UNITED STATES


                       SECURITIES AND EXCHANGE COMMISSION


                             WASHINGTON, D.C. 20549


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


                                    FORM 10-Q

     (Mark One)

[X]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002

                                       or

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


                        Commission File Number 000-27095
                                  -------------

                           AVERY COMMUNICATIONS, INC.


             (Exact name of registrant as specified in its charter)

            DELAWARE                                             22-2227079
(State or other jurisdiction of                           (IRS Employer ID No.)
incorporation or  organization)

  190 SOUTH LASALLE STREET, SUITE 1710                            60603
         CHICAGO, ILLINOIS
(Address and principal executive offices)                     (Zip code)

                                 (312) 419-0077
              (Registrant's telephone number, including area code)


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

Check  whether the Issuer is an  accelerated  filer (as defined in Rule 12b-2 of
the Exchange Act) Yes No X



The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity, as of October 15, 2002:


       TITLE OF CLASS                               NUMBER OF SHARES OUTSTANDING
       --------------                               ----------------------------

Common Stock, $.01 par value                                  1,048,653





<PAGE>

                   AVERY COMMUNICATIONS, INC. AND SUBSIDIARIES


                                      INDEX



PART I    FINANCIAL INFORMATION                                             PAGE

Item 1.   Consolidated Financial Statements

          Consolidated Balance Sheets - September 30, 2002                   1-2
          (unaudited) and December 31, 2001

          Consolidated  Statements of Operations - For the Three               3
          and Nine Months  Ended September 30, 2002 and 2001
          (unaudited)

          Consolidated Statements of Cash Flows - For the Nine                 4
          Months Ended September 30, 2002 and 2001 (unaudited)

          Notes to Consolidated Financial Statements                           5

Item 2.   Management's Discussion and Analysis of Financial                   12
          Condition and Results of Operations

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          22

Item 4.   Controls and Procedures                                             22

PART II   OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                                    22

          Signatures                                                          23



<PAGE>
<TABLE>
<CAPTION>
                                   ITEM 1. AVERY COMMUNICATIONS, INC. AND SUBSIDIARIES
                                               CONSOLIDATED BALANCE SHEETS


                                     ASSETS
                                                                                                  09/30/02      12/31/01
                                                                                                -------------  ------------
                                                                                                 (UNAUDITED)   (RESTATED)
Current assets:
<S>                                                                                          <C>              <C>
   Cash and cash equivalents                                                                 $     3,519,481  $  5,422,202
                                                                                                -------------  ------------
   Accounts receivable:
      Trade accounts, net of allowance for doubtful accounts of $242,901                           2,331,876     3,231,166
      Advance payment receivables                                                                  2,409,830     1,794,352
      LEC billing and collection fees receivable                                                   4,581,309     4,948,502
      Receivable from OAN                                                                          5,311,615     5,153,881
      Other receivables                                                                              403,338        94,376
                                                                                                -------------  ------------
         Total accounts receivable                                                                15,037,968    15,222,277
                                                                                                -------------  ------------

   Deferred tax asset                                                                                494,000     1,090,690
   Deposits with LECs                                                                                601,485       933,618
   Other current assets                                                                              915,938        53,354
                                                                                                -------------  ------------
         Total current assets                                                                     20,568,872    22,722,141
                                                                                                -------------  ------------

Property and equipment:
   Computer equipment and software                                                                 5,795,073     5,718,172
   Furniture and fixtures                                                                            490,410       500,003
   Accumulated depreciation and amortization                                                      (2,610,407)   (1,379,877)
                                                                                                -------------  ------------
         Property and equipment, net                                                               3,675,076     4,838,298
                                                                                                -------------  ------------

Other assets:
   Goodwill, net                                                                                   5,574,366     5,577,735
   Customer contracts, net                                                                           112,500             -
   Investments                                                                                             -        30,100
   Long-term deposits with LECs                                                                    2,236,983     2,236,983
   Purchased contracts, net of accumulated amortization of $354,263 and $339,996 at
      September 30, 2002 and December 31, 2001                                                             -        14,267
   Notes receivable due from related parties, net of allowance of $781,110                           182,700       752,700
   Capitalized financing fees, net                                                                   601,250       718,299
   Long-term deferred tax asset                                                                    1,721,542             -
   Other assets                                                                                        2,040        43,036
                                                                                                -------------  ------------
         Total other assets                                                                       10,431,381     9,373,120
                                                                                                -------------  ------------

         Total assets                                                                        $    34,675,329  $ 36,933,559
                                                                                                =============  ============
</TABLE>

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

                                     - 1 -
<PAGE>

<TABLE>
<CAPTION>
                                   ITEM 1. AVERY COMMUNICATIONS, INC. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS-(CONTINUED)
                                          LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                                                                 09/30/02      12/31/01
                                                                                                -----------  -----------
                                                                                                (UNAUDITED)  (RESTATED)
<S>                                                                                           <C>           <C>
Current liabilities:
   Line of credit                                                                             $  5,582,572  $ 2,607,705
   Trade accounts payable                                                                        1,446,488    5,144,763
   Accrued liabilities                                                                           3,277,849    4,306,386
   Current portion of customer cure liability                                                      317,701      317,701
   Income taxes payable                                                                                 -       163,994
   Deposits and other payables related to customers                                             26,773,187   23,311,999
                                                                                                -----------  -----------
       Total current liabilities                                                                37,397,797   35,852,548
                                                                                                -----------  -----------

Non-current liabilities:
   Long-term notes payable to related parties                                                      680,681      680,681
   Customer cure liability                                                                       1,326,461    1,576,021
                                                                                                -----------  -----------
       Total non-current liabilities                                                             2,007,142    2,256,702
                                                                                                -----------  -----------

Redeemable preferred stock:
   Series A; $0.01 par value, 391,667 shares authorized, issued and
     outstanding (liquidation preference of $391,667)                                              391,667      391,667
   Series B; $0.01 par value, 390,000 shares authorized, issued and
    outstanding (liquidation preference of $390,000)                                               390,000      390,000
   Series C; $0.01 par value, 40,000 shares authorized,  issued and
    outstanding (liquidation preference of $40,000)                                                 40,000       40,000
   Series D; $0.01 par value, 1,500,000 shares authorized, issued and
    and outstanding (liquidation preference of $1,500,000)                                       1,500,000    1,500,000
                                                                                                -----------  -----------
       Total redeemable preferred stock                                                          2,321,667    2,321,667
                                                                                                -----------  -----------

Commitments and contingencies

Stockholders' deficit:
   Preferred stock:
     Series G; $0.01 par value, 1,140,126 and 2,150,493 shares authorized, issued and
      outstanding at September 30, 2002 and December 31, 2001 (liquidation preference
      of $11,401 at September 30, 2002 and $21,505 at December 31, 2001)                            11,401       21,505
     Series H; $0.01 par value, 1,600,000 shares authorized, issued and
      outstanding (liquidation preference of $1,600,000)                                            16,000       16,000
     Series I; $0.01 par value, 500,000 shares authorized, issued and
      outstanding (liquidation preference of $500,000)                                               5,000        5,000
   Common stock: $0.01 par value, 20,000,000 shares authorized, 1,267,955 issued                    12,680       12,680
   Additional paid-in capital                                                                    6,107,753    6,639,337
   Accumulated deficit                                                                         (12,783,021)  (9,055,012)
   Treasury stock, at cost, 201,802 and 60,271 common shares at September 30, 2002 and
    December 31, 2001                                                                             (245,099)     (58,440)
   Subscription notes receivable, net of allowance of $983,272 and $183,272 at
    September 30, 2002 and December 31, 2001 respectively                                         (175,991)  (1,078,428)
                                                                                                -----------  -----------
       Total stockholders' deficit                                                              (7,051,277)  (3,497,358)
                                                                                                -----------  -----------

       Total liabilities and stockholders' deficit                                            $ 34,675,329  $36,933,559
                                                                                                ===========  ===========
</TABLE>

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

                                     - 2 -
<PAGE>


<TABLE>
<CAPTION>

                                       AVERY COMMUNICATIONS, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENTS OF OPERATIONS
                             FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
                                                       (UNAUDITED)

                                                                  THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                     September 30,                September 30,
                                                             -----------------------------------------------------------
                                                                 2002           2001          2002            2001
                                                              ------------   -------------  ------------   -------------
                                                               (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
<S>                                                          <C>            <C>           <C>            <C>
Revenues                                                     $  9,713,466   $  12,455,802 $  31,228,886  $   29,056,262

Cost of revenues                                               (6,739,823)     (8,842,297)  (21,867,837)    (20,509,098)
                                                              ------------   -------------  ------------   -------------

     Gross profit                                               2,973,643       3,613,505     9,361,049       8,547,164

Operating expenses                                             (4,538,459)     (3,204,196)  (12,773,838)     (6,331,192)
                                                              ------------   -------------  ------------   -------------

     Operating income (loss)                                   (1,564,816)        409,309    (3,412,789)      2,215,972
                                                              ------------   -------------  ------------   -------------

Other income (expense):
   Interest expense                                              (147,858)         66,327      (230,751)        (48,120)
   Option buyback costs                                                 -               -             -         (88,378)
   Write-off investment in affiliate                                    -      (2,221,305)            -      (2,221,305)
   Reserve for non-recourse notes receivable                            -        (930,869)   (1,200,000)       (930,869)
   Other, net                                                           -          86,685      (130,100)        269,157
                                                              ------------   -------------  ------------   -------------

     Total other income (expense), net                           (147,858)     (2,999,162)   (1,560,851)     (3,019,515)
                                                              ------------   -------------  ------------   -------------
Loss from continuing operations before
    provision for income taxes and discontinued operations     (1,712,674)     (2,589,853)   (4,973,640)       (803,543)

Income tax benefit (expense)                                      582,310         623,030     1,245,631        (110,701)

                                                              ------------   -------------  ------------   -------------
Loss from continuing operations                                (1,130,364)     (1,966,823)   (3,728,009)       (914,244)
Loss from discontinued operations (net of applicable income
   tax benefit of $311,799 for the nine months ended
    September 30, 2001)                                                 -               -             -        (605,259)
                                                              ------------   -------------  ------------   -------------

     Net loss                                                  (1,130,364)     (1,966,823)   (3,728,009)     (1,519,503)
     Less dividend earned on preferred stock                      123,192         123,192       369,576         330,523
                                                              ------------   -------------  ------------   -------------
     Net loss attributable to common shareholders            $ (1,253,556)  $  (2,090,015)$  (4,097,585) $   (1,850,026)
                                                              ============   =============  ============   =============
Per share data:
Basic and diluted net loss per share:
Continuing operations loss                                   $      (1.17)  $       (1.65)$       (3.58) $        (0.97)
Discontinued operations                                                 -               -             -           (0.48)
                                                              ------------   -------------  ------------   -------------
Net loss                                                     $      (1.17)  $       (1.65)$       (3.58) $        (1.45)
                                                              ============   =============  ============   =============
Weighted average number of common shares outstanding:
   Basic common shares                                          1,075,214       1,267,760     1,144,032       1,279,609
                                                              ============   =============  ============   =============
   Diluted common shares                                        1,075,214       1,267,760     1,144,032       1,279,609
                                                              ============   =============  ============   =============
</TABLE>

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


                                     - 3 -
<PAGE>

<TABLE>
<CAPTION>
                                                                                                     NINE MONTHS ENDED
                                                                                                        SEPTEMBER 30,
                                                                                              ---------------------------------
                                                                                                   2002              2001
                                                                                              ----------------  ---------------
                                                                                                (UNAUDITED)       (RESTATED)
<S>                                                                                           <C>               <C>
Cash flows from (used in) operating activities:
   Net loss                                                                                   $    (3,728,009)  $   (1,519,503)
   Loss from discontinued operations                                                                        -          605,259
     Amortization of loan discounts                                                                         -            6,210
     Deferred income taxes                                                                         (1,124,852)        (661,270)
     Depreciation and amortization                                                                  1,132,297          541,143
     Option buyback costs                                                                                   -           88,378
     Write off investment in affiliate                                                                      -        2,221,305
     Investment asset surrendered in exchange for royalty obligation                                   30,100                -
     Change in  operating assets and liabilities:
       Trade accounts receivable                                                                      899,290         (521,495)
       Advance payment receivables                                                                   (615,478)      (1,145,030)
       Other current assets                                                                          (862,584)         (94,535)
       Deposits                                                                                       332,133         (282,775)
       Related party notes receivable - provision for bad debt expense                              1,200,000        1,210,800
       Other receivables                                                                             (269,503)      (3,668,715)
       Trade accounts payable and accrued liabilities                                              (4,735,626)       1,157,046
       Income taxes payable                                                                          (163,994)         300,106
       Deposits and other payables related to customers                                             3,211,628       16,809,291
       Other assets                                                                                   331,414           (1,080)
                                                                                               ---------------   --------------

