as of December 30, 2003. Beneficial ownership is determined in
accordance with the rules of the SEC. Shares of common stock subject to options
or warrants that are presently exercisable or exercisable within 60 days of
December 30, 2003 are deemed outstanding for the purpose of computing the
percentage ownership of the person or entity holding options or warrants, but
are not treated as outstanding for the purpose of computing the percentage
ownership of any other person or entity.

         The persons listed below have sole voting and investment power with
respect to all shares of common stock shown as being beneficially owned by them,
subject to community property laws, where applicable. The number of shares
column in the table includes shares issuable upon exercise of options and
warrants exercisable within 60 days of December 30, 2003. The number of options

                                      -19-
<PAGE>

and warrants exercisable within 60 days of December 30, 2003 are listed in the
shares issuable upon exercise of options or warrants column. The address of all
directors and officers is care of Universal Communication Systems, Inc., 407
Lincoln Road, Suite 12F, Miami Beach, Florida 33139.

<TABLE>
<CAPTION>
                                                                          Shares Issuable
Name of Named Executive Officer,           Number of     Percentage       Upon Exercise of
Director, or Beneficial Owner               Shares       Ownership      Options or Warrants
------------------------------               ------       ---------      -------------------
<S>                                      <C>                 <C>            <C>
Michael J. Zwebner (3)                     4,977,910 (1)     4.7%                   0

Alexander Walker, Jr. (3)                    557,000           *                    0

Ramsey Sweis (3)                           1,723,970         1.6%               500,000

Curtis Orgil (3)                             251,000           *                    0

Ami R. Elazari   (3)                       2,200,000         2.1%

Executive Officers and Directors           9,709,880         9.1%
 as a Group - 5 individuals

Endeavour Capital                         10,506,184         9.9%             7,992,654 (2)
c/o Endeavour Advisors, Ltd.
P.O.B. 57116
Jerusalem 91570

</TABLE>

-------------------------------------------
* Less than 1%

(1)  Includes 23 shares beneficially held by Overseas Communications Limited,
     534,014 shares beneficially held by Overseas Development Holdings
     Limited and 204,167 shares beneficially held by Port Universal.

(2)  Represents shares convertible under convertible debentures held, but not
     more than 9.9% of total outstanding, as per provision of debentures.

(3)  The address of each such person is c/o the Company, 407 Lincoln Rd., Ste
     12F, Miami Beach, FL 33139


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Commencing November 1, 2001, we engaged the services of the Chairman
Michael Zwebner under a consulting agreement through Overseas Development
Holdings Corporation, a foreign corporation. The annual payment is $240,000.
Overseas Development Holdings Corporation is 33% owned by our Chairman.

         Alexander Walker, Jr., a Director and the Secretary of our company, is
Chairman of the Board and a shareholder of Nevada Agency and Trust Company, our
transfer agent since November 6, 2001. During the fiscal year ended September
30, 2003, we incurred fees aggregating $6,963 to Nevada Agency and Trust
Company. In addition, 500,000 shares of common stock were issued to Mr. Walker
as payment for legal services.

                                      -20-
<PAGE>

         Curtis Orgil, a Director and the Chief Financial Officer of our
company, received 200,000 shares of common stock for his financial services.

         On June 12, 2002, the Company entered into a non-binding letter of
intent to acquire Card Universal Corporation ("CUC"), a privately held
development stage Florida corporation in the business of providing and marketing
prepaid "Stored Money Cards." The acquisition value is estimated at $3 million,
subject to a third party independent valuation. Michael Zwebner, our Chairman
and CEO is the president and a major stockholder of CUC. CUC has ceased its
development activities, is currently inactive, and the acquisition has been
abandoned.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

   ITEM (601)                    DOCUMENT
   ----------                    --------
 (i)   3.1     Articles of Incorporation.

 (i)   3.2     Amendment to Articles of Incorporation

 (i)   3.3     Amendment to Articles of Incorporation.

 (i)   3.4     By-laws.

 (iv)  3.5     Amendment to Articles of Incorporation.

 (i)   4.1     Form of Certificate Evidencing shares of Common Stock of
               Universal Communication Systems, Inc.

 (i)   4.2     Convertible Unsecured Debenture for $740,000 issued by World
               Wide Wireless Communications, Inc. to Credit Bancorp.

 (ii)  10.11   World Wide Communications, Inc. Incentive Stock Option Plan

 (iii) 10.12   Agreement between Overseas Communication Limited and World Wide
               Wireless Communications, Inc.

       21.1    Subsidiaries

       31.1   Certification Pursuant to 18 USC Section 302
              for Michael Zwebner.

       31.2   Certification Pursuant to 18 USC Section 302
              for Curtis Orgil.

       32.1   Certification Pursuant to 18 USC Section 1350
              as adopted pursuant to Section 906 of Sarbanes-
              Oxley Act of 2002 for Michael Zwebner.

       32.2   Certification Pursuant to 18 USC Section 1350
              as adopted pursuant to Section 906 of Sarbanes-
              Oxley Act of 2002 for Curtis Orgil.

------------------

          (i) Filed with the registration statement on Form SB-2 with
              the Securities and Exchange Commission on May 31, 2000.

                                      -21-
<PAGE>

         (ii) Filed with the registration statement on Form SB-2 with
              the Securities and Exchange Commission on December 15,
              2000.

        (iii) Filed with Form 10-KSB for the period September 30, 2002.

         (iv) Filed with Form DEF14A on April 25, 2002.


    (b)  The following Form 8-K was filed during the fourth quarter.

         September 29, 2003, Item 2. Acquisition or Disposition of Assets.
         Reporting the completion of the acquisition of Millenium Electric
         T.O.U., Ltd, pursuant to a stock purchase agreement dated August 22,
         2003.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Pursuant to SEC Release No. 33-8183 (as corrected by Release No.
33-8183A), the disclosure requirements of this Item are not effective until our
Annual Report on Form 10-KSB for our first fiscal year ending after December 15,
2003.


                                      -22-
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on January 13, 2004.

                                      Universal Communication Systems, Inc.


