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

               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 MARCH 31, 2003

 [ ]     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
                 (Name of small business issuer in its charter)

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

                            1280 BISON, SUITE B9-597
                         NEWPORT BEACH, CALIFORNIA 92660
                    (Address of principal executive offices)

         Issuer's telephone number (including area code): (949) 760-5470

         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 issuer's only class of common
stock, $.001 par value per share, was 73,716,530 on April 29, 2003.


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



<PAGE>



                         PART I - FINANCIAL INFORMATION

The financial statements have been certified by the Chief Executive Officer and
the Chief Financial Officer of the company, but as of this date, they have not
been reviewed by an independent auditor. The Company intends to file an amended
Form 10QSB upon completion of this independent auditor's review.


ITEM 1.  FINANCIAL STATEMENTS.

                          INDEX TO FINANCIAL STATEMENTS
                       KANAKARIS WIRELESS AND SUBSIDIARIES

Condensed Consolidated Balance Sheet at March 31, 2003 .................  F-1

Condensed Consolidated Statements of Operations for the Three Months
     Ended March 31, 2003 and 2002 .....................................  F-3

Condensed Consolidated Statements of Comprehensive Loss for the
     Three Months and Six Months Ended March 31, 2003 and 2002 .........  F-4

Condensed Consolidated Statements of Cash Flows for the Six Months
     Ended March 31, 2003 and 2002 ...................................... F-5

Condensed Consolidated Statement of Changes in Stockholders' Equity
     (Deficiency) for the Three Months Ended March 31, 2003 ............  F-6

Supplemental Disclosure of Non Cash Investing and Finance Activities ...  F-7

Notes to Condensed Consolidated Financial Statements .................... F-8



<PAGE>


                       KANAKARIS WIRELESS AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2003
                                   (UNAUDITED)

ASSETS
------

Current assets:
   Accounts Receivable, Net                                    $        453,792
   Loans Receivable                                                     150,499
   Inventories, net                                                      25,942
   Interest receivable                                                   49,103
   Investments in marketable securities (at market value)                 8,571
   Prepaid expenses                                                       2,489
                                                               -----------------

           Total current assets                                         690,396
                                                               -----------------

Property and equipment, net of accumulated
   depreciation and amortization                                         77,276
                                                               -----------------

   Security/Vendor deposits                                               1,235
   Other                                                                    607
   Goodwill, net                                                        319,442
                                                               -----------------

           Total assets                                        $      1,088,956
                                                               =================

     See accompanying notes to condensed consolidated financial statements.

                                       F-1





<PAGE>




                       KANAKARIS WIRELESS AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2003
                                   (UNAUDITED)

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

Current liabilities:
   Outstanding checks payable                                $           49,008
   Accounts payable and accrued expenses                              3,218,246
   Notes payable                                                        464,700
   Convertible debentures                                             4,129,183
   Convertible promissory notes                                         372,550
   Due to former shareholder of former subsidiary                       113,504
                                                             -------------------

           Total current liabilities                                  8,347,191


           Total liabilities                                          8,347,191
                                                               =================


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
   Preferred stock, $1,000 par value; 900 shares
       authorized; 900 Class B Convertible issued
       and outstanding                                                  900,000
   Common stock, $0.001 par value; 250,000,000
       shares authorized; 63,312,029 issued and
       outstanding                                                       63,312
   Additional paid-in capital                                        32,025,873
   Accumulated deficit                                              (40,194,139)
   Deferred expense                                                     (63,281)
                                                             -------------------

           Total stockholders' equity (deficiency)                   (7,258,235)
                                                             -------------------

           Total liabilities and
           stockholders' equity (deficiency)                 $        1,088,956
                                                             ===================

     See accompanying notes to condensed consolidated financial statements.

                                       F-2







<PAGE>



<PAGE>
<TABLE>
<CAPTION>


                                     KANAKARIS WIRELESS AND SUBSIDIARIES
                               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                 (UNAUDITED)

                                                        Three Months      Three Months      Six Months         Six Months
                                                            Ended            Ended             Ended             Ended
                                                          March 31,         March 31,         March 31,         March 31,
                                                            2003              2002              2003              2002
                                                        ------------      ------------      ------------      ------------
<S>                                                     <C>               <C>               <C>               <C>
Net sales                                               $    220,000       $   16,493       $   253,045       $    31,588

Cost of sales                                                176,085            2,337           181,425            25,487
                                                        ------------      ------------      ------------      ------------