          Net cash provided by (used in) continuing operations                                     (4,363,184)      15,045,135
          Net cash provided by (used in) discontinued operations                                            -          275,271
                                                                                               ---------------   --------------
          Net cash provided by (used in) operations                                                (4,363,184)      15,320,406
                                                                                               ---------------   --------------

Cash flows from (used in) investing activities:
   Purchase of property and equipment                                                                 (67,308)        (445,300)
   Payment received on notes receivable                                                                     -           13,308
   Amounts loaned for notes receivable                                                                      -       (2,549,805)
   Acquisition Costs                                                                                        -         (254,345)
   Purchase of OAN Services, Inc., net assets                                                               -       (1,108,000)
   Purchase of investments                                                                                  -          (11,100)
                                                                                               ---------------   --------------

          Net cash used in investing activities                                                       (67,308)      (4,355,242)
                                                                                               ---------------   --------------

Cash flows from (used in) financing activities:
   Redemption of preferred shares                                                                     (10,104)        (350,000)
   Proceeds from line of credit                                                                     2,974,867                -
   Purchase of options for cash                                                                             -         (215,000)
   Purchase of treasury stock                                                                         (75,408)      (1,207,617)
   Payment of preferred stock dividends                                                              (361,584)        (278,023)
   Issuance of shares of common and preferred stock for cash                                                -        2,046,307
                                                                                               ---------------   --------------

          Net cash provided by (used in) financing activities                                       2,527,771           (4,333)
                                                                                               ---------------   --------------

Increase/(decrease)  in cash                                                                       (1,902,721)      10,960,831

Cash at beginning of period                                                                         5,422,202        6,719,888
                                                                                               ---------------   --------------

Cash at end of period                                                                         $     3,519,481   $   17,680,719
                                                                                               ===============   ==============
Supplemental disclosures:
   Interest paid                                                                              $       230,751   $       46,702
                                                                                               ===============   ==============
   Income taxes paid                                                                          $             -   $      160,066
                                                                                               ===============   ==============

Schedule of non-cash financing activities:
   Receipt of common stock in exchange for notes receivable                                   $       102,437   $            -
                                                                                               ===============   ==============

   Receipt of preferred stock in exchange for notes receivable                                $       170,000   $            -
                                                                                               ===============   ==============
</TABLE>


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


                                     - 4 -
<PAGE>



                   AVERY COMMUNICATIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


         NOTE 1. BASIS OF PRESENTATION


         The   accompanying    unaudited    financial    statements   of   Avery
Communications,  Inc. ("Avery") and subsidiaries  (collectively,  the "Company")
have been prepared in accordance with generally accepted  accounting  principles
for interim financial information.  Accordingly,  they do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements.


         Avery's  principal  subsidiaries,  whose  results  are  included in the
financial statements, are as follows:

         o        ACI Billing Services, Inc. ("ACI"), which provides billing and
                  collection   clearinghouse   services  to   telecommunications
                  customers;

         o        HBS Billing Services  Company ("HBS"),  which provides billing
                  and collection  clearinghouse  services to  telecommunications
                  customers; and

         o        Aelix,  Inc.  ("Aelix"),   which  offers  intelligent  message
                  communication   services,   principally   in  the  travel  and
                  hospitality sectors.


         Management  uses  estimates  and  assumptions  in  preparing  financial
statements in accordance with generally accepted  accounting  principles.  Those
estimates and assumptions affect the reported amounts of assets and liabilities,
the disclosure of contingent  assets and liabilities and the reported amounts of
revenues and expenses.  Actual  results could vary from the estimates  that were
used.


         Certain prior period amounts have been  reclassified  to conform to the
2002 presentation.


         In the opinion of  management,  all  adjustments  (consisting of normal
recurring  adjustments)  considered  necessary for a fair presentation have been
included.  Operating  results for the three-month  and nine-month  periods ended
September  30, 2002 are not  necessarily  indicative  of the results that may be
expected for the year ending December 31, 2002.


         NOTE 2.  LIQUIDITY


         Avery has  incurred a net loss of $3.7  million  during the nine months
ended September 30, 2002,  which included a $1.2 million  non-cash  write-off of
notes receivable from related parties.  The Company used $4.4 million of cash in
operating  activities during the same period.

                                     - 5 -
<PAGE>

The Company is optimistic that it will achieve  profitability  during the fourth
quarter  of  2002,   based  upon  cost  reductions   being  realized  through  a
consolidation  of  operations  which was  completed  during the third quarter of
2002. Accordingly, the Company does not anticipate the need over the foreseeable
future for additional  financing or capital (excluding funding from the existing
line of credit) to fund continuing operations.


         The Company's revenue during the first nine months of 2002 increased by
$2.2 million  compared to the same period in 2001.  The increase  reflected $9.8
million of additional  revenue from the acquired ACI and Aelix  businesses  (see
Note 7) offset by a $7.6  million  decline in the HBS  business.  Revenue in the
Company's  core business is declining as a result of a decrease in the volume of
call  records  processed  on  behalf of the  Company's  customers.  The  latter,
typically  long distance  network  resellers,  have been  adversely  affected by
increased  usage of cell  phones and prepaid  phone  cards and greater  consumer
reliance on local  exchange  carriers  ("LECs") for long distance  service.  The
Company  is  attempting  to  increase   revenue   through  the   acquisition  of
complementary  businesses and through the offering of new services,  such as 900
area code business  billing and the Aelix message  communication  services.  The
Company's  intention is to make  acquisitions  or expand into markets which will
leverage the Company's existing infrastructure.


         Avery's working  capital  position at September 30, 2002 was a negative
$16.8  million,  compared to a negative  $13.1 million at December 31, 2001. The
Company can operate with negative working capital because a significant  portion
of its  current  liabilities  do not  require  payment in the near  future.  For
example,  current  liabilities  at September 30, 2002 include  approximately  $6
million of  deposits  from  customers  which are not  typically  refunded in the
ordinary course of business. The customer deposits would be refundable over time
only if the customer  were to  significantly  reduce the volume of business done
with the Company or terminate its relationship.  Most of the Company's customers
have  experienced  lower  call  record  volumes  during  2002,  and such  volume
reductions have reduced certain categories of deposits from customers. Avery has
not  historically  experienced any material loss of customers in its business in
any one year.



         NOTE 3.  NET LOSS PER COMMON SHARE


         Basic and diluted net loss per share are  computed by dividing  the net
loss,  less preferred  stock  dividends  earned of $123,192 and $123,192 for the
three month  periods and $369,576 and $330,523 for the nine month  periods ended
September 30, 2002 and 2001,  respectively,  by the weighted  average  number of
shares of common stock outstanding during the respective periods.  The effect of
the  preferred  stock  dividend on the basic loss per common share was $0.11 and
$0.10 per weighted average common share  outstanding for the three month periods
and $0.32 and $0.24 for the nine month  periods  ended  September  30,  2002 and
2001, respectively.


         Diluted net loss per share equals  basic loss per share  because of the
anti-dilutive   effect  of  outstanding   options,   warrants  and   instruments
convertible  into common  stock.  If all  outstanding  options  and  warrants to
purchase common stock were exercised,  and if all instruments  convertible  into
common stock were so converted,  then the  additional  common stock  outstanding
would approximate 762,000 shares.

                                     - 6 -
<PAGE>

         NOTE 4.  DISCONTINUED OPERATIONS


         On August  1,  2000,  the  Board of  Directors  of Avery  approved  the
spin-off of Primal Solutions, Inc. ("PSI").


         On February 12, 2001, Avery distributed 100% of the outstanding capital
stock of PSI to its security holders. Accordingly, as of such date, Avery had no
further  ownership  interest  in  Primal  or its  subsidiary,  Wireless  Billing
Systems.


         As part of the formal  distribution,  the seven PSI stockholders at the
time of the  Company's  acquisition  of PSI  redeemed  4,976,401  shares  of the
Company's  Series G voting  preferred stock in exchange for 32% of PSI's capital
stock.  Also,  the  exercise  prices  of  Avery's  outstanding  options  and the
conversion prices of Avery's convertible securities were adjusted to reflect the
distribution.  After the transaction was completed, Avery's outstanding Series G
preferred stock was reduced to 2,150,493 shares.


         The financial  information contained in this document presents PSI as a
discontinued  operation  due to the  spin-off.  Accordingly,  the amounts in the
statements of operations through the provision for income taxes exclude expenses
relating to PSI.


          The  operating  results  of PSI  for the  period  January  1,  2001 to
February 12, 2001 were as follows:


                                                               Period January 1,
                                                               2001 to February
                                                                   12, 2001
                                                              ------------------
      Operating revenues                                              $ 825,417
      Cost of revenues                                                 (598,792)
                                                              ------------------
         Gross profit                                                   226,625
      Selling, general and administrative expenses                   (1,127,751)
                                                              ------------------
         Loss from operations                                          (901,126)
      Other Expense                                                     (15,932)
                                                              ------------------
         Loss before income tax benefit                                (917,058)
         Income tax benefit                                             311,799
                                                              ------------------
         Net loss                                                    $ (605,259)
                                                              ==================



         NOTE 5. CERTAIN TRANSACTIONS


         On March 9, 2001, HBS' largest customer, which accounted for 57% of its
call  records  processed in 2000 and 55% of all call  records  processed  during
2001,  filed a voluntary  petition for protection  under Chapter 11 of the U. S.
Bankruptcy Code in connection with the reorganization of its parent company. The
customer's  volume of call records  processed has declined  since the bankruptcy
filing,  but the  decline in volume is believed  to be  attributable  to general
industry trends.  For the first nine months of 2002, the customer  accounted for
62% of all call records processed by HBS, compared to 64% during the same period
of 2001. As of September 30, 2002, the filing has had no material adverse effect
on HBS' business relationship with this customer,  and, based upon conversations
between the  managements  of the two  companies,  the Company does not currently
anticipate that the filing will  materially  adversely  affect the  relationship
with this company in the future.


         In  connection  with  our  purchase  of  assets  from  Qorus.com,  Inc.
("Qorus")  in  November  2001  (which  resulted  in the  formation  of our Aelix
business), the Company agreed to pay Qorus an amount equal to five percent (5%)

                                     - 7 -
<PAGE>

of the net  after-tax  income,  if any,  generated by the  acquired  intelligent
message communications service business for a period of five years following the
closing date.  Pursuant to an agreement  among the parties entered into in March
2002,  Qorus agreed to eliminate  this  royalty  obligation  in exchange for the
Company's  (i) cash  payment  in the  amount  of  $100,000,  (ii)  return of all
3,010,000  common  shares of Qorus held by the Company;  and (iii)  agreement to
cancel all unexercised options to purchase 1,066,500 common shares of Qorus at a
price of $0.01 per share.  At December 31,  2001,  the  investment  in Qorus was
recorded in the  Company's  financial  statements  at $30,100.  During the first
quarter of 2002, the Company  recorded an expense of $130,100 in connection with
this transaction.


         On  January  3, 2002,  the  Company  advanced  the sum of  $200,000  to
Norlenton Investments,  a shareholder of the Company, in exchange for a recourse
promissory  note.  The note bears  interest at 6% and calls for the repayment of
all principal and interest on January 3, 2003.  The advance is secured by 38,881
shares of common stock in the Company.


         In October 2000, in order to permit its employees to participate in the
PSI spin-off,  the Board of Directors of the Company  authorized  the Company to
accelerate all its outstanding  options and to loan its employees,  on a secured
but non-recourse  basis,  the amount required to exercise such options,  plus an
additional  amount to offset the tax consequences of such exercises.  The loans,
which were  classified as stock  subscriptions  receivable,  were secured by the
stock acquired by the employees upon exercise of their options.  At December 31,
2001, the aggregate of subscription notes receivable was $1,078,428.  During the
second quarter of 2002, the Company  established an $800,000 reserve against the
subscription  notes receivable,  based on the excess of the amount owed over the
fair market value of the underlying  stock.  The reserve was deemed  adequate at
September 30, 2002.


