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


                                  FORM 10-QSB/A
 [X]        Quarterly report pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934. For the quarterly period ended June 30, 2002

                                       OR

     [ ]Transition report pursuant to Section 13 or 15 (d) of the Securities
   Exchange Act of 1934. For the transition period from ________ to ________.


                         Commission File Number 33-95796

                               LecStar Corporation
                      -------------------------------------

                 (Name of small business issuer in its charter)


        Texas                                              76-0406417
      --------                                             ---------
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)

                             4501 Circle 75 Parkway,
                           Building D-4210 30339-3025
                                Atlanta, Georgia
                                    --------

               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (404) 659-9500

 Securities registered pursuant to Name of exchange on which registered: Section
 12(b) of the Exchange Act:
             None                                          None

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

                          Common Stock, $.01 par value
                    Series A Preferred Stock, $1.00 par value
                         Common Stock Purchase Warrants
              Redeemable Series A Preferred Stock Purchase Warrants
                 -----------------------------------------------
                                (Title of class)






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


       As                of August 14, 2002, 132,491,988 shares of LecStar
                         Corporation's common stock were outstanding.



<PAGE>


                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS...............................................3

     Consolidated Balance Sheets as of June 30, 2002 and
     December 31, 2001.........................................................4

     Consolidated Statements of Operations for the
     six months ended June 30, 2002 and 2001...................................5

     Consolidated Statements of Cash Flows for the six months
     ended June 30, 2002 and 2001...... .......................................6

     Notes to Consolidated Financial Statements................................7



ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR
            PLAN OF OPERATION.................................................11


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.................................................14

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.........................14

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES...................................15

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............15

ITEM 5.     OTHER INFORMATION.................................................16

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K..................................16



SIGNATURES....................................................................17

                                        2
<PAGE>


                         PART I - FINANCIAL INFORMATION



ITEM 1.           FINANCIAL STATEMENTS

The following financial statements are furnished
1.       Consolidated Balance Sheets as of June 30, 2002 and
              December 31, 2001.

2.       Consolidated Statements of Operations for the three months
              and six months ended June 30, 2002 and 2001.

3.       Consolidated Statements of Cash Flows for the six months
              ended June 30, 2002 and 2001.

4.       Notes to Consolidated Financial Statements


                                        3

<PAGE>



                               LECSTAR CORPORATION

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                         June 30,    December 31,
                                                                           2002         2001
                                                                        (Unaudite     (Audited)
<S>                                                                    <C>           <C>
ASSETS
Current assets:
   Cash and cash equivalents                                           $  167,919    $  55,193
   Accounts receivable, net of allowance for doubtful accounts
     of $52,560 and $55,826 respectively                                  998,150      548,417
   Prepaid expenses and other current assets                              308,551      157,538
                                                                       ----------   ----------
Total current assets                                                    1,474,620      761,148

Long term investments                                                     250,000      250,000

Property and equipment:
   Furniture and fixtures                                                 326,241      326,241
   Network equipment                                                    1,863,927    2,188,273
   Software                                                               592,133      586,638
   Leasehold improvements                                                 125,189      125,189
                                                                       ----------   ----------
                                                                        2,907,490    3,226,341

   Accumulated depreciation                                            (1,441,502)  (1,133,397)
                                                                       ----------   ----------
Net property and equipment                                              1,465,988    2,092,944

Restricted cash                                                           115,000       45,000
Other assets                                                              717,807      357,953
                                                                       ----------   ----------

Total assets                                                           $4,023,415   $3,507,045
                                                                       ==========   ==========


LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
   Accounts payable                                                    $3,198,733   $2,267,342
   Accrued expenses                                                     4,307,177    2,387,330
   Unearned revenue                                                       408,425      155,600
   Current portion of notes payable                                     3,968,696       88,649
   Current portion of convertible debentures                              160,000      180,000
   Current portion of capital lease obligations                            29,299       51,535
   Capital lease obligations in default                                 1,139,489    1,139,489
                                                                       ----------   ----------
Total current liabilities                                              13,211,819    6,269,945
                                                                       ----------   ----------

Long-term portion of notes payable                                             -     2,940,487
                                                                       ----------   ----------