           Gross profit                                      43,915            14,156            71,620             6,101
                                                        ------------      ------------      ------------      ------------
Operating expenses:
   Executive compensation                                   135,893           213,112           334,070           499,447
   Salaries                                                  51,617             8,530           113,477            22,209
   Payroll taxes and employee benefits                        2,520             3,254             3,860             5,076
   Consulting services                                      192,590           324,635           281,041           696,890
   Travel and entertainment                                  12,998            12,972            26,852            36,045
   Telephone and utilities                                    6,258             6,292            12,773             9,987
   Marketing, advertising and investor relations             64,451            30,870            91,017            52,639
   Professional fees                                        114,190           260,415           274,835           396,367
   Rent                                                       1,407                 -             6,865                 -
   Office and other expenses                                 56,378            56,939           118,209           102,906
   Equipment rental and expense                                   -                 -                 -             1,018
   Insurance                                                 17,473            15,316            36,470            35,115
   Depreciation and amortization                             13,020            30,013            25,196            60,035
   Taxes - other                                              1,220                 -             1,220                 -
   Bank charges                                                 879               356             2,074               560
   Website development                                            -                 -                 -               323
   Bad debt expense                                               -                 -             4,024                 -
   Automobile                                                 2,153                 -             2,153                 -
   Other income/expense                                           -                 -              (184)                -
   Interest income                                            2,093                 -             2,093                 -
   Contributions                                                  -            13,500                 -            13,500
                                                        ------------      ------------      ------------      ------------

           Total operating expenses                         673,047           976,204         1,334,136         1,932,117
                                                        ------------      ------------      ------------      ------------

       Loss from continuing operations                     (629,132)         (962,048)       (1,262,516)       (1,926,016)

       Financing and other income (expense), net             (2,093)       (1,063,353)         (206,298)        (1,165,045)
                                                        ------------      ------------      ------------      ------------

       Loss before discontinued operations                 (631,225)       (2,025,401)       (1,468,814)       (3,091,061)

       Income from discontinued operations                        -          (132,509)                -           (76,864)
                                                        ------------      ------------      ------------      ------------

       Net loss                                         $  (631,225)      $(2,157,910)      $(1,468,814)      $(3,167,925)
                                                        ============      ============      ============      ============

       Net (loss) income per common share:
         Basic and diluted-continuing operations        $     (.025)      $      (.23)      $     (.095)      $      (.41)
         Basic and diluted-discontinued operations                -              (.02)                -              (.01)
                                                        ------------      ------------      ------------      ------------

         Net loss per share                             $     (.038)      $      (.25)      $     (.095)      $      (.42)
                                                        ============      ============      ============      ============

       Weighted average common shares
          outstanding - basic and diluted                25,240,909         8,717,977        15,371,646         7,569,320
                                                        ============      ============      ============      ============

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

                                                     F-3



<PAGE>


<TABLE>
<CAPTION>

                                 KANAKARIS WIRELESS AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                             (UNAUDITED)


                                      Three Months      Three Months      Six Months         Six Months
                                          Ended            Ended             Ended             Ended
                                        March 31,         March 31,         March 31,         March 31,
                                          2003              2002              2003              2002
                                      ------------      ------------      ------------      ------------
<S>                                   <C>               <C>               <C>               <C>

Net loss                              $  (631,225)      $(2,157,910)      $(1,468,814)      $(3,167,925)

Other comprehensive loss:
   Unrealized loss on securities                -           (39,200)                -           (40,800)
                                      ------------      ------------      ------------      ------------

Comprehensive loss                    $  (631,225)      $(2,197,110)      $(1,468,814)     $ (3,208,725)
                                      ============      ============      ============      ============

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

                                                F-4



<PAGE>




<TABLE>
<CAPTION>

                            KANAKARIS WIRELESS AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                     FOR THE SIX MONTHS ENDED MARCH 31, 2003 AND 2002
                                        (UNAUDITED)

                                                                   2003              2002
                                                               ------------      ------------
<S>                                                            <C>               <C>
Cash flows from operating activities:
   Net loss                                                    $(1,468,814)      $(3,167,925)
   Adjustments to reconcile net loss
       to net cash used in operating activities:
           Goodwill                                               (319,442)                -
           Depreciation and amortization                            25,196            60,139
           Write-off of goodwill                                         -           337,052
           Gain on sale of assets                                        -          (247,301)
           Provision for bad debts                                   4,024                 -
           Compensation, consulting, marketing and
             professional services, incurred in exchange
             for common stock                                      484,701           996,546
           Consulting services incurred in exchange
             for stock options                                           -            46,841
           Convertible debt-marketing cost                          36,875           154,500
           Convertible debt-beneficial conversion cost              52,500                 -
           Convertible debt-financing cost                               -           893,452
           Convertible debt-legal cost                              48,500                 -
           Convertible debt-interest cost                            9,578            59,214
           Decrease in notes receivable-
             Shareholders and related parties                       36,280                 -
   Changes in assets and liabilities
       (Increase) decrease in:
              Accounts receivable                                 (327,763)          101,546
              Prepaid expenses                                      11,591            20,063
              Advances to suppliers and security deposits              608               386
              Interest receivable                                      184           (16,802)
              Inventory                                              1,554                 -
       Increase (decrease) in:
              Accounts payable and accrued expenses                484,529           145,442
                                                               ------------      ------------