          Effective March 20, 2002,  pursuant to a unanimous  written consent of
the  Company's  Directors,   the  Company  formally  acknowledged  that  certain
promissory notes aggregating  $685,118  received from executive  officers and/or
directors in October  2000, in  connection  with the exercise of stock  options,
were  intended  by the  Company  and the  various  borrowers  at the time of the
transaction to be non-recourse loans secured solely with the common stock issued
pursuant to the stock option  exercise.  The originally  issued notes,  however,
were issued without the intended non-recourse  language. In July 2002, new notes
which  clarified the notes as secured and  non-recourse  were  exchanged for the
previously issued notes.


         In connection  with the spin-off of PSI, the Company  advanced  certain
former PSI  stockholders  $1,563,500 on July 31, 2000 in exchange for promissory
notes.  The notes are  non-recourse,  bear  interest  at 6.6% per annum and were
originally  due on July 31, 2002.  During the third quarter of 2001, the Company
established  a reserve of $810,000  against those notes  receivable,  due to the
excess of the amount due over the stock  value.  In January  2002,  notes with a
face value of $878,500  were  assigned to an unrelated  party,  and the maturity
date of such  assigned  notes was extended to July 31,  2006.  During the second
quarter of 2002,  the Company added $400,000 to the reserve based upon a further
decline  in the  stock  value.  On July 31,  2002,  notes  with a face  value of
$685,000 (and a net carrying  value of $170,000)  were cancelled in exchange for
surrender  of the  related  collateral  of  1,010,367  shares  of the  Company's
non-dividend  bearing  Series G preferred  stock.  At September  30,  2002,  the

                                     - 8 -
<PAGE>

$878,500  of  outstanding  loans (with a net  carrying  value of  $182,700)  are
secured by  1,140,126  shares of the  Company's  non-dividend  bearing  Series G
preferred  stock (which are  convertible  into 159,076  shares of the  Company's
common stock).


         During the first nine months of 2002, the Company has purchased a total
of 49,700 shares of the Company's common stock in open market transactions at an
average  purchase price of $1.52 per share.  The Company  additionally  acquired
91,831  shares of common  stock  through the  surrender of  collateral  securing
certain cancelled non-recourse notes receivable.



         NOTE 6.  COMMITMENTS AND CONTINGENCIES

         On August 3, 2001, the Company,  through ACI, completed the acquisition
of certain assets from OAN Services,  Inc.  ("OAN").  OAN had filed a bankruptcy
petition under Chapter 11 of the U.S.  Bankruptcy  Code earlier in 2001.  During
2002,  one of the major  pre-petition  creditors of OAN appealed  certain of the
bankruptcy's  court's  rulings  relative to the  disbursement  of OAN's funds to
creditors  after the  bankruptcy  filing.  During the third quarter of 2002, the
pre-petition  creditor  succeeded  in  obtaining a ruling from an appeals  court
which remanded the case back to the bankruptcy court for  reconsideration of its
earlier rulings. The creditor has put many of ACI's customers on notice that all
or a portion of OAN's  disbursements  to them which were previously  approved by
the  bankruptcy  court  may be  disgorged.  The  Company  is not a party  to the
bankruptcy filing nor any appeal of the bankruptcy court's rulings.  The Company
does not  believe  that the  ultimate  resolution  of this  dispute  will have a
material  adverse  effect on the  Company's  results of  operation  or financial
position;  however, due to the inherent uncertainty of litigation,  there can be
no  assurance  that the  resolution  of the  dispute  would not have a  material
adverse effect on the Company's results of operations or financial  position for
the fiscal period in which such resolution occurred.


         The  Company  is  involved  in  various  other  claims  and  regulatory
proceedings arising in the ordinary course of business.  The Company believes it
is unlikely that the final outcome of any of the claims or  proceedings to which
the  Company  is a party will have a material  adverse  effect on the  Company's
financial  position  or  results of  operations;  however,  due to the  inherent
uncertainty of litigation,  there can be no assurance that the resolution of any
particular  claim or proceeding  would not have a material adverse effect on the
Company's  results of operations or financial  position for the fiscal period in
which such resolution occurred.



         NOTE 7.  OAN and AELIX TRANSACTIONS


         ACI completed  its purchase of certain  assets from OAN in August 2001.
The Company  completed its  acquisition  of  substantially  all of the assets of
Aelix in November 2001.


         At the  time of  ACI's  purchase  of the  net  assets  of OAN,  OAN had
indicated  that the net bad debt  reserve  held  against  customers (a liability
which was assumed by ACI) was $0.6 million.  This amount  represents a liability
for funds  withheld from  customers to cover bad debt charges for processed call
records.  During the third quarter of 2002, the Company  determined,

                                     - 9 -
<PAGE>

with OAN's  cooperation,  that the amount  withheld from  customers to cover bad
debts as of the closing  date of the purchase was  actually  $3.6  million.  The
Company has adjusted its bad debt reserves,  recorded a $3.0 million  additional
receivable from OAN and restated the prior period financial statements (see Note
11 to Consolidated Financial Statements). The Company believes the receivable is
collectible in full from the OAN bankruptcy estate.


         Unaudited  pro forma  financial  information  for the nine months ended
September  30,  2001 as though the OAN and Aelix  acquisitions  had  occurred on
January 1, 2001 is as follows:


                                                                NINE MONTHS
                                                                    ENDED
                                                             SEPTEMBER 30, 2001

Revenue                                                         $ 46,571,343

Net loss from continuing operations                               (9,656,338)

Net loss per share from continuing operations:
     Basic                                                           $ (7.55)
     Diluted                                                         $ (7.55)



         NOTE 8 - SEGMENT INFORMATION


         The local exchange  carrier billing segment  represents the third party
billing  clearinghouses for the telecommunications  industry.  These third party
clearinghouses  process telephone call records and other transactions and submit
them to local  telephone  companies  for  inclusion  in their  monthly  bills to
end-users.  The intelligent  message  communication  services  segment  provides
services  to   enterprises,   particularly   in  the  travel,   hospitality  and
transportation sectors.


         A summary of the segments'  operating  income (loss) for the nine-month
period ended  September 30, 2002 and certain  balance sheet data as of September
30, 2002 is as follows:


<TABLE>
<CAPTION>
                                         LOCAL EXCHANGE   INTELLIGENT MESSAGE             CORPORATE         CONSOLIDATED
                                        CARRIER BILLING      COMMUNICATIONS            ADMINISTRATION

<S>                                        <C>                  <C>                   <C>                  <C>
Revenue                                    $ 30,745,263         $ 483,623             $            -       $ 31,228,886

Depreciation and Amortization                   955,758           132,295                      44,244          1,132,297

Segment profit (loss)                           643,040        (1,069,600)                 (3,301,449)        (3,728,009)

Segment assets                               24,021,398         4,225,023                   6,057,828         34,304,249

Capital expenditures by                         168,777          (104,969) *                    3,500             67,308
segment
<FN>
* $150,000 reclassified from fixed assets to intangible assets
</FN>
</TABLE>


         The intelligent message  communication service business was acquired in
November 2001.  Accordingly,  there was only one  continuing  segment during the
nine months ended September 30, 2001.


         Approximately  $2.1 million of Avery's  corporate  office  expenses and
$0.4 million of the intelligent  message  communication  business  expenses have
been allocated to the local exchange  carrier  billing segment based on services
provided to that segment.



         NOTE 9.  REVERSE STOCK SPLIT


                                     - 10 -
<PAGE>

         The stockholders of the Company approved a 1-for-8 reverse split of the
Company's  common  stock,  which was  effective  on December  12,  2001.  Shares
outstanding and earnings per share during periods before the reverse stock split
have been restated to reflect the split.





         NOTE 10.  GOODWILL


         Financial  Accounting  Standard No. 142 "Goodwill and Other  Intangible
Assets" requires that goodwill recorded on acquisitions  completed prior to July
1, 2001 be  amortized  through  December 31,  2001.  Effective  January 1, 2002,
goodwill is no longer to be amortized in periodic equal pre-determined  charges,
but will instead be tested for  impairment  as set forth in the  statement.  The
Company adopted this statement effective January 1, 2002.


         The net effect of not recording any  amortization  of goodwill  reduced
the net loss by  $40,000  for the three  months  ended  September  30,  2002 and
$120,000 for the nine months ended September 30, 2002. If the statement had been
applied effective at the beginning of the three-month period ended September 30,
2001, the net loss for that period would have decreased by $40,000, resulting in
net loss of  $1,927,000  ($1.52  loss per  share,  basic  and  diluted).  If the
statement had been applied  effective at the beginning of the nine-month  period
ended September 30, 2001, the net loss from continuing operations and net income
would have  decreased  by $120,000,  which would have  resulted in net loss from
continuing operations of $794,000 ($0.62 loss per share, basic and diluted), and
a net loss of $1,400,000 ($1.09 loss per share, basic and diluted).


         The Company has two segments  which  correspond  with its two reporting
units,  the local exchange  carrier billing segment and the intelligent  message
communications segment.  Goodwill recorded on the Company's financial statements
includes $2.5 million within the local exchange carrier billing segment and $3.1
million within the intelligent message communication segment.


         The  Company  obtained  an  independent  valuation  of the  intelligent
message  communication  segment  during the second  quarter of 2002,  updating a
valuation  obtained to support the Company's  initial purchase price allocation.
This business  valuation  supports the related goodwill carried on the Company's
financial statements. On the basis of the independent valuation and the judgment
of management, the Company concluded that there is no impairment of goodwill for
this segment.


         The Company intends annually, on a going forward basis, to evaluate the
goodwill of its  intelligent  message  communications  segment during the fourth
quarter of each year. Accordingly,  this goodwill impairment review process will
be completed  again during the fourth quarter of 2002 using an enterprise  value
methodology.  If the fair market value of the business is less than the carrying
value,  the Company will complete the impairment test to  specifically  identify
the goodwill impairment amount.


         In connection  with its local exchange  carrier  billing  segment,  the
Company has completed its initial  assessment of the business value by comparing
its estimate of fair value to the  carrying  amount and has  concluded  that the
fair value of this  segment  exceeds its  carrying

                                     - 11 -
<PAGE>

value. The Company intends  annually,  on a going forward basis, to evaluate the
goodwill of its local exchange carrier billing segment during the fourth quarter
of each year.  Accordingly,  this  goodwill  impairment  review  process will be
completed  again  during the fourth  quarter of 2002 using an  enterprise  value
methodology.  If the fair market value of the business is less than the carrying
value,  the Company will complete the impairment test to  specifically  identify
the goodwill impairment amount.





         NOTE 11.   RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS


         During the third quarter of 2002,  the Company  determined,  with OAN's
cooperation, that an error was made in the computation of the purchase price for
net  assets  purchased.  It was  determined  that the  liability  assumed by the
Company for amounts withheld from customers to cover bad debts as of the closing
date of the  purchase was actually  $3.6  million,  rather than the $0.6 million
calculated  at the  time of  closing.  The  Company  has  adjusted  its bad debt
reserves,  recorded a $3.0 million  additional  receivable from OAN and restated
the December 31, 2001 balance sheet as previously  filed in the Company's Annual
Report  on Form  10-KSB as if such  entries  had been made as of the date of the
asset purchase.  The adjustments  affect only the balance sheet and statement of
cash  flows  dated  after  August  2001.  There was no  impact to the  Company's
statement of operations.




                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

ITEM 2.


         General


         Avery is a telecommunications  service company which operates two lines
of business.  Through its HBS and ACI  subsidiaries,  Avery provides billing and
collection  services for  inter-exchange  carriers and long-distance  resellers.
Through its Aelix subsidiary,  Avery provides intelligent message  communication
services to the travel, hospitality and transportation sectors.


         Our  billing  and  collection  service  operates  as  a  clearinghouse.
Customers,  principally  long distance service  resellers,  submit their billing
records to us. We aggregate  those records from all of our customers and present
them to local exchange carriers, such as regional Bell operating companies.  The
local  exchange  carriers  include the submitted  charges on monthly phone bills
sent to end-users.  The local exchange  companies  remit  collected funds to us,
generally 45 to 60 days after we submit our customers'  billing records to them.
We then remit such funds to our customers,  after withholding our fees and other
expenses.

