<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10-QSB

(Mark One)

[X]      Quarterly report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

         For the quarterly period ended March 31, 2001


[ ]      Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934

         For the transition period from                  to
                                        -----------------   -----------------

Commission File Number:             000-29755


                                   SATX, INC.
       (Exact Name of Small Business Issuer as Specified in Its Charter)


           NEVADA                                               87-0293479
(State or Other Jurisdiction of                                (IRS Employer
 Incorporation or Organization)                             Identification No.)


                            8351 ROSWELL ROAD, # 374
                             ATLANTA, GEORGIA 30350
                    (Address of Principal Executive Offices)


                                 (813) 290-0911
                (Issuer'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 Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes   [X]         No   [ ]


         Approximately 84,395,392 shares of the issuer's Common Stock, $.001
par value, were outstanding as of May 10, 2001.

Transitional Small Business Disclosure Format (check one):   Yes [ ]   No [X]


<PAGE>   2


                    A NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This report (including the section in Part I below entitled "Item 2.
Management's Discussion and Analysis or Plan of Operation") contains
forward-looking statements that involve risks and uncertainties. You should
exercise extreme caution with respect to all forward looking statements
contained in this report. Specifically, the following statements are
"forward-looking":

         -        statements regarding our overall strategy for deploying our
                  proprietary technology, including without limitation, our
                  intended markets and future products;

         -        statements regarding our research and development efforts;

         -        statements regarding the plans and objectives of our
                  management for future operations, including the research,
                  development and production of products incorporating our
                  technology, and the size and nature of the costs we expect to
                  incur and the people and services we may employ;

         -        statements regarding future opportunities in our targeted
                  industries, our competition or regulations that may affect
                  us;

         -        statements regarding our ability to compete with third
                  parties;

         -        any statements using the words "anticipate", "believe",
                  "estimate", "expect", "intend", and similar words; and

         -        any statements other than historical fact.

         We believe that it is important to communicate our future expectations
to our shareholders. Forward-looking statements reflect the current view of
management with respect to future events and are subject to numerous risks,
uncertainties and assumptions, including without limitation, the factors listed
in Exhibit 99.1 - "Risks Associated with Our Business." Although we believe that
the expectations reflected in such forward-looking statements are reasonable, we
can give no assurance that such expectations will prove to be correct. Should
any underlying assumptions prove incorrect, actual results are likely to vary
materially from those described in this report. There can be no assurance that
the projected results will occur, that these judgments or assumptions will prove
correct, or that unforeseen developments will not occur.


<PAGE>   3


                          SATX, INC. AND SUBSIDIARIES
                        (A DEVELOPMENTAL STAGE COMPANY)

                              INDEX TO FORM 10-QSB


<TABLE>
<CAPTION>
                                                                                                        PAGE
<S>                                                                                                     <C>
PART I.       FINANCIAL INFORMATION

Item 1.       Financial Statements.

              Consolidated Condensed Balance Sheets
                    At March 31, 2001 (unaudited) and December 31, 2000  ............................     3

              Consolidated Condensed Statements of Operations For the three
                    months ended March 31, 2001 and 2000, and Cumulative during
                    the developmental stage period from
                    June 28, 1972 to March 31, 2001 (unaudited)  ....................................     4

              Condensed Statements of Cash Flows
                    For the three months ended March 31, 2001 and 2000, and
                    Cumulative during the developmental stage period from
                    June 28, 1972 to March 31, 2001 (unaudited)  ....................................     5

              Notes to Interim Consolidated Condensed Financial Statements  .........................     6

Item 2.       Management's Discussion and Analysis or Plan of Operations  ...........................    11

PART II.      OTHER INFORMATION

Item 1.       Legal Proceedings  ....................................................................    14

Item 2.       Changes in Securities  ................................................................    14

Item 3.       Defaults Upon Senior Securities  ......................................................    15

Item 4.       Submission of Matters to a Vote of Security Holders  ..................................    15

Item 5.       Other Information  ....................................................................    15

Item 6.       Exhibits and Reports on Form 8-K  .....................................................    15

Signatures          .................................................................................    18
</TABLE>


                                       2
<PAGE>   4
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          SATX, INC. AND SUBSIDIARIES
                         (A DEVELOPMENT STAGE COMPANY)
                     CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                   MARCH 31,           December 31,
                                                                                                      2001                2000
                                                                                                  ------------         ------------
                                                                                                   (UNAUDITED)
<S>                                                                                               <C>                  <C>
                                                             - ASSETS -

CURRENT ASSETS:
     Cash                                                                                         $    522,419         $         --
     Notes receivable                                                                                   40,000               40,000
     Inventory                                                                                          22,815               40,315
                                                                                                  ------------         ------------
TOTAL CURRENT ASSETS                                                                                   585,234               80,315
                                                                                                  ------------         ------------