           Net cash used in operating activities                  (919,899)         (616,847)
                                                               ------------      ------------

Cash flows from investing activities:
           Purchase of property and equipment                     (14,446)                 -
           Proceeds from notes receivable - other                  25,000             50,000
           Increase in notes receivable -
             shareholders and related parties                           -             74,530
           Increase in notes receivable - other                  (150,499)                 -
           Payments on notes payable                              (35,300)                 -
           Increase in notes payable                              500,000                  -
                                                               ------------      ------------

           Net cash provided by investing activities               324,755           124,530
                                                               ------------      ------------

Cash flows from financing activities:
   Proceeds from convertible debt, net                             499,475           545,500
   Proceeds from sale of common stock                               25,000           245,220
                                                               ------------      ------------

           Net cash provided by financing activities               524,475           790,720
                                                               ------------      ------------

Net decrease in cash                                               (70,669)         (298,403)

Cash, beginning of period                                           21,661            51,473
                                                               ------------      ------------

Outstanding checks payable/cash and equivalents,
   End of period                                               $   (49,008)       $  349,876
                                                               ============      ============
</TABLE>

                                           F-5



<PAGE>



<TABLE>
<CAPTION>

                                         KANAKARIS WIRELESS AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'EQUITY (DEFICIENCY)
                                       FOR THE SIX MONTHS ENDED MARCH 31, 2003
                                                     (UNAUDITED)


                             COMMON STOCK ISSUED  PREFERRED STOCK
                             ------------------   ---------------                  ACCUMULATED     DEFERRED
                               SHARES   AMOUNT    SHARES     AMOUNT      APIC        DEFICIT       EXPENSE         TOTAL
                            ----------- ------- ----------- -------- ------------ ------------- ------------   ------------
<S>                           <C>       <C>       <C>       <C>      <C>          <C>           <C>          <C>
BALANCES
SEPTEMBER 30, 2002           24,450,065 $24,450   1,000,900 $910,000 $ 31,707,539 $(38,725,325) $  (353,656)   $(6,436,992)

  STOCK ISSUED FOR CASH:        500,000     500           -        -       24,500            -            -         25,000

  STOCK ISSUED FOR:
    COMPENSATION                                                                                    253,125        253,125
    CONSULTING SERVICES      19,032,500  19,033           -        -      171,293            -       37,250        227,576
    PROFESSIONAL SERVICES       400,000     400           -        -        3,600            -       -               4,000


  CONVERTED DEBENTURES       18,929,464  18,929           -        -       66,441            -            -         85,370

  CONVERTIBLE DEBT FINANCING
    COSTS                             -       -           -        -       52,500            -            -         52,500


  NET (LOSS)                          -       -           -        -            -   (1,468,814)           -     (1,468,814)
                            ----------- ------- ----------- -------- ------------ ------------- ------------    ------------

BALANCES
MARCH 31, 2003               63,312,029 $63,212   1,000,900 $910,000 $ 32,025,873 $(40,194,139) $  (63,281)    $(7,258,235)
                            =========== ======= =========== ======== ============ ============= ============   ============

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

                                                     F-6



<PAGE>


        SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
        -----------------------------------------------------------------------

        During the six months ended March 31, 2003, the Company issued 400,000
        shares of common stock for marketing services having a fair value of
        $4,000. The Company also expensed $253,125 of deferred compensation and
        $37,250 of deferred consulting services.

        During the six months ended March 31, 2003, the Company issued an
        aggregate of 18,929,465 shares of common stock having a fair value of
        approximately $85,370 to various debenture investors representing the
        conversion of principal and interest.

         During the six months ended March 31, 2003, the Company issued
         19,032,500 shares of common stock for consulting services, having a
         fair value of $190,326. Of the 19,032,500 shares issued during the six
         months ended March 31, 2003, 3,532,500 shares were issued to seven
         members of the Company's board of directors and 15,500,000 shares were
         issued to 9 other consultants.

         During the six months ended March 31, 2002, the Company issued
         2,612,128 shares of common stock for consulting services having a fair
         value of $709,227.

         During the six months ended March 31, 2002, the Company issued 65,200
         shares of common stock for legal services having a fair value of
         $7,500.

         During the six months ended March 31, 2002, the Company issued 830,000
         shares of common stock in lieu of compensation of $112,055.

         During the six months ended March 31, 2002, the Company issued an
         aggregate of 897,991 shares of common stock having a fair value of
         approximately $173,000 to various debenture investors representing the
         conversion of principal and interest.

         During the six months ended March 31, 2002, the Company converted
         $372,550 of accounts payable to convertible promissory notes.


                                       F-7



<PAGE>


                       KANAKARIS WIRELESS AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   ------------------------------------------

         (A) 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. Kanakaris Wireless believes that the disclosures
         are adequate to make the information presented not misleading when read
         in conjunction with its consolidated financial statements for the year
         ended September 30, 2002 included in its Form 10-KSB. 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 months ended March 31, 2003 are not necessarily indicative of the
         results to be expected for the full year ending September 30, 2003, or
         any other period.

