<PAGE>

================================================================================


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


                                   FORM 10-QSB

(MARK ONE)
 [X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the quarterly period ended June 30, 2000

 [ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the transition period from __________ to __________


                        Commission File Number 0-28213


                             KANAKARIS WIRELESS
                          -----------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


            NEVADA                                               86-0888532
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                        3303 HARBOR BOULEVARD, SUITE F-3
                          COSTA MESA, CALIFORNIA 92626
                         -------------------------------
                    (Address of principal executive offices)


                                (714) 444-0530
                              -----------------
               (Issuer's Telephone Number, Including Area Code)


                         KANAKARIS COMMUNICATIONS, INC.
                        --------------------------------
               (Former Name, Former Address and Former Fiscal Year,
                        if Changed Since Last Report)

         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 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 outstanding of the registrant's only class of
common stock, $.001 par value per share, was 34,229,661 on August 9, 2000.



<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                       KANAKARIS WIRELESS AND SUBSIDIARIES
               (formerly known as Kanakaris Communications, Inc.)
                      Condensed Consolidated Balance Sheet
                                  June 30, 2000
                                   (Unaudited)

ASSETS
------

Current assets:
   Cash and cash equivalents                                      $     542,414
   Accounts receivable                                                   44,395
   Inventories                                                            2,784
   Advances to suppliers                                                    700
   Current maturities of notes receivable -
      shareholders and related parties                                  249,529
   Judgment receivable - current portion                                 85,417
   Interest receivable                                                    1,363
   Prepaid expenses                                                     244,220
                                                                  --------------

           Total current assets                                       1,170,822
                                                                  --------------

Property and equipment, net of accumulated
   depreciation and amortization                                         48,176
                                                                  --------------

Other assets:
   Notes receivable - shareholders and
      related parties - noncurrent                                      110,810
   Judgment receivable - noncurrent                                     119,583
   Security deposits                                                        700
   Film library - net of amortization                                   242,563
   Goodwill - net of amortization                                       330,172
                                                                  --------------

           Total other assets                                           803,828
                                                                  --------------

           Total assets                                           $   2,022,826
                                                                  ==============

     See accompanying notes to condensed consolidated financial statements.

                                       2


<PAGE>

                       KANAKARIS WIRELESS AND SUBSIDIARIES
               (formerly known as Kanakaris Communications, Inc.)
                      Condensed Consolidated Balance Sheet
                                  June 30, 2000
                                   (Unaudited)


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
-------------------------------------------------

Current liabilities:
   Accounts payable and accrued expenses                          $     442,103
   Convertible debentures                                             2,750,000
   Due to former shareholder of subsidiary                               80,160
                                                                  --------------

           Total current liabilities                                  3,272,263

Long-term liabilities:
   Royalties payable                                                     46,526
                                                                  --------------

           Total liabilities                                          3,318,789
                                                                  --------------

Stockholders' equity (deficiency):
   Preferred stock, $0.01 par value; 5,000,000 shares
       authorized; 1,000,000 Class A Convertible issued
       and outstanding                                                   10,000
   Common stock, $0.001 par value; 1,000,000,000
       shares authorized; 33,098,961 issued and
       outstanding                                                       33,099
   Additional paid-in capital                                        17,322,960
   Accumulated deficit                                              (18,660,762)
   Less subscription receivable
       (1,260,000 shares, common)                                        (1,260)
                                                                  --------------

           Total stockholders' equity (deficiency)                   (1,295,963)
                                                                  --------------

           Total liabilities and
           stockholders' equity (deficiency)                      $   2,022,826
                                                                  ==============

     See accompanying notes to condensed consolidated financial statements.

                                       3


<PAGE>
<TABLE>

                                           KANAKARIS WIRELESS AND SUBSIDIARIES
                                   (formerly known as Kanakaris Communications, Inc.)
                                     Condensed Consolidated Statements of Operations
                                                       (Unaudited)
<CAPTION>
                                                          Three Months       Three Months         Nine Months         Nine Months
                                                             Ended              Ended                Ended              Ended
                                                            June 30,           June 30,             June 30,           June 30,
                                                             2000               1999                 2000               1999
                                                       ----------------   ----------------    ----------------    ----------------
<S>                                                    <C>                <C>                 <C>                 <C>
Net sales                                              $        51,970    $       415,968     $       253,112     $       772,167

Cost of sales                                                   26,508            282,430             204,419             485,272
                                                       ----------------   ----------------    ----------------    ----------------

           Gross profit                                         25,462            133,538              48,693             286,895
                                                       ----------------   ----------------    ----------------    ----------------

Operating expenses:
   Executive compensation                                      130,268             84,346             326,380             295,658
   Salaries                                                     62,526             20,671             174,988              69,125
   Payroll taxes and employee benefits                          24,766              4,541              50,973              11,539
   Consulting services                                         677,460            977,233           2,583,195           1,195,873
   Royalties                                                       -               27,577               2,333              35,852
   Travel and entertainment                                     59,400             40,148             144,332              52,034
   Telephone and utilities                                      17,331             (4,605)             42,784              15,579
   Marketing, advertising and investor relations             1,204,538            106,498           2,093,300             257,270
   Professional fees                                           219,356            226,815           1,335,014             393,815
   Rent                                                          7,761              5,632              19,540              19,828
   Office and other expenses                                    13,250             11,125              31,871              35,651
   Equipment rental and expense                                    713              1,267               2,932               3,535
   Insurance                                                    18,184              9,652              38,341              11,665
   Depreciation and amortization                                13,413              7,023              35,803              22,483
   Taxes - other                                                   383                -                 6,436                 215
   Bank charges                                                  1,127              1,489               2,411               2,817
   Miscellaneous                                                27,247             (1,467)             77,191              29,429
                                                       ----------------   ----------------    ----------------    ----------------

           Total operating expenses                          2,477,723          1,517,945           6,967,824           2,452,368
                                                       ----------------   ----------------    ----------------    ----------------

       Loss before interest and other income
           (expense)                                        (2,452,261)        (1,384,407)         (6,919,131)         (2,165,473)

       Financing and other income (expense), net            (2,406,405)            14,104          (3,377,491)             12,012
                                                       ----------------   ----------------    ----------------    ----------------

       Net loss                                        $    (4,858,666)   $    (1,370,303)    $   (10,296,622)    $    (2,153,461)
                                                       ================   ================    ================    ================

       Net loss per common share -
          basic and diluted                            $          (.18)   $          (.06)    $          (.35)    $         (.099)
                                                       ================   ================    ================    ================

       Weighted average common shares
          outstanding - basic and diluted                   28,069,151         23,687,314          29,326,819          21,786,418
                                                       ================   ================    ================    ================

                         See accompanying notes to condensed consolidated financial statements.
</TABLE>

                                                           4


<PAGE>
<TABLE>
                                KANAKARIS WIRELESS AND SUBSIDIARIES
                         (formerly known as Kanakaris Communications, Inc.)
                           Condensed Consolidated Statements of Cash Flows
                          For the Nine Months Ended June 30, 2000 and 1999
                                             (Unaudited)
<CAPTION>
                                                                   2000               1999
                                                              --------------     --------------
<S>                                                           <C>                <C>
Cash flows from operating activities:
   Net loss                                                   $ (10,296,622)     $  (2,153,461)
   Adjustments to reconcile net loss
       to net cash used in operating activities:
           Amortization of goodwill                                  19,975              4,275
           Depreciation and amortization                             15,828              4,968
           Write off of organizational costs                          1,451                  -
           Income from judgment                                    (250,000)                 -
           Compensation, consulting, marketing and
             professional services, incurred in exchange
             for common stock and treasury stock                  4,157,650          1,488,473
           Income from forgiveness of debt                                -            (26,607)
           Convertible debt - marketing cost                        520,000                  -
           Convertible debt-financing costs                       2,977,500                  -
           Convertible debt-interest cost                           128,625                  -
   Changes in assets and liabilities
       (Increase) decrease in:
              Accounts receivable                                   109,715            (21,256)
              Inventory                                              (2,784)            (1,313)
              Prepaid expenses                                     (183,407)           (17,779)
              Advances to suppliers and security deposits                 -             (5,703)
              Interest receivable                                     1,041              8,548
       Increase (decrease) in:
              Accounts payable and accrued expenses                (491,107)            97,931
              Due to former shareholder of subsidiary                     -             31,083
              Royalties payable                                      46,526             18,009
              Customer deposits                                           -            (29,427)
              Other current liabilities                                   -             10,900
                                                              --------------     --------------

