<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

                                   (Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 14(d) OF THE SECURITIES EXCHANGE ACT OF
1934.

                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 2001

                                       OR

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.

           For the transition period from ____________ to ____________


                         COMMISSION FILE NUMBER 0-21913


                            GROUP LONG DISTANCE, INC.
                            -------------------------
                 (Name of Small Business Issuer in Its Charter)


             FLORIDA                                    65-0213198
             -------                                    ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)


                     400 E. ATLANTIC BOULEVARD, FIRST FLOOR
                             POMPANO BEACH, FL 33060
                             -----------------------
                    (Address of Principal Executive Offices)


                                 (954) 788-7871
                                 --------------
                (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 |_|

The number of shares of Common Stock, no par value, outstanding as of October
12, 2001 was 13,525,402.

Transitional Small Business Disclosure Format (check one): Yes |_|        No |X|

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<PAGE>
<TABLE>

                                  GROUP LONG DISTANCE, INC. AND SUBSIDIARIES
======================================================================================================================

                                                     INDEX
<CAPTION>

                                                                                                                 PAGE
                                                                                                                NUMBER
                                                                                                                ------
<S>      <C>                                                                                                      <C>
PART I.  FINANCIAL INFORMATION

         Item 1.    Financial Statements

                    Consolidated Balance Sheets as of July 31, 2001 (Unaudited) and April 30,
                    2001..........................................................................................  1

                    Unaudited Consolidated Statements of Operations for the Three months ended
                    July 31, 2001 and 2000........................................................................  2

                    Unaudited Consolidated Statements of Cash Flows for the Three months ended
                    July 31, 2001 and 2000........................................................................  3

                    Notes to Consolidated Financial Statements...................................................  4

         Item 2.    Management's Discussion and Analysis of Financial Condition
                    and Results of Operations.....................................................................  8

PART II. OTHER INFORMATION

         Item 6.    Exhibits and Reports on Form 8-K............................................................. 12

                    SIGNATURES.................................................................................... 14

</TABLE>

                                                      i
<PAGE>
<TABLE>

                                         PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

                                  GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                                          CONSOLIDATED BALANCE SHEETS

                                 JULY 31, 2001 (UNAUDITED) AND APRIL 30, 2001


                                                    ASSETS
<CAPTION>
                                                                                     July 31,          April 30,
                                                                                      2001               2001
                                                                                  -------------      -------------
                                                                                   (Unaudited)
<S>                                                                               <C>                <C>
Current assets
Cash                                                                              $    523,081       $  1,118,210
Accounts receivable less allowance for doubtful
accounts of $102,000 and $55,000 at July 31, 2001 and
April 30, 2001, respectively                                                           412,981            232,914
Income Tax receivable                                                                  335,942            295,942
Prepaid expenses and other current assets                                               53,651             83,743
                                                                                  -------------      -------------

               Total current assets                                                  1,325,655          1,730,809
                                                                                  -------------      -------------

Property and equipment, net                                                            213,918            281,329
Intangible assets                                                                    7,340,615          6,499,927
                                                                                  -------------      -------------

               Total assets                                                       $  8,880,188       $  8,512,065
                                                                                  =============      =============

                                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable                                                                  $    706,238       $    863,775
Volume shortfall charge payable, net                                                         -             30,556
Deferred Revenue                                                                       300,000                  -
Accrued expenses and other liabilities                                                 613,511            493,925
                                                                                  -------------      -------------

               Total current liabilities                                             1,619,749          1,388,256
                                                                                  -------------      -------------

Stockholders' equity
Series A preferred stock, no par value, liquidation value of $4,000,000,
  200,000 shares authorized; 200,000 shares issued and
  outstanding as of July 31, 2001 and April 30, 2001, respectively                           -                  -
Common stock, no par value, 100,000,000 shares authorized; 13,525,402 and
  11,300,402 shares issued and outstanding as of July 31, 2001 and April 30,
  2001, respectively                                                                         -                  -
Additional paid-in capital                                                          12,519,988         11,303,988
Accumulated deficit                                                                 (5,259,549)        (4,180,179)
                                                                                  -------------      -------------

               Total stockholders' equity                                            7,260,439          7,123,809
                                                                                  -------------      -------------

               Total liabilities and stockholders' equity                         $  8,880,188       $  8,512,065
                                                                                  =============      =============
</TABLE>

The accompanying notes are an integral part of these statements.

                                                      1
<PAGE>
<TABLE>

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

                FOR THE THREE MONTHS ENDED JULY 31, 2001 AND 2000
<CAPTION>

                                                                 Three Months Ended
                                                                 ------------------
                                                                      July 31,
                                                                      --------
                                                              2001               2000
                                                          -------------      -------------
<S>                                                       <C>                <C>
Sales                                                     $    627,783       $  1,362,431
Other revenue                                                   90,098                  -
                                                          -------------      -------------
Total Revenues                                                 717,881          1,362,431

Cost of sales                                                  379,863            685,114
                                                          -------------      -------------

                   Gross profit                                338,018            677,317

Selling, general and administrative expenses                   760,856            349,603
Depreciation and amortization                                  388,689              1,200
Research and development                                       342,139                  -
                                                          -------------      -------------

                   (Loss) Income from operations            (1,153,666)           326,514

Interest income, net                                            34,296             55,417
                                                          -------------      -------------

                   (Loss) Income before income taxes        (1,119,370)           381,931

Income tax (benefit) expense                                   (40,000)           144,000
                                                          -------------      -------------

                   Net (loss) income                      $ (1,079,370)      $    237,931
                                                          =============      =============

Net (loss) income per common share - basic                $      (0.09)      $       0.07
                                                          =============      =============

Net (loss) income per common share - diluted              $      (0.09)      $       0.06
                                                          =============      =============

Weighted average of common shares outstanding - basic       11,567,250          3,500,402
                                                          =============      =============
</TABLE>

The accompanying notes are an integral part of these statements.