         (B) Business Organization and Activity
         --------------------------------------

         Kanakaris Wireless, which on June 2, 2000 changed its name from
         Kanakaris Communications, Inc., was incorporated in the State of Nevada
         on November 1, 1991. Kanakaris Wireless and subsidiaries (the
         "Company") operates various websites including www.kanakaris.com, an
         interactive entertainment content delivery website. The Company's
         websites consolidate previous websites developed by the Company
         including www.CinemaPop.com, www.WordPop.com and www.AK.TV. The
         Company's websites offer consumers over 400 click-and-view online
         movies, a television-styled web channel which plays regularly scheduled
         movies and other features, and print-on-demand books with online
         preview chapters. The Company's websites offer for sale various
         products of the pop culture genre and VHS and DVD titles. The Company
         also develops and supplies software and products for electronic
         commerce and content delivery. The Company operated a subsidiary, which
         was sold in March 2002, which designed and installed modular data
         control consoles. In April 2002, the Company acquired the business of
         Fast Forward Marketing, Inc., a national distributor of VHS and DVD
         movies and features, and now operates a video distribution business
         through its Fast Forward Marketing, Inc. subsidiary. The Company
         purchases its products from major motion picture studios and/or
         independent video producers and sells directly to video retailers
         including children's educational stores, gift shops, museum stores,
         educational distributors and direct mail catalogs.

                                       F-8


<PAGE>


         In January 2003 the Company acquired LAIN International and its wholly
         owned subsidiary Tele Anuncio. LAIN and Tele Anuncio buy and sell the
         rights for particular territories to Spanish language and Spanish
         language sub-titled films. LAIN and Tele Anuncio distribute Programs on
         DVDs and own the Spanish language online movie web site
         www.CineManiaNetwork.com. LAIN and Tele Anuncio produce Spanish
         language films.

         (C) Business Combinations and Dispositions
         ------------------------------------------

         On March 4, 2002, the Company entered into an asset purchase agreement
         whereby substantially all of the assets and business of Desience were
         sold. Included in the sale were all contract rights. Accordingly, for
         accounting purposes, the financial activity of Desience was treated as
         a discontinued operation and is presented in the statements of
         operations separately from continuing operations for the three months
         ended March 31, 2002.

         On March 15, 2002, the Company formed a new corporation called FFM
         Acquisition Corp. This corporation was used to acquire certain assets
         and liabilities of Fast Forward Marketing, Inc. on April 8, 2002, and
         now operates under the name of Fast Forward Marketing, Inc.

         On January 19, 2003, the Company entered into acquired LAIN
         International and its wholly owned subsidiary Tele Anuncio. LAIN and
         Tele Anuncio Headquarters are in Miami, Florida, and operate as Wholly
         owned subsidiaries of Kanakaris Wireless.

         (D) Principles of Consolidation
         -------------------------------

         The accompanying condensed consolidated financial statements include
         the accounts of the Company, and its wholly owned subsidiaries
         Kanakaris Internetworks Inc., and Fast Forward Marketing, Inc.
         (formerly known as FFM Acquisition Corp.), LAIN International and
         Tele Anuncio. All significant intercompany balances and transactions
         have been eliminated in consolidation.

         Desience, the Company's former subsidiary, has been classified as a
         discontinued operation, and the prior year's information has been
         restated to account for this classification.

         (E) Loss Per Share
         ------------------

         Loss per share is computed using the weighted average of common shares
         outstanding as defined by Financial Accounting Standards No. 128,
         "Earnings Per Share." The assumed exercise of outstanding common share
         equivalents was not utilized since the effect was anti-dilutive.

         (F) Use of Estimates
         --------------------

         The accompanying condensed consolidated financial statements have been
         prepared in accordance with generally accepted accounting principles in
         the United States of America. The preparation of condensed consolidated
         financial statements in accordance with generally accepted accounting
         principles requires management to make estimates and assumptions that
         affect the reported amounts of assets and liabilities and disclosure of
         contingent assets and liabilities at the date of the financial
         statements and the reported amounts of revenue and expenses during the
         reporting period. Actual results could differ from those estimates.

         (G) Inventories, net
         --------------------

         Inventories, which consist of videos and video parts, are valued at the
         lower of cost or market. Cost is determined by the first-in, first-out
         (FIFO) method. Management performs periodic assessments to determine
         the existence of obsolete, slow-moving and non-salable inventories and
         records necessary provisions to reduce such inventories to net
         realizable value. As of March 31,2003, the Company recorded a reserve
         of $27,497.00.