Stockholders' deficit:
   Cumulative Preferred Stock
     Issued and outstanding - 1,146,823 and 1,147,249                   1,146,823    1,147,249
   Common stock, $.01 par value; 500,000,000 authorized;
     Issued and outstanding - 130,695,170 and
     111,932,768                                                        1,306,952    1,119,328
   Deferred compensation                                                  (96,976)    (193,951)
   Additional paid-in capital                                          42,912,759   40,362,532
   Net unrealized loss on securities                                     (550,000)    (550,000)
   Accumulated deficit                                                (53,907,962) (47,588,545)
                                                                       ----------   ----------
Total stockholders' deficit                                            (9,188,404)  (5,703,387)
                                                                       ----------   ----------
Total liabilities and stockholders' deficit                            $4,023,415   $3,507,045
                                                                       ==========   ==========




                 See notes to consolidated financial statements.

                                        4

</TABLE>
<PAGE>


                               LECSTAR CORPORATION

                      CONSOLDIATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                     Three Months Ended                Six Months Ended
                                                          June 30,                         June 30,

                                                     2002           2001              2002           2001
                                                 ------------   ------------      ------------   ------------
<S>                                              <C>            <C>               <C>            <C>
Revenues                                         $  1,967,964   $  1,218,613      $  3,553,308   $  2,072,162
                                                 ------------   ------------      ------------   ------------

Operating expenses:
   Cost of services                                 1,268,899        604,234         2,244,602      1,067,050
   Provisioning costs                                 250,303        146,782           353,415        284,551
   Selling, general and administrative expenses     2,286,319      2,841,111         4,681,532      5,128,725
   Depreciation and amortization                      275,290      2,292,308           551,750      4,583,222
   Write-down of net property and equipment                 -         44,222           205,960         44,222
                                                 ------------   ------------      ------------   ------------
Total operating expenses                            4,080,811      5,928,657         8,037,259     11,107,770

Loss from operations                              (2,112,847)    (4,710,044)       (4,483,951)    (9,035,608)

Other income (expense):
   Interest expense                                 (566,349)      (503,072)         (798,745)      (824,895)
                                                 ------------   ------------      ------------   ------------
Net loss                                          (2,679,196)    (5,213,116)       (5,282,696)    (9,860,503)
Preferred stock dividends                         (1,031,216)      (465,888)       (1,036,720)    (1,245,406)
                                                 ------------   ------------      ------------   ------------

Net loss attributable to common stockholders    $ (3,710,412)  $ (5,679,004)     $ (6,319,416)  $(11,105,909)
                                                 ============   ============      ============   ============
Basic and diluted net loss per common share     $      (0.03)  $      (0.17)     $      (0.06)  $      (0.55)
                                                 ============   ============      ============   ============

Weighted-average shares outstanding used in
   computing basic and diluted net loss per
   common share                                   114,707,341     33,683,740       108,670,580     20,275,131
                                                 ============   ============      ============   ============



                 See notes to consolidated financial statements.

</TABLE>

                                        5

<PAGE>


                               LECSTAR CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 Six Months Ended
                                                                                     June 30,

                                                                             2002                2001
                                                                          -----------        -----------
<S>                                                                       <C>                <C>
OPERATING ACTIVITIES


Net loss                                                                  $(5,282,696)       $(9,860,503)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                              442,109          4,460,490
   Write-down of net property and equipment                                   205,960             44,222
   Stock compensation                                                         480,975            122,732
   Non-cash interest expense                                                  504,509            215,701
   Other non-cash items                                                             -             10,182
   Changes in operating assets and liabilities:
     Accounts receivable                                                     (449,733)          (358,114)
     Prepaid and other assets                                                (529,356)           (95,881)
     Accounts payable                                                         931,391            732,617
     Accrued expenses                                                       1,965,890            925,630
     Unearned revenue                                                         252,825            101,480
                                                                         ------------        -----------
Net cash used in operating activities                                      (1,478,126)        (3,701,444)

INVESTING ACTIVITIES


Purchases of property and equipment                                           (15,292)          (481,613)
Increase in restricted cash                                                   (70,000)                 -
Cash acquired in Corzon merger                                                      -             81,357
                                                                         ------------        -----------
Net cash used in investing activities                                         (85,292)          (400,256)