                                      By:   /s/ MICHAEL ZWEBNER
                                            -------------------
                                            Michael J. Zwebner
                                            Chief Executive Officer

         In accordance with the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant in the capacities indicated on January 13, 2004:

<TABLE>
<CAPTION>

Signature                             Title                              Date
---------                             -----                              ----
<S>                         <C>                                    <C>
/s/ MICHAEL J. ZWEBNER      Director, Chief Executive Officer,     January 13, 2004
----------------------      and Chairman of the Board (Principal
Michael J. Zwebner          Financial and Accounting Officer)

/s/ ALEXANDER WALKER JR     Director and Secretary                 January 13, 2004
-----------------------
Alexander Walker, Jr.

/s/ RAMSEY SWEIS            Director                               January 13, 2004
-----------------------
Ramsey Sweis

/s/ CURTIS ORGIL            Director and Chief Financial Officer   January 13, 2004
-----------------------
Curtis Orgil

/s/ AMI R. ELAZARI          Director                               January 13, 2004
-----------------------
Ami R. Elazari
</TABLE>


                                      -23-
<PAGE>

               __________________________________________________


                      UNIVERSAL COMMUNICATION SYSTEMS, INC.
               __________________________________________________



                     REPORT ON AUDIT OF FINANCIAL STATEMENTS

                            AS OF SEPTEMBER 30, 2003

                     ______________________________________











                            REUBEN E. PRICE & COMPANY
                         PUBLIC ACCOUNTANCY CORPORATION

<PAGE>



                      UNIVERSAL COMMUNICATION SYSTEMS, INC.
                           ___________________________


                                    CONTENTS



                                                                    PAGE
                                                                    ----

FINANCIAL STATEMENTS:

         Report of Independent Auditor                               F-2

         Consolidated Balance Sheet as of September 30, 2003         F-3

         Consolidated Statements of Operations for the Years Ended
         September 30, 2003 and 2002                                 F-4

         Consolidated Statements of Stockholders' Deficit for the
         Years Ended September 30, 2003 and 2002                     F-5

         Consolidated Statements of Cash Flows for the Years
         Ended September 30, 2003 and 2002                           F-6 - F-7

         Notes to Consolidated Financial Statements                  F-8 - F-22



                                      F-1

<PAGE>
<TABLE>
<CAPTION>
<S>                                              <C>                                            <C>
                                                 REUBEN E. PRICE & CO.
REUBEN E. PRICE, C.P.A. (1904-1986)          PUBLIC ACCOUNTANCY CORPORATION                     MEMBERS
            ------                                  FOUNDED 1942                          AMERICAN INSTITUTE OF
RICHARD A. PRICE, C.P.A.                                                               CERTIFIED PUBLIC ACCOUNTANTS
                                                  703 MARKET STREET
                                                SAN FRANCISCO, CA 94103                  SECURITIES AND EXCHANGE
                                                      --------                         COMMISSION PRACTICE SECTION
                                                  (415) 982-3556                       OF THE AMERICAN INSTITUTE OF
                                                FAX (415) 957-1178                     CERTIFIED PUBLIC ACCOUNTANTS
                                                                                                  ------
                                                                                           CALIFORNIA SOCIETY OF
                                                                                        CERTIFIED PUBLIC ACCOUNTANTS
</TABLE>

                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Universal Communication Systems, Inc.

We have audited the accompanying consolidated balance sheet of Universal
Communication Systems, Inc. and subsidiaries (the Company), as of September 30,
2003, and the related consolidated statements of operations, stockholders'
deficit and cash flows, for the years ended September 30, 2003 and 2002. The
consolidated financial statements of Universal Communication Systems, Inc. and
subsidiaries are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above, present
fairly, in all material respects, the financial position of Universal
Communication Systems, Inc. and subsidiaries, as of September 30, 2003 and the
results of their operations and their cash flows for the years ended September
30, 2003 and 2002, in conformity with accounting principles generally accepted
in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3, the
Company has suffered recurring losses that raise substantial doubt about its
ability to continue as a going concern. Realization of a major portion of the
assets is dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations, the outcome of which cannot
be determined at this time. Management's plans in regard to these matters are
also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



Reuben E. Price & Co.
January 12, 2004

                                      F-2
<PAGE>

Part I.  FINANCIAL INFORMATION
Item 1.  FINANCIAL STATEMENTS


              UNIVERSAL COMMUNICATION SYSTEMS, INC. & SUBSIDIARIES
                           Consolidated Balance Sheet


                                                                   September 30,
                                                                       2003
                                                                   ------------
                                     ASSETS
Current Assets:
   Cash & cash equivalents                                         $    144,682
   Accounts receivable, net                                             105,859
   Note receivable                                                      116,782
   Inventory                                                              4,900
   Prepaid expenses                                                      35,185
                                                                   ------------
        Total Current Assets                                            407,408
                                                                   ------------
Fixed Assets:
   Furniture and equipment                                               65,786
   Less: Accumulated depreciation                                        22,527
                                                                   ------------
        Total Fixed Assets, Net                                          43,259
                                                                   ------------
Other Assets:
   Intangibles                                                          606,714
   Deposits                                                               4,600
                                                                   ------------
       Total Other Assets                                               611,314
                                                                   ------------
            Total Assets                                           $  1,061,981
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
   Notes payable                                                   $    344,746
   Line of credit                                                        25,721
   Accounts payable                                                   1,142,332
   Accrued expenses                                                     180,489
   Due to officer                                                        11,368
   Due to other related parties                                          93,308
                                                                   ------------
       Total Current Liabilities                                      1,797,964
Long-term Liabilities:
    Convertible debentures                                            4,446,996
                                                                   ------------
            Total Liabilities                                         6,244,960
                                                                   ------------
Commitments and Contingencies                                                --
                                                                   ------------
Stockholders' Deficit:
   Preferred stock, par value $.001 per share , 10,000,000 shares
       authorized, no shares Issued and outstanding                          --
   Common stock, par value $.001 per share,
      800,000,000 shares authorized, 76,911,053 shares
       issued and outstanding                                            76,911
   Additional paid-in capital                                        26,126,640
   Accumulated deficit                                              (31,453,282
   Capital stock subscriptions                                           66,752
                                                                   ------------
       Total Stockholders' Deficit                                   (5,182,979)
                                                                   ------------
             Total Liabilities and Stockholders' Deficit           $  1,061,981
                                                                   ============



   The accompanying notes are an integral part of these financial statements.