FIXED ASSETS:
     Furniture and fixtures                                                                             14,448               14,448
     Computer equipment                                                                                 14,794               14,794
                                                                                                  ------------         ------------
                                                                                                        29,242               29,242
     Less:  accumulated depreciation and amortization                                                   13,624               11,669
                                                                                                  ------------         ------------
                                                                                                        15,618               17,573
                                                                                                  ------------         ------------

OTHER ASSETS:
     Investments                                                                                         8,788               43,788
     Deposits                                                                                          123,600              100,000
                                                                                                  ------------         ------------
                                                                                                       132,388              143,788
                                                                                                  ------------         ------------

                                                                                                  $    733,240         $    241,676
                                                                                                  ============         ============

                                              - LIABILITIES AND SHAREHOLDERS' DEFICIT -
CURRENT LIABILITIES:
     Bank overdraft                                                                               $         --         $     49,133
     Accounts payable                                                                                  541,007              516,180
     Accrued expenses                                                                                  267,800              450,034
     Notes payable (Note 4a)                                                                           301,000            1,661,000
     Loan payable  - officer (Note 4b)                                                                  77,754               63,670
     Convertible debenture (Note 4c)                                                                   250,000              250,000
                                                                                                  ------------         ------------
TOTAL CURRENT LIABILITIES                                                                            1,437,561            2,990,017
                                                                                                  ------------         ------------

LONG-TERM LIABILITIES (NOTE 4a)                                                                      1,060,998                   --
                                                                                                  ------------         ------------

COMMITMENTS AND CONTINGENCIES (NOTE 6)

SHAREHOLDERS' DEFICIT (NOTE 5):
     Preferred stock, $.001 par value, 20,000,000 shares authorized, none issued                            --                   --
     Common stock, $.001 par value, 100,000,000 shares authorized 93,026,708 and
       65,871,392 issued and outstanding in 2001 and 2000, respectively                                 93,027               65,871
     Additional paid-in capital                                                                     13,235,614           10,164,258
     Deficit accumulated during the development stage                                              (15,093,960)         (12,978,470)
                                                                                                  ------------         ------------
                                                                                                    (1,765,319)          (2,748,341)
                                                                                                  ------------         ------------

                                                                                                  $    733,240         $    241,676
                                                                                                  ============         ============
</TABLE>

                             See accompanying notes.

                                       3
<PAGE>   5
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                          For The Three Months Ended             Cumulative During the
                                                                   March 31,                       Development Stage
                                                    -------------------------------------          (June 28, 1972 to
                                                        2001                     2000                March 31, 2001)
                                                    ------------             ------------             ------------
<S>                                                 <C>                      <C>                 <C>
REVENUES                                            $     33,076             $         --             $     90,037
                                                    ------------             ------------             ------------

COSTS AND EXPENSES:
     Costs of sales                                       26,143                       --                  191,916
     Selling, general and administrative               2,071,560                  616,579               13,180,247
     Interest expense                                     50,863                   20,575                  177,016
     Inventory write-down                                     --                       --                  342,420
     Write-down of investment                                 --                       --                1,292,398
                                                    ------------             ------------             ------------
                                                       2,148,566                  637,154               15,183,997
                                                    ------------             ------------             ------------

NET LOSS                                            $ (2,115,490)            $   (637,154)            $(15,093,960)
                                                    ============             ============             ============



BASIC/DILUTED LOSS PER
     COMMON SHARE                                   $       (.03)            $       (.01)            $       (.27)
                                                    ============             ============             ============


WEIGHTED AVERAGE COMMON
     SHARES OUTSTANDING                               71,667,225               52,758,428               56,273,400
                                                    ============             ============             ============
</TABLE>

                             See accompanying notes.

                                       4
<PAGE>   6
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               For The Three Months Ended     Cumulative During the
                                                                                        March 31,               Development Stage
                                                                             -------------------------------      (June 28, 1972
                                                                                2001                2000        to March 31, 2001)
                                                                             ------------       ------------       ------------
<S>                                                                          <C>                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                 $ (2,115,490)      $   (637,154)      $(15,093,960)
    Adjustments to reconcile net loss to net cash flows from operating
     activities:
       Depreciation and amortization                                                1,955              1,884            157,929
       Compensatory shares                                                      1,856,412                 --          7,093,842
       Imputed interest                                                             1,560                 --             12,140
       Write-down of investments                                                       --                 --          1,292,398
       Write-down of inventory                                                         --                 --            342,420
       Accounts and notes receivable written off                                       --                 --            275,911
       Stock issued for acquisition                                                    --                 --            116,000
    Changes in assets and liabilities:
       Accounts and notes receivable                                                   --           (225,990)           (19,420)
       Inventories                                                                 17,500            (22,660)          (405,535)
       Prepaid expenses                                                                --                 90             40,300
       Bank overdraft                                                             (49,133)                --                 --
       Account payable and accrued expenses                                        24,591           (173,898)           990,805
                                                                             ------------       ------------       ------------
CASH FLOWS USED BY OPERATING ACTIVITIES                                          (262,605)        (1,057,728)        (5,197,170)
                                                                             ------------       ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                               --             (6,223)          (173,547)
    Note receivable                                                                    --                 --           (296,491)
    Deposits                                                                      (23,600)                --           (123,600)
    Proceeds from sale of investment                                               35,000                 --             35,000
    Investments in common stock                                                        --                 --           (936,186)
                                                                             ------------       ------------       ------------
CASH FLOWS PROVIDED (USED) BY INVESTING
  ACTIVITIES                                                                       11,400             (6,223)        (1,494,824)
                                                                             ------------       ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from sale of common stock and warrant exercise                       740,540            958,906          5,206,659
    Loans from shareholders/officers                                               33,084             46,874          2,007,754
                                                                             ------------       ------------       ------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                                       773,624          1,005,780          7,214,413
                                                                             ------------       ------------       ------------