           Net cash used in operating activities                 (3,245,609)          (591,359)
                                                              --------------     --------------

Cash flows from investing activities:
   Purchase of property and equipment                               (26,671)           (20,900)
   Loans to shareholders and related parties                       (175,000)                 -
   Decrease in notes receivable -
      shareholders and related parties                               61,694             34,900
   Proceeds from judgment receivable                                 45,000                  -
   Acquisition of film                                             (242,563)                 -
                                                              --------------     --------------

           Net cash provided by investing activities               (337,540)            14,000
                                                              --------------     --------------

Cash flows from financing activities:
   Payment of notes payable                                               -            (20,867)
   Proceeds from notes payable - stockholders                        54,500                  -
   Payments on notes payable - stockholders                         (54,500)                 -
   Proceeds from convertible debt                                 3,817,500            150,000
   Proceeds from sale of common stock                                   416              3,726
   Proceeds from additional paid in capital                         152,584            639,786
                                                              --------------     --------------

           Net cash provided by financing activities              3,970,500            772,645
                                                              --------------     --------------

Net increase in cash and cash equivalents                           387,351            195,286

Cash and cash equivalents, beginning of period                      155,063              5,415
                                                              --------------     --------------

Cash and cash equivalents, end of period                      $     542,414      $     200,701
                                                              ==============     ==============
</TABLE>

                                                  5


<PAGE>

Supplemental disclosure of non-cash investing and financing activities:

During the nine months ended June 30, 2000, the Company issued 3,354,752 shares
of common stock for consulting, marketing and professional services having a
fair value of $4,113,250.

The Company distributed 99,024 of shares of treasury stock and issued 10,000
shares of common stock for compensation of $32,000 and $12,400, respectively.

The Company recorded a judgment receivable in the amount of $250,000 which
represented a legal settlement (see legal actions section of commitments and
contingencies notes).


     See accompanying notes to condensed consolidated financial statements.

                                       6


<PAGE>
<TABLE>

                                           KANAKARIS WIRELESS AND SUBSIDIARIES
                                   (formerly known as Kanakaris Communications, Inc.)
                     Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                                         For the Nine Months Ended June 30, 2000
                                                       (Unaudited)
<CAPTION>

                           Common Stock Issued     Preferred Stock
                         --------------------- --------------------              Accumulated   Treasury     Stock
                            Shares     Amount    Shares     Amount     APIC        Deficit      Stock    Subscriptions     Total
                         ------------ ------- ------------ ------- ------------ ------------- ---------- ------------- -------------
<S>                        <C>        <C>        <C>       <C>     <C>          <C>           <C>        <C>           <C>
Balances
September 30, 1999         25,958,050 $25,958    1,000,000 $10,000 $ 7,907,746  $ (8,364,140) $(201,920) $     (1,260) $   (623,616)

   Stock issued for cash:     416,000     416            -       -     152,584             -          -             -       153,000

   Stock issued for:
     Accounts payable          73,516      73            -       -      52,935             -          -             -        53,008
     Compensation              10,000      10            -       -    (157,530)            -    201,920             -        44,400
     Consulting services    1,816,000   1,816            -       -   1,892,209             -          -             -     1,894,025
     Marketing, advertising
       and investor
       relations            1,090,236   1,091            -       -   1,277,126             -          -             -     1,278,217
     Professional
       services               375,000     375            -       -     887,625             -          -             -       888,000

   Converted debentures     3,360,159   3,360            -       -   2,332,765             -          -             -     2,336,125

   Convertible debt -
     financing costs                -       -            -       -   2,977,500             -          -             -     2,977,500

   Net (loss)                       -       -            -       -           -   (10,296,622)         -             -   (10,296,622)
                         ------------ ------- ------------ ------- ------------  ------------ ---------- ------------- -------------

Balances
June 30, 2000              33,098,961 $33,099    1,000,000 $10,000 $17,322,960  $(18,660,762) $       -  $     (1,260) $ (1,295,963)
                         ============ ======= ============ ======= ============ ============= ========== ============= =============

                                See accompanying notes to condensed consolidated financial statements.

                                                                               7
</TABLE>


<PAGE>

                       KANAKARIS WIRELESS AND SUBSIDIARIES
               (formerly known as Kanakaris Communications, Inc.)
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Basis of presentation
---------------------

The condensed consolidated financial statements included herein have been
prepared by Kanakaris Wireless, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The Company
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the Company's financial statements for
the year ended September 30, 1999. The financial information presented reflects
all adjustments, which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented. The results of
operations for the three and nine months ended June 30, 2000 are not necessarily
indicative of the results to be expected for the full year ending September 30,
2000, or any other period.

Business Organization and Activity
----------------------------------

Kanakaris Wireless (formerly Big Tex Enterprises, Inc.) (the "Company") was
incorporated in the State of Nevada on November 1, 1991. The Company develops
and supplies internet products for electronic commerce and operates a subsidiary
which designs and installs modular consoles.

Business Combinations
---------------------

On October 10, 1997 (the "Acquisition Date"), Kanakaris Internetworks, Inc.
("KIW") consummated a Stock Purchase Agreement with the shareholder (the
"Seller") of Desience Corporation ("Desience") to purchase 10,000 common shares
representing 100% of its issued and outstanding common stock in exchange for a
4% royalty on the gross sales (after collection) of Desience subsequent to the
Acquisition Date, to be paid monthly for as long as Desience remains in business
or its products are sold. Pursuant to APB 16, since the Seller has no continuing
affiliation with the Company, the 4% royalty is accounted for as an increase to
goodwill at the date the amount is determinable. KIW will hold harmless the
Seller from any claims, causes of action, costs, expenses, liabilities and prior
shareholder advances. Immediately following the exchange, Desience became a
wholly-owned subsidiary of KIW.

On November 25, 1997, KIW and its stockholders (the ("Stockholders") consummated
an acquisition agreement with Big Tex Enterprises, Inc. ("Big Tex"), an inactive
public shell with no recent operations at that time, whereby the stockholders
sold all of their preferred and common stock, which represented 100% of KIW's
issued and outstanding capital stock, to Big Tex in exchange for 7,000,000
shares (6,000,000 common, 1,000,000 preferred) of Big Tex's restricted stock,
representing 66.67% of the issued and outstanding common stock and 100% of the
issued and outstanding preferred stock of Big Tex, aggregating 75% of the total
voting rights (the "Exchange"). Big Tex was founded in 1991 for the purpose of
lawful business or enterprise, but had been inactive since 1991. Immediately
following the Exchange, the Company changed its name to Kanakaris
Communications, Inc., which was subsequently changed to Kanakaris Wireless on
June 2, 2000.

                                       8


<PAGE>

Principles of Consolidation
---------------------------

The accompanying consolidated financial statements include the accounts of the
Company, and its wholly-owned subsidiaries Kanakaris Internetworks, Inc. and
Desience Corporation. All significant intercompany balances and transactions
have been eliminated in consolidation.

Earnings Per Share
------------------

Earnings per share are computed using the weighted average of common shares
outstanding as defined by Financial Accounting Standards No. 128, "Earnings Per
Share".

NOTES RECEIVABLE SHAREHOLDERS AND RELATED PARTIES
-------------------------------------------------

During the three months ended June 30, 2000, the Company issued $175,000 of
notes to two stockholders. Principal and interest is due prior to May 2001.

COMMITMENTS AND CONTINGENCIES
-----------------------------

Leases
------

On October 8, 1998 the Company, as subtenant, entered into a sublease agreement
with the existing tenant commencing on October 15, 1998. The term of the
sublease is through and including the end of the original term of the tenant's
lease of the premises, which is August 20, 2000. The monthly rent on this
sublease is $1,512 through August 20, 1999 at which time it increased to $1,579
a month until August 20, 2000. Upon the termination of this lease, the Company
will lease the facilities on a month-to-month basis.

Legal Actions
-------------

On August 5, 1999, the Company filed a complaint in the Los Angeles Superior
Court against its former securities attorney along with 20 unnamed defendants
claiming damages for breach of contract, conversion fraud and deceit and
negligence. This complaint arises out of the alleged transfer of certain funds
without the Company's authorization to an unknown entity by named and possible
unnamed defendants. In January of 2000, this complaint was settled for $250,000,
receivable over a 3 year period, at $5,694 per month.