FINANCING ACTIVITIES


Proceeds from borrowing                                                       895,000          4,399,722
Payment of current portion of long-term debt                                  (38,649)           (94,027)
Payment of capital lease obligations                                          (22,236)          (268,515)
Proceeds from the sale of stock                                                91,460                  -
Proceeds from the sale of warrants                                            750,569                  -
                                                                         ------------        -----------
Net cash provided by financing activities                                   1,676,144          4,037,180
                                                                         ------------        -----------
Increase (Decrease) in cash and cash equivalents                              112,726            (64,520)
Cash and cash equivalents at beginning of period                               55,193            145,674
                                                                         ------------        -----------
Cash and cash equivalents at end of period                               $    167,919        $    81,154
                                                                         ============        ===========

NON-CASH INVESTING AND FINANCING ACTIIVITIES


Issuance of common stock to convert debentures and interest              $     27,802        $         -
Issuance of common stock to convert preferred stock and dividends        $  1,037,529        $         -


Acquisition of Corzon:
         Liabilities assumed                                             $          -        $  7,149,501
         Assets acquired...                                              $          -        $    241,919
         Goodwill recorded.                                              $          -        $ 12,165,101




                 See notes to consolidated financial statements.

                                        6

</TABLE>
<PAGE>

                               LECSTAR CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 2002



1.       Description Of Business And Basis of Financial Statements

     LecStar Corporation (the "Company") is a Competitive Local Exchange Carrier
(CLEC) which markets on a region-wide basis, a full scope of advanced
telecommunications services that include local access dial tone, national and
international long distance, enhanced subscriber services, high-speed data and
internet services and network management.

     The Company had a working capital deficiency at June 30, 2002 of
approximately $11,737,000, and recorded net losses for the first six months of
2002 of approximately $5,283,000. This raises substantial doubt about the
Company's ability to continue as a going concern. The Company's continued
existence is dependent on its ability to obtain additional debt or equity
financing and to generate profits from operations. The Company is continuing to
pursue additional equity and debt financing. There are no assurances that the
Company will receive additional equity and debt financing. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

     The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The unaudited consolidated balance sheet at June 30, 2002, has
been derived from the unaudited consolidated financial statements at that date.
Operating results for the three month and six month periods ended June 30, 2002,
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2002, or any other interim period. The interim consolidated
financial statements and notes thereto should be read in conjunction with the
Company's audited consolidated financial statements and notes thereto for the
fiscal year ended December 31, 2001.


2.       Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
141, Business Combinations. SFAS 141 supersedes APB 16,Business Combinations,
and SFAS 38, Accounting for Preacquisition Contingencies of Purchased
Enterprises. SFAS 141 requires the purchase method of accounting for all
business combinations initiated after June 30, 2001 and eliminates the
pooling-of-interests method. The Company does not expect the adoption of SFAS
141 to have a material effect on its financial condition or results of
operations.

     In July 2001, the FASB issued SFAS 142, Goodwill and Other Intangible
Assets. SFAS 142 supersedes APB 17, Intangible Assets, and requires the
discontinuance of goodwill amortization. In addition, SFAS 142 includes
provisions regarding the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously reported
goodwill and the testing for impairment of existing goodwill and other
intangibles. SFAS 142 is required to be applied for fiscal years beginning after
December 15, 2001, with certain early adoption permitted. The Company adopted
SFAS 142 for its first fiscal quarter of 2002.

                                        7
<PAGE>

     In August 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations. SFAS 143 addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated retirement costs. The Company does not expect the adoption of SFAS
143 to have a material effect on the Company's consolidated financial
statements.

     In October 2001, the FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which supersedes SFAS 121, Accounting for the
Impairment of Long-Lived Assets to be Disposed Of. SFAS 144 addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of. However, SFAS 144 retains the fundamental
provisions of SFAS 121 for: 1) recognition and measurement of the impairment of
long-lived assets to be held and used; and 2) measurement of long-lived assets
to be disposed of by sale. SFAS 144 is effective for fiscal years beginning
after December 15, 2001. The Company does not expect the adoption of SFAS 144 to
have a material effect on the Company's consolidated financial statements.


3.       Loss per share

     Basic net loss per common share and diluted net loss per common share are
presented in conformity with SFAS No. 128, "Earnings Per Share," for all periods
presented. In accordance with SFAS No. 128, basic net loss per common share has
been computed using the weighted-average number of shares of common stock
outstanding during the period.