NET INCREASE (DECREASE) IN CASH                                                   522,419            (58,171)           522,419

CASH, BEGINNING                                                                        --             98,826                 --
                                                                             ------------       ------------       ------------

CASH, ENDING                                                                 $    522,419       $     40,655       $    522,419
                                                                             ============       ============       ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

    Interest paid                                                            $         --       $         --       $         --
    Taxes paid                                                               $         --       $         --       $         --
</TABLE>

                             See accompanying notes.

                                       5
<PAGE>   7
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)



NOTE   1   -     DESCRIPTION OF COMPANY:

                 SATX, Inc., (the Company) was originally incorporated in June
                 1972 as Growth, Inc., a Utah corporation engaged in the
                 business of corporate development. The Company later changed
                 its name to Westland Resources, Inc. and began functioning as a
                 shell corporation looking for acquisitions. Westland
                 subsequently reincorporated in Nevada, in September 1995, as
                 PageStar, Inc. via a reverse merger. In September 1996,
                 PageStar acquired Satellite Control Technologies, Inc., a
                 privately held Delaware corporation, and its wholly owned
                 subsidiary, J.F.A. Tech, Inc., (JFA), a California corporation.
                 As a part of this acquisition transaction, JFA assigned to
                 PageStar all of its proprietary technology rights and patents
                 (including, at the time, a pending patent, now issued). As a
                 result of these acquisitions, the Company presently owns two
                 patents related to switching electrical devices remotely via
                 pager signals, and communicating the result back to the source
                 of the original action/signal. These patented devices underlie
                 the Company's AlphaTrak System, a GPS (Global Positioning
                 Satellite) tracking, locating and control device that can be
                 used to track and control automobiles, railcars and other
                 transportation vehicles and that can ultimately be used for
                 fleet management. In April 1997, PageStar changed its name to
                 Satellite Control Technologies, Inc.

                 The Company was engaged in the research and development of its
                 tracking systems until May, 1998, at which time it ceased
                 operations due to lack of funds. At such time, the Company's
                 only assets consisted of the two patents relating to its
                 tracking systems. The Company was re-activated in May 1999 with
                 the acquisition of DebitFone International, Inc., a Florida
                 corporation engaged in the prepaid cellular phone industry.
                 From its incorporation in October 1996 until May 1999,
                 DebitFone was a privately held research and development company
                 with no revenues. As a result of the acquisition, DebitFone is
                 now a wholly owned subsidiary of the Company.

                 In May 1999, the Company changed its name to SATX, Inc. In
                 addition to the continuation of DebitFone's pre-paid cellular
                 operations, new management made the decision to re-pursue
                 products and markets related to the Company's patents. Since
                 May 1999 the Company has concentrated its efforts on the
                 continued development of the GPS-based tracking, locating and
                 control systems and the DebitFone prepaid software management
                 system. The Company recently developed a prototype of an
                 updated tracking system, has other pager-based solutions under
                 development, and in December, 1999, initiated the sale of
                 DebitFone products.

                 The Company has been in the development stage in accordance
                 with Statement of Financial Accounting Standards No. 7 from the
                 time of its inception, since, even though the Company has
                 attempted to commence operations, no significant revenues have
                 been generated to date.

                 The accounting policies followed by the Company are set forth
                 in Note 3 to the Company's annual report filed on Form 10-KSB
                 for the year ended December 31, 2000. Specific reference is
                 made to this report for a description of the Company's
                 securities and the notes to the financial statements included
                 therein. The accompanying unaudited interim financial
                 statements have been prepared in accordance with instructions
                 to Form 10-Q and 10-QSB and therefore do not include all
                 information and footnotes required by accounting principles
                 generally accepted in the United States of America.


                                       6
<PAGE>   8
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)



NOTE   1   -     DESCRIPTION OF COMPANY (CONTINUED):

                 In the opinion of management, the accompanying unaudited
                 interim consolidated condensed financial statements of SATX,
                 Inc., contain all adjustments necessary to present fairly the
                 Company's financial position as of March 31, 2001 and the
                 results of its operations and cash flows for the three-month
                 periods ended March 31, 2001 and 2000.

                 The results of operations for the three-month periods ended
                 March 31, 2001 and 2000 are not necessarily indicative of the
                 results to be expected for the full year.