On September 15, 1999, an individual filed a complaint against the Company and
the executive who is the Chairman of the Board, President and Chief Executive
Officer in Los Angeles Superior Court alleging breach of contract and fraud. The
fraud claim was based primarily on alleged misrepresentation and concealment
involving a consulting agreement between the Company and the individual. The
individual alleged that he is entitled to certain stock options, of which 75% of
the option price allegedly is already deemed paid in exchange for services
allegedly rendered to the Company. The individual is attempting to exercise the
options for the purchase of a certain number of shares to which he claims to be
entitled pursuant to the agreement. The Company has engaged counsel to analyze
the complaint and vigorously defend the Company against all of the claims. The
case has been submitted for mediation, and a hearing is scheduled for August 31,
2000. The claim against the Company executive has been dismissed.

On October 14, 1999, an Illinois corporation filed suit against the Company and
the Company's stock transfer agent and registrar, in the Circuit Court of Cook
County, Illinois. The case was removed to the United States District Court for
the Northern District of Illinois, Eastern Division. In the complaint, the
Illinois Corporation sought damages in excess of $50,000 under breach of
contract and various other state law theories in connection with the Company's
unwillingness to permit them to transfer shares of the Company's common stock
held by the Illinois Corporation. The Company believes that the shares were

                                       9


<PAGE>

wrongfully converted by a predecessor to the Illinois Corporation. The Company
engaged counsel to analyze the complaint and vigorously defend the Company
against all claims. The Company has counterclaimed and commenced a third-party
action against affiliates of the Illinois Corporation. A separate action was
filed in Utah, but the Utah court stayed in favor of the action currently
pending in Illinois. The United States District Court is currently holding the
stock at issue until the dispute is resolved.

In the normal course of business, there may be various other legal actions and
proceedings pending which seek damages against the Company. Management believes
that the amounts if any, that may result from these claims, will not have a
material adverse effect on the financial statements.

Letters of Intent
-----------------

On November 1, 1999 the Company signed a Memorandum of Understanding with
SyCoNet.Com, Inc. ("SyCoNet"). SyCoNet will make available all properties which
it has internet online distribution rights to, both now and in the future, for
direct over-the internet delivery by the Company. The Company will incur
encoding and bandwidth charges for those properties which it exercises its
option to deliver over the internet, and will pay SyCoNet 70% of the online
access gross fees and 25% of the product specific gross advertising fees
pertaining to this product.

On November 9, 1999, the Company signed a Memorandum of Understanding with Lain
International ("Lain"). Lain will make available to the Company all Spanish
language, Spanish dubbed and Spanish sub-titled films for which it has internet
distribution rights. The Company will create a KKRS web channel devoted
exclusively to these titles. The Company will maintain web visit status,
accounting, and will pay Lain its royalties on at least a quarterly basis, an
amount of 50% of the gross share of advertising, subscription and pay-per-view
fees for the channel devoted to Lain films, minus 50% of encoding, bandwidth and
advertising charges.

License Agreement
-----------------

On February 18, 1999, the Company entered into a License Agreement ("Agreement")
with ION Systems, Inc. ("ION"), a Missouri corporation. The Agreement is through
December 31, 2004, and thereafter will be renewed automatically for additional
renewal terms of five years each, ending on December 31 of each fifth year.
Under the terms of the Agreement, ION grants to the Company a license to use its
products, the E*Web and the X*Maker computer software enabling the secure
downloading and viewing of web sites, for or in connection with the Company's
web sites. The two parties agreed that the software may be used solely for the
publishing, displaying, promoting, marketing, offering and selling for a fee of
certain specified book categories as well as of products or services listed in
the books published. The aforementioned activities are meant to be offered
directly to customers and end users using the facilities of a web site. No
geographic or territorial restrictions apply to the use of the software. The
agreed fee for each book conversion performed by ION will be $100, and the
royalties for each book sale and product sale shall be 12% and 5%, respectively,
of the gross revenue. Furthermore, ION shall have the right to buy 100,000
shares of the Company's common stock at a price of $0.30 per share at any time
between June 1, 1999 and December 31, 2005, 175,000 shares at $.01 until May 1,
2003, and 87,500 shares at $1.295 until May 1, 2003.

In addition, on May 23, 2000, the Company agreed to pay ION $55,000 for software
which will provide for the sale of electronic books online. As of June 30, 2000,
the required payment under this agreement was paid and charged to cost of sales
account.

                                       10


<PAGE>

Service Agreements
------------------

The Company signed an agreement with ValueClick in January of 2000 whereby
ValueClick will drive advertisers to the Kanakaris web site. The Company
receives $.20 each time a customer clicks on a ValueClick-served ad. The Company
will also receive $.03 per click whenever a customer clicks on a KKRS-referred
web site.

In February 2000, the Company entered into an agreement with Wave Systems Corp.,
which provides the transactional capability to enable Kanakaris Wireless to
implement the subscription and pay-per-view revenue collection portion of its
Internet based business plan.

On March 1, 2000, the Company entered into a one-year agreement with Sonar
Network, (a business unit of DoubleClick, Inc. to sell media space on the
Company's various web sites for the display of advertising. The Company will
receive fifty percent (50%) of the net revenues generated from the sale
of advertisement.

In June 2000, the Company entered into a one year agreement with the Fortino
Group, Inc. Based upon the terms of the contract, the Fortino Group will provide
media relations services in connection with the marketing and promotion of the
Company's business, products and/or services. The Company will pay approximately
$300,000 for these services. As of June 30, 2000, $100,000 of this amount has
been paid and charged to operations.

Internet Data Center Services Agreements
----------------------------------------

Effective August 9, 1999, the Company entered into an agreement with Microsoft
Corporation whereby Microsoft will promote certain of the Company's web sites in
consideration for the Company's promotion of specified Microsoft Windows Media
Technology on the Company's web sites through December 30, 2001. No expense or
income has been recorded by the Company relating to this agreement because under
APB No. 29, Accounting For Non-monetary Transactions, the fair values of such
web site promotions are not determinable within reasonable limits.

On August 23, 1999, the Company entered into a one-year agreement with
ScreamingMedia, Inc. to receive daily customized content update for the
Company's web site. Under the terms of this agreement, the Company will pay
ScreamingMedia $12,000, of which $3,000 was paid in August 1999. The balance of
$9,000 is payable in twelve monthly installments of $750.

On November 17, 1999, and effective December 7, 1999, the Company entered into
an agreement with Microsoft Corporation. Microsoft will assist the Company with
the development of an audio/video enhanced Website which delivers timely and
relevant audiovisual content using Windows Media Technologies in a broadband
network infrastructure.

On March 6, 2000, the Company entered into a one year Jumpstart Program
Agreement with Microsoft whereby Microsoft will assist the Company with the
development of an audio/video enhanced Web site which delivers timely and
relevant audio/visual content. No expense or income has been recorded by the
Company relating to this agreement because under APB No. 29, Accounting For
Non-monetary Transactions, the fair values of such web site promotions are not
determinable within reasonable limits.

                                       11

<PAGE>

On March 10, 2000 the Company entered into a Webcast Distribution agreement with
iBeam Broadcasting Corporation ("iBeam"). iBeam will distribute and promote
certain portions of Kanakaris content and Internet web sites.

On April 20, 2000 the Company entered into a distribution agreement with John
Clark for the Internet distribution rights to his book "Dead Angel" which
pertain to Clark's relationship to Jerry Garcia. Kanakaris will pay $7,000 to
support completion of the book and $6,000 in expenses for promotional interviews
with Cliff Garcia and others as well as a promotional party to be webcast on the
Kanakaris web site and made into a videotape.

In consideration of this Clark agrees to pay to the Company in perpetuity a 50%
royalty of the gross sales of the book on the Internet and for two years to pay
to the Company 50% of all royalties generated by the book, and the interview and
party video, as well as all other ancillary rights.

In June of 2000, the Company entered into a six month agreement with Stockcom
International, Inc. whereby the Company will receive various advertisement
services in exchange for $28,000, $4,000 due upon signing and $4,000 per month
thereafter.

In May of 2000, the Company entered into an agreement with Meiselman-Rede Media
Group ("MRMG"). Based upon the terms of the agreement, the Company paid MRMG
$100,000 in exchange for the future Internet distribution rights to the first
sixteen (16) two (2) minute duration episodes of a project known as Paris Falls.
The $100,000 payment has been accounted for as a prepaid expense since the
Company has not received any of the episodes as of June 30, 2000.

