UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


              [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

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

             For the transition period from _________ to __________.

                          Commission File No. 333-3074

                                  NEXLAND, INC.
                                  -------------
             (Exact name of registrant as specified in its charter)

                     DELAWARE                                   37-1356503
                     --------                                   ----------
         (State or other jurisdiction of                     (I.R.S. Employer
          incorporation or organization)                  Identification Number)


1101 BRICKELL AVENUE, NORTH TOWER, SUITE 200, MIAMI, FLORIDA       33131
          (Address of principal executive offices)               (Zip Code)

   Registrant's telephone number, including area code:         (305-358-7771)
                                                               --------------

(1)    Registrant has filed all reports required to be filed by Section 13 or
       15(d) of the Securities Exchange Act of 1934 during the preceding 12
       months (or for such shorter period that the registrant was required to
       file such reports), and

(2)    has been subject to such filing requirements for the past 90 days. [X]
       Yes [ ] No

       As of August 1, 2002, there were 34,853,385 shares outstanding of
       issuer's common stock.


<PAGE>




PART I

FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS






                                       2
<PAGE>




                          NEXLAND, INC. AND SUBSIDIARY

                             CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

                            FOR THE SIX MONTH PERIOD
                               ENDED JUNE 30, 2002








                                       3
<PAGE>


                                TABLE OF CONTENTS
                                -----------------




Condensed Consolidated Financial Statements:

     Condensed Consolidated Balance Sheets at June 30, 2002 and
       December 31, 2001 (Unaudited).......................................F - 1

     Condensed  Consolidated  Statements of Operations  for
       the six months ended  June 30,  2002 and 2001  (Unaudited)
       and the three  months ended June 30, 2002 and 2001 (Unaudited)......F - 2

     Condensed Consolidated Statements of Cash Flows for the six months
         ended June 30, 2002 and 2001 (Unaudited)..........................F - 3


Notes to Condensed Consolidated Financial Statements.........F - 4 through F - 6



<PAGE>





NEXLAND, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

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

                                     ASSETS
                                     ------

                                                JUNE 30,       DECEMBER 31,
                                                  2002             2001*
                                               ----------      ------------

Current assets:
    Cash                                        $ 11,029         $ 39,901
    Accounts receivable                          128,611          113,739
    Inventory                                    126,835          319,482
    Prepaid expenses                             370,258                -
                                              -----------      -----------
           Total current assets                  636,733          473,122
                                              -----------      -----------

Property and equipment, net                       70,679           62,503

Other assets:
    Deposits                                      25,231           32,968
    Loan closing cost                                  -           41,960
                                              -----------      -----------
                                                  25,231           74,928
                                              -----------      -----------

           Total assets                        $ 732,643        $ 610,553
                                              ===========      ===========

                         LIABILITIES AND CAPITAL DEFICIT
                         -------------------------------

Current liabilities:
    Accounts payable                           $ 504,907        $ 200,018
    Accrued professional fees                    209,753          282,093
    Accrued expenses                             433,529          285,309
    Due to related party supplier                607,113          666,209
    Convertible debentures                             -          255,000
    Other liabilities                             97,356           97,356
                                              -----------      -----------
           Total current liabilities           1,852,658        1,785,985
                                              -----------      -----------

Commitments and contingencies

Capital deficit:
    Preferred stock, $0.0001 par value;
      10,000,000 shares authorized; no
      shares outstanding                               -                -
    Common stock, $0.0001 par value;
      50,000,000 shares authorized;
      35,653,385 shares issued and
      outstanding at June 30, 2002 and
      December 31, 2001                            3,566            3,566
    Additional paid-in capital                 3,819,418        3,775,418
    Unearned compensation                              -          (83,340)
    Accumulated deficit                       (4,942,999)      (4,871,076)
                                              -----------      -----------
           Total capital deficit              (1,120,015)      (1,175,432)
                                              -----------      -----------
           Total liabilities and capital
             deficit                           $ 732,643        $ 610,553
                                              ===========      ===========



*NOTE:  The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

     See accompanying notes to condensed consolidated financial statements.