NOTE   2   -     GOING CONCERN UNCERTAINTY:

                 The accompanying financial statements have been prepared in
                 conformity with accounting principles generally accepted in the
                 United States of America, which contemplates continuation of
                 the Company as a going concern. However, the Company has
                 sustained a substantial operating loss during the three-month
                 period ended March 31, 2001 of $2,115,490 and as of that date
                 had a working capital deficit of $852,327. For the year ended
                 December 31, 2000, the net loss was $9,314,385, and the working
                 capital deficiency was $2,909,702 as of December 31, 2000. As
                 of March 31, 2000, the Company is reflecting a net worth
                 deficiency of $1,765,319. The Company is also in default on
                 certain notes payable to shareholders.

                 These conditions raise substantial doubt about the Company's
                 ability to continue as a going concern. In view of these
                 matters, realization of a major portion of the assets in the
                 accompanying balance sheet is dependent upon continued
                 operations of the Company, which in turn is dependent upon the
                 Company's ability to meet its financing requirements, and the
                 success of its future operations.

                 In January 2001, the Company entered into an agreement with an
                 investment banking and consulting firm to provide the Company
                 with financial, management and marketing assistance and
                 guidance. This firm agreed to, among other undertakings, act as
                 a private investment banker and help raise the necessary
                 capital to make the Company and its subsidiaries a success.
                 Through April 6, 2001, this firm's efforts have resulted in the
                 sale of the Company's securities for net proceeds of
                 approximately $741,000. As payment for these services, the
                 Company has issued an aggregate of 15,000,000 of its common
                 shares as well as options to acquire an additional 5,000,000
                 shares at an exercise price of $1.00 per share to this firm.
                 Management also agreed to pay this firm its standard fee for
                 any acquisition that is merged into the Company or its
                 subsidiaries as well as a commission of 10% on the sale of the
                 Company's equity securities.

                 Management believes that this firm will be able to accomplish
                 additional equity funding which will provide for the continued
                 development of the AlphaTrak product line as well as the
                 continued development of certain prepaid cellular products. The
                 Company will also investigate other merger and acquisition
                 opportunities in order to provide revenues and operating cash
                 flows during the ongoing development of its products. The
                 Company believes that these actions presently being taken to
                 revise the Company's operating and financial requirements
                 provide the opportunity for the Company to continue as a going
                 concern.

                                       7
<PAGE>   9
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)



NOTE   3   -     EARNINGS (LOSS) PER SHARE:

                 Basic earnings (loss) per share has been computed on the basis
                 of the weighted average number of common shares outstanding
                 during each period presented according to the standards of SFAS
                 No. 128 "Earnings Per Share". Diluted earnings (loss) per share
                 have not been presented, as the effect of any common stock
                 purchase warrants/options outstanding, on such calculation,
                 would have been antidilutive. Such securities could potentially
                 dilute basic earnings per share in the future.


NOTE   4   -     NOTES PAYABLE:

        (a)      NOTES PAYABLE - SHAREHOLDERS:

                 As of March 31, 2001 and December 31, 2000, the Company was
                 indebted to certain of its shareholders as follows:

<TABLE>
<CAPTION>
                                                                                                2001             2000
                                                                                          -------------     -------------
                                                                                            (UNAUDITED)
<S>                                                                                       <C>               <C>
                 Unsecured notes payable, annual interest between 8% and 10%              $     201,000     $   1,061,000
                 Unsecured notes payable, annual interest between 8% and 12%,
                    convertible at the option of the holders (see Note 5)                       100,000           600,000
                 Unsecured notes payable; annual interest at 10%; due on March 31, 2003       1,060,998            -
                                                                                          -------------     -------------
                                                                                          $   1,361,998     $   1,661,000
                                                                                          =============     =============
</TABLE>

                 Effective April 1, 2001, certain note-holders extended the due
                 dates of their notes (including interest accrued as of that
                 date of $181,998) to March 31, 2003. Interest accrued at March
                 31, 2001 and December 31, 2000, aggregated $53,928 and
                 $172,787, respectively. The Company has not paid any interest
                 on these notes and is currently in default with regard to its
                 repayment obligations.

        (b)      LOANS PAYABLE - OFFICERS:

                 As of March 31, 2001 and December 31, 2000, the Company was
                 indebted to an officer in the amount of $77,754 and $63,670,
                 respectively. These loans are payable on demand and are
                 non-interest bearing. However, interest is being imputed at an
                 annual rate of 8% and is being recorded as additional paid-in
                 capital.

                                       8

<PAGE>   10
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)



NOTE   4   -     NOTES PAYABLE (CONTINUED):

        (c)      CONVERTIBLE DEBENTURE:

                 In August 2000, the Company issued an 8% convertible debenture
                 in the amount of $250,000. This 1-year debenture is convertible
                 at a 30% discount at the option of the holder, with a maximum
                 conversion price of $1.00. The holder also has the right to
                 purchase up to 100,000 shares of common stock for each $250,000
                 invested for the next 5 years.