     The following table presents the calculation of basic and diluted net loss
per common share:

<TABLE>
<CAPTION>

                                            Three Months Ended        Six Months Ended
                                                 June 30                  June 30
                                         -----------------------   ----------------------
                                            2002         2001         2002         2001
                                         ---------     ---------   ---------    ---------
<S>                                   <C>           <C>           <C>          <C>
         Net loss attributable to
          common stockholders         $(3,710,412)  $(5,679,004)  $(6,319,416) $(11,105,909)
                                         ---------     ---------   ---------    ---------
         Basic and diluted:
         Weighted-average shares used in
           computing basic and diluted
           net loss per common share   114,707,341    33,683,740   108,670,580  20,275,131
                                        ==========    ==========   ==========   ==========

         Basic and diluted net loss per
           common share                  $  (0.03)     $  (0.17)   $  (0.06)     $  (0.55)
                                        ==========    ==========   ==========   ==========

</TABLE>

     The Company has excluded all convertible preferred stock, warrants, and
outstanding stock options from the calculation of diluted loss per common share
because all such securities are anti-dilutive for all periods presented. The
total number of shares excluded from the calculation of diluted loss per share
was 278,301,404 in 2002, and 40,150,068 in 2001.


4.       Equity line and credit facilities

     The Company has entered into an equity line financing agreement whereby an
institutional investor has committed to purchase up to $25,000,000 of the
Company's common stock, upon the registration covering the resale of such stock,
over a thirty-six month period, at the sole discretion of the Company. As of
June 30, 2002 no shares have been sold under the equity line.

                                        8
<PAGE>

     Additionally, the Company has entered into a credit agreement with Sherman
LLC that will provide up to $5,000,000 in revolving credit. Pursuant to the
terms of the credit agreement, upon each borrowing the Company will issue to
Sherman a warrant to purchase common stock equal to 19% of the amount borrowed
divided by the average of the closing bid price of the common stock for the five
trading days immediately prior to the date of the loan. Borrowings under the
credit agreement are secured by accounts receivable and certain fixed and other
assets of the Company, and those of significant subsidiaries, and accrue
interest at the rate of 15% per year. During the six months ended June 30, 2002,
the Company borrowed $295,000 pursuant to this credit agreement. As of June 30,
2002, $3,470,000 is outstanding under this facility and warrants to purchase
2,359,803 shares of our common stock at exercise prices ranging from $0.06 to
$0.81 per share have been issued. Additionally, as of June 30, 2002, the Company
did not meet conditions to borrow additional funds under the credit agreement.


5.       Notes Payable

     As of June 30, 2002, the Company entered into secured notes payable with
officers, directors and investors of the Company totalling $499,000. These notes
are either payable on demand or no later than January 31, 2003; bear interest
rates ranging from 4 to 5 percent; and are secured by certain assets of the
Company, including the common stock of the operating subsidiaries, and LecStar
common stock held by investors of the Company.


6.       Exchange Agreement

     On September 29, 2001 the Company entered into an Exchange Agreement with
certain investors, whereby such investors exchanged Series D Convertible
Preferred Stock owned by them and certain debt issued by the Company. This
exchange of preferred stock, debt, and accrued dividends resulted in the
issuance of 77,726,078 shares of the Company's common stock. Sherman LLC was
issued 48,716,835 shares pursuant to the Exchange Agreement, becoming a 43.5%
holder of the common stock then outstanding. The remaining 29,009,243 shares
were issued to six other debenture or preferred stock holders. Before the
execution of the Exchange Agreement, Dominion Capital Fund Limited was the
Company's single largest shareholder, being the beneficial owner of 6,767,009
shares of common stock. Such ownership represented approximately 20.1% of the
then-outstanding common stock of the Company.

     As a result of this exchange, the Company recognized $4,191,160 of non-cash
interest expense, which represents the value of premium shares given to Sherman
LLC as part of this transaction. The Exchange Agreement contains a provision
whereby the holders shall return 10% of their shares issued under the Exchange
Agreement, if within 18 months the closing price of the Company's common stock
on the NASDAQ Stock Market, the OTC Bulletin Board, or any other national
securities exchange on which the stock is listed remains at or above $3.00 per
share for 50 consecutive trading days. An additional 5% of the shares issued
under the Exchange Agreement shall be returned if the closing price remains at
or above $4.00 per share for 50 consecutive trading days. As a result of this
contingency, the Company has excluded 11,594,366 shares of common stock from the
denominator in computing basic and diluted earnings per share.