         Our intelligent message  communication  service allows us to accept and
deliver  messages,  via voice,  e-mail or fax,  between  our  customers  and any
individual  or group of people  (customers,  suppliers,  employees,  etc.) on an
expedited   basis.   Examples  of  the  types  of  services  we  offer   include
confirmations  of  airline  and  hotel  reservations.  Generally,  we  charge  a
per-message fee to our intelligent message communication service customers.

                                     - 12 -
<PAGE>



         Forward Looking Statements


         This Quarterly Report on Form 10-Q contains  certain  "forward-looking"
statements as such term is defined in the Private  Securities  Litigation Reform
Act of 1995 and  information  relating  to the  Company  that  are  based on the
beliefs  of  the  Company's  management  as  well  as  assumptions  made  by and
information currently available to the Company's  management.  When used in this
report, the words "anticipate," "believe," "estimate," "expect" and "intend" and
words or  phrases  of  similar  import,  as they  relate to the  Company  or its
subsidiaries  or Company  management,  are intended to identify  forward-looking
statements.  Such  statements  reflect  the  current  risks,  uncertainties  and
assumptions   related  to  certain  factors   including,   without   limitation,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation  and  supervision,   seasonality,   distribution  networks,   product
introductions  and  acceptance,   technological  change,   changes  in  industry
practices,  onetime  events  and other  factors  described  herein  and in other
filings made by the Company with the Securities and Exchange  Commission.  Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize,  or should  any  underlying  assumptions  prove  incorrect,  actual
results  may  vary  materially  from  those  described  herein  as  anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.





         GENERAL


         The following is a discussion of the consolidated  financial  condition
and results of  operations of the Company for the three and  nine-month  periods
ended  September  30, 2002 and 2001. It should be read in  conjunction  with the
Consolidated  Financial  Statements of the Company,  the notes thereto and other
financial  information  included  elsewhere  in this report,  and the  Company's
Annual Report on Form 10-KSB for the year ended  December 31, 2001. For purposes
of the following  discussion,  references to year periods refer to the Company's
fiscal year ended December 31 and  references to quarterly  periods refer to the
Company's fiscal three month periods ended September 30, 2002 and 2001.


         The results of  operations  for the first nine  months in 2002  include
nine  months of  activity by ACI,  which  purchased  the assets of OAN in August
2001,  and nine  months of activity by Aelix,  which was  purchased  in November
2001. The  corresponding  results of operation for the first nine months of 2001
include two months' activity for ACI and no activity from Aelix.


         The results on the  "Discontinued  operations"  lines  during the first
nine months of 2001 relate to PSI, a wholly owned  subsidiary  that was spun-off
in February  2001.  All  discussions  relating to revenue,  cost of revenues and
operating  expenses  pertain only to  continuing  operations,  which  consist of
Avery, HBS, ACI and Aelix.





         RESULTS OF OPERATIONS

                                     - 13 -
<PAGE>

         The   following   table   presents   certain  items  in  the  Company's
Consolidated  Statements  of  Operations  for the  three and nine  months  ended
September 30, 2002 and 2001:


<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                     September 30,                  September 30,
                                                             -----------------------------  -----------------------------
                                                                 2002           2001            2002           2001
                                                             -------------  --------------  -------------  --------------
                                                              (Unaudited)    (Unaudited)     (Unaudited)    (Unaudited)
                                                                    (In Thousands)                 (In Thousands)

<S>                                                          <C>            <C>             <C>            <C>
Revenues                                                     $      9,714   $      12,456   $     31,229   $      29,056

Cost of revenues                                                   (6,740)         (8,842)       (21,868)        (20,509)
                                                              ------------   -------------   ------------   -------------

     Gross profit                                                   2,974           3,614          9,361           8,547

Operating expenses                                                 (4,539)         (3,204)       (12,774)         (6,331)
                                                              ------------   -------------   ------------   -------------
     Operating income (loss)                                       (1,565)            410         (3,413)          2,216
Other income (expense), net                                          (148)         (2,999)        (1,561)         (3,019)
Income tax benefit (expense)                                          583             623          1,246            (111)
Discontinued operations loss                                            -               -              -            (605)
                                                              ------------   -------------   ------------   -------------
     Net loss                                                $     (1,130)  $      (1,966)  $     (3,728)  $      (1,519)
                                                              ============   =============   ============   =============
</TABLE>


         THREE MONTHS ENDED  SEPTEMBER  30, 2002  COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2001


         Operating Revenues


         The  Company's  revenues are derived  primarily  from the  provision of
billing  clearinghouse and information  management  services to direct dial long
distance  carriers and operator  services  providers  ("Local  Exchange  Carrier
billing" or "LEC billing").  To a lesser extent,  revenues are also derived from
enhanced  billing services  provided to companies that offer voice mail,  paging
and Internet services or other  non-regulated  telecommunications  equipment and
services,  and from electronic messaging services provided by Aelix. LEC billing
fees charged by the Company  include  processing  and customer  service  inquiry
fees. Processing fees are assessed to customers either as a fee charged for each
telephone call record or other  transaction  processed or as a percentage of the
customer's revenue that is submitted by the Company to local telephone companies
for billing and collection. Processing fees also include any charges assessed to
the Company by local  telephone  companies for billing and  collection  services
that are passed  through to the  customer.  Customer  service  inquiry  fees are
assessed as a fee charged for each billing inquiry made by end users.


         Total  revenue for the three months ended  September  30, 2002 was $9.7
million,  which was $2.7 million or 22.0% lower than  revenue in the  comparable
quarter in 2001. Revenue included in the third quarter of 2002 from the acquired
ACI and Aelix  business  units was $4.5 million and $0.2 million,  respectively.
During  the third  quarter  of 2001,  ACI  provided  $4.5  million  of  revenue.
Excluding  revenue  generated by ACI and Aelix in both  periods,  the  Company's
revenue  would have  declined by 37.3%,  reflecting a 33.0%  decrease in records
processed and a  competitive  pricing  environment.  The decline in call records
processed  reflects  increased  consumer  usage of cell phones and prepaid phone
cards to make long  distance  calls.  Call  records for neither  cell phones nor
prepaid phone cards are  typically  processed  through a billing  clearinghouse.
Additionally,  some of the local  exchange  companies  have  begun to offer long
distance  service,  which reduces the market share of the network  resellers who
typically use clearinghouse services.


         The Company is pursuing additional sources of revenue to supplement its
LEC  billing  business.  The  additional  sources  of revenue  could  arise from
acquisitions or internal growth. The Company has engaged,  from time to time, in
discussions  with  various  entities  regarding  potential  acquisition  of such
entities.  In order to achieve internal growth, the Company intends to offer new
services,  such  as 900  area  code  business  billing  and  the  Aelix  message

                                     - 14 -
<PAGE>

communication  services.  The  Company's  intention is to make  acquisitions  or
expand into markets which will leverage the Company's existing infrastructure.


         Cost of Revenues


         Cost of revenues  includes  billing and collection  fees charged to the
Company by local telephone companies and related  transmission costs, as well as
all costs associated with the customer service organization,  including staffing
expenses and costs  associated  with  telecommunications  services.  Billing and
collection fees charged by the local telephone  companies  include fees that are
assessed for each record  submitted  and for each bill  rendered to its end-user
customers.  The Company achieves  discounted billing costs due to its aggregated
volumes and can pass these discounts on to its customers.  Cost of revenues also
includes $0.2 million of costs relating to the Aelix business unit.


         The  Company's  gross  profit  margin in the third  quarter of 2002 was
30.6%,  compared to 29.0% in the third  quarter of 2001.  The  increase in gross
margin  principally  reflects the inclusion of ACI for three months in the third
quarter of 2002  compared  to two months in the third  quarter of 2001.  ACI has
historically  achieved a higher gross margin level than HBS.  Additionally,  the
Company was able to reduce  personnel costs associated with the customer service
function by  consolidating  into a single  location during the second quarter of
2002.


         Operating Expenses


         Operating  expenses  are  comprised  of  all  selling,   marketing  and
administrative  costs incurred in direct  support of the business  operations of
the Company. Operating expenses for the third quarter of 2002 were $4.5 million,
compared to $3.2 million in the third quarter of 2001. The increase in operating
expenses was  attributable  to the  inclusion,  in the third quarter of 2002, of
three months'  operating  expenses for ACI,  compared to two months in the third
quarter of 2001 and the inclusion of Aelix in the 2002  expenses.  Excluding the
effect of the acquired  businesses in both periods,  operating  expenses in 2002
would have been $2.5 million,  compared to $2.4 million in 2001. The 2002 period
expenses  included  approximately  $0.1  million  of  one-time  termination  and
redundancy  costs  associated  with  the  consolidation  of our two LEC  billing
business units.


         Depreciation and Amortization


         Depreciation  and  amortization  expense  for the  three  months  ended
September 30, 2002 and 2001 was $601,392 and $260,610 respectively. The increase
in expense during 2002 was  attributable to (i)  depreciation  and  amortization
expenses  associated  with fixed assets of ACI and Aelix and (ii) an  additional
$0.3 million  writedown of assets to fair value,  offset by (iii) the absence of
amortization  expense  for  goodwill  during the 2002  period,  pursuant  to the
provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets."


         Other Income (Expense), Net


         Other  income  (expense),  net,  in the  third  quarter  of 2002 was an
expense of  $147,858  compared  to an expense of $3.0  million  during the third
quarter  of 2001.  Other  expense  in the

                                     - 15 -
<PAGE>

third  quarter of 2002  consisted of interest  expense.  Other  expenses of $3.0
million  in 2001  included  a $2.2  million  write-off  of an  investment  in an
affiliated  company and a $0.9  million  increase in reserves  for  non-recourse
notes receivable.  The $2.2 million write-off of the investment in an affiliated
company   occurred  when  the  company  ceased   operations.   The  reserve  for
non-recourse  notes  receivable  related  to notes  from  former  employees  who
borrowed funds to purchase shares of Avery and Primal stock. The increase in the
reserves  was  deemed  appropriate  in light of a  decline  in the  value of the
underlying  stock  for  the  non-recourse  notes  (see  Note  5 to  Consolidated
Financial Statements).


         Income Taxes


         An income tax  benefit of $0.6  million  was  recorded  during both the
third quarter of 2002 and the third  quarter of 2001.  The income tax benefit in
third  quarter of 2001  differs  materially  from the  expected  income  benefit
primarily  because of items  permanently not deductible for income tax reporting
purposes.





         NINE MONTHS  ENDED  SEPTEMBER  30, 2002  COMPARED TO NINE MONTHS  ENDED
SEPTEMBER 30, 2001


         Total  revenue for the nine months ended  September  30, 2002 was $31.2
million,  up $2.2  million  or 7.5% from the $29.1  million  of  revenue  in the
comparable  period in 2001.  Revenue  included  in the first nine months of 2002
from the  acquired  ACI and Aelix  business  units was  $13.8  million  and $0.5
million,  respectively.  During the first nine months of 2001,  revenue from the
acquired ACI business unit was $4.5 million.  Excluding revenue generated by ACI
and Aelix in both periods,  the Company's  revenue would have declined by 31.0%,
reflecting  a 26.8%  decrease in records  processed  and a  competitive  pricing
environment.  The decline in call records processed  reflects increased consumer
usage of cell phones and prepaid phone cards to make long distance  calls.  Call
records for neither cell phones nor prepaid phone cards are typically  processed
through  a  billing  clearinghouse.  Additionally,  some of the  local  exchange
companies  have begun to offer long distance  service,  which reduces the market
share of network resellers who typically use clearinghouse services.


         The Company is pursuing additional sources of revenue to supplement its
LEC  billing  business.  The  additional  sources  of revenue  could  arise from
acquisitions  or  internal  growth.  In  general,  the  Company  intends to make
acquisitions  or expand into markets which will leverage the Company's  existing
infrastructure.


         Cost of Revenues

         Cost of revenues  includes  billing and collection  fees charged to the
Company by local telephone companies and related  transmission costs, as well as
all costs associated with the customer service organization,  including staffing
expenses and costs  associated  with  telecommunications  services.  Billing and
collection fees charged by the local telephone  companies  include fees that are
assessed for each record  submitted  and for each bill  rendered to its end-user
customers.  The Company achieves  discounted billing costs due to its

                                     - 16 -
<PAGE>

aggregated  volumes  and can pass  these  discounts  to its  customers.  Cost of
revenues  also  includes  $0.4 million of costs  relating to the Aelix  business
unit.