                 Interest accrued at March 31, 2001, aggregated $10,863. To
                 date, the Company has not paid any interest on this note.


NOTE   5   -     SHAREHOLDERS' EQUITY:

                 The Company's authorized capital consists of (i) 100,000,000
                 shares of common stock, par value $.001 per share and (ii)
                 20,000,000 shares of preferred stock, par value $.001.
                 Presently, there are no issued and outstanding shares of
                 preferred stock. In April 2001, subsequent to the balance sheet
                 date, a majority of the Company's shareholders approved an
                 amendment to the Company's articles of incorporation,
                 increasing its authorized capital to 250,000,000 shares of
                 common stock and 100,000,000 shares of preferred stock. There
                 was no change in the par values.

                 During the quarter ended March 31, 2001, the Company issued
                 16,952,000 shares of common stock to various
                 individuals/entities in lieu of payment for consulting services
                 in the amount of $1,856,412. During this period, the Company
                 also sold 8,603,316 shares of its common stock and realized net
                 proceeds of $740,540. In addition, 400,000 shares of common
                 stock were returned to the Company for no consideration and
                 certain note-holders, pursuant to their loan agreements,
                 exercised their option to convert $500,000 of loans into
                 2,000,000 shares of common stock.

                 The Company plans to adopt a stock option plan in the near
                 future. Through March 31, 2001, the Company has granted options
                 to acquire an aggregate of 15,885,000 shares without a formal
                 plan in place. The Company deemed the value of these options to
                 be immaterial.


NOTE  6   -      COMMITMENTS AND CONTINGENCIES:

        (a)      EMPLOYMENT AGREEMENTS:

                 In 2001, the Company signed an employment agreement with its
                 new President and CEO. The three-year agreement provides for a
                 base salary of $175,000 per annum and annual increases of
                 $25,000. In addition, this executive is entitled to board
                 approved discretionary bonuses, other fringe benefits and was
                 also granted 500,000 shares of Company common stock and
                 2,000,000 stock options, none of which have been issued to
                 date.

                                       9
<PAGE>   11
                           SATX, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
          NOTES TO INTERIM CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)



NOTE  6   -      COMMITMENTS AND CONTINGENCIES (CONTINUED):

        (b)      LEGAL PROCEEDINGS:

                 The Company is a defendant in a lawsuit styled Nigro V.
                 Satellite Control Technologies, Inc.,Et Al., which is now
                 pending in the Los Angeles County Superior Court. This is a
                 class action lawsuit filed by Nigro on behalf of himself and
                 others who owned SATX stock between September 26, 1996 and
                 October 7, 1997. Plaintiffs seek to recover damages for
                 depreciation of their stock due to alleged intentional and
                 negligent misrepresentation of certain former officers and
                 directors of the Company. The alleged misrepresentations are
                 that (i) the Company had substantial purchase orders for its
                 AlphaTrak product line and (ii) the AlphaTrak product line was
                 viable and would be available on the market in the first or
                 second quarter of 1997. Based on the documentary evidence
                 currently in the possession of the Company and interviews with
                 former officers, directors, employees, and outside engineers,
                 it appears that the allegations are incorrect. Based on the
                 facts presently available to counsel, substantial recovery by
                 plaintiffs appears unlikely.

                 The Company is also involved in the following litigious
                 matters:

                           Hill & Knowlton v. DebitFone International, Inc. This
                           case involves a collection claim against DebitFone
                           for monies allegedly owed for media relations and
                           investor relation services allegedly performed by the
                           Plaintiffs. This case in currently being settled for
                           $20,000

                           Suter v. Satellite Control Technology, Inc.. This
                           lawsuit was filed by Carl Suter alleging that the
                           Company failed to repay monies due on three separate
                           promissory notes. A default judgment was obtained in
                           the state of California, by the Plaintiff, in the
                           amount of $173,630, which amount includes interest
                           calculated through August 12, 1999. Thereafter, daily
                           interest charges of $48 are assessed until the
                           judgment is satisfied.

                           Satx, Inc. v. Casterline & Agajanian et al. On
                           February 23, 2001, the Company entered into a
                           settlement agreement regarding a lawsuit commenced by
                           the Company whereby the defendants filed a
                           counterclaim. Pursuant to the settlement, the Company
                           agreed to pay the defendant $6,000 and was required
                           to issue 100,000 shares of common stock to the
                           principal of the defendant.


The Company believes that it is adequately reserved for the above matters.

In April 2001, a final judgment after default was entered into against the
Company, whereby the plaintiff, VOSR Industries, Inc., was awarded a total of
$111,330 plus interest, at an annual rate of 10%, as well as additional
pre-judgment interest of approximately $9,000.

Also in April 2001, the Company entered into a settlement and general release
agreement with Intercontinental Capital Corp., ("ICC"), whereby the Company
would pay to ICC $5,363 in cash and issue 72,000 shares of Company common stock.


                                       10

<PAGE>   12


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

         The following discussion should be read in conjunction with the
financial statements and related notes contained in this report on Form 10-QSB.