                                      F-3
<PAGE>

              UNIVERSAL COMMUNICATION SYSTEMS, INC. & SUBSIDIARIES
                      Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                            For the Year Ended
                                                               September 30,

                                                            2003            2002
                                                        ------------    ------------
Operating Expenses:
<S>                                                     <C>             <C>
    Sales and marketing                                 $    151,804    $         --
    Product development                                       62,333              --
    General and administrative                             1,490,431         807,033
    Impairment losses                                             --         128,706
                                                        ------------    ------------
        Total Operating Expenses                           1,704,568         935,739
                                                        ------------    ------------
Other Income / (Expense):
    Interest and dividend income                                  --              --
    Interest (expense)                                      (200,256)       (334,953)
                                                        ------------    ------------
        Total Other Expense                                 (200,256)       (334,953)
                                                        ------------    ------------
Net Loss                                                $ (1,904,824)   $ (1,270,692)
                                                        ============    ============

Basic and Diluted Net Loss per Common Share             $      (0.07)   $      (5.54)
                                                        ============    ============

Basic and Diluted Weighted Average Shares Outstanding     26,758,511         229,239
                                                        ============    ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                      F-4
<PAGE>


              UNIVERSAL COMMUNICATIONS SYSTEMS, INC. & SUBSIDIARIES
                       Statements of Stockholders' Deficit
                 For the Years Ended September 30, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                              Common Stock             Additional                        Other
                                        ---------------------------      Paid-in      Accumulated    Comprehensive       Total
                                           Shares         Amount         Capital        Deficit          Income         Deficit
                                        ------------   ------------   ------------    ------------    ------------    ------------
<S>                                          <C>       <C>            <C>             <C>             <C>             <C>
Balance, September 30, 2001                  137,993   $        137   $ 19,713,954    $(28,158,732)   $   (119,034)   $ (8,563,675)
Eliminate foreign currency adjustment             --             --             --         (19,034)        119,034              --
                                                                                                      ============
                                                                                                      Capital Stock
                                                                                                      Subscriptions
                                                                                                      -------------
Common stock issued in private
    Placement between $3.00
    and $5.00 per share                       45,254             45        173,455              --              --         173,500

Conversion of debentures
    for common stock between
    $0.50 and $4.00 per share              4,898,636           4899      2,611,537              --              --       2,616,436

Common stock issued for services
    at $0.20 and $15.00 per
    share                                    584,011            584        572,903              --              --         573,487

One for one thousand  reverse
    Split, Fractional shares
    Adjustment                                 2,096              3             (3)             --              --              --

Common stock issued in escrow
    to secure debt                           300,000            300           (300)             --              --              --

Net loss for the fiscal year
    Ended, September 30, 2002                     --             --             --      (1,270,692)             --      (1,270,692)
                                        ------------   ------------   ------------    ------------    ------------    ------------
Balance, September 30, 2002                5,967,990          5,968     23,071,546     (29,548,458)             --      (6,470,944)

Common stock issued in private
    placements between $0. 253
    and $1.000 per share                  18,430,211         18,430      1,036,147              --              --       1,054,577

Conversions of debentures
    for common stock between
    $0.0253 and $0.1275 per
    share                                 23,486,734         23,487        693,578              --              --         717,065

Common stock issued for services
    between $0.04 and $ 0.12 per
    share                                 16,008,770         16,009        888,386              --              --         904,395

Common stock issued for purchase
    of subsidiary at $.05 per
    share                                  5,000,000          5,000        245,000              --              --         250,000

Common stock issued for non-cash
    Investments in patent rights
    at of $0.05 per share                  4,000,000          4,000        196,000              --              --         200,000

Common stock issued between
    $0.033 and $1.00 per share
    in escrow, not paid                    4,017,451          4,017         (4,017)             --              --              --

Capital stock subscription deposits               --             --             --              --         160,252         160,252

Receivable for stock issued                       --             --             --              --         (93,500)        (93,500)

Net loss for the fiscal year
    ended, September 30, 2003                     --             --             --      (1,904,824)             --      (1,904,824)
                                        ------------   ------------   ------------    ------------    ------------    ------------
Balance, September 30, 2003               76,911,055   $     76,911   $ 26,126,640    $(31,453,282)   $     66,752    $ (5,182,979)
                                        ============   ============   ============    ============    ============    ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>

              UNIVERSAL COMMUNICATION SYSTEMS, INC. & SUBSIDIARIES
                     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                      For the Year Ended
                                                                         September 30,
                                                                      2003          2002
                                                                  -----------    -----------
<S>                                                               <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Loss                                                      $(1,904,824)   $(1,270,692)
    Adjustments to reconcile net loss from operations
      to net cash used by operating activities:
     Common stock issued for services                                 904,395        573,485
     Impairment loss                                                       --        128,706
     Depreciation and amortization expense                              6,638         22,036
     Interest payable added to principal of debentures                154,197        246,341
     Interest payable added to principal of note payable               30,509             --
     Loss on write down of assets                                          --        190,066
    Changes in operating assets and liabilities:
     (Increase) in inventory                                           (4,900)        48,991
     (Increase) in accounts receivable                               (105,859)            --
     (Increase) in prepaid and other                                  (85,249)        (4,600)
     Increase (Decrease) in accrued expenses and
     accounts payable                                                  86,902       (343,459)
                                                                  -----------    -----------

     Net Cash (Used) by Operating Activities                         (918,191)      (409,126)
                                                                  -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of patent rights                                       (100,000)            --
     Purchase of fixed assets                                         (38,610)        (1,917)
     Note receivable                                                 (116,782)            --
     (Increase) Decrease in advances to related parties                35,456        (35,456)
                                                                  -----------    -----------

     Net Cash (Used) by Investing Activities                         (219,936)       (37,373)
                                                                  -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds of short term notes                                     60,000             --
      Proceeds of line of credit                                       25,721             --
      Proceeds from the issuance of senior secured
          convertible debentures, net                                      --        240,000
      Proceeds from issuance of common stock                        1,054,577        173,500
      Proceeds of capital stock subscriptions                         160,252             --
           Increase (Decrease) in advances from related parties       (18,615)        29,791
                                                                  -----------    -----------

     Net Cash Provided by Financing Activities                      1,281,935        443,291
                                                                  -----------    -----------

NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS                                                           143,808         (3,208)

CASH AND CASH EQUIVALENTS
    AT BEGINNING OF PERIOD                                                874          4,082
                                                                  -----------    -----------