                                      F-1
<PAGE>




NEXLAND, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED 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>
      Sales                                    $ 1,822,234           $ 777,473        $ 2,856,187        $ 1,535,171

      Cost of sales                                908,790             382,851          1,353,403            824,484
                                               ------------         ------------     ------------       -------------

      Gross profit                                 913,444             394,622          1,502,784            710,687
                                               ------------         ------------     ------------       -------------

      Operating expenses:
          Selling, general and administrative      705,472           1,068,061          1,406,066          1,881,601
          Depreciation and amortization              2,315               3,035              9,282              5,651
                                               ------------         ------------     ------------       -------------
                   Total operating expenses        707,787           1,071,096          1,415,348          1,887,252
                                               ------------         ------------     ------------       -------------

      Income (loss) from operations                205,657            (676,474)            87,436         (1,176,565)
                                               ------------         ------------     ------------       -------------

      Other expense:
          Interest expense                          57,427              70,580             80,980             76,135
                                               ------------         ------------     ------------       -------------
                   Total other expense              57,427              70,580             80,980             76,135
                                               ------------         ------------     ------------       -------------

      Net income (loss) before extraordinary
        item                                       148,230            (747,054)             6,456         (1,252,700)
                                               ------------         ------------     ------------       -------------

      Extraordinary Item:
          Loss on extinguishment of debt            78,378                   -             78,378                  -

      Net income (loss)                           $ 69,852          $ (747,054)         $ (71,922)       $(1,252,700)
                                               ============         ============     =============      =============

      Net loss per common share,
        basic and diluted                           $ 0.00             $ (0.02)            $ 0.00            $ (0.03)
                                               ============         ============     =============      =============

      Weighted-average number of                35,653,385          36,100,189         35,653,385         36,153,385
        common shares                          ============         ============     =============      =============


                        See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                                       F - 2


<PAGE>


NEXLAND, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
--------------------------------------------------------------------------------

                                                            SIX MONTHS ENDED
                                                                 JUNE 30,
                                                        ------------------------
                                                            2002          2001
                                                        ------------ -----------

Net cash provided by (used in) operating activities      $ 284,735   $ (194,676)
                                                        ------------ -----------

Cash flows from investing activities:
    Purchase of property and equipment                     (17,847)     (11,837)
                                                        ------------ -----------

Cash flows from financing activities:
    Proceeds from exercise of warrants and options               -           17
    Proceeds from issuance of convertible debentures             -      255,000
    Costs on issuance of convertible debentures                  -      (41,960)
    Extinguishment of debentures                          (295,760)           -
                                                        ------------ -----------
Net cash provided by (used in) financing activities       (295,760)     213,057
                                                        ------------ -----------

Net increase (decrease) in cash                            (28,872)       6,544
Cash, beginning of period                                   39,901       59,523
                                                        ------------ -----------
Cash, end of period                                       $ 11,029     $ 66,067
                                                        ============ ===========
Supplemental Cash Flow Information:
-----------------------------------
    Cash paid for interest                                $ 86,379     $      -
                                                        ============ ===========
    Cash paid for taxes                                   $      -     $      -
                                                        ============ ===========
    Cash paid for extraordinary item -
      Extinguishment of debt                              $ 36,418     $      -
                                                        ============ ===========

Non Cash Supplemental Information:
----------------------------------
    Compensation expense in connection with
      employment agreement                                $ 83,340    $ 124,988
                                                        ============ ===========
    Expenses in connection with stock options
    and stock issued                                      $ 14,938    $ 431,081
                                                        ============ ===========


     See accompanying notes to condensed consolidated financial statements.


                                      F-3

<PAGE>


NEXLAND, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - FINANCIAL STATEMENTS AND INTERIM PERIOD
------------------------------------------------

In the opinion of the Company, the accompanying unaudited condensed consolidated
financial  statements have been prepared in accordance  with generally  accepted
accounting principles for interim financial information and Regulation SB.

In the  opinion  of  management,  all  adjustments  (consisting  only of  normal
recurring accruals), which are necessary for a fair presentation for the periods
presented,  have been included.  Certain  information  and footnote  disclosures
normally  included  in  the  consolidated   financial   statements  prepared  in
accordance with generally accepted accounting principles have been omitted.

It is suggested that these condensed  consolidated  financial statements be read
in  conjunction  with the  Company's  Annual  Report on Form 10-KSB for the year
ended December 31, 2001. The results of operations for the six months ended June
30, 2002 are not  necessarily  indicative  of the results to be expected for the
full year.