7.       Stockholders' Deficit

     Series A Preferred Stock: The Company has designated 3,000,000 shares out
of a total of 5,000,000 authorized shares of its $1.00 par value preferred stock
as Series A Redeemable Convertible Preferred Stock ("Series A Preferred Stock").
Dividends of the Series A Preferred Stock are cumulative and payable quarterly
in arrears at a quarterly rate of $0.30 per share, representing a yield of 12%
per year. Dividends may be paid in cash or an equivalent value of common stock.
The Series A Preferred Stock has no voting rights and has a liquidation
preference of $10 per share. At June 30, 2002 dividends in arrears on this
preferred stock totaled $2,215,264. The Series A Preferred Stock is convertible
at the option of the holder into shares of the Company's common stock. The
initial conversion rate is 2.7 shares of common stock for each share of Series A
Preferred Stock, subject to adjustment in certain events. The Series A Preferred
Stock will automatically convert into the Company's common stock if the closing
price of the Series A Preferred Stock exceeds $20 per share for ten consecutive
days. The Series A Preferred Stock may also be redeemed by the Company upon 30
days written notice at 110% of the average bid price for the twenty trading days
prior to the redemption date. The Company has the option to pay the redemption
in either cash or common stock. At June 30, 2002, 446,410 shares of Series A
Preferred Stock are outstanding.

                                        9
<PAGE>

     Series D Preferred Stock: The Company has designated 10,534 shares out of a
total of 5,000,000 authorized shares of its $1.00 par value preferred stock as
Series D Convertible Preferred Stock ("Series D Preferred Stock"). The original
issue price of the Series D Preferred Stock was $1,000 per share. Dividends on
the Series D Preferred Stock accrue at an annual rate of 7% of the original
issue price, or $70 per share, and are payable in cash or common stock, as
determined by the holders, only at the time of conversion of such shares.
Dividends are cumulative from the date of issue. Unless full cumulative
dividends have been or are contemporaneously paid on the Series D Preferred
Stock, the Company may not declare or pay cash dividends on the common stock,
nor may it redeem, purchase, or otherwise acquire common stock, nor may it make
any other distribution with respect to the common stock or any class of capital
stock on a parity with or junior to the Series D Preferred Stock.

     The Series D Preferred Stock is convertible at the option of the holder
into shares of common stock for up to three years after initial issuance. After
three years, the Series D Preferred Stock will automatically convert into shares
of common stock. The conversion rate is equal to $1,000 divided by 80% of the
five-day average closing bid price of the common stock on the NASDAQ Stock
Market, the OTC Bulletin Board, or any other national securities exchange on
which the common stock is listed at the time of conversion. Holders of Series D
Preferred Stock are allowed to convert the aggregate amount of such holder's
Series D Preferred Stock into common stock. The holders of the Series D
Preferred Stock have no preemptive rights or other rights to subscribe for any
other shares or securities of the Company. During the six months ended June 30,
2002, 426 shares of Series D Preferred Stock were converted to common stock. At
June 30, 2002, 1,700 shares of Series D Preferred Stock are outstanding, with
related dividends in arrears of $197,410.

     Series E Preferred Stock: The Company has designated 745,000 shares out of
a total of 5,000,000 authorized shares of its $1.00 par value preferred stock as
Series E Redeemable Convertible Preferred Stock ("Series E Preferred Stock").
The original issue price of the Series E Preferred Stock was $10.00 per share.
Dividends on the Series E Preferred Stock accrue at an annual rate of 8% of the
original price, or $0.80 per share, and are payable in cash or common stock, as
determined by the Company, only at the time of conversion of such shares.
Dividends are cumulative from the date of issue. Unless full cumulative
dividends have been or are contemporaneously paid on Series E Preferred Stock,
the Company may not declare or pay cash dividends on the common stock, nor may
it redeem, purchase or otherwise acquire common stock, nor may it make any other
distribution with respect to the common stock or any class of capital stock on a
parity with or junior to the Series E Preferred Stock.

     The Series E Preferred Stock is redeemable at the option of the Company at
any time after six months of issuance, in whole or in part, for $0.01 per share,
if the average closing bid price of the Company's common stock, as quoted on any
national securities exchange, NASDAQ, or the OTC Bulletin Board exceeds $3.50
per share for five consecutive trading days. Each share of Series E Preferred
Stock is convertible at the option of the holder into four shares of common
stock at any time after six months from the date of issuance, subject to
adjustment. The Series E Preferred Stock is non-voting, and it is ranked junior
to the Company's Series A Preferred Stock and Series D Preferred Stock. The
holders of the Series E Preferred Stock have no preemptive rights or other
rights to subscribe for any other shares or securities of the Company. At June
30, 2002, 698,713 shares of Series E Preferred Stock are outstanding, with
related dividends in arrears of $1,927,297.