CASH AND CASH EQUIVALENTS
    AT END OF YEAR                                                $   144,682    $       874
                                                                  ===========    ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>

              UNIVERSAL COMMUNICATION SYSTEMS, INC. & SUBSIDIARIES
                     Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                           For the Year Ended
                                                                               September 30,
                                                                             2003         2002
                                                                          ----------   ----------
CONTINUED:
<S>                                                                       <C>          <C>
SUPPLEMENTAL DISCLOSURES OF CASH:
     Interest paid                                                        $       --   $       --
     Income taxes paid                                                    $       --   $       --
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
     Interest accrued on debentures, added to the
       principal of the debentures                                        $  154,197   $  246,341
     Interest accrued on note payable added to the
       principal of the note                                              $   30,509   $       --
     Debentures converted to capital stock                                $  717,065   $2,616,436
     Capital stock issued in acquisition of subsidiary                    $  250,000   $       --
     Capital stock issued in acquisition of patent rights                 $  200,000   $       --
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-7
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003


NOTE 1 - BACKGROUND, ACQUISITIONS AND SUBSIDIARIES

         Background
         ----------

         The Company and its subsidiaries are actively engaged in developing and
         marketing solar energy systems, and systems for the extraction of
         drinkable water from the air. Consolidated subsidiaries include
         wholly-owned subsidiaries AirWater Corp, AirWater Patents Corp,
         Millennium Electric T.O.U. Ltd, and Solar One Inc, as well as
         majority-owned Solar Style Ltd.

         Digital Way, Peru
         -----------------

         The Company owns 27% of Digital Way, S.A., a Peruvian
         telecommunications company. The Company treats Digital Way as an
         unconsolidated investment. The investment is fully impaired.

         Hard Disc Cafe, Inc.
         --------------------

         On November 1, 2001, The Company signed a non-binding letter of intent
         to acquire Hard Disc Cafe, Inc., a privately held Florida corporation
         wholly owned by an officer of the Company. It intended to develop and
         license themed internet cafes. During 2002, it ceased all operations.
         All parties agreed to unwind the transaction. In connection with this
         transaction, the Company had advanced a total of $146,154 to Hard Disc
         Cafe, Inc. Of this amount, the Company received $35,456 and accordingly
         it recorded a loss of $110,698 on these advances in 2002.

         Card Universal Corporation, Inc.
         --------------------------------

         During fiscal 2003, the Company entered into a non-binding letter of
         intent to acquire Card Universal Corporation, Inc.(CUC), a privately
         held development-stage Florida corporation of which an officer of the
         Company was CEO and a major shareholder. It was developing the business
         of providing and marketing prepaid "Stored Money Cards". CUC has ceased
         its development activities, is currently inactive, and the acquisition
         has been abandoned.

         CinemaElectric
         ---------------

         During fiscal 2003, the Company agreed to acquire CinemaElectric, a Los
         Angeles based multimedia messaging service company. On August 12, 2003,
         the Company released CinemaElectric from the agreement, in exchange for
         10% of CinemaElectric's stock, which is yet to be received.


                                      F-8
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003


NOTE 1 - BACKGROUND, ACQUISITIONS AND SUBSIDIARIES (continued)

         AirWater systems
         ----------------

         On March 21, 2003, the Company licensed exclusive worldwide rights to
         patents held by J.J. Reidy & Co, relating to a water
         production/generation system, for a period of not less than 10 years.
         In connection with the licensing, the Company created two wholly-owned
         subsidiaries: AirWater Corp, to produce and market the systems, and
         AirWater Patents Corp, to hold the Company's licensed patent rights.
         The Company paid $100,000 cash and 4 million shares of Company stock
         valued at $200,000. Additionally, the license agreement requires
         royalty payments of 5-7% of gross water system sales, with minimum
         royalty payments of $10,000 monthly beginning November 2003.

         The $300,000 acquisition cost is included in Intangibles.

         Millennium Solar Systems
         ------------------------

         On September 29, 2003, the Company completed an agreement to purchase
         100% of the stock of Millennium Electric T.O.U. Ltd (Millennium), an
         Israeli company specializing in the development and installation of
         solar power systems worldwide. Terms included an initial transfer of 5
         million shares of Company stock, valued at $250,000, with options for
         the sellers to purchase an additional 22 million shares at various
         exercise prices, ranging from $0.05 to $0.39 per share, to be granted
         under various conditions related to certain future events and future
         Company performance standards.

         The Company's purchase cost plus net liabilities assumed, resulted in
         $300,064 of intangibles in the form of patent costs, for which no
         impairment has been recognized. No amortization is recorded in the year
         ended September 30, 2003.

         A new wholly-owned US subsidiary, Solar One, Inc, was created by the
         Company to market the solar systems. As of September 30, 2003, it was
         inactive, with no assets or liabilities.

         Millennium's assets and liabilities are included in the Company's
         consolidated balance sheet at September 30, 2003. However, Millennium's
         results are not included in the Company's consolidated statements of
         operations, stockholders' deficit, or cash flows.


                                      F-9
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003


NOTE 1 - BACKGROUND, ACQUISITIONS AND SUBSIDIARIES (continued)

         Millennium Solar Systems (continued)
         ------------------------------------

         The following pro forma data is presented on a combined basis, as if
         Millennium had been acquired as of October 1, 2001:

            For the years ended September 30:       2003               2002
                                                -----------        -----------
         Revenues                               $   162,066        $   136,814
         Expenses                                 2,096,736          1,364,838
                                                -----------        -----------
         Net (Loss)                             $(1,934,670)       $(1,228,024)
                                                ===========        ===========
         Basic & Diluted Loss per Share         $     (0.07)       $     (5.36)
                                                ===========        ===========

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Reverse Stock Split
         -------------------

         The Company completed a one-for-one-thousand reverse stock split on
         August 23, 2002. All share and per share information reflects this
         reverse stock split.

         Principles of Consolidation
         ---------------------------

         The consolidated financial statements include the accounts of all
         majority-owned subsidiaries. Investments in which the Company has the
         ability to exercise significant influence, but not control, are
         accounted for by the equity method. All other investments are carried
         at cost. Intercompany transactions are eliminated.