                                       F-9


<PAGE>



         (H) Accounts receivable and payable
         -----------------------------------

         Fast Forward Marketing, Inc. has an agreement with its customers and
         suppliers that allows for returns of merchandise. Accordingly, a
         reserve for accounts receivable and payable has been provided. The
         reserve accounts require the use of significant estimates, which could
         differ from actual results. The Company believes the techniques and
         assumptions used in establishing the reserve accounts are appropriate.
         As of March 31, 2003, the Company recorded a reserve for accounts
         receivable of approximately $8,697.00, and a reserve for accounts
         payable of approximately $7,640.00.

         (I) Investments in marketable securities
         ----------------------------------------

         The Company classifies marketable debt securities as "held to maturity"
         if it has the positive intent and ability to hold the securities to
         maturity. All other marketable securities are classified as "available
         for sale." Securities classified as "available for sale" are carried on
         the financial statements at fair market value. Unrealized gains and
         losses are reported as a separate component of comprehensive income.
         Unrealized losses are charged against net income when a decline in fair
         value is determined to be other than temporary. Securities classified
         as held to maturity are carried at amortized cost.

         (J) Property and Equipment
         --------------------------

         Property and equipment are stated at cost and depreciated using the
         straight line method over the estimated economic useful life of 5 to 7
         years. The Company periodically reviews such assets for possible
         impairments and any expected losses are recorded currently. Maintenance
         and repairs are charged to expense as incurred. Major improvements are
         capitalized. Depreciation expense for the three months ended March 31,
           2003 was approximately $157,981.00

         (K) Deferred expenses
         ---------------------

         Deferred expenses as of March 31, 2003 represent the deferred portion
         of the fair value of stock issued to two consultants and one officer
         for services that are being expensed over the respective lives of the
         contracts. The current amortization charge to operations is related to
         the Company receiving services in connection with the underlying
         agreements. The Company will continue to evaluate the recoverability of
         the unamortized portion of the deferred consulting expense in
         subsequent periods.

         (L) Revenue Recognition
         -----------------------

         The Company offers monthly recurring subscriptions at $4.95 per month.
         Once a subscription is received from a new subscriber, the customer is
         automatically billed each month at the per month rate of $4.95 until
         the customer cancels the subscription. All CinemaPop films can be
         purchased on an individual pay-per-view basis for $2.95 per viewing.
         The customer can view pay-per-view films for a 24-hour period following
         initial purchase. The Company also sells videos, and movie and sports
         memorabilia and other products of the pop culture genre on a per-item
         basis.

                                      F-10


<PAGE>



         The Company offers books for sale on a print-on-demand basis, which are
         printed and shipped directly to the customer. Prices for the Company's
         print-on-demand books range from $1.95 to $25.00 per book.

         The Company accepts Visa and MasterCard for secure online payments. The
         Company accepts returns on all items purchased from its websites and
         offers full refunds on subscriptions and pay-per-view transactions to
         any unsatisfied customer.

         Any royalty due is accounted for by the Company as a cost of sale. Most
         on-demand, DVD or VHS movies do not require the payment of any royalty.
         Where a royalty payment is required, it is paid subsequent to the
         receipt of the order and is recorded as a cost of sale. All memorabilia
         sales are fulfilled by third parties, for which the Company pays a
         wholesale price. Most books currently offered do not require payment of
         a royalty. For books that do require payment of a royalty, these
         payments are made periodically and recorded as a cost of sale.

         Desience, a former wholly owned subsidiary of the Company, produced
         revenues from product sales of business furniture and modular consoles
         and incidental revenues for installation and freight. Product sale
         revenues and freight revenues were recognized when the product was
         shipped. Installation revenues were recognized as work was completed.

         Fast Forward Marketing, Inc. recognizes revenues upon shipment of
         product, at which time title passes to the customer. The Company
         records a provision for estimated future returns, which has been offset
         against total sales.


2. PROPERTY AND EQUIPMENT
   ----------------------

         Property and equipment consist of the following as of March 31, 2003:

                        Computer hardware and Software        $156,475
                        Leasehold improvements                  $4,081
                        Furniture and fixtures                  74,701
                        Less accumulated depreciation          157,981
                                                          --------------
                                                               $77,276
                                                          ==============

3. COMMITMENTS AND CONTINGENCIES
   -----------------------------

         (A) Legal Actions
         -----------------

         On March 8, 2001, Loudeye Technologies, Inc., commenced an action
         against the Company. The complaint alleges breach of contract for
         $44,107 and also seeks attorneys' fees, court costs and late charges.
         On October 11, 2001, the Company filed an answer to the Loudeye
         complaint that includes a general denial of all allegations made by
         Loudeye and, as of March 31, 2003, no further action had been taken by
         either Loudeye or the Company. The Company will defend any further
         action, and no loss accrual has been made at March 31, 2002.