                                       2
<PAGE>
<TABLE>

                                  GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

                                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                               FOR THE THREE MONTHS ENDED JULY 31, 2001 AND 2000
<CAPTION>

                                                                                            Three Months Ended
                                                                                            ------------------
                                                                                                 July 31,
                                                                                                 --------

                                                                                          2001              2000
                                                                                      ------------      ------------
<S>                                                                                   <C>               <C>
Cash flows from operating activities
Net (loss) income                                                                     $(1,079,370)      $   237,931
Adjustments to reconcile net income to net cash provided by operating activities
          Depreciation and amortization                                                   388,689             1,200
          Provision for bad debts                                                          69,648            41,443
          Other adjustments                                                                48,034                --
Changes in assets and liabilities
               (Increase) Decrease in accounts receivable                                (249,715)          178,515
               Decrease in deferred tax assets                                                 --            31,000
               Decrease in prepaid expenses and other
                 current assets                                                            30,092            12,000
               Increase in taxes receivable                                               (40,000)               --
               Decrease in volume shortfall charge payable                                (30,556)          (91,666)
               Decrease in accounts payable                                              (157,537)          (96,522)
               Increase in accrued expenses and other liabilities                         119,586            43,370
               Increase in deferred revenue                                               300,000                --
               Decrease in income taxes payable                                                --          (425,766)
                                                                                      ------------      ------------

                    Net cash used in operating activities                                (601,129)          (68,495)
                                                                                      ------------      ------------

Cash flows from investing activities

                    Net cash provided by investing activities                                  --                --
                                                                                      ------------      ------------

Cash flows from financing activities

               Proceeds from exercising of director options                                 6,000                --

                    Net cash provided from financing activities                             6,000                --
                                                                                      ------------      ------------

Net decrease in cash                                                                     (595,129)          (68,495)

Cash at beginning of year                                                               1,118,210         2,240,267
                                                                                      ------------      ------------

Cash at end of year                                                                   $   523,081       $ 2,171,772
                                                                                      ============      ============


Supplemental disclosure of cash flow information: Cash paid during the year for:
         Taxes                                                                        $         -       $   538,766
         Interest                                                                     $         -       $         -

Non-cash activity:

     On July 20, 2001 the Company acquired 20% of the outstanding shares of
     common stock of HA Technology, Inc. ("HAT") not yet owned by the Company,
     from the spouse of the Company's Chairman of the Board of Directors, in
     exchange for 2.2 million shares of the Company's common stock.

</TABLE>

The accompanying notes are an integral part of these statements.

                                                      3
<PAGE>

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

              UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A--BASIS OF PRESENTATION

     The accompanying unaudited condensed financial statements have been
prepared in accordance with the generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for fair presentation have been included.
Operating results for the three months ended July 31, 2001, are not necessarily
indicative of the results that may be expected for the year ending April 30,
2002.

     The balance sheet at April 30, 2001, has been derived from the audited
financial statements at that date, but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the audited financial
statements and footnotes thereto included in the Form 10-KSB filed by the
Company for the year ended April 30, 2001.

NOTE B--FORMATION AND OPERATIONS OF THE COMPANY

     Group Long Distance, Inc. (the "Company") comprises two business
operations. The first business, which prior to April 2001 had been the only
source of revenue for the Company since its inception, is telecommunications
services. The second line of business is as a provider of software development
and integration services for various information and e-commerce products and
services.

     The telecommunications segment of the Company's business is as a
non-facilities-based reseller of long distance telecommunications services to
small and medium-sized commercial customers and residential subscribers. The
Company utilizes contracts with Talk America Holdings, Inc., ("TALK"), formerly
Talk.com Inc., a national long-distance telecommunications carrier to provide
its customers with products and services which include basic "1 plus" and "800"
long distance services. The Company was incorporated under the laws of Florida
in September 1995.

     As of the date of this report, the Company has earned minimal revenue and
has not generated any sales from its software development and integration line
of business. Based in Irvine, California, HomeAccess Microweb, Inc.
("HomeAccess") deploys HomeAccess (TM) information and e-commerce services,
software and systems. The technology known as "HomeAccess Technology," has been
in a development stage since 1995. HomeAccess has focused nearly all of its
efforts and resources on continuing the development of HomeAccess Technology.
Such technology consists of source code, programs, software, hardware, business
methods, and other inventions relating to a system designed for use with various
Internet appliances. The development continues to progress towards providing a
solution for connecting consumers via various Internet appliances, the first of
which is an Internet screen telephone, which contains features that include a
1/4 VGA screen, pull-out keyboard, speaker phone, built-in rolodex, caller ID,
and a smart card slot. HomeAccess software is also used to integrate peripherals
such as bar-code scanners and smart cards. The HomeAccess Technology supports
the provisioning of a variety of services including; email, messaging, news and
information, financial services, bill presentation and payment, travel and
entertainment, ticketing, coupon distribution, directory search, localized
shopping and personal productivity services.