Internet Content Provider Agreements
------------------------------------

Effective August 1, 1999, the Company entered into an agreement with InXsys
Corporation ("InXsys") granting the Company the right to incorporate InXsys's
Aggregated ClassiFIND On-Line Classifieds, and Buy Sell Bid On-Line Personals
co-branded services as revenue-generating and traffic-building content within
the Company's web site by placement of one or more hotlinks and/or banners to
the InXsys sites. Under the terms of this agreement, the Company shall receive a
referral commission equal to a percentage, as defined in the agreement, of the
net user fees collected.

On May 29, 2000, the Company entered into an agreement with Tribune Media
Services, Inc. ("TMS"). Under the agreement TMS will provide movie title and
background information to be viewed in conjunction with the Company's on line
movies. The agreement is for 600 movies for a fee of $2.50 per movie.

Letter of Intent - Financial Services
-------------------------------------

On October 21, 1999, the Company entered into an agreement with eConnect to
enter into a joint venture and strategic alliance to be called Internet Cash
Programming ("ICP"). ICP will enable the consumer the ability to purchase
programming by Same-as-Cash, or by Enhanced Credit Card payments. ICP shall be
formed as a Nevada Corporation and shall authorize 1,000,000 shares of stock of
which the Company will receive 400,000 shares, eConnect will receive 400,000
shares and 200,000 shares will remain in ICP treasury. The Company shall retain
managing control of ICP. All profits of ICP will be equally split between
eConnect and the Company.

                                       12

<PAGE>

REVOLVING LINE OF CREDIT
------------------------

On February 25, 1999, the Company entered into a Revolving Line of Credit
Agreement (the "Agreement") with Alliance Equities Inc. ("Alliance"), a
Florida-based venture capital firm which expires December 10, 2001. Under the
terms of the Agreement, Alliance has made available a $7 million revolving line
of credit with interest on the unpaid principal at 10% per annum. The funds from
the line of credit will enable the Company to pursue current Internet
opportunities and commerce development. Under the terms of the Agreement the
Company may draw up to $500,000 per month on the total line of credit upon
written request by the Company to the lender. Additionally the parties have
agreed that any portion of the indebtedness may be paid back by the Company
either with cash or by the issuance of common stock. Furthermore, in a separate
memorandum of agreement the two parties agreed that Alliance will provide
ongoing consulting services to the Company including, but not limited to,
strategic growth advice and introductions, marketing advice, and business ideas.
Alliance will be compensated for these services at the option of the Company
either in cash, or through the issuance of stock or credit towards the purchase
of stock.

STOCK OPTION PLAN
-----------------

In May 2000, the Board of Directors and stockholders approved a stock option
plan (the "2000 Plan"). The 2000 Plan is designed to offer an incentive-based
compensation system to employees, officers and directors of the Company, and to
employees of companies which do business with Company. The 2000 Plan provides
for the grant of incentive stock options and non-qualified stock options. A
total of 3,000,000 shares of common stock are authorized for issuance under the
Plan. In May 2000, the Company granted to various officers, directors and
employees options to purchase an aggregate of 2,037,500 shares of common stock
under the 2000 Plan. (See subsequent events notes.)

NON-QUALIFIED STOCK OPTIONS
---------------------------

On December 31, 1999 the Company granted 4,220,000 non-qualified options at a
price of $.52 which will expire on December 31, 2009. 3,645,000 options were
granted to officers and 575,000 options were granted to certain shareholders.
The option price of a share of stock was the fair market value on the day of
grant.

On January 13, 2000 the Company granted 330,000 non-qualified options to two
shareholders of the Company at a price of $1.31 which will expire on January 13,
2010. The option price of a share of stock was the fair market value on the day
of grant.

CONVERTIBLE DEBT
----------------

Alliance Equities
-----------------

In order to provide working capital and financing for the Company's expansion,
on August 5, 1999 the Company entered into an agreement with Alliance Equities
(the "Purchaser") whereby the Purchaser acquired $520,000 of the Company's 10%
Convertible Subordinated Debentures, due August 4, 2000.

The debentures contained a contingency provision whereby, if the Company issued
common stock at a price less than both the fixed conversion price and the then
market price on the date of issuance, the fixed conversion price would be
adjusted as stipulated in the agreement. Pursuant to the Rules and Regulations
of the Securities and Exchange Commission regarding beneficial conversion
features, the Company has expensed as financing costs any excess of the fair
market value of the common stock at the debenture issuance date over the fixed
conversion price, which amounted to $130,000. There is no amortization period
for these financing costs since the debentures were convertible immediately upon
issuance.

                                       13

<PAGE>

On January 5, 2000 the Company filed an amended registration statement on Form
SB-2 whereby 866,667 shares were registered for resale by Alliance Equities.
This registration statement was declared effective by the Securities and
Exchange Commission on January 11, 2000. Subsequently, these convertible
debentures were converted into common stock. These shares were carried over onto
a subsequent registration statement on Form SB-2 that was declared effective by
the SEC on July 5, 2000.

NIR GROUP - INVESTORS
---------------------

In order to provide working capital and financing for the Company's expansion,
on September 27, 1999 the Company entered into an agreement with investors
introduced by the NIR Group (the "Purchaser") whereby the Purchaser acquired
$550,000 of the Company's 10% Convertible Subordinated Debentures, due September
29, 2000.

The debentures contained a contingency provision whereby, if the Company issued
common stock at a price less than both the fixed conversion price and the then
market price on the date of issuance, the fixed conversion price would be
adjusted as stipulated in the agreement. Pursuant to the Rules and Regulations
of the Securities and Exchange Commission regarding beneficial conversion
features, the Company has expensed as financing costs any excess of the fair
market value of the common stock at the debenture issuance date over the fixed
conversion price, which amounted to $357,500. There is no amortization period
for these financing costs since the debentures were convertible immediately upon
issuance.

On January 5, 2000 the Company filed an amended registration statement on Form
SB-2 whereby 916,667 shares were registered for resale by the Purchaser. This
registration statement was declared effective by the Securities and Exchange
Commission on January 11, 2000. Subsequently, these convertible debentures were
converted into common stock.

                                       14


<PAGE>

In order to provide working capital and financing for the Company's expansion,
on February 4, 2000 the Company entered into an agreement with investors
introduced by the NIR Group (the "Purchaser") whereby the Purchaser acquired
$1,000,000 of the Company's 10% Convertible Debentures, due February 1, 2001.
The Purchaser also acquired warrants to purchase an aggregate of 300,000 shares
of common stock at an initial exercise price of $1.90 per share.

The debentures are convertible into common stock at a rate equal to the lowest
of $.97 or 66.66% of the average closing bid price for the common stock during
the 20 trading days immediately preceding the conversion date. The debentures
contain a contingency provision whereby, if the Company issues common stock at a
price less than both the fixed conversion price and the then market price on the
date of issuance, the fixed conversion price shall be adjusted as stipulated in
the agreement. Pursuant to the Rules and Regulations of the Securities and
Exchange Commission regarding beneficial conversion features, the Company has
expensed as financing costs any excess of the fair market value of the common
stock at the debentures issuance date over the conversion price, which amounted
to $925,000. There is no amortization period for these financing costs since the
debentures were convertible immediately upon issuance.

On March 3, 2000 the Company filed a registration statement on Form SB-2 whereby
2,568,046 shares were being registered for resale by the Purchaser. This
registration statement was declared effective by the Securities and Exchange
Commission on March 27, 2000. Subsequently, all of these debentures have been
converted into common stock.

In order to provide working capital and financing for the Company's expansion,
in April 2000 the Company entered into an agreement with investors introduced by
the NIR Group (the "Purchaser") whereby the Purchaser acquired $3,000,000 of the
Company's 10% Convertible Debentures, due May 1, 2001. The Purchaser also
acquired warrants to purchase an aggregate of 900,000 shares of common stock at
an initial exercise price of $1.90 per share. The Company has filed a
registration statement on Form SB-2 whereby the shares of common stock
underlying the debentures and warrants were registered for resale by the
Purchaser. As of June 30, 2000, $250,000 of these debentures and interest
thereon were converted into 390,622 shares of the Company's common stock.

The debentures are convertible into common stock at a rate equal to the lowest
of $.97 or 66.66% of the average closing bid price for the common stock during
the 20 trading days immediately preceding the conversion date. The debentures
contain a contingency provision whereby, if the Company issues common stock at a
price less than both the fixed conversion price and the then market price on the
date of issuance, the fixed conversion price shall be adjusted as stipulated in
the agreement. Pursuant to the Rules and Regulations of the Securities and
Exchange Commission regarding beneficial conversion features, the Company has
expensed as financing costs any excess of the fair market value of the common
stock at the debentures issuance date over the conversion price, which amounted
to $1,760,000. There is no amortization period for these financing costs since
the debentures were convertible immediately upon issuance.