         Basic and Diluted Net Loss Per Share
         ------------------------------------

         The calculation of basic and diluted net loss per share is in
         accordance with Statement of Financial Accounting Standards No. 128,
         "Earnings Per Share". The effect of outstanding stock options and
         warrants has been excluded from the dilutive computation, as their
         inclusion would be anti-dilutive.

         Net loss per common share, basic and diluted, has been computed using
         weighted average common shares outstanding. The effect of outstanding
         stock options and warrants has been excluded from the dilutive
         computation, as their inclusion would be anti-dilutive.


                                      F-10
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
<TABLE>
<CAPTION>

                                                           Fiscal Year Ended
                                                             September 30,
                                                          2003           2002
                                                          ----           ----
<S>                                                 <C>               <C>
         Net loss                                   $   (1,998,324)   $(1,270,692)
                                                    ==============    ===========

         Weighted average number of common shares       26,758,511        229,239
                                                    ==============    ===========
         Basic and diluted loss per share           $        (0.07)   $     (5.54)
                                                    ==============    ===========
</TABLE>

         Cash Equivalents
         ----------------

         The Company considers all highly liquid investments with an original
         maturity of three months or less to be cash equivalents. Balances in
         bank accounts may, from time to time, exceed federal insured limits.

         Inventory
         ---------

         Inventory is stated at the lower of cost (determined using the
         "first-in, first-out" method) or market. Inventory write-offs are
         provided to cover risks arising from slow-moving items or obsolescence.

         Fixed Assets
         ------------

         Furniture, fixtures and equipment are depreciated over their estimated
         useful lives of 3 to 15 years, using the straight-line method of
         depreciation.

         Long-Lived Assets
         -----------------

         The Company reviews its long-lived assets on a quarterly basis to
         determine any impairment in accordance with Statement of Financial
         Accounting Standards (SFAS) No. 144. This statement provides a single
         accounting model for long-lived assets to be disposed of and
         significantly changes the criteria that would have to be met to
         classify an asset as held-for-sale. Classification as held-for-sale is
         an important distinction since such assets are not depreciated and are
         stated at the lower of fair value and carrying amount. This statement
         also requires expected future operating losses from discontinued
         operations to be displayed in the period(s) in which the losses are
         incurred, rather than as of the measurement date as previously
         required.


                                      F-11
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         Estimates
         ---------

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         Fair Value of Financial Instruments
         -----------------------------------

         For cash, cash equivalents, other assets, accounts payable, and accrued
         expenses, the carrying amounts represent their fair market value. The
         carrying amount of the debentures payable approximates fair value
         because of similar current rates at which the Company could borrow
         funds with consistent remaining maturities.

         Segment Information
         -------------------

         The Company adopted Statement of Financial Accounting Standards No.
         131, "Disclosures about Segments of an Enterprise and Related
         Information" (SFAS No. 131) in 1999. This statement establishes
         standards for the reporting of information about operating segments in
         annual and interim financial statements and requires restatement of
         prior year information. The Company has no reportable operating
         segments for the years ended September 30, 2003 and 2002.

         Comprehensive Income and Foreign Currency Translation
         -----------------------------------------------------

         The Company has adopted FASB Statement No. 130, Reporting Comprehensive
         Income. The financial statements of the Company's foreign subsidiaries
         are measured using the U.S. dollar as the functional currency. Where
         there are foreign currency transactions, assets and liabilities are
         translated at exchange rates as of the balance sheet date and revenues
         and expenses were translated at average rates of exchange in effect
         during the year. The resulting cumulative translation adjustments were
         recorded as a separate component of stockholders' equity.


                                      F-12
<PAGE>


             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         Recent Accounting Pronouncements
         --------------------------------

         The Company has adopted SFAS No. 133, "Accounting for Derivative
         Instruments and Hedging Activities", and SFAS No. 137, "Accounting for
         Derivative Instruments and Hedging Activities-Deferral of the Effective
         Date of FASB No. 133", in the year ended September 30, 2001. These
         pronouncements establish methods of accounting for derivative financial
         instruments and hedging activities related to those instruments as well
         as other hedging activities. To date, the Company has not entered into
         any derivative financial instruments or hedging activities.

         The Financial Accounting Standards Board has established the following
         new pronouncements, none of which will materially affect the Company:
         SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained after
         the Securitization of Mortgage Loans Held for Sale by a Mortgage
         Banking Enterprise - an amendment of SFAS No. 65 (effective for fiscal
         quarters beginning after December 15, 1998)," SFAS No. 135, "Rescission
         of SFAS No. 75 and Technical Corrections (effective for fiscal years
         ending after December 15, 1999)," SFAS No. 137, "Accounting for
         Derivative Instruments and Hedging Activities - Deferral of the
         Effective Date of SFAS No. 133 - an amendment of SFAS No. 133
         (effective June 1999)," SFAS No. 138, "Accounting for Certain
         Derivative Instruments and Certain Hedging Activities - an amendment of
         SFAS No. 133 (effective for fiscal years beginning after June 15,
         2000)," SFAS No. 139, "Rescission of SFAS No. 53 and amendments to SFAS
         No. 63, 89, and 121 (effective for fiscal years beginning after
         December 15, 2000)," SFAS No. 140, "Accounting for Transfers and
         Servicing of Financial Assets and Extinguishments of Liabilities - a
         replacement of SFAS No. 125 (effective for certain disclosures for
         fiscal years ending after December 15, 2000)," SFAS No. 141, "Business
         Combinations," which eliminates the pooling-of-interests method for
         business combinations initiated after June 30, 2001, SFAS No. 142,
         "Goodwill and Other Intangible Assets" (effective for fiscal years
         beginning after March 15, 2001), which enhances disclosure for these
         assets subsequent to their acquisition, SFAS No. 143, "Accounting for
         Asset Retirement Obligations," which is effective for financial
         statements issued for fiscal years beginning after June 15, 2002.