NOTE 2 - STOCK OPTIONS
----------------------

During the six months  ended June 30,  2002,  the Company  cancelled  options to
purchase  616,000 shares of the Company's  common stock to certain  employees of
the Company and granted  options to purchase  154,000  shares of common stock to
these same employees of the Company. The Company accounted for this cancellation
and  re-issuance  of shares under  Financial  Interpretation  No. 44 recognizing
approximately  $3,000 in  compensation  expense.  The  Company  granted  200,000
options during the six-month period ended June 30, 2002 to certain  consultants.
The weighted  average fair value of options  granted during the six months ended
June 30, 2002 is  estimated  on the date of the grant,  using an  option-pricing
model for public companies. The weighted average grant-date fair value was $0.26
for options  whose  exercise  price was equal to the market price on the date of
the grant.  All options granted have an exercise price equal to the market price
on the date of grant.  The  Company  also  granted  450,000  options  during the
six-month  period  ended June 30, 2002 to certain  Officers and  Directors.  The
weighted  average  grant-date  fair value was $0.13 for options  whose  exercise
price  was  equal to the  market  price on the date of the  grant.  All  options
granted have an exercise price equal to the market price on the date of grant.

The  Company  has  elected to account  for the stock  options  under  Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
related   interpretations.   Accordingly,   no  compensation  expense  has  been
recognized on the employee stock options. The Company accounts for stock options
granted to consultants under Financial  Accounting Standards Board Statement No.
123, "Accounting For Stock-Based Compensation."

The fair value of each option is  estimated  on the date of grant using the fair
value-pricing model with the assumption:

              Risk-free interest rate           6.0%
              Expected life (years)             10
              Expected volatility               1.23
              Expected dividends                None

Had the  compensation  expense for the employee  stock  options been  determined
based on the fair value of the  options at the grant  date  consistent  with the
methodology   prescribed  under  Statement  of  Financial   Standards  No.  123,
"Accounting  for Stock Based  Compensation",  the Company's net loss for the six
months ended June 30, 2002 would have changed.


                                      F-4
<PAGE>



NEXLAND, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - STOCK OPTIONS, continued
---------------------------------

The  Company's  net loss and loss per share  would have been  reduced to the pro
forma amounts indicated below:

                                             2002                   2001
                                        -------------          --------------

Net loss
   As reported                          $    (71,922)          $  (1,252,700)
                                        =============          ==============
   Pro forma                            $   (131,922)          $  (1,438,700)

NOTE 3 - EXTINGUISHMENT OF DEBT
-------------------------------

In June 2002, the Company prepaid the holders of certain privately placed senior
notes in an  aggregate  amount  of  $312,000.  These  payments  were made out of
available cash.  Interest  accrued on these privately  placed senior notes at 6%
and was $16,240.  In connection with this transaction,  the Company was required
to pay prepayment  penalties of $40,760,  and wrote off the unamortized deferred
financing costs of approximately $37,618. The total of $78,378 has been recorded
as a net extraordinary loss in the 2002 statement of operations.

The company has not recognized  any benefit of net operating loss  carryforwards
in the  accompanying  financial  statements in accordance with the provisions of
SFAS No. 109, "Accounting for Income Taxes," as the realization of this deferred
tax  benefit is not more likely than not. A 100%  valuation  allowance  has been
recognized to offset the entire effect of the Company's net deferred tax assets.

NOTE 4 - CONCENTRATIONS
-----------------------

Approximately  49% of the  Company's  revenues in the six months  ended June 30,
2002 were  generated  by one customer in the  technology  sector and none in the
same period in 2001.

NOTE 5 - GOING CONCERN
----------------------

The  accompanying  condensed  consolidated  financial  statements  were prepared
assuming  that the  Company  will  continue  as a going  concern.  This basis of
accounting   contemplates   the  recovery  of  the  Company's   assets  and  the
satisfaction  of its  liabilities  in the  normal  course of  operations.  Since
inception,  the Company has been  involved in the  development  of its  Internet
sharing   devices   organizational   infrastructure,   and  the  performance  of
preliminary  marketing  and  sales.  The  Company's  ultimate  ability to attain
profitable  operations is dependent  upon obtaining  additional  financing or to
achieve a level of sales adequate to support its cost structure.

Accordingly,  there are no  assurances  that the Company will be  successful  in
achieving the above plans, or that such plans,  if consummated,  will enable the
Company to obtain profitable operations or continue as a going concern.

NOTE 6 - SUBSEQUENT EVENTS
--------------------------

In July 2002 the Company  granted 541,667  options to certain  consultants.  The
weighted  average  grant-date  fair value was $0.19 for options  whose  exercise
price was  equal to the  market  price on the date of the  grant.  The  weighted
average  fair value of options  granted is  estimated  on the date of the grant,
using an option-pricing  model for public companies.  The $104,167 fair value of
the grant was expensed in July.