                                       15


<PAGE>

<TABLE>

SEGMENT INFORMATION
-------------------
<CAPTION>
                                          Internet         Modular
                                          Commerce         Consoles          Total
                                       -------------    -------------    -------------
For the nine months ended June 30:

<S>                                    <C>              <C>              <C>
1999
----
   Revenues                            $     31,048     $    741,119     $    772,167
   Segment profit (loss)                 (2,281,492)         128,031       (2,153,461)
   Total assets                             737,348          282,641        1,019,989
   Additions to long-lived assets            20,900                -           20,900
   Depreciation and amortization             20,833            1,650           22,483

2000
----
   Revenues                            $     16,843     $    236,269     $    253,112
   Segment (loss)                       (10,209,535)         (87,087)     (10,296,622)
   Total assets                           1,983,588           39,238        2,022,826
   Additions to long-lived assets            24,515            2,156           26,671
   Depreciation and amortization             13,533            2,295           15,828

For the three months ended June 30:

1999
----
   Revenues                            $      5,833     $    410,135     $    415,968
   Segment profit (loss)                 (1,500,974)         130,671       (1,370,303)
   Total assets                             737,348          282,641        1,019,989
   Additions to long-lived assets            20,494                -           20,494
   Depreciation and amortization             18,589              550           18,039

2000
----
   Revenues                            $      5,835     $     46,135     $     51,970
   Segment profit (loss)                 (4,815,727)         (42,939)      (4,858,666)
   Total assets                           1,983,588           39,238        2,022,826
   Additions to long-lived assets            16,680            2,156           18,836
   Depreciation and amortization              8,141            1,530            9,671

</TABLE>

YEAR 2000 COMPLIANCE
--------------------

The Company is aware of the issues associated with the programming code in
existing computer systems caused by the arrival of the millennium ("Year 2000").
Year 2000 issues may affect the Company's products as the products are primarily
computer related. The Company's products have been developed and tested with
regard to Year 2000 compliance. All products were deemed to be Year 2000
compliant. The costs of such development and testing and validating were minimal
and absorbed as part of the Company's normal quality control procedures. We have
not experienced any significant problems as a result of the arrival of the Year
2000. Although no significant problems have materialized to date, we will
continue to monitor our systems throughout the Year 2000.

PREFERRED STOCK
---------------

At a special meeting of the Company's stockholders held on May 24, 2000, the
holders of the Company's convertible preferred stock and common stock agreed to
amend the Company's Articles of Incorporation so that the voting rights of the
convertible preferred stock were increased from 3 votes per share to 20 votes
per share. As a result of this increase in voting rights, the Chairman of the
Board, who is President and Chief Executive Officer, became entitled to exercise
voting control over the Company.

SUBSEQUENT EVENTS
-----------------

Letter of Intent
----------------

On August 3, 2000, the Company executed a non-binding letter of intent relating
to the acquisition of all of the outstanding shares of stock of PCS Link, Inc.,
a California Corporation dba Greenwood & Hall. The letter of intent provides,
among other things, that the Company would issue 3,000,000 shares of restricted
common stock to the sellers at the closing and would be obligated to issue an
additional 2,000,000 shares of restricted common stock approximately one year
later if certain performance criteria were met. In addition, the letter of
intent provides that the Company would be required to provide Greenwood & Hall
with working capital of $1,200,000 over the next twelve months.

Stock option plan
-----------------

Effective August 2, 2000, the Company's board of directors approved the grant to
various officers, directors and employees of options to purchase up to 962,500
shares of common stock pursuant to the Company's 2000 Plan.

                                       16

<PAGE>

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

         This Quarterly Report on Form 10-QSB contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
we intend that such forward-looking statements be subject to the safe harbors
created thereby.

         We have incurred significant losses since our inception. As of June 30,
2000, we had an accumulated deficit of $18,660,762. We expect to incur
substantial operating losses for the foreseeable future. Our results of
operations have been and may continue to be subject to significant fluctuations.
The results for a particular period may vary due to a number of factors, many of
which are beyond our control, including:

         o        the timing and nature of revenues from our Internet and
                  e-commerce businesses and data control console product sales
                  that are recognized during any particular quarter;
         o        the impact of price competition on our average prices for our
                  products and services;
         o        market acceptance of new product or service introductions by
                  us or our competitors;
         o        the timing of expenditures in anticipation of future sales;
         o        product returns;
         o        the financial health of our customers;
         o        the overall state of the Internet and e-commerce industries
                  and the data control console industry; and
         o        economic conditions generally.

         Any of these factors could cause operating results to vary
significantly from prior periods and period-to-period. As a result, we believe
that period-to-period comparisons of our results of operations are not
necessarily meaningful and should not be relied upon as any indication of future
performance. Fluctuations in our operating results could cause the price of our
common stock to fluctuate substantially.

         The information contained in this report is not a complete description
of our business or the risks associated with an investment in our company's
common stock. Before deciding to buy or maintain a position in our common stock,
you should carefully review and consider the various disclosures made by us in
this report and in other materials we have filed with the Securities and
Exchange Commission, including our Form SB-2/A No. 1 dated June 30, 2000 (and,
in particular, in the "Risk Factors" section therein), that discusses our
business in greater detail and that also discloses various risks, uncertainties
and other factors that may affect our business, results of operations or
financial condition.

         Assumptions relating to the forward-looking statements involve
judgments with respect to, among other things, future economic, competitive and
market conditions, all of which are difficult or impossible to predict
accurately, and many of which are beyond our control. In addition, our business
and operations are subject to significant risks which increase the uncertainty
inherent in the forward-looking statements. In light of this, the inclusion of
forward-looking information should not be regarded as a representation or
guarantee by us or any other person that our objectives or plans will be
achieved.

                                       17

<PAGE>

OVERVIEW

         We are an Internet-based provider of online delivery of films and
books. Our Internet web site, www.KKRS.Net, is the portal to all of the
proprietary content and web sites of our company. Our films are accessible by
Internet users at access rates from 56K to broadband. We have over 300 on-demand
movies available with full-screen scalability and television quality. We have
over 400 books online available. The books feature re-sizable type, the ability
to turn pages without scrolling and the ability to search by word or phrase. In
August 2000, we introduced a unique system whereby authors and publishers may
interactively post books online for secure Internet distribution.

         In addition to our Internet and e-commerce businesses, we design,
manufacture and install ergonomic data control console systems for high-end
computer command centers used by governmental agencies and Fortune 500 and other
companies. Our customers include NASA, the Federal Bureau of Investigation, the
United States Navy, Bank of America, Mitsubishi and many others.

         Our company is a Nevada corporation that was incorporated on November
1, 1991 and is the sole stockholder of Kanakaris InternetWorks, Inc. Kanakaris
InternetWorks, Inc. is the sole stockholder of Desience Corporation. Our common
stock is currently traded on the OTC Bulletin Board under the ticker symbol
"KKRS."

         To date, substantially all of our revenues have been derived through
sales of our data control console systems. Our current business strategy
includes expansion of our data control console business and a significant
emphasis upon developing and expanding our Internet and e-commerce businesses.
In that regard, we anticipate deriving revenue from, among other sources:

         o   sales of online, downloaded and print books and other written
             materials;
         o   movie subscription and pay-per-view fees; and
         o   advertising fees.

         We expect to continue to place significant emphasis upon the further
development and expansion of our Internet and e-commerce businesses. We expect
to increase our sales and marketing expenses in the near term. We intend to
increase our marketing efforts substantially in order to develop awareness and
brand loyalty for our Internet-based products and services and to generate
revenues from those who visit our Internet sites. These marketing efforts will
require a considerable effort on our part.

         We also intend to continue to invest in the development of new products
and services, complete the development of our products and services currently
under development and expand our network. Toward those goals, in July 2000, we
entered into a non-binding letter of intent to purchase all of the outstanding
shares of stock of PCS Link, Inc., a California corporation dba Greenwood &
Hall.

         Greenwood & Hall is an e-commerce company that, if the acquisition is
consummated, would provide sales, customer service and fulfillment support for
our emerging Internet-based products and services. In addition, if the
acquisition is consummated, the acquisition would result in an expansion of our
business model to include an existing network of Internet points-of-presence at
over 70 locations in major cities across the United States.

                                       18

<PAGE>

         The letter of intent provides, among other things, that we would issue
3,000,000 shares of restricted common stock to the sellers at the closing of the
transaction and would be obligated to issue up to an additional 2,000,000 shares
of restricted common stock approximately one year later if certain performance
criteria were met. In addition, we would be required to provide Greenwood & Hall
with working capital of $1,200,000 over the next twelve months.