         In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
         Associated with Exit or Disposal Activities," which requires companies
         to recognize costs associated with exit or disposal activities when
         they are incurred rather than at the date of a commitment to an exit or
         disposal plan. Such costs covered by the standard include lease
         termination costs and certain employee severance costs that are
         associated with a restructuring, discontinued operation, plant closing,
         or other exit or disposal activity. SFAS No. 146 replaces the previous
         accounting guidance provided by the Emerging Issues Task Force Issue
         No. 94-3, "Liability Recognition for Certain Employee Termination
         Benefits and Other Costs to Exit an Activity (including Certain Costs
         Incurred in a Restructuring)." SFAS No. 146 is to be Universal
         Communication Systems, Inc. and Subsidiaries Notes to the Consolidated
         Financial Statements September 30, 2003

                                      F-13
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

         Recent Accounting Pronouncements (continued)
         --------------------------------------------

         applied prospectively to exit or disposal activities initiated after
         December 31, 2002. The Company does not anticipate that the adoption of
         SFAS No. 146 will have any effect on the Company's financial statement
         presentation or disclosures.


NOTE 3 - GOING CONCERN AND SIGNIFICANT RISKS AND UNCERTAINTIES

         The Company's financial statements are prepared using generally
         accepted accounting principles applicable to a going concern which
         contemplates the realization of assets and liquidation of liabilities
         in the normal course of business. The Company has experienced losses
         since inception, and had an accumulated deficit of $31,546,782 at
         September 30, 2003. Net losses are expected for the foreseeable future.
         As such, there is substantial doubt as to the Company's ability to
         continue as a going concern. Management has modified its business plan
         and is currently focusing its operations on the design, manufacture and
         sale of water production and generation systems along with solar power
         systems. The Company needs to secure additional capital through sales
         of common stock. There is no assurance that management will be
         successful in its efforts to raise additional capital.

NOTE 4 - COMMITMENTS AND CONTINGENCIES

         Litigation
         ----------

         In November 1998, the Company and its predecessor affiliates filed an
         action against the lessor of its leases for the Concord and San Marcos,
         California multipoint distribution service channels. Thereafter, the
         lessor cross-complained against the Company and its predecessors
         alleging breach of contract. On December 9, 1999, a settlement
         agreement was signed, which provided for the Company to pay $87,375 to
         the lessor, in the fiscal years ended September 30 1998, 1999, and
         2000. Under terms of the settlement agreement, the Company also had an
         option to purchase the Concord and San Marcos leases for a price of
         $250,000 each, less lease payments already made. The Company elected to
         exercise the option to purchase the Concord lease, and the appropriate
         transfer procedure has been initiated with the U.S. Federal
         Communications Commission (FCC) which is still pending. The Company
         believes that under current FCC regulations it is not required to pay
         the $250,000 purchase price until such time as the FCC has approved the
         transfer of the license. Management has abandoned the pursuit of these
         leases and licenses.



                                      F-14
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 4 - COMMITMENTS AND CONTINGENCIES (continued)

         Litigation (continued)
         ----------------------

         During 1999, the Company borrowed $740,000 from Credit Bancorp. Also in
         1999, the Company filed suit against Credit Bancorp in US District
         Court in San Francisco, regarding improprieties. The case was settled
         in 1999, with the $740,000 loan converting to a $740,000 convertible
         debenture. In 2000, Credit Bancorp's receiver agreed to convert the
         debenture into 482 shares of the Company's stock. A new receiver has
         been appointed to administer the affairs of Credit Bancorp. The Company
         has been informed that the appointed receiver denies that such a
         conversion request was made, and the Company may be subject to further
         liability. As of September 30, 2003, no shares had been issued.
         Management believes that the resolution of these matters will not have
         a material effect on the Company's financial statements.

         On April 19, 2001, the Company was served with a complaint alleging
         unjust enrichment and a violation of California Business and
         Professions Code by Broad Horizons, Inc., a Florida corporation. The
         complaint stems from allegations that the Company improperly received
         monetary benefits from the Company's intended acquisition of
         Comunicacoes 100Fio, Ltda, a Brazilian corporation, and the Company's
         subsequent relations with Luis Cuza, a former vice-president and
         director of Broad Horizons, Inc., and a former member of the Company's
         board of directors. The Company denies the allegations and believes
         that the resolution of this matter will not have a material effect on
         the Company's financial statements.

         In fiscal 2003, Electric & Gas Technology Inc (ELGT) filed suit against
         the Company in Federal District Court in Texas, alleging patent
         infringement and other claims regarding the Company's AirWater
         products. This suit was dismissed without prejudice, for
         venue/jurisdictional reasons. It is not yet clear whether ELGT will
         re-file in another jurisdiction. The Company has counter-sued ELGT for
         defamation and patent infringement, which case is still pending.
         Management believes that the resolution of these matters will not have
         a material effect on the Company's financial statements.



                                      F-15
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 4 - COMMITMENTS AND CONTINGENCIES (continued)

         Operating Leases
         ----------------

         During 2003, the Company converted the lease of its Miami executive and
         administrative offices to a month-to-month basis. The Company's
         Millennium subsidiary in Israel rents facilities under non-cancelable
         operating leases for periods ending in 2005, and also leases a car
         under a 36-month lease commencing October 2003.

         Future minimum lease payments required under these leases are as
         follows at September 30, 2003:

                       Fiscal year
                       Ending September 30,
                       --------------------

                             2004               $  73,692
                             2005                  68,677
                             2006                  13,512
                                                ---------
                                                $ 155,881
                                                =========

         Management Agreement
         --------------------

         The Company entered into a three year consulting agreement with
         Overseas Communications Limited ("Overseas") on November 2, 2001, for
         the management and business advisory services provided by Mr. Michael
         Zwebner, Chairman and CEO of the Company. The Agreement calls for a
         monthly payment of $20,000, payable in cash or the Company's common
         stock. For the fiscal years ended September 30, 2003 and 2002, the
         Company paid $51,000 and $20,000 in cash, respectively, and issued
         3,160,742 and 365,966 shares of common stock, respectively, under this
         agreement. Mr. Zwebner is a shareholder of Overseas.

         Settlement Agreement
         --------------------

         As described more fully in Note 9, below, the Company has entered into
         a settlement agreement with the Andrew Corporation, formerly a major
         supplier to the Company. The related note payable for $300,000 is due
         and payable on April 15, 2004, and is secured by 300,000 shares of the
         Company's stock. In the event that the $300,000 is not paid when due,
         and if the security's value does not equal or exceed $300,000 at that
         time, then the original balance of $1,400,000 will again be due and
         payable.

         Because there was no stated interest, $15,254 was calculated as imputed
         interest, with $284,746 recorded as part of Notes Payable.