     Unless otherwise indicated, all references to the Company include GLD, the
Company's predecessor, and the Company's wholly owned subsidiaries. These
subsidiaries include HomeAccess Microweb, Inc., HAT Technology, Inc., Eastern
Telecommunications Incorporated, Gulf Communications Services and
Adventures-in-Telecom.


NOTE C--ACQUISITION OF SUBSIDIARIES

     On February 20, 2001, the Company and Quentra Networks, Inc. (formerly
Coyote Network Systems, Inc.), as debtor in possession ("Quentra"), entered into
a Stock Purchase Agreement (the "Stock Purchase Agreement"). Pursuant to the
Stock Purchase Agreement, the Company agreed to acquire all of the outstanding
shares of common stock of HomeAccess from Quentra in exchange for (i) cash in
the amount of $100,000 and (ii) 200,000 shares of Series A Preferred Stock. Each
share of Series A Preferred Stock has no par value, has a liquidation preference
of $20.00 per share, does not have a dividend preference and does not pay
dividends, does not have any voting rights, except as otherwise provided by law,
and, commencing April 13, 2002, is convertible into ten shares of the Company's
common stock ("Common Stock").

                                       4
<PAGE>

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

        UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



     The Stock Purchase Agreement was approved by the United States Bankruptcy
Court for the Central District of California (the "Bankruptcy Court") on March
8, 2001. In addition, pursuant to an order of the Bankruptcy Court, upon its
acquisition of a controlling interest in HA Technology, Inc. ("HAT"), the
Company was required to deliver to Quentra warrants to purchase 200,000 shares
of Common Stock at an exercise price of $4.50 per share. The warrants are
exercisable for a period of six months, commencing on April 13, 2002, and
terminating on October 12, 2002. The Company also agreed to convert all loans
made to HomeAccess prior to closing into capital. Such loans totaled $625,000 on
April 13, 2001.

     On April 13, 2001, the Company acquired all of the outstanding shares of
common stock of HomeAccess.

     On April 13, 2001, the Company and Barbara Conrad entered into an Exchange
Agreement (the "Exchange Agreement"). Pursuant to the Exchange Agreement, among
other things, the Company acquired 80% of the outstanding shares of common stock
of HAT, in exchange for 7,800,000 shares of Common Stock. In October 2000,
HomeAccess licensed its HomeAccess Technology for all states except Washington,
Nevada, Oregon and Pennsylvania, to HAT. Barbara Conrad is the spouse of the
Company's Chairman and Chief Executive Officer.

     Simultaneously with the acquisition, the Company entered into an agreement
to acquire the remaining 20% of the outstanding shares of HAT common stock from
Mrs. Conrad in exchange for an additional 2.2 million shares of the Company's
Common Stock. The acquisition of the remaining shares of HAT common stock was
subject to certain conditions, including an increase in the number of authorized
shares of the Company's Common Stock. During July 2001, all of the conditions
were satisfied and the Company purchased the remaining 20% of HAT common stock
based on the terms discussed above.

     On April 27, 2001, the Company filed a Form 8-K with the Securities and
Exchange Commission in connection with the acquisition of HomeAccess and HAT.

     Simultaneously with the acquisition of 80% of the outstanding number of
shares of common stock of HAT, the Company issued to Quentra the warrants
described above.

     On July 20, 2001, the Company issued 2,200,000 shares of Common Stock to
Barbara Conrad pursuant to the Second Exchange Agreement in exchange for 20% of
the common stock of HAT not then owned by the Company.


NOTE D--CHANGE IN CONTROL AND OWNERSHIP

     As a result of the issuance of shares of the Company's Common Stock in
connection with the acquisition of HAT, a change in control of the Company
occurred. As of the date of this report, Barbara Conrad holds legal title to
10,000,000 shares of the Company's Common Stock, or approximately 74% of the
aggregate number of common shares then outstanding.

     Pursuant to an Amended and Restated Investment Sharing Agreement effective
as of September 30, 2000 (the "Investment Sharing Agreement") by and between
John J. Prehn ("Prehn"), Peter J. Wachtell ("Wachtell"), and Barbara Conrad,
each of Prehn and Wachtell holds a 20% interest in the shares of Common Stock
legally owned by Barbara Conrad. As such, as of the date of this report, Prehn
holds an interest in 2,000,000 shares of Common Stock, or approximately 14.8% of
the aggregate number of then outstanding shares of Common Stock; Wachtell holds
an interest in 2,000,000 shares of Common Stock, or approximately 14.8% of the
aggregate number of then outstanding shares of Common Stock; and Barbara Conrad
beneficially owns 6,000,000 shares of Common Stock, or approximately 44.4% of
the aggregate number of then outstanding shares of Common Stock.