         In anticipation of the proposed acquisition, we have begun to use a
23,000 square-foot headquarters facility managed by Greenwood & Hall, which
facility includes a 24-hour, 7-day-a-week e-support organization. We are in the
process of conducting due diligence and negotiating a definitive agreement with
Greenwood & Hall. However, there can be no assurance that the proposed
acquisition will be consummated in the time frame and upon the terms set forth
in the letter of intent, if at all.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999

         NET SALES. Net sales decreased $363,998 or 87%, from $415,968 for the
three months ended June 30, 1999 to $51,970 for the three months ended June 30,
2000. The portion of net sales derived from our e-commerce businesses increased
$2 or .03%, from $5,833 for the three months ended June 30, 1999 to $5,835 for
the three months ended June 30, 2000. The portion of our net sales derived from
the sales of our data control console systems decreased $364,000 or 89%, from
$410,135 for the three months ended June 30, 1999 to $46,135 for the three
months ended June 30, 2000. This decrease was primarily due to a decrease in
sales of our OPCON Modular System, which we believe to be a result of
fluctuations in the timing of orders for our products. Budget constraints and
delayed receipt of expected funding by some prospective clients have caused hold
ups in placements of orders for our OPCON Modular System. Current pending
proposals that may become orders are in excess of $400,000. In an effort to
increase sales of our data control consoles, on June 30, 2000 we hired two
exclusive sales representatives. In addition, we recently launched a new
marketing campaign and engaged the services of a state-of-the-art OEM
manufacturer.

         GROSS PROFIT (LOSS). Gross profit decreased $108,076 or 81%, from a
gross profit of $133,538 for the three months ended June 30, 1999 to a gross
profit of $25,462 for the three months ended June 30, 2000. This decrease in
gross profit was due primarily to the decrease in total sales noted above, and
due also in part to the increased cost of purchasing intangible movie rights for
use on our web sites.

         OPERATING EXPENSES. Total operating expenses increased $959,778 or 63%,
from $1,517,945 for the three months ended June 30, 1999 to $2,477,723 for the
three months ended June 30, 2000. This increase in total operating expenses was
due primarily to an increase in marketing, advertising and investor relations
costs. Consulting fees decreased $299,773 or 31%, from $977,233 for the three
months ended June 30, 1999 to $677,460 for the three months ended June 30, 2000.
Marketing, advertising and investor relations costs increased $1,098,040 or
1,131%, from $106,498 for the three months ended June 30, 1999 to $1,204,538 for
the three months ended June 30, 2000, primarily due to our initial consumer and
trade advertising. Professional fees decreased $7,459 or 3%, from $226,815 for
the three months ended June 30, 1999 to $219,356 for the three months ended June
30, 2000. Each of these operating expenses was paid primarily through the
issuance of shares of our common stock to the service provider.

                                       19

<PAGE>

         OTHER EXPENSE. Other expense increased $2,420,509, from $14,104 of
income for the three months ended June 30, 1999 to $2,406,405 of expense for the
three months ended June 30, 2000. This increase in other expense was due to the
financing cost of issuing stock through convertible debentures.

         NET LOSS. Net loss increased $3,488,363 or 354%, from $1,370,303 for
the three months ended June 30, 1999 to $4,858,666 for the three months ended
June 30, 2000. This increase in net loss is due to a combination of decreased
sales, decreased gross profit, increased operating expenses, and increased other
expense, as discussed above.

NINE MONTHS ENDED JUNE 30, 2000 COMPARED TO NINE MONTHS ENDED JUNE 30, 1999

         NET SALES. Net sales decreased $519,055 or 67%, from $772,167 for the
nine months ended June 30, 1999 to $253,112 for the nine months ended June 30,
2000. The portion of net sales derived from our e-commerce businesses decreased
$14,205 or 46%, from $31,048 for the nine months ended June 30, 1999 to $16,843
for the nine months ended June 30, 2000 due primarily to a concentration on web
site development preparing for the availability of subscription, pay-per-view
and partner web programs. The portion of our net sales derived from the sales of
our data control console systems decreased $504,850 or 68%, from $741,119 for
the nine months ended June 30, 1999 to $236,269 for the nine months ended June
30, 2000. This decrease was primarily due to a decrease in sales of our OPCON
Modular System, which we believe to be a result of fluctuations in the timing of
orders for our products. Budget constraints and delayed receipt of expected
funding by some prospective clients have caused hold ups in placement of orders
for our OPCON Modular System. Current pending proposals that may become orders
are in excess of $400,000. In an effort to increase sales of our data control
consoles, on June 30, 2000 we hired two exclusive sales representatives. In
addition, we recently launched a new marketing campaign and engaged the services
of a state-of-the-art OEM manufacturer.

         GROSS PROFIT. Gross profit decreased $238,202 or 83%, from $286,895 for
the nine months ended June 30, 1999 to $48,693 for the nine months ended June
30, 2000. This decrease in gross profit was due in part to the decrease in total
sales noted above, and due also in part to the increased cost of purchasing
movie rights for use on our web sites.

         OPERATING EXPENSES. Operating expenses increased $4,515,456 or 284%,
from $2,452,368 for the nine months ended June 30, 1999 to $6,967,824 for the
nine months ended June 30, 2000. This increase was due primarily to an increase
in consulting fees, marketing, advertising and investor relations costs, and
professional fees. Consulting fees increased $1,383,322 or 116%, from $1,195,873
for the nine months ended June 30, 1999 to $2,583,195 for the nine months ended
June 30, 2000, primarily due to strategic expansion. Marketing, advertising and
investor relations costs increased $1,836,030 or 813%, from $257,270 for the
nine months ended June 30, 1999 to $2,093,300 for the nine months ended June 30,
2000, primarily due to our initial consumer and trade advertising. Professional
fees increased $941,199 or 338%, from $393,815 for the nine months ended June
30, 1999 to $1,335,014 for the nine months ended June 30, 2000, primarily due to
increased scope of our development, including becoming a fully reporting
company, resulting in higher legal and accounting fees. Each of these operating
expenses was paid primarily through the issuance of our common stock to the
service provider.

         OTHER EXPENSE. Other expense increased $3,389,503, from income of
$12,012 for the nine months ended June 30, 1999 to expense of $3,377,491 for the
nine months ended June 30, 2000. This increase was due primarily to the
financing cost of issuing stock through convertible debentures.

         NET LOSS. Net loss increased $8,143,161 or 478%, from $2,153,461 for
the nine months ended June 30, 1999 to $10,296,622 for the nine months ended
June 30, 2000. This increase is due to a combination of decreased sales,
decreased gross profit, increased operating expenses, and increased other
expense, as discussed above.

                                       20

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         From February 25, 1997 through June 30, 2000, we funded our operations
primarily from equity investments through private placements of our securities,
including our convertible debentures, proceeds from our line of credit, and
revenue generated from our operations.

         As of June 30, 2000, we had a negative working capital of $2,101,441
and an accumulated deficit of $18,660,762. As of that date, we had $542,414 in
cash and cash equivalents, $44,395 in accounts receivable, and $205,000 in a
judgment receivable. We also had accounts payable of $442,103 and $2,750,000 of
convertible debentures, of which $120,000 and $180,000 of the principal amount
plus interest on such amounts were converted into shares of common stock in July
2000 and August 2000, respectively.

         Cash used in our operating activities totaled $3,245,609 for the nine
months ended June 30, 2000 and $1,814,050 for the three months ended June 30,
2000. Cash used by our investing activities totaled $337,540 for the nine months
ended June 30, 2000 and $421,399 for the three months ended June 30, 2000.

         Cash provided by our financing activities totaled $3,970,500 for the
nine months ended June 30, 2000 and $2,557,001 for the three months ended June
30, 2000. We raised $3,817,500 of the cash provided by financing activities
during the nine months ended June 30, 2000 and $2,569,000 of the cash provided
by financing activities during the three months ended June 30, 2000 from the
issuance of our convertible debentures.