PLAN OF OPERATION

         Although the Company's existence dates back to 1972, the essence of
our current business commenced in September, 1996 with the acquisition of the
one-way and two-way paging patents for remote signaling. Since that time, we
have been in the development stage of operation. However, until our 1999 merger
with DebitFone International, Inc., there was little business activity.
Throughout the year 2000, the Company's primary focus has been the maturation
of products, services and markets for the prepaid cellular market and GPS-based
tracking, locating and control business units.

         In the prepaid cellular phone business unit, the Company's strategic
plan has been, and is, to sell into the expanding prepaid portion of the
cellular industry, initially concentrating on USA requirements. This very large
market niche continues to evolve rapidly as handsets, protocols and
infrastructures change technologically. The Company's intent is to compete
primarily by selling prepaid cellular phones and time-renewal through video
rental stores, convenience stores and other retail stores and via select agent
channels. Locking into specific solutions and maturing the products and
services required in this industry that has taken significantly more time than
management previously estimated. The complexity continued to grow and the
competitive cellular offerings continued to demand additional evaluation and
solutions in Company product and in the delivery of support services. It is now
anticipated that the Company can enter a broad market with competitive,
creative solutions during the year 2001. Some directional changes will have
been incorporated, and development of both applicable handsets and customer
service centers will continue, but the baseline offering will be stabilized.
Alternative solutions for future introduction into the marketplace continue to
be investigated and evaluated. During the fiscal year 2000, the Company funded
a development project for the technical specifications for prepaid software in
digital protocols. It is clear that such offerings will be mandatory in the
future in order to maintain a competitive posture. In fact, a major factor in
schedule delays has been the efforts surrounding digital prepaid unique
requirements. The Company has now completed and is in the process of
copyrighting our digital software package.

         The AlphaTrak tracking, locating and control business unit has
extended its product development cycle at the expense of short-term sales, but
to benefit medium and long-term effectiveness and competitiveness in the target
markets. Cost-effective and functionally complete solutions for GPS-based
tracking, locating and control products have been virtually non-existent in the
past. Market research demonstrates a tremendous international market, presently
in its infancy, but the Company realizes it is imperative to enter each of the
various niche markets with the proper product and system-management tools.
Additional time is being taken at the front end of the process to test and
evaluate alternative solutions and also to finish development of a
new-generation state of the art GPS-based tracking, locating and control
product line. These new products should be ready for deployment in the USA
markets and possibly in Europe before year-end 2001. The Company's patents
covering paging signals sent to remotely


                                       11

<PAGE>   13


engage switches and communicate responses clearly involve applications well
beyond vehicle disabling and tracking. Other broader market applications such
as rail car, truck and cargo container tracking and fleet management are being
reviewed for future applications of the AlphaTrak product line.

         Although the AlphaTrak and DebitFone systems are currently the
Company's core businesses, it is paramount that we begin to generate cash flow.
Accordingly, our management team is giving careful consideration to several
niche areas within the telecommunications industry to compliment and expand our
product lines and to generate revenue and cash flow. Presently, we are
evaluating the prospects of the Telemedicine industry, which provides remote
psychiatric and medical care via high speed networks. Our management believes
that Telemedicine is rapidly becoming accepted and encouraged by federal and
state governments as well as within the medical community. We are also
evaluating the opportunities associated with the provision of telecommunication
services to the nation's inmate population. Specifically, inmates generate a
significant volume of collect telephone calls, which may be profitable and have
the potential to generate cash flow for the Company. In addition, the
corrections industry also uses Telemedicine for its inmate population. Our
management will continue to identify and evaluate opportunities that have a
potential to generate solid cash flow for the Company.

         Technology remains the core Company focus in communications
applications. Market opportunities may exist in broad arenas on an
international basis. More effort has been expended in research and development
activities and in systemic solutions than previously estimated, but management
believes such additional efforts will have long-term benefits and paybacks.
Equity financing as well as possible debt financing will continue to be
exploited to solve our short-term development and long-term growth
requirements. We can give no assurance however, that such debt or equity
financing will continue to be available sources for funding.

         Our plan of operation for the 2001 fiscal year will consist of
activities principally aimed at:

         -        Producing next generation field test products for
                  demonstration and trial purposes;

         -        Completing initial product designs and beginning production
                  for sale;

         -        Conducting field tests with national paging companies and
                  forming alliances for the AlphaTrak Systems;

         -        Conducting field trials with potential customers;

         -        Conducting marketing campaigns, including technical
                  publications, branding and identity awareness, and media and
                  public relations campaigns;

         -        Expanding our technology research and development efforts to
                  include, among other things, digital and network-based
                  solutions for our DebitFone Systems, and next generation
                  GPS-based tracking, location and control technology for our
                  AlphaTrak Systems;


                                       12

<PAGE>   14


         -        Expanding our research and development team and other staff;

         -        Expand into related telecommunication markets, including
                  Telemedicine and the corrections industry, to provide cash
                  flow;

         -        Investigating and, if appropriate, pursuing acquisitions
                  believed by the Board of Directors to be consistent with our
                  plan to design, develop, manufacture, license and market
                  products based upon our AlphaTrak and DebitFone technologies.