     Pursuant to the Investment Sharing Agreement, until such time as the
transfer of all of the shares of Common Stock in which Prehn and Wachtell hold
an interest are registered under the Securities Act of 1933, Barbara Conrad
alone holds the power to vote all of such shares and the power to dispose of all
of such shares. Pursuant to a Registration Rights Agreement (the "Registration
Rights Agreement") entered into between the Company and Barbara Conrad, at any
time after April 13, 2002, Barbara Conrad may cause the Company to register the
transfer of varying numbers of shares of Common Stock registered in her name on
one occasion during each fiscal year of the Company until April 12, 2006. In

                                       5
<PAGE>

addition, pursuant to such Registration Rights Agreement, Barbara Conrad may
from time to time through April 12, 2006, cause the Company to register the
transfer of shares of Common Stock registered in her name in connection with
other registered offerings of securities by the Company.

     In addition, upon conversion of the shares of Series A Preferred Stock and
exercise of its warrants, Quentra would own up to 2,200,000 shares of Common
Stock, or up to approximately 14.0% of the then aggregate number of outstanding
shares of Common Stock. As of the date of this report, Quentra has not exercised
its rights related to the conversion of the Series A Preferred Stock or its
warrants.

NOTE E - SEGMENT DATA

     The Company comprises two business operations. The first business operation
is as a provider of telecommunications services and the second line of business
is as a provider of software development and integration services for various
information and e-commerce products and services.

     Summarized financial information concerning the Company's reportable
segments is shown in the following table. Corporate related items, results of
insignificant operations and income and expenses not allocated to reportable
segments are included in the reconciliations to consolidated results.

     The following schedule presents information about the Company's operating
segments for the three months ended July 31, 2001.



Industry Segment                                               2001
                                                               ----

Revenues:
   Telecommunications                                       $   627,783
   Software Development and Integration                          90,098
                                                            ------------
                                                            $   717,881
                                                            ============

Operating (Loss) Profit:
   Telecommunications                                       $    27,041
   Software Development and Integration                      (1,180,707)
                                                            ------------
                                                            $(1,153,666)
                                                            ============

Identifiable Assets:
   Telecommunications                                       $ 1,240,948
   Software Development and Integration                       7,639,240
                                                            ------------
                                                            $ 8,880,188
                                                            ============

Reconciliation to consolidated amounts was as follows:
   Operating (Loss)
       Total loss for reportable segments                   $(1,153,666)
       Other Income                                              34,296
                                                            ------------
       Consolidated loss before income tax benefit          $(1,119,370)
                                                            ============

                                       6
<PAGE>

                   GROUP LONG DISTANCE, INC. AND SUBSIDIARIES

        UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)



NOTE F--SUBSEQUENT EVENTS

     In August 2001, the Company entered into a software development agreement
(the "Pilot Program Agreement") with Portland General Electric Company ("PGE").
The Pilot Program Agreement provides for the two companies to develop and
integrate technology and software to be used in delivering a variety of services
to consumers including online bill presentation and payment, two-way messaging
and time-of-use energy consumption information. As part of the Pilot Program,
PGE has deployed approximately 800 Internet Screen Phones in apartment buildings
within its service area and plans to deploy an additional 600 Internet Screen
Phones in single-family neighborhoods as part of the next phase of the Pilot
Program. The Pilot Program Agreement also provides PGE with an option to enter
into longer-term agreements with the Company for up to fifteen years and
provides PGE with an exclusive licensing option for the states of Oregon,
Washington, and Nevada, for a minimum licensing fee per state per month, subject
to certain performance criteria. There can be no assurance the Company will
enter into any longer-term agreements or receive any licensing fees. (See
"Liquidity and Capital Resources" for more details.)

     Pursuant to the agreement, the Company agreed to issue to PGE a warrant to
purchase 310,000 shares of the Company's common stock for an aggregate exercise
price of $1,050,000. The warrant expires on June 30, 2002. Provided that PGE
satisfies all conditions under the agreement, including making all required
payments, the Company will apply such payments towards the exercise price of the
warrant. The agreement provides the Company with an aggregate of $1,050,000 in
cash through December 31, 2001, $800,000 of which has already been received for
services performed to date. For the three months ended July 31, 2001, the
Company had received $300,000 from PGE and which has been included in deferred
revenue on the balance sheet. Revenue from the Pilot Program Agreement will be
recognized over the period beginning August 1, 2001 and ending December 31,
2001. In addition, a certain amount of the payment received from PGE will be
treated as equity due to the warrant provision in the agreement.

     The Company's headquarters are currently located at 400 E. Atlantic
Boulevard, First Floor, Pompano Beach, Florida. All telecommunications
operations are currently performed at this location. Within approximately 30 to
60 days the Company intends to close this office and relocate its corporate
headquarters to Irvine, California. The Company has agreed to terms with its
current Chief Financial Officer and one office employee. The severance packages
total approximately $130,000.

NOTE G--RELATED PARTY TRANSACTIONS

     During the three month period ended July 31, 2001, the Company processed
its payroll through Primary Knowledge, Inc. ("PKI"), a related party through
common ownership and management. As such, the Company paid approximately
$268,000 to PKI for HomeAccess employees' payroll costs. During August 2001, the
Company opened a separate payroll account for HomeAccess and transferred all
employees that were being paid through PKI's payroll to the new payroll account.

     During the three month period ended July 31, 2001, the Company paid
approximately $53,000 in rent to Roswell Properties for the Irvine, California
office. The daughter of the Company's Chief Executive Officer is a partial owner
of Roswell Properties.