         On February 25, 1999, we obtained a $5,000,000 revolving line of credit
from Alliance Equities. On April 7, 1999, this line of credit was increased to
$7,000,000. The February 25, 1999 agreement memorializing our arrangement with
Alliance Equities provides that a definitive agreement is to be negotiated
within seven days of that date. Prior to December 10, 1999, the parties had not
finalized a definitive agreement and had operated under the February 25, 1999
agreement as amended by the April 7, 1999 amendment. On December 10, 1999, the
parties executed a definitive agreement relating to the revolving line of
credit. The agreement provides that our company may draw up to $500,000 per
month on the line of credit, up to a maximum aggregate borrowing of $7,000,000.
Interest accrues at the rate of 10% per annum, with unpaid principal and accrued
interest due at maturity on December 10, 2001, unless the line of credit is
terminated earlier by mutual agreement of the parties upon 30 days' prior
written notice, is prepaid by us or is converted into shares of our common stock
by us, by the lender or automatically upon the happening of certain events.

         At any time or times prior to maturity, our company may convert any
portion of the unpaid principal balance into shares of our common stock, or the
lender may convert up to 50% of the unpaid principal balance, at a conversion
price equal to the average market price for our common stock for the 30 days
prior to the conversion. The unpaid principal balance of the line of credit is
automatically convertible into shares of our common stock if we fail to pay the
unpaid principal and interest due at maturity, at a conversion price equal to
the average market price for our common stock for the 30 days prior to the
conversion. Alternatively, the unpaid principal balance of the line of credit is
automatically convertible into shares of our common stock if we close a
financing in which the aggregate gross proceeds received by us equal or exceed
$7,000,000, in which case a total of 50% of the entire original line of credit
amount (which is the aggregate of amounts previously converted at that time plus
non-converted amounts equaling a maximum of 50% of the entire original line of
credit amount) will be converted at a conversion price equal to the average
market price of our common stock as exists thirty days prior to such automatic
conversion.

         In January 2000, our convertible debentures that were outstanding as of
December 31, 1999 were converted into an aggregate of 1,783,334 shares of our
common stock.

                                       21

<PAGE>

         In February 2000, we issued $1,000,000 of our 10% Convertible
Debentures due February 1, 2001, which were accompanied by warrants to purchase
up to 300,000 shares of common stock. The net proceeds of that offering, after
the payment of finder's fees and before the payment of other related expenses,
were $870,000. In March and April 2000, $750,000 of the principal amount plus
interest was converted into shares of common stock. In June 2000, the remaining
$250,000 of the principal amount plus interest was converted into shares of
common stock.

         In April 2000, we issued $3,000,000 of our 10% Convertible Debentures
due May 1, 2001, which were accompanied by warrants to purchase up to 900,000
shares of common stock. The net proceeds of that offering, after the payment of
finder's fees and before the payment of other related expenses, were $2,610,000.
The shares of common stock underlying the debentures and warrants were
registered for resale by the purchasers. The debenture purchase documents
provide that the purchasers will be obligated to purchase, and we will be
obligated to issue, additional debentures in the aggregate principal amount of
$3,000,000, together with warrants to purchase an aggregate of 900,000 shares of
common stock, within 45 days following the date that the registration statement
covering the shares of common stock underlying the debentures and warrants is
declared effective by the Securities and Exchange Commission, if certain
conditions relating to the market price of our common stock are met. As of
August 4, 2000, $550,000 of the principal amount plus certain interest payments
had been converted into shares of common stock.

         In August 2000, we entered into the letter of intent described above
with Greenwood & Hall. If our proposed acquisition of Greenwood & Hall is
consummated on the terms set forth in the letter of intent, we will be obligated
to, among other things, provide Greenwood & Hall, as our subsidiary, with
working capital of $1,200,000 over a period of twelve months.

         We believe that current and future available capital resources,
revenues generated from operations, and other existing sources of liquidity,
including our revolving line of credit with Alliance Equities, will be adequate
to meet our anticipated working capital and capital expenditure requirements for
at least the next 12 months. If, however, our capital requirements or cash flow
vary materially from our current projections or if unforeseen circumstances
occur, we may require additional financing sooner than we anticipate. Failure to
raise necessary capital could restrict our growth, limit our development of new
products and services or hinder our ability to compete.

IMPACT OF YEAR 2000

            We have not experienced any significant problems as a result of the
arrival of the Year 2000. Although no significant problems have materialized to
date, we will continue to monitor our systems (both IT and non-IT) throughout
the Year 2000, including the proper recognition of the leap year.

                                       22

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         On September 15, 1999, Robert Adams filed a complaint against our
company and our Chairman of the Board, President and Chief Executive Officer,
Alex Kanakaris, individually, in Los Angeles Superior Court (Case No. LC050023)
alleging breach of contract and fraud. Mr. Adams based his fraud claim primarily
on alleged misrepresentations and concealment involving a consulting agreement
between our company and Mr. Adams. Mr. Adams alleged that he is entitled to
certain stock options, of which 75% of the option price allegedly is already
deemed paid in exchange for services allegedly rendered by Mr. Adams to our
company. Mr. Adams is attempting to exercise the options for the purchase of a
certain number of shares to which he claims to be entitled pursuant to the
agreement. The claims against Mr. Kanakaris individually have been dismissed. We
engaged counsel to analyze the complaint and vigorously defend us against all of
Mr. Adams' claims. Although the parties have submitted their dispute for
mediation, Mr. Adams filed a motion for summary judgment in Los Angeles Superior
Court on April 28, 2000. A hearing on the motion is scheduled for August 31,
2000, and mediation has been set for August 21, 2000.

         On October 14, 1999, Institutional Management, Inc., an Illinois
corporation, filed suit against our company and Alpha Tech Stock Transfer &
Trust Company, our stock transfer agent and registrar, in the Circuit Court of
Cook County, Illinois (Case No. 99L 011509). The case was removed to the United
States District Court for the Northern District of Illinois, Eastern Division
(Case No. 99C 7100). In the complaint, Institutional Management sought damages
in excess of $50,000 under breach of contract and various other state law
theories in connection with our unwillingness to permit them to transfer shares
of our company's common stock held by Institutional Management. We believe that
the shares were wrongfully converted by a predecessor to Institutional
Management. We have engaged counsel to vigorously defend us against all of
Institutional Management's claims.

         We have also counterclaimed against Institutional Management and
commenced a third-party action against the Institutional Management affiliates,
namely Power Media Group, Pinnacle Management, Inc., and Frank Custable. In our
counterclaim and cross-claims, we have sought injunctive relief to block any
further transfer of the converted shares held by any of the aforementioned
parties, and damages for, among other things, breach of a consulting agreement,
for fraud, conversion and for unjust enrichment. We intend to vigorously pursue
all available remedies against the aforementioned parties.

         Institutional Management, Pinnacle and Power Media countered by
attempting to assert claims against us in a separate action in Utah. In the Utah
action, the parties were challenging our right to block their transfer of the
stock at issue and attempting to recover for damage they claim to have suffered
in the interim. The Utah action, however, was promptly by that court stayed in
favor of the action currently pending in Illinois.

         The stock at issue was in the hands of Alpha Tech and Miller, Johnson &
Kuehn, Inc., a stock brokerage firm that clears the trades of introducing
brokers. Both Alpha Tech and MJ&K filed actions for interpleader, by which they
were prepared to tender to the court the stock certificates to which our
company, Institutional Management and Pinnacle Management are each laying claim.
In July 2000, that tender was effectuated, and the claims asserted by and
against Alpha Tech and MJ&K were dismissed. The stock, therefore, has been and
will remain issued in the name of the United States District Court until the
dispute is resolved.

                                       23

<PAGE>

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     (a) Effect of Amendment and Restatement of Charter Documents
         --------------------------------------------------------

         At the special meeting of stockholders held on May 24, 2000, the
holders of shares of our Class A Convertible Preferred Stock and common stock as
of April 14, 2000 approved Amended and Restated Articles of Incorporation and
Amended and Restated Bylaws. In addition to the modification of the terms of
Class A Convertible Preferred Stock as described in (b) below, numerous other
changes to the former articles of incorporation and bylaws of our company were
made. Such changes and the effect of such changes on the rights of the holders
of our common stock are described more particularly in our Definitive Proxy
Statement filed on May 1, 2000 pursuant to Section 14(a) of the Securities
Exchange Act of 1934.

     (b) Effect of Modification of Terms of Class A Convertible Preferred Stock
         ----------------------------------------------------------------------

         At the special meeting of stockholders held on May 24, 2000, the
holders of shares of our Class A Convertible Preferred Stock and common stock as
of April 14, 2000 approved an amendment to our Certificate of Designation of
Class A Convertible Preferred Stock that increased the voting rights of the
Class A Convertible Preferred Stock from three non-cumulative votes per share,
voting together with our common stock on all matters on which the holders of our
common stock are entitled to vote, to twenty non-cumulative votes per share on
such matters. This amendment was incorporated into our Amended and Restated
Articles of Incorporation that were filed with the Nevada Secretary of State on
June 2, 2000.