                                      F-5
<PAGE>


NEXLAND, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6 - SUBSEQUENT EVENTS, continued
-------------------------------------

On November 22, 2000, the Company  entered into a settlement  agreement in which
it agreed to dismiss a threatened  lawsuit  against  Fred  Schmid,  Fred Schmid,
Inc., Dale Runyon, a former principal  shareholder of WindStar,  and Erik Nelson
(WindStar  parties),  and to terminate Schmid's  consulting  agreement.  In this
connection,  Schmid and Nelson  agreed to escrow the  consulting  shares and the
penalty  shares with an Escrow  Agent and Dale Runyon  agreed to return  800,000
transfer shares of common stock that were issued to him in a prior year. In July
2002 the agreement was deemed to be fully performed and the Company recorded the
return of these shares.


                                      F-6
<PAGE>


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

INTRODUCTORY STATEMENTS

FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

      This filing  contains  forward-looking  statements,  including  statements
regarding,  among other things, (a) the growth strategies of Nexland,  Inc. (the
"Company"),  (b) anticipated trends in the Company's industry, (c) the Company's
future  financing  plans and (d) the Company's  ability to obtain  financing and
continue  operations.   In  addition,  when  used  in  this  filing,  the  words
"believes,"  "anticipates,"  "intends," "in anticipation  of," and similar words
are   intended   to   identify   certain   forward-looking   statements.   These
forward-looking  statements are based largely on the Company's  expectations and
are subject to a number of risks and uncertainties, many of which are beyond the
Company's   control.   Actual  results  could  differ   materially   from  these
forward-looking  statements  as a result of changes in trends in the economy and
the Company's  industry,  reductions in the  availability of financing and other
factors.  In light of these risks and  uncertainties,  there can be no assurance
that the forward-looking statements contained in this filing will in fact occur.
The Company does not undertake any obligation to publicly release the results of
any revisions to these  forward-looking  statements  that may be made to reflect
any future events or circumstances.

GOING CONCERN

      The Company's auditors stated in their reports on the financial statements
of the Company for the years ended  December 31, 2001 and December 31, 2000 that
the Company is dependent on outside financing and has had losses since inception
that raise  substantial  doubt about our ability to continue as a going concern.
For the years ended December 31, 2001 and 2000, the Company  incurred net annual
losses of  $1,667,202  and  $2,876,244,  respectively,  and the  Company  had an
accumulated  deficit of  $4,871,076  and  $3,203,874,  respectively.  Management
believes that resources will be available from private and operating  sources in
2002 to continue the marketing of the Company's  Internet sharing  devices.  The
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of  recorded  assets,  or the  amounts  and
classification  of liabilities  that might be necessary in the event the Company
cannot continue in existence.

      Management  has  established  plans  intended to increase the sales of the
Company's  products.  Management  intends  to seek new  capital  from new equity
securities offerings to provide funds needed to increase liquidity,  fund growth
and implement  its business  plan;  however,  no assurance can be given that the
Company will be able to raise any additional capital.

SIGNIFICANT PLANT OR EQUIPMENT PURCHASES

      We  do  not  currently  anticipate  any  significant  plant  or  equipment
purchases during the next twelve months.

CHANGES IN THE NUMBER OF EMPLOYEES

      We  currently  have twenty five (25)  employees  in Miami and seven (7) in
Canada. If the Company is successful in increasing its sales level or in raising
significant  new capital,  we anticipate  hiring five (5)  additional  personnel
during the remainder of 2002. We believe that these  personnel  will be adequate
to accomplish the tasks set forth in the plan.

MANAGEMENT'S DISCUSSION AND ANALYSIS

      Financial  Reporting  Release No. 60, which was  recently  released by the
U.S. Securities and Exchange  Commission,  encourages all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Our consolidated financial statements include a summary of
the significant  accounting  policies and methods used in the preparation of our
consolidated financial statements.

      Management  believes the following critical accounting policies affect the
significant  judgments and estimates  used in the  preparation  of the financial
statements.



                                       4
<PAGE>

REVENUE RECOGNITION

         Revenues  are  recognized  at the time of  shipment  of the  respective
merchandise. Our Company includes shipping and handling fees billed to customers
as revenues.  Costs of sales  include  outbound  freight.  Products are under an
unconditional  money-back guarantee for the first 30 days after purchase. A five
year warranty covering the repair of the unit is provided on all products.

USE OF ESTIMATES

         Management's discussion and analysis of financial condition and results
of operations is based upon our consolidated  financial  statements,  which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and judgments  that affect the reported  amounts of
assets,   liabilities,   revenues,  and  expenses,  and  related  disclosure  of
contingent  assets and liabilities.  On an ongoing basis,  management  evaluates
these  estimates,  including  those related to allowances for doubtful  accounts
receivable  and  the  carrying  value  of  inventories  and  long-lived  assets.
Management  bases these estimates on historical  experience and on various other
assumptions  that are believed to be  reasonable  under the  circumstances,  the
results of which form the basis of making  judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources.  Actual
results  may  differ  from  these  estimates  under  different   assumptions  or
conditions.