     During the three month period ended July 31, 2001, the Company incurred
approximately $26,000 in travel expenses to be paid to Object Development, Inc.,
a related party through common ownership and management. The Company anticipates
paying such expenses by December 31, 2001.

NOTE H--GOING CONCERN

     The quarterly financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has experienced a
significant decrease in cash as a result of the software development and
integration business that is described above in Note B. On September 30, 2001,
the Company had a cash balance of approximately $234,000. No sales have been
generated and significant expenses have been incurred to develop and integrate
the technology acquired. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company's plan to meet its
liquidity needs for the next twelve months is comprised of the following: enter
into a development cost sharing agreement with a strategic partner (Refer Note F
- Subsequent Events), identify and enter into agreements with property
management companies to generate revenue, and raise additional capital by
issuing securities. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

     There can be no assurance the Company's plan will be successful in meeting
the Company's short-term liquidity needs. The funds to be received under the
Pilot Program Agreement (Refer Note F - Subsequent Events) are not adequate to
fund the Company's cash needs, and the Company does not have any immediate
prospects to increase its revenues or cash flow. As a result, it can be
reasonably anticipated that, within the next 60 to 90 days, the Company may be
unable to pay its debts and obligations in the ordinary course of business as
they become due. Failure to secure additional revenues or cash investments in
the Company in that short time frame, may likely result in an inability to
operate as a going concern as well as the Company seeking protection under the
bankruptcy laws.

                                       7
<PAGE>

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

     The following discussion and analysis of significant factors affecting the
Company's operating results and liquidity and capital resources should be read
in conjunction with the accompanying financial statements and related notes.

     This Report on Form 10-QSB contains forward-looking statements. Additional
written and oral forward-looking statements may be made by the Company from time
to time in Securities and Exchange Commission ("SEC") filings and otherwise. The
Company cautions readers that results predicted by forward-looking statements,
including, without limitation, those relating to the Company's future business
prospects, revenues, working capital, liquidity, capital needs, interest costs,
and income are subject to certain risks and uncertainties that could cause
actual results to differ materially from those indicated in the forward-looking
statements. Some of these risks and factors are identified herein and from time
to time in the Company's filings with the SEC. Readers are cautioned that
forward-looking statements are not guarantees of future performance and that the
actual results may differ materially from those suggested or projected in
forward-looking statements. Accordingly, there can be no assurance that the
forward looking statements will occur, or that the results will not vary
significantly from those described in the forward-looking statements.

OVERVIEW

     Group Long Distance, Inc., has two primary business operations;
telecommunications services and software development and integration. See "Note
B - Formation and Operations of the Company" for a more detailed discussion.

     Historically, the Company has only offered telecommunication services and
products, which are provided for under contracts with TALK. The Company is no
longer conducting, nor does it have any plans to conduct any marketing campaigns
to attract new customers related to telecommunications services provided by
TALK, since the Company has determined that it is currently unable to both
procure new customers, and achieve positive earnings after amortization of
acquisition costs for these new customers. The Company expects
telecommunications revenues to continue to decline. Future marketing and sales
efforts will be directed at growing the Company's software development business.

     HomeAccess has been in a development stage since its formation in 1999 and
the majority of its costs have been related to research and development of the
HomeAccess Technology. Although the Company believes HomeAccess will evolve from
a development stage company into an operational company in the future, the
Company expects to continue to incur significant research and development costs.
There can be no assurance as to the Company's ability to evolve into an
operational company or as to the amount of research and development costs to be
incurred in the future.

RESULTS OF OPERATIONS

     The results of operations for comparison reasons have been split according
to their respective business operations, "telecommunications services
operations" and "software development and integration operations". For the
remaining categories that are not distinct to one or other of the business
operations, they have been included together under the heading "combined
operations". Refer "Note E - Segment Data" for more detail.

COMPARISON OF THREE MONTHS ENDED JULY 31, 2001 TO THREE MONTHS ENDED JULY 31,
2000

TELECOMMUNICATIONS SERVICES OPERATIONS:

     SALES. The Company's sales were $627,783 for the three months ended July
31, 2001, compared to $1,362,431 for the three months ended July 31, 2000, a
decrease of $734,648 or approximately 54%. The decrease in sales was primarily
due to continued attrition of the Company's telecommunications customer base.
The Company ceased all marketing activities in fiscal year 1998 and is currently
not marketing its telecommunications products and services. Based on continued
attrition, and a decline in the commissions paid by TALK on the "800" customer
base, the Company's telecommunications sales are expected to continue to decline
through the rest of the fiscal year ending April 30, 2002. The Company has
disputed the reduced commissions with TALK.

     COST OF SALES. Cost of sales were $329,011 for the three months ended July
31, 2001, compared to $685,114 for the three months ended July 31, 2000, a
decrease of $356,103, or approximately 52%. As a percentage of sales, cost of
sales was approximately 52% and 50% for the three months ended July 31, 2001 and
July 31, 2000, respectively. The decrease in cost of sales between comparative
periods was due to the decrease in the Company's telecommunications revenues as
a result of customer attrition. Cost of sales are expected to further decline

                                       8
<PAGE>

for the fiscal year ended April 30, 2002. The increase in the cost of sales as a
percentage of sales for the current fiscal year was due to a price increase from
the carrier. The Company has disputed the correctness of the price increase and
other related overcharges and is in discussions with its carrier. There however
is no assurance that the matter will be resolved in the Company's favor.