         As a result of this increase in voting rights and as a result of
ownership of shares of common stock and Class A Convertible Preferred Stock by
Alex Kanakaris, our Chairman of the Board, President and Chief Executive
Officer, Mr. Kanakaris became entitled to exercise voting control over our
company. Immediately prior to such time, no identifiable person or group of
persons had voting control over our company.

         Specifically, as of June 2, 2000, we had 31,614,775 shares of common
stock outstanding. As of June 2, 2000, Mr. Kanakaris beneficially owned all of
the 1,000,000 shares of our outstanding Class A Convertible Preferred Stock and
5,015,147 shares of common stock, which shares of common stock included
2,100,000 shares issuable upon the exercise of options and 1,000,000 shares
issuable upon conversion of Class A Convertible Preferred Stock. Based upon this
ownership, as of June 2, 2000, Mr. Kanakaris beneficially owned approximately
15.9% of our common stock and 100% of our Class A Convertible Preferred Stock,
and held approximately 48.5% of the voting power over all matters on which the
holders of our common stock are entitled to vote.

         Consequently, Mr. Kanakaris has sufficient voting power to control the
outcome of corporate matters submitted to the vote of our stockholders. Those
matters could include the election of directors, changes in the size and
composition of the Board of Directors (and, thereby, the qualification and
appointment of officers of our company), and mergers and other business
combinations involving our company. In addition, through his control of the
Board of Directors and voting power, he may be able to control certain
decisions, including decisions with respect to our company's dividend policy,
access to capital (including borrowing from third-party lenders and the issuance
of additional equity securities), and the acquisition or disposition of assets
by our company. In addition, the concentration of voting power in Mr. Kanakaris
could have the effect of delaying or preventing a change in control of our
company and may affect the market price of our common stock.

     (c) Sales of Unregistered Securities During the Quarter Ended June 30, 2000
         -----------------------------------------------------------------------

         In April 2000, our company issued 206,000 shares of common stock upon
partial exercise by a former employee of an option with an exercise price of
$0.25 per share.

         In April 2000, our company issued 50,000 shares of common stock to one
consultant in a private offering in exchange for consulting services rendered
with an estimated value of $112,000.

                                       24

<PAGE>

         In April 2000, our company issued an aggregate of $3,000,000 of 10%
convertible debentures and accompanying warrants to purchase up to 900,000
shares of common stock to four accredited investors in a private offering. The
net offering proceeds were approximately $2,600,000 in cash.

         In April 2000, our company issued an aggregate of 14,667 shares of
common stock, warrants to purchase up to 14,667 shares of common stock at an
initial exercise price of $1.725 and warrants to purchase up to 14,667 shares of
common stock at an initial exercise price of $1.95 to one consultant in a
private offering in exchange for consulting services.

         In April 2000, our company issued an aggregate of 788,730 shares of
common stock to three accredited investors upon conversion of $750,000 in
principal amount of 10% convertible debentures and interest payable on those
debentures.

         In May 2000, our company issued an option to purchase up to 87,500
shares of common stock at an exercise price of $1.295 per share pursuant to our
company's 2000 Stock Option Plan to one consultant in connection with an
amendment to an existing consulting agreement.

         In May 2000, our company issued to eleven employees and executives and
one non-employee director options to purchase up to an aggregate of 1,950,000
shares of common stock at an exercise price of $.705 pursuant to our company's
2000 Stock Option Plan.

       In May 2000, our company issued to seven individuals and four entities an
aggregate of 809,396 shares of common stock in exchange for consulting services
rendered with a value of approximately $850,964.

         In June 2000, our company issued an aggregate of 788,096 shares of
common stock to one accredited investor upon conversion of $500,000 in principal
amount of two 10% convertible debentures and interest payable on those
debentures.

       In June 2000, our company issued an aggregate of 163,120 shares of common
stock to one individual and one entity in exchange for consulting services
rendered with a value of approximately $129,680.

       In June 2000, our company issued an aggregate of 50,000 shares of common
stock to one individual and one entity in exchange for consulting services
rendered with a value of approximately $46,250.

         Exemption from the registration provisions of the Securities Act of
1933 for the transactions described above is claimed under Section 4(2) of the
Securities Act of 1933, among others, on the basis that such transactions did
not involve any public offering and the purchasers were sophisticated with
access to the kind of information registration would provide.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

                                       25

<PAGE>

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

         In connection with the special meeting of stockholders held on May 24,
2000, the holders of shares of our Class A Preferred and common stock as of
April 14, 2000 were asked:

         PROPOSAL 1. To consider and vote upon a proposal to approve an
amendment to our Articles of Incorporation to change our name to "Kanakaris
Wireless";

         PROPOSAL 2. To consider and vote upon a proposal to approve an
amendment to our Articles of Incorporation to remove the provision that sets the
authorized number of directors;

         PROPOSAL 3. To consider and vote upon a proposal to approve an
amendment to our Certificate of Designation of Class A Preferred that would
increase the voting rights of the Class A Preferred from three non-cumulative
votes per share, voting together with our common stock on all matters on which
the holders of our common stock are entitled to vote, to twenty non-cumulative
votes per share on such matters;

         PROPOSAL 4. To consider and vote upon a proposal to approve Amended and
Restated Articles of Incorporation that amend, restate and replace our current
Articles of Incorporation and effect the principal changes in Proposals 1
through 3 above and various additional changes recommended by the Board of
Directors;

         PROPOSAL 5. To consider and vote upon a proposal to approve Amended and
Restated Bylaws that modernize and conform our Bylaws to current Nevada law and
provide that the acquisition of controlling interest provisions of the Nevada
Corporations Code shall not apply in connection with the change in voting rights
described in Proposal 3; and

         PROPOSAL 6. To consider and vote upon a proposal to approve a 2000
Stock Option Plan, pursuant to which our company may grant to its key employees,
officers and directors of our company and to employees of companies who do
business with our company options to purchase up to 3,000,000 shares of our
common stock.

         Each of the six proposals described above was described more
particularly in our Definitive Proxy Statement filed on May 1, 2000 pursuant to
Section 14(a) of the Securities Exchange Act of 1934 and was approved by our
stockholders by the votes set forth below:

                        PROPOSAL 1
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,490,742
         Against: 0                 Against: 80,843
         Abstain: 0                 Abstain: 23,670

                        PROPOSAL 2
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,357,387
         Against: 0                 Against: 180,683
         Abstain: 0                 Abstain: 57,185

                                       26

<PAGE>

                        PROPOSAL 3
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,096,142
         Against: 0                 Against: 378,168
         Abstain: 0                 Abstain: 120,945

                        PROPOSAL 4
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,312,036
         Against: 0                 Against: 203,479
         Abstain: 0                 Abstain: 79,740

                        PROPOSAL 5
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,356,982
         Against: 0                 Against: 155,988
         Abstain: 0                 Abstain: 82,285

                        PROPOSAL 6
                        ----------
         CLASS A PREFERRED          COMMON STOCK
         -----------------          ------------
         For: 3,000,000             For: 18,184,428
         Against: 0                 Against: 296,122
         Abstain: 0                 Abstain: 114,705


ITEM 5.  OTHER INFORMATION.

         None.


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

         (a)      Exhibits.

                  2.1   Letter of Intent dated August 3, 2000 by and between
                        Kanakaris Wireless and PCS Link, Inc. dba Greenwood &
                        Hall

                  27.1  Financial Data Schedule


         (b)      Reports on Form 8-K.

                  On June 8, 2000, we filed a Current Report on Form 8-K in
                  connection with matters approved by our stockholders at the
                  special meeting of stockholders held on May 24, 2000, the
                  results of which meeting are described in Item 4 above. The
                  Form 8-K included "Item 1. Changes in Control of Registrant"
                  and "Item 5. Other Events."

                                       27

<PAGE>

                                   SIGNATURES

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

                                    KANAKARIS WIRELESS


Dated: August 11, 2000              By: /S/ DAVID SHOMAKER
                                    --------------------------------------------
                                    David Shomaker
                                    Acting Chief Financial Officer
                                    (principal financial and accounting officer)



<PAGE>

                                  EXHIBIT INDEX


Exhibit No.                Description
-----------                -----------

2.1               Letter of Intent dated August 3, 2000 by and between Kanakaris
                  Wireless and PCS Link, Inc. dba Greenwood & Hall

27.1              Financial Data Schedule