RESULTS OF OPERATIONS

         FOR THE THREE MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2002 AND 2001

      (1)  REVENUES.  For the three months ended June 30, 2002,  our Company had
$1,822,234  in revenue as compared  to $777,473 in revenue for the three  months
ended June 30,  2001,  an  increase  of 134.4%.  Sales of units of our  Internet
access  "hardware  routers" for small offices and home users increased to 11,686
for the three  months  ended June 30, 2002 from 6,398 units for the three months
ended June 30,  2001,  an increase of 82.7%.  During the three months ended June
30, 2002, the average  selling price per unit was $154 as compared to an average
selling  price  per unit of $122 for the  corresponding  period  in 2001.  Other
revenues consist of related accessories to the "hardware routers."

      For the six months  ended June 30,  2002,  our Company had  $2,856,187  in
revenue as compared to  $1,535,171  in revenue for the six months ended June 30,
2001,  an increase of 86.1%.  Sales of units of our  Internet  access  "hardware
routers"  increased  to 17,309  units from 10,927 units for the six months ended
June 30, 2002,  an increase of 58.4%.  During the six months ended June 30, 2002
the average  selling  price per unit was $163 as compared to an average  selling
price per unit of $141 for the  corresponding  period in 2001.  The  increase in
average  selling  price is due to the Company  selling more of the higher priced
units.

      (2) COST OF SALES.  For the three months ended June 30, 2002,  our Company
had  $908,790  (50%) in cost of sales as compared  to $382,851  (49%) in cost of
sales for the three months ended June 30, 2001.

      For the six months ended June 30 2002, our Company had $1,353,403 (47%) in
cost of sales as compared to $824,484  (54%) in cost of sales for the six months
ended June 30, 2001.  The increase in the dollar amount of the cost of sales for
the three  months and six months  ended June 30, 2002 was due to the increase in
the number of units sold.

      (3) GROSS PROFIT.  For the three months ended June 30, 2002, our Company's
gross  profit was 50% as  compared to 51% in gross  profit for the three  months
ended June 30, 2001. The gross profit  decreased for the three months ended June
30, 2002,  compared to the corresponding  period in 2001 due to a product with a
lower margin to a customer in the technology sector.

      For the six months ended June 30, 2002, our Company's gross profit was 53%
as compared to 46% in gross profit for the six months  ended June 30, 2001.  The
gross profit  increased  for the six months ended June 30, 2002  compared to the
corresponding  period in 2001 due to lower  costs and  selling of higher  priced
units. The new generation of the Internet access "hardware  routers" were phased
in during the second  quarter of 2001,  resulting in these  increases in average
sales prices and lower product costs.



                                       5
<PAGE>

      (4) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

      THREE  MONTHS  ENDED  JUNE  30,  2002  AND  2001.  Selling,   general  and
administrative  expenses  decreased  to $705,472 for the three months ended June
30, 2002 as compared to $1,068,061 for the three months ended June 30, 2001. The
decrease of $362,589 is the result of a decrease of legal expenses by $58,000, a
decrease of commissions expense by $52,000, a decrease of accounting expenses by
$13,000,  an increase of other  expenses  by $17,000  and  non-cash  expenditure
decreases in  amortization  of unearned  compensation of $42,000 and stock based
compensation paid to consultants of $215,000.

      During the three month period  ended June 30, 2002,  the Company had three
transactions  that  resulted in  non-cash  selling,  general and  administrative
expenditures:  i) a charge of $20,841 in connection  with the issuance of common
stock to the Chief  Financial  Officer to amortize his unearned  compensation in
accordance  with his  employment  agreement;  ii) $14,938 in option  expenses to
consultants;  and iii) amortization of loan closing asset of $1,988.  During the
comparable  period in 2001,  the Company had three  non-cash  transactions  that
resulted in non-cash  expenditures:  i) the Company recorded a charge of $20,500
in connection with the issuance of common stock to the Chief  Financial  Officer
to  amortize  his  unearned  compensation  in  accordance  with  his  employment
agreement;  ii) the Company  incurred an expense of $214,854 in connection  with
the issuance of options to consultants;  and iii) a company controlled by one of
our principal shareholders incurred research and development costs on our behalf
for  the  further  development  of our  Internet  access  hardware  routers  for
$127,636,  which was recorded as a capital contribution.  The Company expects to
increase  its  selling,  general  and  administrative  expenses in the future in
proportion to the Company's anticipated growth in sales.