     GROSS PROFIT. Gross profit was $298,772 for the three months ended July 31,
2001, compared to $677,317 for the three months ended July 31, 2000, a decrease
of $378,545, or approximately 56%. As a percentage of sales, gross profit was
48% and 50% for the three months ended July 31, 2001 and July 31, 2000,
respectively. The decrease in gross margin between comparative periods was due
to the decrease in revenues as a result of customer attrition, and a price
increase imposed by the carrier during the previous fiscal year. The Company has
disputed the correctness of the price increase and other related overcharges and
is in discussions with its carrier. There however is no assurance that the
matter will be resolved in the Company's favor.

SOFTWARE DEVELOPMENT AND INTEGRATION OPERATIONS:

     OTHER REVENUE. Other revenue of $90,098 for the three months ended July 31,
2001, are for services provided by HomeAccess to PGE in terms of software
support and maintenance of computer equipment. Fees paid by PGE for software
support for the time of certain engineers to help PGE manage its project with
HomeAccess outside the defined scope of such project totaled $22,098 for the
three months ended July 31, 2001. Fees paid for maintaining the computer server
equipment totaled $68,000 for the three months ended July 31, 2001. These
revenues are expected to continue throughout the period of the Pilot Agreement
(Refer Note F- Subsequent Events) with PGE.

     COST OF SALES. Cost of sales of $50,852 for the three months ended July 31,
2001 relate to costs for services provided by HomeAccess to PGE in terms of
software support and maintenance of computer equipment. These costs are for the
time of certain engineers to help PGE manage its project with HomeAccess outside
the defined scope of such project.

     GROSS PROFIT. Gross Profit of $39,246 for the three months ended July 31,
2001 is comprised of fees paid by PGE, less related expenses, for software
support to help PGE manage its project with HomeAccess outside the defined scope
of such project. These revenues are expected to continue throughout the period
of the Pilot Agreement (Refer Note F- Subsequent Events) with PGE.

     RESEARCH AND DEVELOPMENT. Research and development expense was $342,139 for
the three months ended July 31, 2001, or 39% of total operating expenses. The
Company incurs significant research and development costs in the development of
its software for integration. Of the $342,139, approximately $288,000 related to
salaries of HomeAccess employees and consultant costs, with the remaining
balance related to third party development costs, other than outside
consultants.

COMBINED OPERATIONS:

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses ("SG&A") were $760,856 for the three months ended July
31, 2001, compared to $349,603 for the three months ended July 31, 2000, an
increase of $411,253, or approximately 118%. This increase in SG&A is a result
of an increase in employee and related expenses, rent and operating expenses,
related to HomeAccess.

     DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization
expense was $388,689 for the three months ended July 31, 2001, compared to
$1,200 for the three months ended July 31, 2000, an increase of $387,489. The
increase in depreciation and amortization for the fiscal year ended April 30,
2001, was largely attributable to the amortization of the goodwill of $335,312
resulting from the acquisition of HomeAccess and HAT, as well as an increase in
depreciation of 53,377. Of this increase in depreciation, $52,177 relates to
depreciation of the fixed assets of HomeAccess.

     INTEREST INCOME, NET. Interest income (net) for the three months ended July
31, 2001, was $34,296, compared to $55,417 for the three months ended July 31,
2000. The interest income for the three months ended July 31, 2001, and the
three months ended July 31, 2000, was interest earned on cash deposits. The
decrease in the interest income is due to the decrease in cash primarily
resulting from funding HomeAccess during its development phase of operations.

     INCOME TAXES. An income tax benefit of $40,000 was provided for the three
months ended July 31, 2001, compared to income tax expense of $144,000 for the
three months ended July 31, 2000. The decrease in the income tax expense for the
three months ended July 31, 2001, is the result of the Company incurring a net
operating loss, which the Company will carry back to past years in which taxes
were paid and receive a refund. The net operating loss is only being applied
against those losses other than of HomeAccess.

                                       9
<PAGE>

     NET LOSS/INCOME. The Company had a net loss of $1,079,370 or net loss of
$0.09 per share, for the three months ended July 31, 2001, as compared to net
income of $237,931, or $0.07 per share, for the three months ended July 31,
2000.

LIQUIDITY AND CAPITAL RESOURCES

     Historically, the revenues derived from its telecommunications services and
products were greater than the expenses to operate that segment. However,
continued customer attrition, competition, and no marketing efforts, have
contributed to the telecommunications segment operating at a nominal profit for
three months ended July 31, 2001. As a result, the Company intends to either
sell its existing customer base or manage it until it is no longer feasible to
do so. As a result of the foregoing, the Company does not anticipate, within the
next twelve months, having any telecommunications customers for which services
are provided by TALK.

     As of the date of this report, the Company has earned only minimal revenues
and has not generated any sales from its new line of business. The Company's
ability to continue its operations is dependent on a variety of factors, some of
which include: the ability to successfully develop and integrate the HomeAccess
Technology, the ability to generate sales of its products and services in the
future, and the ability to secure financing or additional capital.

     The Company's plan to meet its liquidity needs for the next twelve months
is comprised of the following: enter into a development cost sharing agreement
with a strategic partner, identify and enter into agreements with property
management companies to generate revenue, and raise additional capital by
issuing securities.