                                      F-16
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 4 - COMMITMENTS AND CONTINGENCIES (continued)

         Consultant Agreements
         ---------------------

         In September 2003, the Company entered into two consulting agreements.
         The remaining contingent obligations on these agreements at September
         30, 2003 totals $114,000.

NOTE 5 - STOCKHOLDERS EQUITY

         On May 21, 2002, stockholders approved a measure to increase the number
         of authorized common shares from 300 million to 800 million, and to
         authorize 10 million preferred shares.

         The Company's Board of Directors approved a one-for-one-thousand
         reverse stock split, effective August 23, 2002. Fractional shares were
         rounded up to the next share. All share and per share information
         reflects this reverse stock split.

         During the fiscal year ended September 30, 2003, the Company sold
         18,430,259 shares of its common stock for net cash proceeds of
         $1,054,577. The Company issued 23,486,734 shares of common stock in
         conversion of outstanding debentures for an aggregate value of
         $717,065. The Company also issued 16,008,770 shares of its common stock
         for services at an aggregate value of $904,395. Stock issued for
         services was at the reported market price for the shares at the time of
         issuance.

         During the fiscal year ended September 30, 2002, the Company sold
         45,254 shares of its common stock for net cash proceeds of $173,500.
         The Company issued 4,898,636 shares of common stock in conversion of
         outstanding debentures for an aggregate value of $2,616,436. The
         Company also issued 584,011 shares of its common stock for services at
         an aggregate value of $573,485. Stock issued for services was at the
         reported market price for the shares at the time of issuance.


                                      F-17
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003


NOTE 6 - INCOME TAXES

         A reconciliation between the actual income tax benefit and the federal
         statutory rate follows:

<TABLE>
<CAPTION>
                                                                Fiscal years ended September 30,
                                                                     2002                      2003
                                                            Amount           %         Amount          %
                                                            ------          ---        ------         ---
<S>                                                       <C>                <C>      <C>              <C>
            Computed income tax benefit at statutory      $  447,000         34 %     $ 656,000        34 %
            rate
            Tax benefit reserved for doubtful valuation     (447,000)       (34)%      (656,000)      (34)%
                                                          ----------                  ---------
            Income tax benefit                               None                        None
                                                             ----                        ----
</TABLE>


         At September 30, 2002, the Company had a net operating loss carry
         forward for federal tax purposes of approximately $29,300,000 which, if
         unused to offset future taxable income, will expire between the years
         2011 to 2023. A valuation allowance has been recognized to offset the
         related deferred tax assets due to the uncertainty of realizing any
         benefit therefrom.

         Under section 382 of the Internal Revenue Code, the utilization of net
         operating loss carryforwards is limited after an ownership change, as
         defined, to an annual amount equal to the market value of the loss
         corporation's outstanding stock immediately before the date of the
         ownership change multiplied by the highest Federal long-term tax exempt
         rate in effect for any month in the 3 calendar month period ending in
         the calendar month in which the ownership change occurred. Due to the
         ownership changes as a result of the May 1998 reorganization and
         subsequent stock issuances, any future realization of the Company's net
         operating losses will be severely limited.

         Significant components of the Company's deferred tax assets are as
         follows:

                                               2002                 2003
                                               ----                 ----
         Net operating loss carryforwards   $ 28,000,000       $ 29,300,000

         Valuation allowance                 (28,000,000)       (29,300,000)
                                            ------------       ------------
         Net deferred tax assets                None               None
                                                ====               ====

                                      F-18
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 7 - STOCK OPTION PLANS

         Nonstatutory Stock Options
         --------------------------

         The Company has issued stock options under nonstatutory stock option
         agreements. The options are granted at the fair market value of the
         shares at the date the option is granted. The options are granted for a
         period of 5 years, and are fully exercisable during the term of the
         option period or within thirty (30) days of the participant's
         resignation or termination.

         Combined transactions in non-employee options for the fiscal years
         ended September 30, 2003 and 2002 are as follows:
<TABLE>
<CAPTION>
                                                         2003                      2002
                                                         ----                      ----
                                                              Average                     Average
                                               Number of      Exercise     Number of     Exercise
                                                Shares         Price        Shares         Price
                                                -------      ---------      -------      ---------
<S>                                             <C>          <C>            <C>          <C>
         Options outstanding October 1          251,400      $   95.00      251,400      $   95.00
         Granted                                     --             --           --             --
         Cancelled/Expired                          250          95.00           --             --
         Exercised                              250,000          95.00           --             --
                                                -------      ---------      -------      ---------
         Options outstanding, September 30        1,150      $   95.00      251,400      $   95.00
                                                =======      =========      =======      =========
</TABLE>

         Incentive Stock Plan
         --------------------

         The Company adopted an incentive stock plan on August 5, 1998, which
         was approved by the shareholders on March 1, 2001. The options are
         granted at the fair market value of the shares at the date that the
         option is granted. The options are granted for a period of 10 years,
         and are exercisable after one year from the date of grant, at a vested
         rate of 20% per year during the term of the option period or within
         thirty (30) days of the participant's resignation or termination. The
         number of shares of stock covered by each outstanding option, and the
         exercise price per share thereof set forth in each such option, shall
         be proportionately adjusted for any stock split, and or stock dividend.
         All such options were being treated as non-statutory stock options
         until the incentive stock plan was approved by the shareholders.


                                      F-19
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 7 - STOCK OPTION PLANS (continued)

         Combined transactions in employee options for the fiscal years ended
         September 30, 2003 and 2002 are as follows:
<TABLE>
<CAPTION>

                                                             2003                   2002
                                                             ----                   ----
                                                                  Average                 Average
                                                    Number of    Exercise   Number of     Exercise
                                                     Shares       Price       Shares       Price
                                                     -----      ----------     -----      -------
<S>                                                  <C>        <C>            <C>        <C>
              Options outstanding October 1          6,300      $   602.00     6,300      $602.00
              Granted                                    0               0         0            0
              Cancelled/Expired                          0               0         0            0
              Exercised                              3,250          602.00         0            0
                                                     -----      ----------     -----      -------
              Options outstanding, September 30      6,300      $   602.00     6,300      $318.00
                                                     =====      ==========     =====      =======
</TABLE>

         The Company applies APB Opinion 25 in accounting for its stock
         compensation plans discussed above. Accordingly, no compensation costs
         have been recognized for these plans in 2003 or 2002. Had compensation
         costs been determined on the basis of fair value pursuant to FASB
         Statement No. 123, no compensation costs would have been recognized
         inasmuch as no options were granted under these plans.