      SIX  MONTHS   ENDED  JUNE  30,  2002  AND  2001.   Selling,   general  and
administrative  expenses  decreased to $1,406,066  for the six months ended June
30, 2002 as compared to $1,881,601  for the six months ended June 30, 2001.  The
decrease of $475,535 is the result of a decrease of legal  expenses by $112,000,
a decrease of commissions  expense by $63,000, a decrease of accounting expenses
by $27,000,  a decrease of other  expenses by $17,000 and  non-cash  expenditure
decreases in  amortization  of unearned  compensation of $42,000 and stock based
compensation paid to consultants of $215,000.

      During the six month  period  ended June 30,  2002,  the Company had three
transactions  that  resulted in  non-cash  selling,  general and  administrative
expenditures:  i) a charge of $83,340 in connection  with the issuance of common
stock to the Chief  Financial  Officer to amortize his unearned  compensation in
accordance  with his  employment  agreement;  ii) $14,938 in option  expenses to
consultants;  iii)  amortization  of loan  closing  asset of $4,342.  During the
comparable  period in 2001,  the Company  had four  non-cash  transactions  that
resulted in non-cash expenditures:  i) the Company recorded a charge of $125,000
in connection with the issuance of common stock to the Chief  Financial  Officer
to  amortize  his  unearned  compensation  in  accordance  with  his  employment
agreement;  ii) the Company  incurred an expense of $214,854 in connection  with
the issuance of options to consultants;  iii) a company controlled by one of our
principal shareholders incurred research and development costs on our behalf for
the further  development of our Internet access  hardware  routers for $127,636,
which was recorded as a capital  contribution;  and iv) we issued 126,000 shares
of common stock to a consultant for services and recorded a non-cash transaction
of  $88,591.   The  Company  expects  to  increase  its  selling,   general  and
administrative expenses in the future in proportion to the Company's anticipated
growth in sales.

LIQUIDITY AND CAPITAL RESOURCES

      Since inception,  the Company has relied  principally upon the proceeds of
private equity financings and loans to fund its working capital requirements and
capital  expenditures.  The  Company's  net cash provided by (used in) operating
activities for the six months ended June 30, 2002 was $284,735, compared to cash
used in operating  activities  of  ($194,676)  for the six months ended June 30,
2001, an increase of $479,411.  This  increase in cash flow  resulted  primarily
from decreases in the Company's net operating loss on increased sales during the
comparable six-month periods.

      The  Company's  net cash used by investing  activities  for the  six-month
period ended June 30, 2002 was $17,847 for purchase of property and equipment.

      The  Company's  net cash used by financing  activities  for the  six-month
period ended June 30, 2002 was $295,760. During the six month period ending June
30, 2002, the  convertible  debentures in the principle  amount of $255,000 were
redeemed for $295,760 plus accrued interest of $16,240.

      The Company has no assured financial  resources available to meet its June
30, 2002 working capital deficit of $1,215,925 and future operating costs.



                                       6
<PAGE>

RISK FACTORS

      Our  Company is subject to various  risks  which may  materially  harm our
business,  financial  condition  and results of  operations.  Certain  risks are
discussed below.

WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE

      We have  historically  lost money. For the six months ended June 30, 2002,
we  sustained  losses of $71,922.  For the year ended  December 31, 2001 and the
year ended  December 31, 2000,  we sustained  losses of $1.67  million and $2.88
million,  respectively.  Future  losses  are  likely to occur.  Our  independent
auditors  have noted that our  Company  may not have  significant  cash or other
material  assets to cover its  operating  costs and to allow it to continue as a
going  concern.  Our ability to obtain  additional  funding will  determine  our
ability to continue as a going concern.

WE HAVE BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM OUR INDEPENDENT
AUDITORS

      Our independent auditors have added explanatory  paragraphs to their audit
opinions issued in connection with the 2001 and 2000 financial  statements which
states that our Company has had losses since  inception  that raise  substantial
doubt about our ability to continue as a going concern. Our financial statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

WE HAVE BEEN AND CONTINUE TO BE SUBJECT TO A WORKING CAPITAL DEFICIT AND
ACCUMULATED DEFICIT

      We had a working capital deficit of $1.22 million at June 30, 2002. We had
a working  capital deficit of $1.3 million and $0.6 million at December 31, 2001
and 2000,  respectively.  We had an accumulated  deficit of $5.0 million at June
30,  2002.  We had an  accumulated  deficit of $4.9  million and $3.2 million at
December 31, 2001 and 2000,  respectively.  No  assurances  can be given that we
will be successful in reaching or maintaining profitable operations.