         The Company's  gross profit margin in the first nine months of 2002 was
30.0%,  which was 0.6% better than the 29.4% gross margin earned during the same
period in 2001.  The modestly  improved gross profit margin in 2002 reflects the
higher mix of calls processed by ACI in the 2002 financial results,  offset by a
competitive pricing environment in 2002. ACI has historically  achieved a higher
gross margin level than HBS.


         Operating Expenses


         Operating  expenses  are  comprised  of  all  selling,   marketing  and
administrative  costs incurred in direct  support of the business  operations of
the  Company.  Operating  expenses  for the first nine months of 2002 were $12.8
million,  compared to $6.3  million in the first nine  months of 2001.  The $6.5
million increase in operating expenses in 2002 is attributable to the inclusion,
in the first nine months of 2002, of $6.9 million of operating  expenses for ACI
and Aelix,  compared  to $0.8  million  during  the first  nine  months of 2001.
Excluding  the effect of the  acquired  businesses,  operating  expenses in 2002
would have been $5.8  million,  which would have been $0.3  million  higher than
operating expenses in the first nine months of 2001.  Operating expenses in 2002
were adversely affected by staffing  redundancies,  travel,  severance and other
costs associated with the consolidation of operations into a single facility.


         Depreciation and Amortization


         Depreciation  and  amortization  expense  for  the  nine  months  ended
September 30, 2002 and 2001 was $1.1 million and $0.5 million, respectively. The
increase  in  expense  during  2002 was  attributable  to (i)  depreciation  and
amortization  expenses associated with fixed assets of ACI and Aelix and (ii) an
additional $0.3 million  writedown of assets to fair value,  offset by (iii) the
absence of  amortization  expense  for  goodwill  during  2002,  pursuant to the
provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets."


         Other Income (Expense), Net


         Other  income  (expense),  net, in the first nine months of 2002 was an
expense of $1.6 million, compared to an expense of $3.0 million during the first
nine months of 2001.  Other  expense in 2002  included  $1.2  million of charges
relating to increases in reserves for  non-recourse  notes  receivable and stock
subscription notes receivable, $0.2 million in interest expense and $0.1 million
in royalty  payments.  The $1.2 million increase in the reserve for non-recourse
debt was  deemed  appropriate  in light of a  decline  in the value of the stock
which  serves  as  collateral  for  the  non-recourse   notes  (see  Note  5  to
Consolidated  Financial  Statements).  The  Company's  $0.1  million  of royalty
expense arose in connection  with the Company's  agreement with Qorus to relieve
the  Company of any  future  royalty  obligation  to Qorus in  exchange  for the
Company's cash payment of $100,000,  the Company's surrender of 3,010,000 common
shares  of  Qorus  and the  Company's  waiver  of its  right to  purchase  up to
1,066,500 shares of Qorus common stock for $0.01 per share.


         Other  expenses  of  $3.0  million  in  2001  included  a $2.2  million
writedown of an investment in an affiliated  company and a $0.9 million increase
in reserves for non-recourse

                                     - 17 -
<PAGE>

notes receivable.  The increase in the reserves was deemed  appropriate in light
of a decline in the value of the  underlying  stock for the  non-recourse  notes
(see Note 5 to Consolidated Financial Statements).





         Income Taxes


         An income tax benefit of $1.2  million was  recorded for the first nine
months  of  2002  compared  to an  expense  of  $0.1  million  (from  continuing
operations)  in the first nine  months of 2001.  The income tax  benefit in both
periods  differs from the expected  income  benefit  primarily  because of items
permanently not deductible for income tax reporting purposes.


         Loss from Discontinued Operations


         The Company's loss from discontinued  operations,  net of tax benefits,
was $605,259 for the nine months ended  September 30, 2001.  The loss relates to
PSI, which was spun-off on February 12, 2001.





         LIQUIDITY AND CAPITAL RESOURCES


         Avery's cash balance at September 30, 2002 was $3.5  million,  compared
to $5.4 million at December 31, 2001.  Fluctuations  in daily cash  balances are
normal due to the large  amount of  customer  receivables  that we  collect  and
process on behalf of our  customers.  We receive money daily from local exchange
carriers,  but we ordinarily disburse such collected funds to our customers once
each week on Fridays.  Accordingly, our cash balance is generally at its highest
level on Thursdays and its lowest level on Fridays.


         Avery  incurred a net loss of $3.7 million during the nine months ended
September 30, 2002, which included a $1.2 million  write-off of notes receivable
from  related  parties.  The  Company  used $4.4  million  of cash in  operating
activities  during  the same  period.  The  Company is  optimistic  that it will
achieve  profitability  during  the  fourth  quarter  of 2002,  based  upon cost
reductions  being  realized  through  consolidation  of  operations,  which  was
completed during the third quarter of 2002.


         Additionally,  Avery's working  capital  position at September 30, 2002
was a negative $16.8  million,  compared to a negative $13.1 million at December
31,  2001.  The Company can operate with  negative  working  capital,  because a
significant  portion of its current  liabilities  do not require  payment in the
near future.  For example,  current  liabilities  at September  30, 2002 include
approximately  $6 million of deposits  from  customers  which are not  typically
refunded in the ordinary  course of business.  The  customer  deposits  would be
refundable  over time only if the  customer  were to  significantly  reduce  the
volume of business done with the Company or terminate its relationship.  Most of
the Company's  customers have experienced lower call record volumes during 2002,
and such volume  reductions  have reduced  certain  categories  of deposits from
customers. Avery has not historically experienced any material loss of customers
in its business in any one year. The Company also maintains a $9 million line of
credit to meet peak cash demands. The credit line includes a $6 million facility
for working capital and a $3

                                     - 18 -
<PAGE>

million line to provide advance funding to customers.  The Company's  ability to
borrow  funds at any point in time is  determined  by the value of its  accounts
receivable.  At September 30, 2002, the Company had $2.2 million available under
this credit line.


         Cash  flow  from  operating  activities.  Net  cash  used in  operating
activities  was $4.4 million  during the first nine months of 2002,  compared to
$15.0  million  provided  during  the  first  nine  months  of  2001  (excluding
discontinued operations).  The $4.4 million of cash used in operating activities
during 2002 was principally  attributable  to a $4.7 million  reduction in trade
accounts  payable  and accrued  liabilities,  a $3.7  million  net loss,  a $1.1
million  increase in deferred  income  taxes,  a $0.9 million  increase in other
current  assets and a $0.6  million  increase  in advance  funding  receivables,
offset by a $3.2  million  increase in deposits  and other  payables  related to
customers,  a $1.2 million non-cash  provision for  uncollectible  related party
receivables,  $1.1  million of  depreciation  and  amortization,  a $0.9 million
decrease in trade accounts  receivable  and a $0.3 million  decrease in deposits
with LECs.


         During  the  first  nine  months  of  2001,  the  Company's  continuing
operations  provided  $15.0 million of cash,  arising  principally  from a $16.8
million  increase in  deposits  and other  payables  related to  customers.  The
increase in deposits and other payables to customers was largely attributable to
ACI's acquisition of assets and liabilities from OAN in August 2001.


         Cash flow from investing activities.  Cash used in investing activities
was $0.1 million  during the first nine months of 2002  compared to $4.4 million
in the  comparable  period of 2001.  During  the first  nine  months of 2002 the
Company  purchased  property and  equipment  costing $0.1  million.  In the same
period in 2001, the Company used $4.4 million of cash,  principally  through its
extension  of $2.5 million of loans to other  entities,  the purchase of the OAN
assets for $1.4 million  (inclusive  of  acquisition  costs) and the purchase of
$0.4 million in property and equipment.


         Cash  flow  from  financing  activities.  Cash  provided  by  financing
activities  was $2.5 million  during the first nine months of 2002 compared to a
net use of zero  during  the first  nine  months of 2001.  During the first nine
months of 2002, the Company borrowed $3.0 million under its line of credit,  and
used  cash to pay $0.4  million  of  dividends  to  preferred  stockholders  and
purchase $0.1 million of treasury  stock. In the  corresponding  period in 2001,
the Company raised $2.0 million from the issuance of common and preferred stock,
and used cash to (i) redeem $0.3 million of preferred stock,  (ii) purchase $0.2
million of  outstanding  stock  options,  (iii)  purchase  common stock for $1.2
million, and (iv) pay $0.3 million for preferred stock dividends.


         Avery's  operating  cash  requirements  consist  principally of working
capital  requirements,  scheduled  debt  service  obligations,  and  payments of
preferred  dividends and capital  expenditures.  The Company believes cash flows
generated from  operations,  together with borrowings under its existing line of
credit,  will be sufficient  to fund working  capital  needs,  debt and dividend
payment  obligations and capital  expenditure  requirements  for the next twelve
months.

                                     - 19 -
<PAGE>



         CRITICAL ACCOUNTING POLICIES


         The discussion  and analysis of our financial  condition and results of
operations  are based on our financial  statements,  which have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("GAAP").  The preparation of these financial  statements requires us to
make  estimates  and  adjustments  that affect the  reported  amounts of assets,
liabilities,  revenues and expenses, and related disclosure of contingent assets
and liabilities.  On an on-going basis, we evaluate these  estimates,  including
those related to bad debts,  technological  obsolescence,  tax  obligations  and
litigation.  We base our estimates on historical experience and on various other
assumptions  that are believed to be  reasonable  under the  circumstances.  The
evaluation of these  estimates  forms the basis for making  judgments  about the
carrying values of assets and liabilities.  Actual results may differ from these
estimates under different assumptions or conditions.


         We have  identified  below the accounting  policies  believed to be the
most critical to our business  operations as discussed  throughout  Management's
Discussion and Analysis of Financial  Condition and Results of Operations  where
such policies affect our reported and expected financial results.


    Revenue Recognition

        Billing  Services--The  Company recognizes billing services revenue when
    its customers'  records are accepted by the LEC for billing and  collection.
    Bills are generated by the LECs and the collected  funds are remitted to the
    Company,  which in turn remits these funds, net of fees and reserves, to its
    billing customers.  These reserves represent cash withheld from customers to
    satisfy  future  obligations  on behalf  of the  customer.  The  obligations
    consist of local exchange  carrier  billing fees,  bad debts,  and sales and
    excise taxes.  The Company  records trade  accounts  receivable  and service
    revenue for fees charged for its billing services. When the Company collects
    the customers'  receivables  from the LECs, the Company's trade  receivables
    are reduced by the amount  corresponding  to the Company's  processing fees.
    The remaining funds are recorded as amounts due to customers and included in
    deposits and other payables related to customers in the accompanying balance
    sheets.  The Company also retains a reserve from its  customers'  settlement
    proceeds,  calculated to cover accounts that the LECs are unable to collect,
    including LEC billing fees and sales taxes, and are included in deposits and
    other payables related to customers in the accompanying balance sheets.

        Advance Funding  Programs--The  Company offers  participation in advance
    funding to qualifying  customers through its advance payment program.  Under
    the terms of the agreements,  the Company purchases the customer's  accounts
    receivable  for an amount  equal to the face amount of the  billing  records
    submitted to the LEC by the Company,  less various items including costs and
    expenses on previous billing records,  financing fees, LEC charges,  rejects
    and other similar  items.  The Company  advances 50% to 75% of the purchased
    amount.  The purchased  accounts  receivable  are recorded at the net amount
    advanced to customers (as advance payment  receivables).  Financing  charges
    are  assessed  until the Company  recoups its initial  payment.  The Company
    records as income an initial

                                     - 20 -
<PAGE>

    non-refundable  fee,  typically  no more than 1%, when funds are advanced to
    the customer.  The Company also records interest  income,  typically at four
    percentage  points  over  prime  on  outstanding  advances.   There  are  no
    substantial  costs incurred in factoring a customer's  receivables,  and all
    costs  associated  with the  receivable  are  recognized  as  incurred.  The
    receivables are typically repaid in 60 days.

        The Company believes that three factors reduce the potential exposure to
   credit losses. First, the Company advances funds against customer receivables
   at a level which is usually less than 90% of the expected  recovery  from the
   billing LEC. Second, payments from a diversified group of telephone end-users
   are being passed  through a LEC,  which  has  historically  been an A+ credit
   risk.  Thirdly,  the LECs pay the Company  directly,  so that the Company can
   deduct  any  amounts  owed it  before  remitting  funds to the  customer.  In
   addition, the Company typically withholds a portion of payments received from
   LECs before  remitting the balance due to its customers  which  minimizes the
   Company's exposure to subsequent charges from LECs.