                                       10
<PAGE>

     During the six month period ended June 30, 2002, the Company issued
1,800,000 shares of its common stock, with a fair market value of $384,000, to
its advisors in exchange for professional and advisory services.


8.       Customer Migration

     On April 1, 2002, the Company entered into a migration agreement with Nuvox
Communications, Inc. to solicit their residential customer base for the right to
receive LecStar's service in nine Southeast states. This agreement requires the
Company to pay a fee to Nuvox over a nine-month period totaling approximately
$220,000. The Company has included this obligation in accrued expenses and has
recorded a corresponding asset, which is included in Other Assets. The asset is
being amortized over the estimated life of the customer base, not to exceed 24
months.


9.       Reclassifications

     Certain reclassifications have been made to prior period financial
statements to conform to the current period presentation. These
reclassifications had no effect on previously reported results of operations or
retained earnings.


10.      Commitments and Contingencies

     Legal - The Company is a party to numbers of lawsuits arising out of the
normal conduct of its business. While there can be no assurance as to their
ultimate outcome, there exists the possibility that these lawsuits could have a
material adverse effect on the Company's financial condition, operating results,
or cash flows. Pledged assets - The Company has pledged $350,000 of customer
accounts receivable to a significant vendor to secure payment for services to be
rendered.



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

     The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with the financial
statements and the related notes included in this Form 10-QSB. This quarterly
report of Form 10-QSB contains forward-looking statements based upon current
expectations that involve risks and uncertainties, such as our plans,
objectives, expectations, and intentions. These forward-looking statements
include all statements that are not statements of historical fact. You can
identify these statements by our use of words such as "may," "expect,"
"believe," "anticipate," "intend," "could," "estimate," "continue," "plans," or
their negatives or cognates. Some of these statements include discussions
regarding future business strategy and our ability to generate revenue, income,
and cash flow. We wish caution to the reader that all forward-looking statements
contained in this Form 10-QSB are only estimates and predictions. Our actual
results could differ materially from those anticipated as a result of risks
facing us or actual events differing from the assumptions underlying such
forward-looking statements. Some factors that could affect our results include
those that we discuss in this section as well as elsewhere in this Form 10-QSB.

                                       11
<PAGE>

     Readers are cautioned not to place reliance on any forward-looking
statements contained in this prospectus. We will not update these
forward-looking statements unless the securities laws require us to do so.


Results of Operations

Six Months Ended June 30, 2002 Compared with June 30, 2001

     Total net revenues increased 71% to $3,553,308 for the six months ended
June 30, 2002 from $2,072,162 for the six months ended June 30, 2001. The
increase was driven primarily by incremental line count growth and market
penetration in both residential and business local and long distance service
segments through additional utility partnerships and the development of outside
sales agent programs. This growth was furthered through customer migration
subsequent to the agreement we entered with Nuvox Communications, Inc. in April
2002. The Company expects continued growth of its revenue base by capitalizing
on its strategic marketing and support channels, while continuing to expand
geographically and to develop its data, internet, and integrated services
presence in the competitive marketplace.

     Cost of services as a percentage of revenues was 63% or $2,244,602 in the
first half of 2002 compared to 51% or $1,067,050 for 2001. The decrease in gross
profit margin is primarily the result of a significant product mix shift from
prepaid to a post-paid residential service base. The principal expenses
associated with providing our services are leasing of network components from
Bellsouth, the incumbent telephone provider in our current target markets. Other
primary costs include long distance services purchased from inter-exchange
carriers. Costs can vary greatly depending on product complexity, regionalized
costing in our interconnection agreement with Bellsouth, and by type and method
of provisioning service. Management believes that profit margin will improve as
provisioning processes and operations support systems continue to be refined,
and as overall product mix shifts with the growth of improved margin services.
We periodically evaluate the costs we incur in delivering services to our
customers. As a result of this process, we seek to identify more cost-efficient
procedures for delivering our services, up-sell products to existing customers,
or may decide to discontinue offering some products.