OUR COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY FLUCTUATE
SIGNIFICANTLY

      There has been a limited  public market for our common stock and there can
be no assurance that an active trading market for our common stock will develop.
As a result,  this could adversely affect our shareholders'  ability to sell our
common  stock in short time  periods,  or possibly at all.  Our common stock has
experienced,  and is likely to experience in the future,  significant  price and
volume fluctuations, which could adversely affect the market price of our common
stock without regard to our operating performance.  In addition, we believe that
factors such as quarterly  fluctuations in our financial results,  announcements
by our  competitors  and changes in the overall  economy or the condition of the
financial  markets  could  cause  the  price of our  common  stock to  fluctuate
substantially.

WE HAVE HAD A HISTORY OF A LIMITED CUSTOMER BASE AND THIS MAY CONTINUE

      At present,  our customer  base  consists  primarily  of Internet  service
providers,  telephone  companies,  and  value-added  resellers.  Our  ability to
operate depends on increasing our customer base and achieving  sufficient  gross
profit  margins.  We  cannot  assure  you that we will be able to  increase  our
customer base or to operate  profitably.  If any of our major  customers stop or
delay their purchases of our products,  our revenue and  profitability  would be
adversely  affected.  We anticipate that sales of our products to relatively few
customers will continue to account for a significant  portion of our revenue. In
2000,  sales to 10 customers  accounted  for 53% of our revenue,  while in 2001,
sales to 10 customers accounted for 48% of our revenue. For the six months ended
June 30,  2002,  one  customer in the  technology  sector  generated  49% of the
Company's revenue. If these customers cancel or delay their purchase orders, our
revenue may decline and the price of our common stock may fall. We cannot assure
you that our  current  customers  will  continue  to place  orders with us, that
orders by existing  customers will continue at the levels of previous periods or
that we will be able to obtain orders from new customers. Although our financial
performance  depends on large orders from a few key customers and resellers,  we
do not have binding commitments from any of them.



                                       7
<PAGE>

WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL

      Our success largely depends on the efforts and abilities of key executives
and consultants,  including  Gregory S. Levine,  our President and a Director of
our Company, and Martin Dell'Oca,  our Chief Financial Officer and a Director of
our Company.  The loss of the  services of any of these people could  materially
harm our  business  because of the cost and time  necessary to replace and train
such  personnel.  Such a loss would also divert  management  attention away from
operational  issues. We have entered into employment  agreements with Mr. Levine
and Mr.  Dell'Oca,  respectively.  We do not  maintain  key-man  life  insurance
policies on any of these people.

PART II

ITEM 1.  LEGAL PROCEEDINGS

      The  officers  and  directors  of our Company  believe that to the best of
their  knowledge,  neither our Company nor any of its officers and Directors are
parties  to any legal  proceeding  or  litigation.  Further,  the  officers  and
directors know of no threatened or contemplated legal proceedings or litigation.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

      During  the  three  months  ended  June 30,  2002,  our  Company  redeemed
convertible  debentures  in the  principal  amount of $255,000 for $295,760 plus
accrued interest of $16,240.

      On November 22, 2000, our Company  entered into a settlement  agreement in
which it agreed to  dismiss a  threatened  lawsuit  against  Fred  Schmid,  Fred
Schmid, Inc., Dale Runyon, a former principal shareholder of WindStar,  and Erik
Nelson  (WindStar  parties),  and to terminate  Schmid's  consulting  agreement.
Pursuant  to the  agreement,  Messrs.  Schmid  and  Nelson  agreed to escrow the
consulting  shares and the penalty  shares with an escrow  agent and Mr.  Runyon
agreed to return 800,000 transfer shares of common stock that were issued to him
in a prior year. In July 2002,  the  agreement was deemed to be fully  performed
and our Company recorded the return of these shares.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

      Not applicable.

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

      None.


ITEM 5.  EXHIBITS

      The following  documents  are  incorporated  herein by reference  from the
Registrant's  Form S-1  Registration  Statement  filed with the  Securities  and
Exchange  Commission (the  "Commission"),  Commission file #333-3074 on April 1,
1996 and declared effective by the Commission August 16, 1996:

NUMBER              DOCUMENT
------              --------
3.1                 Articles of Incorporation.