LIQUIDITY AND GOING CONCERN

         Operations have been financed primarily through private sales of our
Common Stock and loans, resulting in net proceeds of approximately $740,000,
$2,551,000, and $1,575,000 for the quarter ended March 31, 2001, the fiscal year
ended December 31, 2000, and the fiscal year ended December 31, 1999,
respectively. In addition, during these periods, a substantial portion of our
expenses were paid by the issuance of stock.

         We sustained a substantial operating loss for the quarterly period
ended March 31, 2001 in the amount of $1,814,360, and as of that date we had a
working capital deficit of $1,352,327 and a net worth deficiency of $2,265,319.
Similarly, we sustained substantial net operating losses of $9,314,385 during
the year ended December 31, 2000, and as of that date, we had a working capital
deficiency of $2,909,702 and a net worth deficiency of $2,748,341.
Additionally, we are in default on certain notes payable to shareholders. These
conditions raise significant doubt as to our ability to continue as a going
concern. Future operating results will depend primarily on our ability to raise
additional working capital, as we do not anticipate significant revenues for
the foreseeable future.

         In January, 2001, we entered into an agreement with a private
investment banker, Lilly Beter Capital Group, Ltd. ("LBCG") to, among other
things, assist us in raising capital, and to seek out mergers and acquisitions
for the Company. LBCG has identified several potential merger and acquisition
candidates that may bring revenues and cash flow to SATX.

         In March, 2001, we divested our holdings in ORA Electronics, Inc.
which had over $9,000,000 in debt and approximately $100,000 per month in cash
flow requirements. In April, 2001, we restructured our balance sheet by
converting over $250,000 in various delinquent debts to equity, and by
converting delinquent short-term loans to long-term notes in the aggregate
amount of just over $1,000,000.

         Management believes that LBCG will be able to accomplish additional
equity funding, and that such financing, together with the divestiture of Ora
Electronics and the restructuring of our balance sheet, as described above,
provides us with an opportunity to continue as a going concern. There can be no
assurance that we will be able to raise the necessary capital to continue as a
going concern. If we are unsuccessful in generating significant revenues,
obtaining additional financing, revising our operating and


                                       13
<PAGE>   15


financial requirements, and/or effecting a merger or sale of the Company, we
may be forced to terminate operations.


                          PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

         The information called for by this Item 1 of Part II is disclosed in
"Note 6 of the Notes to Interim Consolidated Condensed Financial Statements" in
Part I of this report on Form 10-QSB, and is incorporated by reference hereto.

ITEM 2.  CHANGES IN SECURITIES.

         (a)      The information called for by this Item 2 of Part II is
incorporated by reference hereto from Item 4 of this Part II "Submission of
Matters to a Vote of Security Holders."

         (b)      Not applicable.

         (c)      During the three months ended March 31, 2001, the Company
sold unregistered securities as follows:

                  (i)      On January 16, 2000, the Company entered into an
                           agreement with Lilly Beter Capital Group, Ltd.
                           ("LBCG"). We authorized the issuance of 15,000,000
                           shares of SATX Common Stock to LBCG as compensation
                           for their services to the Company. In addition, we
                           granted LBCG an option to purchase 5,000,000 shares
                           of our Common Stock at $1.00 per share;

                  (ii)     We sold an aggregate of 8,306,316 shares of Common
                           Stock to fifty-seven (57) persons and realized net
                           proceeds of approximately $740,000;

                  (iii)    We issued 150,000 shares of Common Stock valued at
                           $15,000 for services rendered to the Company by
                           third parties;

                  (iv)     We issued a total of 900,000 shares of Common Stock
                           valued at $90,000 for services rendered to the
                           Company by affiliates in the first quarter of 2001;


                                       14
<PAGE>   16


                  (v)      We granted options for the purchase of a total of
                           5,000,000 shares at $1.00 per share in connection
                           with services from affiliates in the first quarter
                           of 2001;

                  (vi)     We issued a total of 1,052,000 shares of Common
                           Stock valued at $265,780, as repayment of debt owed
                           by us to third parties;

                  (vii)    We issued a total of 1,000,000 shares of Common
                           Stock valued at $250,000, as repayment of debt owed
                           by us to an affiliate;

                  (viii)   We granted options for the purchase of a total of
                           5,800,000 shares at $.05 per share, in connection
                           with a debt owed by us to affiliates; and

                  (ix)     We issued a total of 475,000 shares of Common Stock
                           valued at $180,350, in connection with the
                           settlement of pending or threatened litigation.

         All transactions described above were deemed to be exempt from
registration under the Securities Act of 1933, as amended (the "Act") (i) in
reliance on Section 4(2) of the Act as transactions by an issuer not involving
any public offering, or (ii) pursuant to the exemption provided by Rule 504 of
Regulation D promulgated under the Act. All of the securities issued in
reliance on Section 4(2) contained a restrictive legend to the effect that they
could not be sold or transferred without registration or an applicable
exemption.