                                      F-11


<PAGE>


         In a letter dated November 26, 2002 to Kanakaris Wireless and to Fast
         Forward Marketing, Inc., among others, counsel to Warner Home Video and
         Warner/Elektra/Atlantic Corporation, or Warner, demanded payment within
         10 days of an aggregate of $566,764.67 allegedly representing the total
         outstanding balances owed to Warner. In a letter dated December 4, 2002
         to counsel to Warner, counsel to Kanakaris Wireless and Fast Forward
         Marketing, Inc. responded requesting back-up data relating to Warner's
         $566,764.67 in accounts receivable allegedly due from the Company and
         Fast Forward Marketing, Inc. In addition, in the letter dated December
         4, 2002, counsel to Kanakaris Wireless and Fast Forward Marketing, Inc.
         asserted that Kanakaris Wireless, as a separate and distinct entity, is
         not liable to Warner for any debts of its subsidiary, Fast Forward
         Marketing, Inc. In a letter dated December 6, 2002 to counsel to
         Kanakaris Wireless and Fast Forward Marketing, Inc., counsel to Warner
         requested that, while they prepare the back-up data supporting the
         alleged accounts receivable amounts owed, counsel to Kanakaris Wireless
         and Fast Forward Marketing, Inc. prepare and send various materials
         relating to the acquisition of Fast Forward Marketing, Inc. and
         accounts payable reports, payment history and any other documents
         reflecting the balance currently owed by Fast Forward Marketing, Inc.
         to Warner.

         The Company has notified Intervisual Books of its plan to litigate over
         material misrepresentations of accounts payable and accounts receivable
         in the Fast Forward Marketing acquisition. Intervisual Books has been
         sued by one or more vendors pertaining to Fast Forward Marketing debt.
         Intervisual Books has filed a consolidated cross-complaint against Fast
         Forward Marketing, the Company and Alex Kanakaris regarding this
         litigation. Legal counsel to Intervisual Books has proposed that all
         matters between the Company, Intervisual Books and related filed and
         pending third-party lawsuits be addressed in a single mediation hearing
         process. The Company anticipates that this mediation hearing will occur
         in the near future, and is presently conducting pre-hearing
         negotiations. In the event mediation fails, the Company intends to
         pursue its lawsuit against Intervisual Books, defend against the
         Intervisual Books lawsuit and seek dismissal of the Company and Alex
         Kanakaris from the Intervisual Books lawsuit.

         Christel H. Uittenbogaart, an individual, commenced an action against
         Kanakaris Wireless, its subsidiary, Kanakaris InternetWorks, Inc., Alex
         Kanakaris and David Shomaker, among others, in the Los Angeles Superior
         Court (Case No. SC075090) on December 17, 2002. The complaint alleged
         that Kanakaris Wireless and Kanakaris InternetWorks owed Ms.
         Uittenbogaart $113,183.43 as of March 31, 2002 under the royalty
         provisions of a Stock Purchase Agreement entered into between Kanakaris
         InternetWorks, Inc. and Ms. Uittenbogaart and alleged other damages in
         unspecified amounts. Ms. Uittenbogaart's complaint included allegations
         of breach of contract, breach of the implied covenant of good faith,
         fraud, and negligent misrepresentation. In addition, Ms. Uittenbogaart
         alleged the existence of a constructive trust based on unjust
         enrichment and sought an equitable lien against property of Kanakaris
         Wireless subsidiary Desience Corporation held by the defendants.
         Lastly, Ms. Uittenbogaart demanded an accounting of the gross sales,
         profits and funds generated as a result of the purchase of Desience
         Corporation from Ms. Uittenbogaart in 1997. The Company has entered
         into settlement discussions which would require the Company to pay Ms.
         Uittenbogaart monthly payments for a period of time.

         The Company is subject to certain legal proceedings, claims and
         litigation arising in the ordinary course of business. While the
         amounts claimed may be substantial, the ultimate liability cannot
         presently be determined because of considerable uncertainties that
         exist. Therefore, it is possible that the outcome of such legal
         proceedings, claims and litigation could have a material effect on
         quarterly or annual operating results or cash flows when resolved in a
         future period. However, based on facts currently available, management
         believes such matters will not have a material adverse effect on the
         Company's financial position, results of operations or cash flows.

         (B) SERVICE AGREEMENTS
         ----------------------

         On October 9, 2001, the Company entered into a service agreement with
         Mind Pointe, Inc. Based upon the terms of the contract, Mind Pointe,
         Inc. will provide web hosting, development services, and programming
         and design assistance for the Company's websites. The Company has
         agreed to pay a maximum of approximately $17,000 each month for these
         services. For the three months ended March 31, 2003, $19,500 was
         charged to operations under this agreement. The agreement is now a
         month-to-month arrangement.

4. CONVERTIBLE DEBENTURES
   ----------------------

         In order to provide working capital and financing for the Company's
         expansion, on various dates during 2000, the Company entered into
         several agreements with four accredited investors the ("Purchasers")
         whereby the Purchasers acquired aggregates of $1,000,000 and $4,500,000
         of the Company's 10% Convertible Debentures, due February 1, 2001 and
         May 1, 2001, respectively.