3.2                 Amended Articles of Incorporation.

3.3                 Bylaws of the Company.

4.1                 Specimen certificate for Common Stock.

4.2                 Specimen certificate for Class A Redeemable Warrants.

4.3                 Specimen certificate for Class B Redeemable Warrants.

      The following  documents  are  incorporated  herein by reference  from the
Registrant's Form 10-K Annual Report for the period ended December 31, 1997:



                                       8
<PAGE>

99.1                Stock Purchase Agreement.

99.2                Employment Agreement with Fred Schmid.

      The following  documents  are  incorporated  herein by reference  from the
Registrant's Form 10-K Annual Report for the period ended December 31, 1998:

3.3                 Amended Articles of Incorporation dated December 31, 1997.

3.4                 Amended Articles of Incorporation dated April 15, 1998.

      The following  documents  are  incorporated  herein by reference  from the
Registrant's Post Effective Amendment 1 to Form S-1 Registration Statement filed
with the  Commission,  Commission  file  #333-3074  on June 17,1998 and declared
effective by the Commission June 19,1998:

3.3                 Amended Articles of Incorporation dated December 31, 1997.

3.4                 Amended Articles of Incorporation dated April 15, 1998.


      The following  documents  are  incorporated  herein by reference  from the
Registrant's Form 8-K Report filed on December 3, 1999:


2.                  Acquisition Agreement and Exhibits attached thereto.

      The  following   documents  are   incorporated   by  reference   from  the
Registrant's Post-Effective Amendment 2 to Form S-1 Registration Statement filed
with the Commission, Commission file #333-3074 on April 3, 2000.

10.1                March 14, 2000, Consulting Agreement between Nexland S.A.
                    and the Company.

10.2                November 17, 1999, Mutual Non-Competition Agreement between
                    Nexland, S.A.  and the Company.

10.3                November 17, 1999 Co-Operation Agreement between Smerwick,
                    Ltd.  and the Company.

                    The following  documents are  incorporated by reference from
                    the   Registrant's   Form  8K  filed  with  the  Commission,
                    Commission file #333-3074 on May 12, 2000.

10.4                Employment Contract of Enrique Dillon.

10.5                Employment Contract of Martin Dell'Oca.

      The  following   documents  are   incorporated   by  reference   from  the
Registrant's Form 10-K filed with the Commission on May 14, 2001:

4.4                 2000 Stock Incentive Plan.

10.6                Promissory Note dated August 1, 2000, by the Company payable
                    to Israel D. Sultan.

10.7                Conversion Agreement dated October 26, 2000, between Israel
                    D.  Sultan and the Company.

10.8                Line of Credit Agreement dated March 19, 2001, between
                    Cornell Capital Partners, L.P. and the Company.

10.9                Registration Rights Agreement dated March 19, 2001, between
                    Cornell Capital Partners, L.P. and the Company.

10.10               Escrow Agreement dated March 19, 2001, between Cornell
                    Capital Partners, L.P., the Company, Butler Gonzalez LLP and
                    First Union National Bank.

10.11               Form of Convertible Debenture.

10.12               Consulting Services Agreement dated March 19, 2001, between
                    Yorkville Advisors Management, L.L.C. and the Company.

10.13               Securities Purchase Agreement dated March 19, 2001, between
                    the investors on Schedule I attached thereto (the
                    "Investors") and the Company.



                                       9
<PAGE>

10.14               Registration Rights Agreement dated March 19, 2001, between
                    the Investors and the Company.

10.15               Placement Agent Agreement dated March 19, 2001, between May
                    Davis Group, Inc. ("May Davis") and the Company.

10.16               Escrow Agreement dated March 19, 2001, between May Davis,
                    the Company and First Union National Bank.

       The following documents are incorporated by reference from the
Registrant's Form 10-Q filed with the Commission on November 14, 2001:

10.17               Employment Agreement, effective August 16, 2001, between the
                    Company and Robert W. Nelson.




                                       10
<PAGE>





                                   SIGNATURES

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

Dated:   August 12, 2002               NEXLAND, INC.

                                       By: /s/ Martin Dell'Oca
                                           --------------------------
                                               Martin Dell'Oca
                                               Chief Financial Officer




                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Nexland, Inc. (the "Company") on Form
10-QSB for the  period  ended June 30,  2002 as filed  with the  Securities  and
Exchange Commission on the date hereof (the "Report"),  each of the undersigned,
in the capacities and on the dates indicated below, hereby certifies pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that to his knowledge:

1. The Report fully complies with the  requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2. The  information  contained in the Report  fairly  presents,  in all material
respects, the financial condition and results of operation of the Company.

/s/ Gregory S. Levine
-----------------------------
Gregory S. Levine
Chief Executive Officer



/s/ Martin Dell'Oca
-----------------------------
Martin Dell'Oca
Chief Financial Officer



                                       11