     Provisioning costs as a percentage of revenues were 10% or $353,415 for the
six-month period ended June 30, 2002 compared to 14% or $284,551 for 2001. These
costs include amounts paid for provisioning new customers and making changes to
existing customer accounts, and are paid to telecommunication carriers based on
our interconnection agreements. For the six month period ended June 30, 2002,
approximately $85,000 of these costs related to recent customer migration under
the agreement with Nuvox Communications, Inc. The Company recognizes these costs
of customer provisioning as period cost, rather than capitalizing these costs
and expensing them over the expected customer life.

     Selling, general and administrative expenses were $4,681,532 for the six
months ended June 30, 2002 compared to $5,128,725 for the corresponding period
in 2001. Expenses include such items as salaries and related personnel costs,
legal and professional services, facilities expenses, rent, utilities, and sales
and marketing costs. Costs decreased between comparable quarters primarily due
to reductions in salaries and wages expenses of $543,028 and legal and
professional services of $263,946, offset by an increase in stock compensation
of $358,243.

                                       12
<PAGE>

     Depreciation and amortization expense decreased to $551,750 in 2002 down
from $4,583,222 in 2002, primarily due to discontinued amortization of goodwill,
subsequent to recording intangibles impairment of $4,651,334 in the fourth
quarter of 2001. In 2002, the Company recorded a write-down of net property and
equipment of $205,960.

     Interest expense for the six months ended June 30, 2002 was $798,745 of
which $504,509 was non-cash interest related to the issuance of warrants and the
conversion of debt to common stock, and $294,236 was related to borrowings under
credit facilities, other notes, and capital leases. Interest expense for the
comparable period ended June 30, 2001 was $824,895 of which $215,701 was
non-cash interest related to the issuance of warrants and the conversion of debt
to common stock, and $609,194 was related to borrowings under credit facilities,
other notes, and capital leases.

     Net loss for the six months ended June 30, 2002 was $(5,282,696) compared
to a net loss of $(9,860,503) for the six months ended June 30, 2001.


Liquidity and Capital Resources

     We have incurred operating losses since our inception and as of June 30,
2002, we had an accumulated deficit of $(53,907,962) and a working capital
deficit of $(11,737,199).

     LecStar has a credit agreement with Sherman LLC that provides us with up to
$5,000,000 in revolving credit. Pursuant to the terms of the credit agreement,
upon each borrowing we will issue to Sherman a warrant to purchase our common
stock equal to 19% of the amount borrowed divided by the average of the closing
bid price of our common stock for the five trading days immediately prior to the
date of the loan. Borrowings under the credit agreement are secured by our
accounts receivable and certain fixed and other assets, and those of each of our
significant subsidiaries, and accrue interest at the rate of 15% per year. At
June 30, 2002, the Company was in compliance with all covenants of this credit
agreement or had received appropriate waivers; however, the Company did not meet
the conditions for additional borrowings under this facility. The Company is
negotiating with Sherman LLC to restructure this agreement.

     We also have a $25,000,000 Equity Line Financing Agreement with Pima
Capital Management Limited. Upon our request, Pima Capital has committed to
purchase up to $25,000,000 of our common stock over a thirty-six month period.
The purchase price per share will be determined by dividing the dollar amount we
request by 92% of the simple average of the closing bid prices of our common
stock over the ten trading days immediately following a draw request from us.
Under the equity line financing agreement, we are obligated to register the
shares of common stock to be purchased by Pima before we may deliver a draw
request to Pima. To date, we have not drawn funds under this equity line of
credit because of conditions to funding.

     Inability to draw funds under either the financing or credit agreement
could result in a material adverse effect on our business, financial condition,
and results of operation. Furthermore, we may need to raise additional funding
through either debt or equity instruments. If we are not successful in these
efforts, lack of additional funding would result in a material adverse effect on
the Company and its viability as an ongoing concern.

                                       13
<PAGE>

     Our cash and cash equivalents increased $112,726 during the first two
quarters of 2002. The principal sources of funds consisted of $895,000 in
borrowings, and $750,569 received in proceeds from the sale of 7,000,000 common
stock warrants, which are included in the total calculation of outstanding
shares. The primary use of funds was cash used in operations of $1,478,126.