     Goodwill and Impairment of Intangibles

              Goodwill  results from the  difference  between the purchase price
     paid and liabilities  assumed by the Company over the estimated fair market
     value of  assets  of HBS and Aelix and  subsequent  increases  to  goodwill
     resulting from earn out payments for the HBS acquisition.  Initial goodwill
     for HBS was  amortized  using the  straight-line  method over 15 years with
     additional  goodwill  from earn out payments  amortized  over the remaining
     goodwill  life.  The Company  discontinued  amortizing  goodwill  effective
     January  1,  2002  in  accordance  with  FAS  142  (see  Recent  Accounting
     Pronouncements).  On an on-going basis,  management reviews  recoverability
     and the valuation and  amortization of goodwill.  As a part of this review,
     the Company  considers the undiscounted  projected future net cash flows in
     evaluating  the goodwill.  If the  undiscounted  future net cash flows were
     less than the stated value, goodwill would be written down to fair value.


     Income Taxes and Deferred Taxes

              The  Company   utilizes  the  asset  and  liability   approach  to
     accounting and reporting for income taxes.  Deferred  income tax assets and
     liabilities  are computed  annually for  differences  between the financial
     statements  and tax basis of assets  and  liabilities  that will  result in
     taxable or  deductible  amounts in the future based on enacted tax laws and
     rates  applicable to the periods in which the  differences  are expected to
     have an effect upon taxable  income.  Valuation  allowances are established
     when necessary to reduce  deferred tax assets to the amount  expected to be
     realized.  Income tax expense or benefit is the tax  payable or  refundable
     for the period plus or minus the change  during the period in deferred  tax
     assets and liabilities.


                                     - 21 -
<PAGE>


         Item 3     Quantitative and Qualitative Disclosures About Market Risk


         The  Company  is  exposed to market  risk from  changes  in  marketable
securities  (which consist of certificates  of deposit).  At September 30, 2002,
our  marketable  securities  were  recorded  at a fair  value  of  approximately
$206,000,  with an overall  weighted  average return of  approximately 2% and an
overall weighted  average life of less than one year. The marketable  securities
held by the  Company  have  exposure to price risk,  which is  estimated  as the
potential  loss in fair value due to a  hypothetical  change of 20 basis  points
(10% of our  overall  average  rate of return)  in quoted  market  prices.  This
hypothetical change would have an immaterial effect on the recorded value of the
marketable securities.


         The  Company is not exposed to  material  future  earnings or cash flow
fluctuations  from changes in interest rates on long-term debt since 100% of our
long-term  debt is at a fixed rate as of September  30, 2002.  The fair value of
our  long-term  debt at September 30, 2002 is estimated to be $0.7 million based
on the 8% rate of the  long-term  debt and its maturity of 4.25 years,  which is
consistent  with  market  rates  currently  available  for  loans of  comparable
duration and comparable risk.


         To date,  the  Company has not entered  into any  derivative  financial
instruments  to manage  interest rate risk and currently is not  evaluating  the
future use of any such financial instruments.


         The Company does not have any exposure to foreign currency  transaction
gains or losses.  Virtually all of the Company's  business  transactions  are in
U.S. Dollars.





         Item 4     Controls and Procedures


         Within  the 90 days  prior  to the  date of this  report,  the  Company
carried out an evaluation,  under the supervision and with the  participation of
the Company's  management,  including the Company's Chief Executive  Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures  pursuant to Exchange  Act Rule
13a-14.  Based  upon that  evaluation,  the Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
relating to the Company  required to be included in the  Company's  periodic SEC
filings.





PART II OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K

(A)      Exhibits


         The  exhibits  are listed in the Exhibit  Index filed  herewith,  which
         Exhibit Index is incorporated herein by reference.

(b) Reports on Form 8-K


         None

                                     - 22 -
<PAGE>

                                   SIGNATURES


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


                                        Avery Communications, Inc.

                                             (Registrant)

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

Date November 14,   2002                 /s/Patrick J. Haynes III
    ----------------------      ------------------------------------------------
                                           Patrick J. Haynes III
                                           Chairman of the Board

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

Date November 14, 2002                     /s/ Thomas C. Ratchford
    ----------------------      ------------------------------------------------

                                           Thomas C. Ratchford
                                         Chief Financial Officer


                           AVERY COMMUNICATIONS, INC.
                                  CERTIFICATION


I, Patrick J. Haynes, III, Chief Executive Officer of Avery Communications, Inc.
(the "Company"), certify that:

1.       I have reviewed this quarterly report of the Company on Form 10-Q;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information included in this quarterly report,  fairly represent in all
         material  respects the financial  condition,  results of operations and
         cash flows of the Company as of, and for, the periods presented in this
         quarterly report;

4.       The  Company's  other  certifying  officers and I are  responsible  for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in  Exchange  Act Rules  13a-14 and 15d-14) for the Company and
         have:

                                     - 23 -
<PAGE>

         a)       designed  such  disclosure  controls and  procedures to ensure
                  that material information  relating to the Company,  including
                  its consolidated  subsidiaries,  is made known to us by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

         b)       evaluated  the  effectiveness  of  the  Company's   disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and

         c)       presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

 5.      The Company's other certifying officers and I have disclosed,  based on
         our most recent  evaluation,  to the  Company's  auditors  and board of
         directors:

         a)       all  significant  deficiencies  in the design or  operation of
                  internal  controls which could adversely  affect the Company's
                  ability to record,  process,  summarize  and report  financial
                  data  and  have  identified  for the  Company's  auditors  any
                  material weaknesses in internal controls; and

         b)       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  Company's internal controls; and

6.       The Company's  other  certifying  officers and I have indicated in this
         quarterly  report  whether there were  significant  changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.


November 14, 2002                /s/ Patrick J. Haynes, III
                                 --------------------------
                                 Patrick J. Haynes, III, Chief Executive Officer


                                     - 24 -
<PAGE>




                           AVERY COMMUNICATIONS, INC.
                                  CERTIFICATION

I, Thomas C. Ratchford,  Chief Financial Officer of Avery  Communications,  Inc.
(the "Company"), certify that:

1.       I have reviewed this quarterly report of the Company on Form 10-Q;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information included in this quarterly report,  fairly represent in all
         material  respects the financial  condition,  results of operations and
         cash flows of the Company as of, and for, the periods presented in this
         quarterly report;

4.       The  Company's  other  certifying  officers and I are  responsible  for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in  Exchange  Act Rules  13a-14 and 15d-14) for the Company and
         have:

         a)       designed  such  disclosure  controls and  procedures to ensure
                  that material information  relating to the Company,  including
                  its consolidated  subsidiaries,  is made known to us by others
                  within those entities, particularly during the period in which
                  this quarterly report is being prepared;

         b)       evaluated  the  effectiveness  of  the  Company's   disclosure
                  controls and  procedures  as of a date within 90 days prior to
                  the filing  date of this  quarterly  report  (the  "Evaluation
                  Date"); and

         c)       presented in this quarterly  report our conclusions  about the
                  effectiveness of the disclosure  controls and procedures based
                  on our evaluation as of the Evaluation Date;

 5.      The Company's other certifying officers and I have disclosed,  based on
         our most recent  evaluation,  to the  Company's  auditors  and board of
         directors:

         a)       all  significant  deficiencies  in the design or  operation of
                  internal  controls which could adversely  affect the Company's
                  ability to record,  process,  summarize  and report  financial
                  data  and  have  identified  for the  Company's  auditors  any
                  material weaknesses in internal controls; and

                                     - 25 -
<PAGE>

         b)       any fraud,  whether or not material,  that involves management
                  or  other  employees  who  have  a  significant  role  in  the
                  Company's internal controls; and

6.       The Company's  other  certifying  officers and I have indicated in this
         quarterly  report  whether there were  significant  changes in internal
         controls or in other factors that could  significantly  affect internal
         controls  subsequent  to  the  date  of  our  most  recent  evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.


November 14, 2002                   /s/ Thomas C. Ratchford
                                    -----------------------
                                    Thomas C. Ratchford, Chief Financial Officer


                                     - 26 -
<PAGE>


Exhibit Index

Exhibit
Number      Description of Document

2.1      Partnership Interest Purchase Agreement dated as of May 3, 1996, by and
         among Avery  Communications,  Inc.,  Avery  Acquisition Sub, Inc., Hold
         Billing  Services,  Ltd.,  Hold Billing & Collection,  L.C.,  Joseph W.
         Webb, James A. Young,  Edward L. Dunn,  Philip S. Dunn,  Harold D. Box,
         and David W. Mechler, Jr. (filed as Exhibit 2.1 to Avery's Registration
         Statement on Form SB-2 (File No.  333-65133)  (the "Prior  Registration
         Statement") and incorporated herein by reference thereto)

2.2      First  Amendment  to  Partnership  Interest  Purchase  Agreement by and
         between Avery  Communications,  Inc., Avery Acquisition Sub, Inc., Hold
         Billing  Services,  Ltd.,  Hold Billing & Collection,  L.C.,  Joseph W.
         Webb, James A. Young, Edward L. Dunn, Philip S. Dunn, Harold D. Box and
         David W. Mechler,  Jr. (filed as Exhibit 2.2 to the Prior  Registration
         Statement and incorporated herein by reference thereto)

2.3      Partnership  Interest Option  Agreement dated as of May 3, 1996, by and
         among Avery  Communications,  Inc., Avery Acquisition Sub, Inc., Harold
         D. Box and David W.  Mechler,  Jr.  (filed as Exhibit  2.3 to the Prior
         Registration Statement and incorporated herein by reference thereto)

2.4      First Amendment to Partnership  Interest  Option  Agreement dated as of
         October  15,  1996,  by and among  Avery  Communications,  Inc.,  Avery
         Acquisition Sub, Inc., Harold D. Box, and David W. Mechler,  Jr. (filed
         as Exhibit 2.4 to the Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

2.5      Agreement and Plan of Merger,  dated as of March 19, 1999, by and among
         Avery Communications,  Inc., ACI Telecommunications  Financial Services
         Corporation, Primal Systems, Inc., Mark J. Nielsen, John Faltys, Joseph
         R. Simrell and David Haynes (the "Primal Merger  Agreement")  (filed as
         Exhibit 2.5 to the Prior Registration Statement and incorporated herein
         by reference thereto)

2.6      Amendment No. 1 to the Primal Merger Agreement (filed as Exhibit 2.6 to
         the Prior Registration  Statement and incorporated  herein by reference
         thereto)

2.7      Amendment No. 2 to the Primal Merger Agreement (filed as Exhibit 2.1 to
         the registrant's  Current Report on Form 8-K, dated September 27, 1999,
         and incorporated herein by reference thereto)

2.8      Primal  Solutions,   Inc.  Preliminary   Distribution   Agreement  (the
         "Distribution  Agreement"),  dated July 31,  2000,  by and among  Avery
         Communications, Inc., a Delaware corporation, Primal Solutions, Inc., a
         Delaware  corporation,  John Faltys,  Joseph R. Simrell,  David Haynes,
         Mark J, Nielsen, Arun Anand, Murari Cholappadi,  Sanjay Gupta, Thurston
         Group, Inc., a Delaware corporation, Patrick

                                     - 27 -
<PAGE>

         J. Haynes,  III and Scot M. McCormick  (filed as Exhibit 2.1 to Avery's
         Form 8-K dated August 31, 2000 (the "Primal Form 8-K") and incorporated
         by reference herein)

2.9      Form of Non-Recourse  Promissory Note, which is attached as Exhibit 5-A
         to the Distribution  Agreement (filed as Exhibit 2.2 to the Primal Form
         8-K and incorporated by reference herein)

2.10     Form of Pledge  Agreement,  which is  attached  as  Exhibit  5-B to the
         Distribution Agreement (filed as Exhibit 2.3 to the Primal Form 8-K and
         incorporated by reference herein)

2.11     Form of Irrevocable Proxy for Thurston Group,  Inc.,  Patrick J. Haynes
         III and their affiliates relating to the common stock of Primal,  which
         is  attached  as Exhibit 9-A to the  Distribution  Agreement  (filed as
         Exhibit  2.4 to the  Primal  Form  8-K and  incorporated  by  reference
         herein)

2.12     Form of Irrevocable Proxy for the Old Primal  Stockholders  relating to
         the common  stock of Avery,  which is  attached  as Exhibit  9-B to the
         Distribution Agreement (filed as Exhibit 2.5 to the Primal Form 8-K and
         incorporated by reference herein)