         (d)      Not applicable.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

                  Not applicable.

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

         Effective April 23, 2001, shareholders holding not less than a
majority of our Common Stock, acting by written consent, approved an amendment
to the Company's Articles of Incorporation to increase in the authorized
capital stock of the Company to 350,000,000 shares, of which 250,000,000 shares
shall be common stock and 100,000,000 shares shall be preferred stock. Articles
of Amendment to the Company's Articles of Incorporation will be filed promptly
with the Secretary of State of the State of Nevada.

ITEM 5.  OTHER INFORMATION.

                  None.


                                       15

<PAGE>   17


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

(A)      EXHIBITS:


<TABLE>
<CAPTION>
EXHIBIT NO.       DESCRIPTION OF EXHIBIT
-----------       ----------------------
<S>               <C>
   3.1            Articles of Incorporation, as amended *
   3.2            By-laws *
   4.1            See Exhibits 3.1 and 3.2 for provisions of the Articles of Incorporation and Bylaws
                  of the Company defining right of holders of the Company's Common Stock
   4.2            Specimen of Stock Certificate*
   4.3            8% Convertible Debenture due September 14, 2001****
   4.4            Form of Common Stock Purchase Warrant ****
   10.1           Securities Purchase Agreement dated September 14, 2000, by and between SATX,
                  Inc. and NASIMIA, Ltd. ****
   10.2           Registration Rights Agreement dated September 14, 2000, by and between SATX,
                  Inc. and NASIMIA, Ltd. ****
   10.3           Employment Agreement dated February 27, 2001, by and between SATX, Inc. and
                  Terry L. Colbert ****
   10.4           Private Label Reseller Agreement dated April 17, 2000, by and between SATX, Inc.
                  and Shared Technologies Cellular, Inc. ****
   10.5           Agreement January 16, 2001, by and between Lilly Beter Capital Group, Ltd. and
                  SATX, Inc. **
   10.6           Termination Agreement and Release  dated February 2, 2001, by and between SATX,
                  Inc. and Shared Technologies Cellular, Inc. **
   10.7           Agreement of Purchase and Sale of Securities dated March 12, 2001, by and among
                  SATX, Inc., Iqbal Ashraf, and ORA Electronics, Inc. **
   10.8           Loan Extension Agreement dated April 1, 2001, by and between John Hartunian and
                  SATX, Inc. ****
   10.9           Promissory Note dated April 1, 2001 by and between John Hartunian and SATX, Inc.
   10.10          Loan Extension Agreement dated April 1, 2001, by and between Kosti Shirvanian,
                  Komar Investments, LLC and SATX, Inc. ****
   10.11          Promissory Note dated April 1, 2001 in the amount of $484,000, by and between
                  Kosti Shirvanian, Komar Investments, LLC and SATX, Inc. ****
   10.12          Promissory Note dated April 1, 2001 in the amount of $434,499, by and between
                  Kosti Shirvanian, Komar Investments, LLC and SATX, Inc. ****
   10.13          Supplemental Agreement by and between SATX, Inc. and Paradigm Manufacturing, Inc.,
                  dated March 3, 2000 ***
   16.1           Letter of Robert L. White Associates on change in auditors**
   99.1           Risks Factors
</TABLE>

---------
   *              Incorporated by reference to the Company's Registration
                  Statement on Form 10-SB, File No. 000- 29755, as filed with
                  the Securities and Exchange Commission on March 1, 2000.


                                       16
<PAGE>   18


   **             Incorporated by reference to the Company's Current Report on
                  Form 8-K/A, as filed with the Securities and Exchange
                  Commission on April 25, 2001.
   ***            Incorporated by reference to the Company's Quarterly Report
                  on Form 10-QSB for the period ended March 31, 2000, as filed
                  with the Securities and Exchange Commission on May 15, 2000.
   ****           Incorporated by reference to the Company's Annual Report on
                  Form 10-KSB for the year ended December 31, 2000, as filed
                  with the Securities and Exchange Commission on April 26, 2001.

(B)      REPORTS ON FORM 8-K.

         No reports on Form 8-K were filed in the quarter ended March 31, 2001.
On April 18, 2001 the registrant filed a report on Form 8-K, as amended on April
25, 2001, with respect to the following matters: "Item 1 - Changes in Control of
Registrant," "Item 4 - Changes in Registrant's Certifying Accountants," and
"Item 5 - Other Information" including the sale of ORA Electronics, Inc. and the
termination of merger with Shared Technologies Cellular, Inc.


                                       17

<PAGE>   19


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on this 14th day of May, 2001.


                                          SATX, INC.
                                          (Registrant)


                                     By:  /s/ Terry L. Colbert
                                          -------------------------------------
                                          Terry L. Colbert
                                          Chairman of the Board of Directors,
                                          Chief Executive Officer and President


                                      18