     We have not paid dividends on the Series A preferred stock since June 1998
and we are currently analyzing our alternatives for addressing these arrearages
totaling $2,215,264. At June 30, 2002, we were in default on $1,139,489 of lease
obligations. Default under lease obligations could have a materially adverse
impact on our business.



                           PART II - OTHER INFORMATION



ITEM 1.           LEGAL PROCEEDINGS

     The Company is a defendant in the action McIntosh & Associates, Inc. v.
LecStar Corporation filed in the district county of Dallas County, Texas. The
Plaintiff alleges breach of contract and is seeking $151,143.18 in actual
damages plus legal and equitable interests of reasonable and necessary attorney
fees. On February 8, 2002, the Plaintiff received a final judgment by default
for the amount of its claim.

     The Company is a defendant in the action James D. Grenfell v. LecStar
Corporation filed with the American Arbitration Association on September 27,
2001. The Plaintiff alleges breach of contract and is seeking in excess of
$900,000 in actual damages plus legal and equitable interests of reasonable and
necessary attorney fees. The likelihood of an unfavorable outcome or estimate of
any possible loss cannot be determined at this time.

     We are not currently a party to any other material legal proceeding other
than various claims and lawsuits arising in the normal course of business. We do
not believe that these lawsuits would individually or in the aggregate, have a
material adverse effect on our business, financial condition or results of
operations.



ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

     During the six months ended June 30, 2002, we sold warrants to purchase a
total of 7,000,000 shares of common stock to certain existing shareholders
(Sovereign Partners, Atlantis Capital Fund, Ltd., Dominion Capital, and Sherman
LLC), and received $750,569 in cash proceeds. These warrants are included in
shares outstanding. In addition, the Company sold 2,292,500 shares of common
stock and received $91,460 in cash proceeds. These warrants and common stock
were issued in reliance on the exemption from registration provided by Section
4(2) of the Securities Act, as a transaction by an issuer not involving a public
offering.

                                       14
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ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

     As of June 30, 2002, the Company had not met the conditions for additional
borrowing as required by the credit agreement with Sherman LLC. The Company is
negotiating with Sherman LLC to restructure this agreement. Inability to draw
funds under the credit agreement could result in a material adverse effect on
our business, financial condition, and results of operation.

     We have not paid dividends on the Series A Preferred Stock since June 1998
and we are currently analyzing our alternatives for addressing these arrearages
totaling $2,215,264.



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

     The annual meeting of the shareholders was held in Atlanta, Georgia on May
13, 2002. Proxies for the meeting were solicited under Regulation 14A. The
matters that were submitted to a vote of shareholders were (a) the election of
three directors, each for a term of one year, (b) the approval of a reverse
common stock split proposal, and (c) the ratification of the appointment of
Sherb & Co., LLP as our independent accountants for our fiscal year ending
December 31, 2002. A total of 59,746,152 votes were received, representing 52.3%
of the entitled vote.



     William S. Woulfin was elected as a director of the  Company.  The vote was
as follows:

              For                 Against                    Abstain

          59,746,152                 0                          0

     W. Dale Smith was  elected as a director  of the  Company.  The vote was as
follows:

              For                 Against                    Abstain

          59,746,152                 0                          0

     John C. Canouse was elected as a director of the  Company.  The vote was as
follows:

              For                 Against                    Abstain

          59,746,152                 0                          0


     The shareholders also approved a reverse common stock split proposal:

              For                 Against                    Abstain

          59,746,152                 0                          0

     Lastly, shareholders ratified the appointment of Feldman, Sherb & Co., P.C.
as our independent accountants for the fiscal year ending December 31, 2002.

              For                  Against                   Abstain

          59,746,152                 0                          0


                                       15
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ITEM 5.           OTHER INFORMATION

         None.



ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.

         None.

(b)      Reports on Form 8-K.

     On April 18, 2002, we filed a current report on Form 8-K to report
agreement with Nuvox Communications, Inc. to solicit their residential customer
base for the right to receive LecStar's telephone service.

<PAGE>


                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act,
LecStar Corporation has caused this ammended quarterly report on Form 10-QSB to
be signed on its behalf by the undersigned, thereunto duly authorized, on
October 23, 2002.
                                                     LECSTAR CORPORATION



                                                     By:  /s/    W. DALE SMITH
                                                                   W. Dale Smith
                                                                       President

                                                     By:  /s/    JAMES E. MALCOM
                                                                 James E. Malcom
                                                         Chief Financial Officer
<PAGE>