2.13     Indemnification  Agreement,  dated July 31, 2000,  by and between Avery
         Communications,  Inc., a Delaware  corporation,  John Faltys, Joseph R.
         Simrell,  and David Haynes (filed as Exhibit 2.6 to the Primal Form 8-K
         and incorporated by reference herein)

2.14     Asset Purchase  Agreement among  Qorus.com,  Inc., TMT Holdings,  Inc.,
         Aelix, Inc. and Avery Communications, Inc. dated May 29. 2001 (filed as
         Exhibit  10.37 to the  Quarterly  Report on Form  10-QSB for the period
         ended June 30, 2001,  filed by Qorus.com,  Inc. (the "Qorus 2Q 10-QSB")
         and incorporated herein by reference thereto)

2.15     First Amendment to Asset Purchase Agreement among Qorus.com,  Inc., TMT
         Holdings,  Inc.,  Aelix,  Inc.  and Avery  Communications,  Inc.  dated
         October  17, 2001 (filed as Exhibit  10.56 to the  Quarterly  Report on
         Form l 0-QSB  for  the  period  ended  September  30,  2001,  filed  by
         Qorus.com,  Inc.  (the "Qorus 3Q 10-QSB")  and  incorporated  herein by
         reference thereto)

2.16     Asset Purchase  Agreement among OAN Services,  Inc.,  nTelecom Holdings
         Inc., OAN Services of Florida, Inc. and ACI Communications,  Inc. dated
         May 25, 2001 (filed as Exhibit  2.1 to Avery's  Current  Report on Form
         8-K dated  August 3, 2001  (filed  August  20,  2001) and  incorporated
         herein by reference thereto)

2.17     Management  Support and  Post-Petition  Financing  Agreement  among OAN
         Services,  Inc., nTelecom Holdings Inc., OAN Services of Florida,  Inc.
         and ACI  Communications,  Inc. dated May 25, 2001 (filed as Exhibit 2.2
         to Avery's  Current  Report on Form 8-K dated  August 3, 2001 (filed on
         August 20, 2001) and incorporated

                                     - 28 -
<PAGE>

         herein by reference thereto)

2.18     First Amendment to Asset Purchase  Agreement among OAN Services,  Inc.,
         nTelecom  Holdings,  Inc.,  OAN  Services  of  Florida,  Inc.  and  ACI
         Communications,  Inc.  dated July 27,  2001  (filed as  Exhibit  2.3 to
         Avery's  Current  Report on Form  8-K/A  dated  August  3, 2001  (filed
         October 17, 2001) and incorporated herein by reference thereto)

2.19     Second Amendment to Asset Purchase Agreement among Qorus.com, Inc., TMT
         Holdings, Inc., Aelix, Inc. and Avery Communications,  Inc. dated March
         15, 2002  (incorporated  by  reference  to the same  Exhibit No. of the
         Annual  Report on Form  10-KSB for the year ended  December  31,  2001,
         filed by Avery Communications, Inc.)

3.1      Certificate of  Incorporation,  as amended (filed as Exhibit 3.1 to the
         Prior  Registration  Statement  and  incorporated  herein by  reference
         thereto)

3.2      Amended  and  Restated  Bylaws  (filed  as  Exhibit  3.2 to  the  Prior
         Registration Statement and incorporated herein by reference thereto)

3.3      Certificate of Designation  of Series A Junior  Convertible  Redeemable
         Preferred Stock (filed as Exhibit 3.3 to Avery's Registration Statement
         on Form SB-2 (File No, 333-57336) (the "Resale Registration Statement")
         and incorporated herein by reference thereto)

3.4      Certificate of Designation  of Series B Junior  Convertible  Redeemable
         Preferred  Stock  (filed  as  Exhibit  3.4 to the  Resale  Registration
         Statement and incorporated herein by reference thereto)

3.5      Certificate of Designation  of Series C Junior  Convertible  Redeemable
         Preferred  Stock  (filed  as  Exhibit  3.5 to the  Resale  Registration
         Statement and incorporated herein by reference thereto)

3.6      Certificate of Designations of Series D Senior  Cumulative  Convertible
         Redeemable  Preferred  Stock  (filed  as  Exhibit  3.6  to  the  Resale
         Registration Statement and incorporated herein by reference thereto)

3.7      Certificate of Designations of Series E Junior  Convertible  Redeemable
         Preferred  Stock  (filed  as  Exhibit  3.7 to the  Resale  Registration
         Statement and incorporated herein by reference thereto)

3.8      Certificate   of   Designations   of  Series  G  Junior   Participating
         Convertible  Voting Preferred Stock (filed as Exhibit 3.8 to the Resale
         Registration Statement and incorporated herein by reference thereto)

3.9      Certificate of  Designations  of Series H Convertible  Preferred  Stock
         (filed  as  Exhibit  3.9  to  the  Resale  Registration  Statement  and
         incorporated herein by reference thereto)

                                     - 29 -
<PAGE>

3.10     Certificate  of  Decrease in  Authorized  Number of Shares of Series of
         Preferred  Stock  (filed as  Exhibit  3.10 to the  Resale  Registration
         Statement and incorporated herein by reference thereto)

3.11     Certificate of  Designations  of Series I Convertible  Preferred  Stock
         (filed as Exhibit  4.2 to Avery's  Quarterly  Report on Form l0-QSB for
         the period ended June 30, 2001,  and  incorporated  herein by reference
         thereto)

3.12     Certificate of Amendment to the Certificate of  Incorporation  of Avery
         Communications,  Inc. providing for a one-for-eight reverse stock split
         dated December 12, 2001 (filed herewith)

4.1      Specimen  Common Stock  Certificate  (filed as Exhibit 4.1 to the Prior
         Registration Statement and incorporated herein by reference thereto)

4.2      Form of Warrant  Exchange and Exercise  Agreement (filed as Exhibit 4.2
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

4.3      Form of Warrant Exercise and Securities Exchange Agreement for $800,000
         Bridge  Loan  Notes  (filed as  Exhibit  4.3 to the Prior  Registration
         Statement and incorporated herein by reference thereto)

4.4      Form  of  Warrant  Exercise  and  Securities   Exchange  Agreement  for
         $1,050,000   Promissory  Note  (filed  as  Exhibit  4.4  to  the  Prior
         Registration Statement and incorporated herein by reference thereto)

4.5      Form of Warrant Exercise and Securities Exchange Agreement for $340,000
         Promissory  Notes  (filed  as  Exhibit  4.5 to the  Prior  Registration
         Statement and incorporated herein by reference thereto)

4.6      Registration Rights Agreement by and among Avery  Communications,  Inc.
         and Joseph W. Webb,  James A.  Young,  Edward L. Dunn,  Philip S. Dunn,
         Harold D. Box. and David W. Mechler, Jr. dated November 15, 1996 (filed
         as Exhibit 4.6 to the Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

4.7      Registration Rights Agreement by and between Avery Communications, Inc.
         and The  Franklin  Holding  Corporation  (Delaware)  dated May 30, 1997
         (filed  as  Exhibit  4.7  to  the  Prior  Registration   Statement  and
         incorporated herein by reference thereto)

4.8      Registration Rights Agreement by and between Avery Communications, Inc.
         and

                                     - 30 -
<PAGE>

         Roger  Felberbaum  dated  December 5, 1996 (filed as Exhibit 4.8 to the
         Prior  Registration  Statement  and  incorporated  herein by  reference
         thereto)

4.9      Registration Rights Agreement by and between Avery Communications, Inc.
         and Giulio Curiel dated  December 31, 1996 (filed as Exhibit 4.9 to the
         Prior  Registration  Statement  and  incorporated  herein by  reference
         thereto)

4.10     Registration Rights Agreement by and between Avery Communications, Inc.
         and Sabina International S.A. dated December 31, 1996 (filed as Exhibit
         4.10 to the Prior  Registration  Statement and  incorporated  herein by
         reference thereto)

4.11     Form  of  Investor   Warrant  (filed  as  Exhibit  4.11  to  the  Prior
         Registration Statement and incorporated herein by reference thereto)

4.12     Registration Rights Agreement by and between Avery Communications, Inc.
         and Thomas A. Montgomery  dated January 24, 1997 (filed as Exhibit 4.12
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

4.13     Registration Rights Agreement by and between Avery Communications, Inc.
         and Thurston Bridge Fund, L.P, dated December 6, 1996 (filed as Exhibit
         4.13 to the Prior  Registration  Statement and  incorporated  herein by
         reference thereto)

4.14     Registration Rights Agreement by and between Avery Communications, Inc.
         and  Eastern  Virginia  Small  Business  Investment  Corporation  dated
         December  23,  1996  (filed as Exhibit  4.14 to the Prior  Registration
         Statement and incorporated herein by reference thereto)

4.15     Securities  Exchange  Agreement  for 1996 HBS Series  (filed as Exhibit
         4.15 to the Prior  Registration  Statement and  incorporated  herein by
         reference thereto)

4.16     $350,000  Promissory  Note payable to Eastern  Virginia  Small Business
         Investment  Corporation  dated December 23, 1996 (filed as Exhibit 4.16
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

4.17     $50,000  Promissory  Note  to  Global  Capita!  Resources,  Inc.  dated
         September  30,  1996 (filed as Exhibit  4.17 to the Prior  Registration
         Statement and incorporated herein by reference thereto)

4.18     Loan and Security Agreement, by and between Hold Billing Services, Ltd.
         and FINOVA Capital  Corporation  dated March 25, 1997 (filed as Exhibit
         4.18 to the Prior  Registration  Statement and  incorporated  herein by
         reference thereto)

4.19     Schedule to Loan and  Security  Agreement,  by and between Hold Billing
         Services,  Ltd.  and FINOVA  Capital  Corporation  dated March 25, 1997
         (filed  as  Exhibit  4.19  to  the  Prior  Registration  Statement  and
         incorporated herein by reference thereto)

                                     - 31 -
<PAGE>

4.20     Amendment  to Loan and  Security  Agreement  and  Schedule  to Loan and
         Security  Agreement,  by and between  Hold Billing  Services,  Ltd. and
         FINOVA Capital  Corporation  dated February 1998 (filed as Exhibit 4.20
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

4.21     Second  Amendment to Loan and Security  Agreement  and Schedule to Loan
         and Security Agreement,  by and between Hold Billing Services, Ltd. and
         FINOVA Capital  Corporation  dated April 1998 (filed as Exhibit 4.21 to
         the Prior Registration  Statement and incorporated  herein by reference
         thereto)

4.22     $7,500,000 Secured Revolving Credit Note to FINOVA Capital  Corporation
         from Hold Billing  Services dated March 25, 1997 (filed as Exhibit 4.22
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

4.23     Series H Preferred  Stock  Purchase  Agreement  dated February 21, 2001
         (filed  as  Exhibit  4.23  to the  Resale  Registration  Statement  and
         incorporated herein by reference thereto)

4.24     Registration Rights Agreement by and between Avery Communications, Inc.
         and Jay Geier  dated  January  4, 2000  (filed as  Exhibit  4.24 to the
         Resale  Registration  Statement  and  incorporated  herein by reference
         thereto)

4.25     Registration Rights Agreement by and between Avery Communications, Inc.
         and  Investor  Network  Company,  LLC dated  October 19, 2000 (filed as
         Exhibit  4.25 to the Resale  Registration  Statement  and  incorporated
         herein by reference thereto)

4.26     Registration Rights Agreement by and among Avery Communications,  Inc.,
         Waterside  Capital  Corporation and CapitalSouth  Partners Fund I, L.P.
         dated   February  21,  2001  (filed  as  Exhibit  4.26  to  the  Resale
         Registration Statement and incorporated herein by reference thereto)

*10.1    Employment  Agreement  by and between  Avery  Communications,  Inc. and
         Patrick J. Haynes, III dated July 1, 1998 (filed as Exhibit 10.1 to the
         Prior  Registration  Statement  and  incorporated  herein by  reference
         thereto)

10.2     Stock Warrant  Certificate to Patrick J. Haynes, III dated July 1, 1998
         (filed  as  Exhibit  10.2  to  the  Prior  Registration  Statement  and
         incorporated herein by reference thereto)

*10.3    Employment  and  Non-competition  Agreement by and between Hold Billing
         Services,  Ltd.  and Harold D. Box dated  November  15,  1996 (filed as
         Exhibit  10.3 to the  Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