                                      F-12


<PAGE>


         The Purchasers converted portions of the 2000 debentures and accrued
         interest into shares of common stock of the Company at various times.
         The initial conversion price of these debentures was equal to the
         lesser of $.97 and 66.66% of the average closing bid price during the
         20 trading days immediately preceding the conversion dates.

         Relating to the $1,000,000 of debentures due February 1, 2001, the
         Company issued 15,000 common stock warrants on February 1, 2001, at an
         exercise price of $38 per share as consideration for debt financing.
         The fair market value of the warrants were deemed immaterial as
         estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 87%, risk-free
         interest rate 6.22%, expected option life 3 years. As of the date of
         this report no warrants have been exercised.

         Relating to the $4,500,000 of debentures due May 1, 2001, the Company
         issued 67,500 common stock warrants on April 1, 2001, at an exercise
         price of $38 per share as consideration for debt financing. The fair
         market value of the warrants were deemed immaterial as estimated on the
         grant date using the Black-Scholes option pricing method as required
         under SFAS 123 with the following weighted average assumptions:
         expected dividend yield 0%, volatility 87%, risk-free interest rate
         6.15%, expected option life 3 years. As of the date of this report no
         warrants have been exercised.

         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 for fiscal year 2000 amounted to $925,000 for debentures
         due February 1, 2001 and $1,760,000 for debentures due May 1, 2001.

         Also, in order to provide working capital and financing for the
         Company's expansion during 2001, effective as of January 5, 2001, the
         Company entered into a securities purchase agreement and related
         agreements with four accredited investors (the "Purchasers") for the
         purchase of the Company's 12% Convertible Debentures due January 5,
         2002 and March 9, 2002.

         The debentures are immediately convertible into shares of the Company's
         common stock. The initial conversion price for the January and March
         2001 debentures was equal to the lesser of (i) $3.00 and (ii) the
         average of the lowest three intraday trading prices during the twenty
         trading days immediately prior to the conversion date, discounted by
         37.5%.

         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 for fiscal year 2001 amounted to $533,500 for the
         debentures due January 5, 2002, and $412,500 for the debentures due
         March 9, 2002.

         The Purchasers made investments in tranches, the first in the aggregate
         amount of $650,000, which was received upon signing of the definitive
         investment agreements and the second, in the aggregate amount of
         $650,000, which was received in March 2001.

                                      F-13


<PAGE>


         Upon the issuance of the first $650,000 of convertible debentures, the
         Purchasers received five-year term warrants to purchase three shares of
         the Company's common stock for each $20.00 invested or which may have
         been invested in the two $650,000 tranches of convertible debentures.
         The initial exercise price of the warrants was equal to the lesser of
         (i) $2.50 and (ii) the average of the lowest three intraday trading
         prices during the twenty trading days immediately preceding the
         exercise date. For all debentures issued in January and March 2001,
         interest is 12% per annum, payable quarterly in common stock or cash at
         the option of the Purchasers.

         The debentures are immediately convertible into shares of the Company's
         common stock. The initial conversion price for the January and March
         2001 debentures was equal to the lesser of (i) $3.00 and (ii) the
         average of the lowest three intraday trading prices during the twenty
         trading days immediately prior to the conversion date, discounted by
         37.5%.

         In connection with the 2001 issuance of the convertible debentures due
         January 5, 2002, the Company has issued warrants to acquire additional
         shares of the Company's common stock as follows:

                 The Company issued 20,000 common stock warrants on January 5,
                 2001, at an exercise price of $50 per share as consideration
                 for debt financing. The fair market value of the warrants were
                 deemed immaterial as estimated on the grant date using the
                 Black-Scholes option pricing method as required under SFAS 123
                 with the following weighted average assumptions: expected
                 dividend yield 0%, volatility 101%, risk-free interest rate
                 4.81%, expected option life 3 years. As of the date of this
                 report no warrants have been exercised.

                 The Company issued 3,750 common stock warrants on February 15,
                 2001, at an exercise price of $50 per share as consideration
                 for debt financing. The fair market value of the warrants were
                 deemed immaterial as estimated on the grant date using the
                 Black-Scholes option pricing method as required under SFAS 123
                 with the following weighted average assumptions: expected
                 dividend yield 0%, volatility 101%, risk-free interest rate
                 4.68%, expected option life 3 years. As of the date of this
                 report no warrants have been exercised.

                 The Company issued 8,750 common stock warrants on March 9,
                 2001, at an exercise price of $50 per share as consideration
                 for debt financing. The fair market value of the warrants were
                 deemed immaterial as estimated on the grant date using the
                 Black-Scholes option pricing method as required under SFAS 123
                 with the following weighted average assumptions: expected
                 dividend yield 0%, volatility 101%, risk-free interest rate
                 4.30%, expected option life 3 years. As of the date of this
                 report no warrants have been exercised.