     In August 2001, the Company entered into agreement with Portland General
Electric Company ("PGE"). The agreement provides for the two companies to
develop and integrate technology and software to be used in delivering a variety
of services to consumers including online bill presentation and payment and
time-of-use energy consumption information. The agreement provides the Company
with an aggregate of $1,050,000 in cash through December 31, 2001, $800,000 of
which has already been received for services performed to date. Pursuant to the
agreement, the Company agreed to issue to PGE a warrant to purchase 310,000
shares of the Company's common stock for an aggregate exercise price of
$1,050,000. The warrant expires on June 30, 2002. Provided that PGE satisfies
all conditions under the agreement, including making all required payments, the
Company will apply such payments towards the exercise price of the warrant. The
agreement also provides PGE with the option to enter into longer-term agreements
with the Company for up to fifteen years. In addition, the agreement provides
PGE with the option for exclusive licensing rights to HomeAccess(TM) technology
for the states of Oregon, Washington and Nevada, for a minimum licensing fee of
$150,000 per month per state, subject to certain performance criteria. There can
be no assurance that PGE will enter into any longer-term agreement or that the
Company will receive any licensing fees for the states noted above.

     The Company has had discussions with several property management companies
to install HomeAccess-enabled devices at their multi-dwelling unit complex
("MDU") facilities. The Company's intent would be to charge a fee for a package
of services offered to the MDU tenants, thereby generating sales on a per phone,
per month basis. There can be no assurance the Company will be able to enter
into an agreements with, or generate sales from, any property management
companies.

     The Company continues to have discussions with various investors, including
investment banks, venture capital firms, and strategic partners, to sell
securities. There can be no assurance the Company will be able to sell any
securities.

     There can be no assurance the Company's plan will be successful in meeting
the Company's short-term liquidity needs. The funds to be received under the
Pilot Program Agreement are not adequate to fund the Company's cash needs, and
the Company does not have any immediate prospects to increase its revenues or
cash flow. As a result, it can be reasonably anticipated that, within the next
60 to 90 days, the Company may be unable to pay its debts and obligations in the
ordinary course of business as they become due. Failure to secure additional
revenues or cash investments in the Company in that short time frame, may likely
result in an inability to operate as a going concern as well as the Company
seeking protection under the bankruptcy laws.

     At July 31, 2001, the Company had a working capital deficit of $294,094
compared to a working capital surplus of $342,553 at April 30, 2001. The primary
reason for the decrease in working capital surplus is due to funding the
operations of HomeAccess.

                                       10
<PAGE>

     Net cash used in operating activities was $601,129 for the three months
ended July 31, 2001, as compared to $68,495 for the three months ended July 31,
2000. The primary reason for the increase in cash used in operating activities
for the three months ended July 31, 2001, is due to net loss from operations and
an increase in accounts receivable, and a decrease in accounts payable. The cash
used in operating activities for the three months ended July 31, 2000, is
attributable to net income from operating activities, offset by a decrease in
income taxes payable.

     No cash was provided by investing activities for the three months ended
July 31, 2001, and for the three months ended July 31, 2000.

     Net cash provided from financing activities was $6,000 for the three months
ended July 31, 2001,as compared to no cash provided for the three months ended
July 31, 2000. The cash provided for the three months ended July 31, 2001
related to the exercise of 25,000 previously issued, vested options, 20,000 at
$0.20 and 5,000 at $0.40, by a director of the Company.

     The Company during the three months ended July 31, 2001 experienced
collection related issues with TALK, who performs all back office services
including collections on behalf of the Company. The Company had addressed this
matter with TALK as recent developments had indicated a potential collectability
issue with an underlying service provider. This has led to an increase in
outstanding receivables at July 31, 2001, and a corresponding increase in the
allowance for doubtful accounts. The Company through discussions with TALK has
resolved the outstanding collections from the third party service provider. The
Company received payment of approximately $168,000 on October 12, 2001.

     At July 31, 2001, the Company believes the allowance for doubtful accounts
is currently adequate for the size and nature of its receivables. Nevertheless,
delays in collection or uncollectability of accounts receivable could continue
to have an adverse effect on the Company's liquidity and working capital
position and require the Company to continually increase its allowance for
doubtful accounts.

     The Company has experienced a significant decrease in cash as a result of
funding the software development and integration business that was acquired. On
September 30, 2001, the Company had a cash balance of approximately $234,000.
Unless the Company can generate revenue streams or secure additional cash within
the next 60 to 90 days, management anticipates the Company may be unable to pay
its obligations as they come due.

DEFERRED REVENUE

     For the three months ended July 31, 2001, the Company had received $300,000
from PGE as part of the Pilot Program Agreement, which has been included in
deferred revenue on the balance sheet. Revenue from the Pilot Program Agreement
will be recognized over the period beginning August 1, 2001 and ending December
31, 2001. In addition, a certain amount of the payment received from PGE will be
treated as equity due to the warrant provision in the agreement. The Pilot
Program Agreement provides the Company with an aggregate of $1,050,000 in cash
through December 31, 2001, $800,000 of which has already been received for
services performed to date, and provides PGE with a warrant for 310,000 shares
of Common Stock.