*10.4    Employment Agreement by and between Avery Communications, Inc, and Mark
         J. Nielsen  dated  December 1, 1998 (filed as Exhibit 10.4 to the Prior
         Registration Statement and incorporated herein by reference thereto)

                                     - 32 -
<PAGE>

*10.5    Avery  Communications,  Inc.  Stock  Option  to Mark J.  Nielsen  dated
         December  1, 1998  (filed  as  Exhibit  10.5 to the Prior  Registration
         Statement and incorporated herein by reference thereto)

10.6     Investment  Agreement by and between The Franklin  Holding  Corporation
         (Delaware) and Avery Communications,  Inc. dated May 30, 1997 (filed as
         Exhibit  10.6 to the  Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

10.7     Warrant  to the  Thurston  Group,  Inc.  dated May 27,  1997  (filed as
         Exhibit  10.7 to the  Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

10.8     Avery  Communications,  Inc. Stock Purchase  Warrant to Thurston Bridge
         Fund,  L.P.  dated December 6, 1996 (filed as Exhibit 10.8 to the Prior
         Registration Statement and incorporated herein by reference thereto)

10.9     Avery  Communications,  Inc. Stock Purchase Warrant to Eastern Virginia
         Small Business Investment Corporation dated December 23, 1996 (filed as
         Exhibit  10.9 to the  Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

10.10    Avery  Communications,  Inc.  Stock  Purchase  Warrant to The  Franklin
         Holding  Corporation  (Delaware)  dated May 30,  1997 (filed as Exhibit
         10.10 to the Prior  Registration  Statement and incorporated  herein by
         reference thereto)

10.11    Form of Billing Services Agreement (filed as Exhibit 10.11 to the Prior
         Registration Statement and incorporated herein by reference thereto)

10.12    Form of Supplemental Advance Purchase Agreement (filed as Exhibit 10.12
         to  the  Prior  Registration   Statement  and  incorporated  herein  by
         reference thereto)

10.13    Form of  Director  and  Officer  Indemnification  Agreement  (filed  as
         Exhibit 10. 13 to the Prior  Registration  Statement  and  incorporated
         herein by reference thereto)

*10.14   Avery  Communications,  Inc.  1999  Flexible  Incentive  Plan (filed as
         Exhibit  99.1 to Avery's  Registration  Statement on Form S-8 (File No.
         333-33486) and incorporated herein by reference thereto)

10.15    Demand  Promissory Note,  dated December 21, 2000,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $650,000 (filed as Exhibit 10.44 to the Form 10-KSB (File No.
         0-27551) filed by Qorus.com, Inc. (the "Qorus 10-KSB") and incorporated
         herein by reference thereto)

10.16    Demand  Promissory Note,  dated February 15, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of  $150,000  (filed as  Exhibit  10.45 to the Qorus  10-KSB and
         incorporated herein by reference thereto)

                                     - 33 -
<PAGE>

10.17    Demand  Promissory Note,  dated February 28, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of  $260,000  (filed as  Exhibit  10.46 to the Qorus  10-KSB and
         incorporated herein by reference thereto)

10.18    Amended and Restated  Convertible  Promissory  Note,  dated  January 1,
         2001, payable to Thurston Communications Corporation by Qorus.com, Inc.
         in the original principal amount of $750,000 (filed as Exhibit 10,37 to
         the Qorus 10-KSB and incorporated herein by reference thereto)

10.19    Convertible  Promissory  Note,  dated  October  20,  2000,  payable  to
         Thurston Communications  Corporation by Qorus.com, Inc. in the original
         principal  amount  of  $250,000  (filed as  Exhibit  10.38 to the Qorus
         10-KSB and incorporated herein by reference thereto)

10.20    Convertible  Promissory  Note,  dated  October  30,  2000,  payable  to
         Thurston Communications  Corporation by Qorus.com, Inc. in the original
         principal  amount  of  $250,000  (filed as  Exhibit  10.39 to the Qorus
         10-KSB and incorporated herein by reference thereto)

10.21    Promissory   Note,   dated   March  16,   2001,   payable  to  Thurston
         Communications Corporation by Qorus.com, Inc. in the original principal
         amount of  $160,000  (filed as  Exhibit  10.48 to the Qorus  10-KSB and
         incorporated herein by reference thereto)

10.22    Note Extension,  Modification  and Amendment  Agreement dated as of May
         31, 2001, among Qorus.com,  Inc., Aelix, Inc., Thurston Interests, LLC,
         Apex Investment Fund III, L.P., Apex Strategic Partners,  LLC, Thurston
         Communications  Corporation and Customer Care and Technology  Holdings,
         Inc.  (filed as Exhibit  10.38 to the Qorus 2Q 10-QSB and  incorporated
         herein by reference thereto)

10.23    Demand Promissory Note, dated as of March 29, 2001, payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $160,000  (filed as Exhibit  10.39 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.24    Demand Promissory Note, dated as of April 12, 2001, payable to Thurston
         Communications  Corporation in the original principal amount of $80,000
         (filed as Exhibit 10.40 to the Qorus 2Q 10-QSB and incorporated  herein
         by reference thereto)

10.25    Demand Promissory Note, dated as of April 30, 2001, payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $170,000  (filed as Exhibit  10.41 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.26    Demand  Promissory Note, dated as of May 11. 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of

                                     - 34 -
<PAGE>

         $25,000 (filed as Exhibit 10.42 to the Qorus 2Q 10-QSB and incorporated
         herein by reference thereto)

10.27    Demand  Promissory Note, dated as of May 15, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of S75,000  (filed as  Exhibit  10.43 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.28    Demand  Promissory Note, dated as of May 31, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $42,000  (filed as  Exhibit  10.44 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.29    Demand Promissory Note, dated as of June 15, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $80,000  (filed as  Exhibit  10.45 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.30    Demand Promissory Note, dated as of June 28, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $60.000  (filed as  Exhibit  10.46 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.31    Demand Promissory Note, dated as of July 12, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $85,000  (filed as  Exhibit  10.47 to the Qorus 2Q 10-QSB and
         incorporated herein by reference thereto)

10.32    Demand Promissory Note, dated as of July 31, 2001,  payable to Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $83,500  (filed as Exhibit 10.48 of the  Quarterly  Report on
         Form  10-QSB  for  the  period  ended  September  30,  2001,  filed  by
         Qorus.com,  Inc.  (the "Qorus 3Q 10-QSB")  and  incorporated  herein by
         reference thereto)

10.33    Demand  Promissory  Note,  dated as of  August  14,  2001,  payable  to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $178,000  (filed as Exhibit  10.49 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.34    Demand  Promissory  Note,  dated as of  August  30,  2001,  payable  to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $102,500  (filed as Exhibit  10.50 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.35    Demand  Promissory  Note,  dated as of September  13, 2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $96,000

                                     - 35 -
<PAGE>

         (filed as Exhibit 10.51 to the Qorus 3Q 10-QSB and incorporated  herein
         by reference thereto)

10.36    Demand  Promissory  Note,  dated as of September  28, 2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $90,500  (filed as  Exhibit  10.52 to the Qorus 3Q
         10-QSB and  incorporated  herein by  reference  thereto)  10.37  Demand
         Promissory  Note,  dated as of  October 1,  2001,  payable to  Thurston
         Communications  Corporation  by Aelix,  Inc. in the original  principal
         amount of $160,000  (filed as Exhibit  10.53 to the Qorus 3Q 10-QSB and
         incorporated herein by reference thereto)

10.38    Demand  Promissory  Note,  dated as of  October  12,  2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $102,000  (filed as Exhibit  10.54 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.39    Demand  Promissory  Note,  dated as of  October  16,  2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $10,000  (filed as  Exhibit  10.55 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.40    Demand  Promissory  Note,  dated as of  October  30,  2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $72,000  (filed as  Exhibit  10.57 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.41    Demand  Promissory  Note,  dated as of  November  5,  2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of $10.000  (filed as  Exhibit  10.58 to the Qorus 3Q
         10-QSB and incorporated herein by reference thereto)

10.42    Demand  Promissory  Note,  dated as of November  14,  2001,  payable to
         Thurston  Communications  Corporation  by Aelix,  Inc. in the  original
         principal  amount of  $77,000  (filed as  Exhibit  10.42 of the  Annual
         Report on Form  10-KSB for the year ended  December  31,  2001 by Avery
         Communications, Inc. and incorporated herein by reference thereto)

*10.43   Executive Employment Agreement between Avery  Communications,  Inc. and
         Patrick J. Haynes,  III dated  November 1, 2001 (filed as Exhibit 10.42
         of the Annual  Report on Form  10-KSB for the year ended  December  31,
         2001 by Avery Communications, Inc. and incorporated herein by reference
         thereto)

10.44    Consulting  Agreement between Avery  Communications,  Inc. and Phipps &
         Company,  LLC dated  September  1, 2001 (filed as Exhibit  10.44 of the
         Annual  Report on Form

                                     - 36 -
<PAGE>

         10-KSB for the year ended  December  31, 2001 by Avery  Communications,
         Inc. and incorporated herein by reference thereto)

10.45    Consulting Agreement between Avery  Communications.  Inc. and Robert T,
         Isham,  Jr.  dated  September  1, 2001  (filed as Exhibit  10.45 of the
         Annual  Report on Form 10-KSB for the year ended  December  31, 2001 by
         Avery  Communications,   Inc.  and  incorporated  herein  by  reference
         thereto)

10.46    Nonqualified Stock Option Agreement between Avery Communications.  Inc.
         and  Waveland,  LLC dated  December 27, 2001 (filed as Exhibit 10.46 of
         the Annual  Report on Form 10-KSB for the year ended  December 31, 2001
         by Avery  Communications,  Inc.  and  incorporated  herein by reference
         thereto)

*10.47   Form of Nonqualified  Stock Option Agreement entered into between Avery
         Communications, Inc. and various directors and employees as of December
         27,  2001 (filed as Exhibit  10.47 of the Annual  Report on Form 10-KSB
         for the year ended December 31, 2001 by Avery Communications,  Inc. and
         incorporated herein by reference thereto)

10.48    Receivables  Sale  Agreement  dated as of  December  19, 2001 among HBS
         Billing Services Company and ACI Billing Services,  Inc.,  individually
         and collectively,  and RFC Capital  Corporation (filed as Exhibit 10.48
         of the Quarterly  Report on Form 10-QSB for the quarter ended March 31,
         2002 by Avery Communications, Inc. and incorporated herein by reference
         thereto)

10.49    Form of  Non-Recourse  Promissory  Note,  dated as of March  20,  2002,
         payable  to Avery  Communications,  Inc.  which is as  restatement  and
         replacement  of a  promissory  note dated  October  19,  2000 (filed as
         Exhibit  10.49 of the  Quarterly  Report on Form  10-Q for the  quarter
         ended June 30,  2002 by Avery  Communications,  Inc.  and  incorporated
         herein by reference thereto)

10.50    Letter  dated  November  8, 2002  from  Textron  Financial  Corporation
         regarding the calculation of covenant  compliance  under Section 4.3(h)
         of the  Receivables  Sale Agreement dated as of December 19, 2001 among
         HBS  Billing   Services  Company  and  ACI  Billing   Services,   Inc.,
         individually and collectively, and RFC Corporation (filed herewith)

11.1     Statement Regarding Computation of Earnings per Share (filed as Exhibit
         11.1 to the Prior  Registration  Statement and  incorporated  herein by
         reference thereto)

16.1     Letter  from   PricewaterhouseCoopers   LLP  on  change  in  certifying
         accountant (filed as Exhibit 16.1 to the Prior  Registration  Statement
         and incorporated herein by reference thereto)

                                     - 37 -
<PAGE>

21.1     Subsidiaries  of  Registrant  (filed as Exhibit  21.1 of the  Quarterly
         Report  on Form  10-Q for the  quarter  ended  June  30,  2002 by Avery
         Communications, Inc. and incorporated herein by reference thereto)

99.1     Certificate  of the Chief  Executive  Officer  dated as of November 14,
         2002 pursuant to the Sarbanes-Oxley Act of 2002 (filed herewith)

99.2     Certificate  of the Chief  Financial  Officer  dated as of November 14,
         2002 pursuant to the Sarbanes-Oxley Act of 2002 (filed herewith)

-------------
*Denotes a management contract or compensatory plan or arrangement.

                                     - 38 -
<PAGE>