NOTE 8 - SECURITIES PURCHASE AGREEMENTS AND DEBENTURES

         On April 14, 2000, the Company entered into a Securities Purchase
         Agreement with six investors, for the purchase of investment units,
         consisting of common stock, common stock purchase warrants, 4%
         subordinated debentures and preferred stock. On August 10, 2000, the
         Company agreed with the investors to modify certain terms of the
         earlier funding agreement.

         On March 29, 2001, the Company entered into a Senior Secured
         Convertible Debentures and Warrants Purchase Agreement with several
         investors.

         On June 7, 2001 the Company and several investors agreed to amend the
         March 29, 2001 Senior Secured Convertible Debentures and Warrants
         Purchase Agreement. The investors agreed to purchase $200,000 principal
         amount of 8% senior convertible debentures. The Company also agreed to
         issue letter warrants to purchase up to $125,000 divided by 85% of the
         average of the three lowest bid prices during the 22 trading days prior
         to June 7, 2001.

         In July 2003, an individual purchased a 4% Convertible Debenture with a
         principal amount of $100,000 from an existing bondholder. As part of
         the transaction, the Company issued ti him a new debenture which allows
         its conversion at any time into 14,000,000 freely transferable shares
         of the Company's stock.


                                      F-20
<PAGE>


             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 8 - SECURITIES PURCHASE AGREEMENTS AND DEBENTURES (continued)

         Commencing on February 5, 2002 through September 30, 2002, debenture
         holders exercised their option to convert $2,492,885 of 4% debentures
         and $123,551 of 8% debentures into 4,898,636 shares of common stock.

         During the fiscal year ended September 30, 2003, debenture holders
         exercised their option to convert $717,065 of 4% debentures into
         23,486,734 shares of common stock.

         The maturities of long-term debt are shown in the following table:

                      Due in 2004                                          --
                      Due in 2005                                   4,446,996
                                                                  -----------
                                                                  $ 4,446,996
                      Less current maturities                              --
                                                                  -----------
                      Total long term                             $ 4,446,996
                                                                  ===========

NOTE 9 - SETTLEMENT AGREEMENT AND NOTE PAYABLE

         On January 14, 2001, the Company entered into a Settlement Agreement
         with its systems integrator, Andrew Corporation, to repay costs
         incurred in purchasing their services and equipment in an approximate
         amount of $1,400,000. Under the Loan Agreement, Andrew received an
         initial payment of $100,000 and was scheduled to receive an additional
         $100,000 each month until the loan was repaid. In addition, the Company
         issued a Company warrant to purchase no less than 200 and no more than
         500 shares of the Company's common stock. The warrants are exercisable
         until January 24, 2005 at an exercise price of $230 per share. The
         warrants were issued in lieu of interest, and the Company is required
         to register the shares underlying the warrants. Further, on July 23,
         2001, the Company entered into an agreement with Andrew to resolve all
         remaining indebtedness. This agreement required the return of all
         equipment previously shipped to Argentina, most of which has been held
         in the duty free zone in La Plata, Argentina, as well as some inventory
         held in the U.S. The equipment in Argentina has not yet been returned
         to Andrew. The Company has not been able to locate the equipment in
         Argentina. On September 3, 2002, the Company reached a settlement
         agreement with Andrew Corporation for all amounts due. The Company
         issued a note in the amount of $300,000 due eighteen months from the
         date of issue. The note bears no interest and is secured by 300,000
         shares of the Company's common stock. The agreement further provides
         that if the $300,000 is not paid when due, and if the security's value
         does not equal or exceed $300,000 on the due date, then the settlement
         will be void and the entire $1,400,000 will again be due.

         Because there was no stated interest, $15,254 was calculated as imputed
         interest, with $284,746 recorded as part of Notes Payable.


                                      F-21
<PAGE>

             Universal Communication Systems, Inc. and Subsidiaries
                 Notes to the Consolidated Financial Statements
                               September 30, 2003

NOTE 10 - RELATED PARTY TRANSACTIONS

         Company CEO Michael Zwebner was the majority shareholder of Hard Disc
         Cafe, Inc (HDC), with which the Company entered into a letter of intent
         to acquire HDC, as discussed in Note 3 above.

         Mr. Zwebner was also the majority shareholder of Card Universal
         Corporation, Inc., with which the Company entered into a letter of
         intent to acquire Card Universal, as discussed in Note 3 above.

         Mr. Zwebner has also advanced certain funds to the Company, of which
         $11,368 was outstanding to him at September 30, 2003. As noted in Note
         4, Mr. Zwebner is also a shareholder of Overseas Communications
         Limited, with which the Company has a management agreement.

         During fiscal 2003, the Company paid $6,963 to its stock registrar, The
         Nevada Agency and Trust Company (NATCO). Alexander Walker, Jr, the
         Company's Corporate Secretary and a Director, is the Chairman and a
         shareholder of NATCO. Mr. Walker also received 500,000 shares of the
         Company's stock as compensation for legal services.

         Mr. Curt Orgil, the Company's Treasurer and a Director, received
         200,000 shares of the Company's stock as compensation for financial
         services.

NOTE 11 - PRODUCT DEVELOPMENT COSTS

         The Company does not capitalize costs for improvement or refinement of
         existing products. Product development expenses charged against
         earnings were $62,333 in the fiscal year ended September 30 2003.

NOTE 12 - INTANGIBLES

         Intangibles consist of $300,064 of goodwill allocated to patents,
         related to the Millennium acquisition (see Note 1), and $306,650 of
         patent costs, $300,000 of which relates to the acquisition of the
         AirWater patent licenses from J.J. Reidy (also see Note 3), and $6,650
         of which relates to the Company's distributed wireless call processing
         system.

NOTE 13 - SUBSEQUENT EVENTS

         On December 15, 2003, the Company tentatively agreed to acquire
         GiraSOLAR BV, a Dutch holding company with 2 subsidiaries, Stroomwerk
         Energy and Solar Service Buro, both involved in the photo voltaic solar
         industry. The Company is in the process of conducting its due diligence
         in connection with this proposed acquisition.



                                      F-22