                                       11
<PAGE>

                           PART II. OTHER INFORMATION

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

(a) Exhibits

Exhibit
Number             Description Of Exhibits
------             -----------------------

3.1      Amended and Restated Articles of Incorporation of Registrant. (Filed as
         an Exhibit to Amendment No. 1 to the Company's Registration Statement
         on Form SB-2 (No. 333-17681) filed March 3, 1996 and incorporated
         herein by reference.)

3.2      Amended and Restated By-laws of Registrant. (Filed as an Exhibit to
         Amendment No. 1 to the Company's Registration Statement on Form SB-2
         (No. 333-17681) filed March 3, 1996 and incorporated herein by
         reference.)

3.3      Articles of Amendment creating Series A Preferred Stock. (Filed as an
         Exhibit to the Company's Annual Report on Form 10-KSB for the year
         ended April 30, 2001 and incorporated herein by reference.)

3.4      Amendment to Amended and Restated Articles of Incorporation to increase
         the authorized shares of capital stock of Group Long Distance, Inc., to
         20,000,000 shares of no par value Preferred Stock and 100,000,000
         shares of no par value Common Stock. (Filed as an Exhibit to the
         Company's Annual Report on Form 10-KSB for the year ended April 30,
         2001 and incorporated herein by reference.)

10.32    Exchange Agreement dated April 13, 2001 by and between Group Long
         Distance, Inc. and Barbara Conrad. (Filed as an Exhibit to Form 8K on
         April 27, 2001 and incorporated herein by reference.)

10.33    Second Exchange Agreement dated April 13, 2001 by and between Group
         Long Distance, Inc. and Barbara Conrad. (Filed as an Exhibit to Form 8K
         on April 27, 2001 and incorporated herein by reference.)

10.34    Registration Rights Agreement dated April 13, 2001 by and between Group
         Long Distance, Inc. and Barbara Conrad. (Filed as an Exhibit to Form 8K
         on April 27, 2001 and incorporated herein by reference.)

10.35    Employment Agreement dated April 13, 2001 by and between Group Long
         Distance, Inc. and Jerry Conrad. (Filed as an Exhibit to Form 8K on
         April 27, 2001 and incorporated herein by reference.)

10.36    Employment Agreement dated April 13, 2001 by and between Group Long
         Distance, Inc. and Glenn S. Koach. (Filed as an Exhibit to Form 8K on
         April 27, 2001 and incorporated herein by reference.)

10.37    Warrant to Purchase 250,000 shares of Common Stock dated April 13, 2001
         issued by Group Long Distance, Inc. to Jerry Conrad. (Filed as an
         Exhibit to Form 8K on April 27, 2001 and incorporated herein by
         reference.)

10.38    Warrant to Purchase 250,000 shares of Common Stock dated April 13, 2001
         issued by Group Long Distance, Inc. to Glenn S. Koach. (Filed as an
         Exhibit to Form 8K on April 27, 2001 and incorporated herein by
         reference.)

10.39    Warrant to Purchase 200,000 shares of Common Stock dated April 13, 2001
         issued by Group Long Distance, Inc. to Quentra Networks, Inc. (Filed as
         an Exhibit to Form 8K on April 27, 2001 and incorporated herein by
         reference.)

10.40    Group Long Distance, Inc., 2001 Employee Stock Option Plan dated June
         13, 2001. (Filed as an Exhibit to the Company's Annual Report on Form
         10-KSB for the year ended April 30, 2001 and incorporated herein by
         reference.)

10.41    Lease agreement between Roswell Property LLC and HomeAccess MicroWeb,
         Inc., dated April 20, 2001. (Filed as an Exhibit to the Company's
         Annual Report on Form 10-KSB for the year ended April 30, 2001 and
         incorporated herein by reference.)

10.42    Pilot Program Agreement between Portland General Electric Company and
         Group Long Distance, Inc., dated August 29, 2001. (Filed as an Exhibit
         to the Company's Annual Report on Form 10-KSB for the year ended April
         30, 2001 and incorporated herein by reference.)

                                       12
<PAGE>

10.43    Proposed Interim Agreement between Portland General Electric Company
         and Group Long Distance, Inc., dated August 29, 2001. (Filed as an
         Exhibit to the Company's Annual Report on Form 10-KSB for the year
         ended April 30, 2001 and incorporated herein by reference.)

(b) Reports on Form 8-K

         On September 7, 2001, the Company filed a Form 8-K/A with the
Securities Exchange Commission in connection with its previously announced
acquisitions of HomeAccess MicroWeb, Inc., and HA Technology, Inc.

                                       13
<PAGE>


                                   SIGNATURES

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


                            GROUP LONG DISTANCE, INC.




October 16, 2001        By:                   /s/ JERRY CONRAD
                            ----------------------------------------------------
                                                Jerry Conrad,
                              CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
                                        (PRINCIPAL EXECUTIVE OFFICER)

October 16, 2001        By:                  /s/ GLENN S. KOACH
                            ----------------------------------------------------
                                               Glenn S. Koach,
                               DIRECTOR, PRESIDENT AND CHIEF OPERATING OFFICER

October 16, 2001        By:                   /s/ SAM D. HITNER
                            ----------------------------------------------------
                                               Sam D. Hitner,
                                           CHIEF FINANCIAL OFFICER
                                (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)

                                       14