         In connection with the 2001 issuance of the convertible debentures due
         March 9, 2002, the Company issued 32,500 common stock warrants on March
         5, 2001, at an exercise price of $50 per share as consideration for
         debt financing. The fair market value of the warrants were deemed
         immaterial as estimated on the grant date using the Black-Scholes
         option pricing method as required under SFAS 123 with the following
         weighted average assumptions: expected dividend yield 0%, volatility
         101%, risk-free interest rate 4.30%, expected option life 3 years. As
         of the date of this report no warrants have been exercised.

                                      F-14


<PAGE>


         As of April 30, 2001, $1,848,500 of the original $4,500,000 principal
         balance of 10% Convertible Debentures due May 1, 2001 remained
         outstanding. As of April 30, 2001, the Company entered into an
         agreement with the holders of these debentures to extend the due date
         of these debentures to May 1, 2002. In consideration for the extension,
         the Company granted to the holders warrants to purchase up to an
         aggregate of 67,500 shares of common stock at an initial exercise price
         equal to the lesser of the average of the lowest three intraday trading
         prices during the 20 trading days immediately preceding the grant of
         the warrants, discounted by 37.5%, and the average of the lowest three
         intraday trading prices of a share of common stock during the 20
         trading days immediately preceding exercise of the warrants.

         The 67,500 warrants had an exercise price of $1.17 per share as
         consideration for extending the due date related to debt financing. The
         fair market value of the warrants, aggregating $97,108 was estimated on
         the grant date using the Black-Scholes option pricing method as
         required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 132%, risk-free
         interest rate 4.25%, expected option life 3 years. The $97,108 was
         charged to interest and financial costs at the grant date. As of the
         date of this report no warrants have been exercised.

         In order to provide working capital and financing for the Company's
         expansion, as of June 29, 2001, the Company entered into a securities
         purchase agreement and related agreements with three accredited
         investors (the "Purchasers") for the purchase of $500,000 of the
         Company's 12% Convertible Debentures due June 29, 2002. The debentures
         bear interest at a rate of 12% per annum, payable quarterly in common
         stock or cash at the option of the Purchasers.

         The debentures initially were convertible into shares of common stock
         at the lesser of $2.00 per share and 50% of the average of the lowest
         three intraday trading prices of a share of common stock during the
         twenty trading days immediately preceding conversion.

         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 for fiscal year 2001 amounted to $50,000 for debentures due
         June 29, 2002.

         On May 6, 2002, the Company restated one of its June 2001 convertible
         debentures to reflect an additional $125,000 investment, resulting in
         an aggregate of $625,000 of June 2001 convertible debentures
         outstanding.

         Upon the issuance of the June 2001 debentures, the Purchasers received
         five-year term warrants to purchase three shares of the Company's
         common stock for each $20.00 invested. The initial exercise price of
         the warrants was equal to the lesser of $1.168 and the average of the
         lowest three intraday trading prices of a share of common stock during
         the 20 trading days immediately preceding exercise.

         The Company issued 75,000 common stock warrants on June 29, 2001, at an
         exercise price of $1.17 per share as consideration for debt financing.
         The fair market value of the warrants were deemed immaterial as
         estimated on the grant date using the Black-Scholes option pricing

                                      F-15


<PAGE>


         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 101%, risk-free
         interest rate 3.58%, expected option life 3 years. As of the date of
         this report no warrants have been exercised.

         As of June 29, 2001, the Company entered into a letter agreement with
         certain of its debenture investors, which provided various
         anti-dilution adjustments to the debentures and warrants issued in the
         April 2000, January 2001 and March 2001 debenture offerings. These
         adjustments were made partly in lieu of other adjustments that would
         have been imposed under the terms of the April 2000, January 2001 and
         March 2001 debenture offering documents. As a result of these
         adjustments, the conversion prices for the debentures held by these
         entities and issued in the April 2000, January 2001 and March 2001
         offerings were reduced to the lesser of (i) $2.00 per share, and (ii)
         50% of the average of the three lowest intraday trading prices of a
         share of our common stock for the 20 trading days immediately preceding
         the conversion of the debentures. In addition, the exercise prices of
         the warrants issued in connection with the April 2000, January 2001 and
         March 2001 offerings were reduced to the lesser of (i) $1.168 per
         share, and (ii) the average of the three lowest intraday trading prices
         of a share of our common stock for the 20 trading days immediately
         preceding the exercise of the warrants.

         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.

         In order to provide working capital and financing for the Company's
         expansion, as of January 9, 2002, the Company entered into a securities
         purchase agreement and related agreements with one accredited investor
         (the "Purchasers") for the purchase of $200,000 of the Company's 12%
         Convertible Debentures due January 9, 2003. The debentures bear
         interest at a rate of 12% per annum, payable quarterly in common stock
         or cash at the option of the Purchasers.

         The debentures initially were convertible into shares of common stock
         at the lesser of $0.055 per share and 50% of the average of the lowest
         three intraday trading prices of a share of common stock during the
         trading days immediately preceding conversion.

         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 for fiscal year 2002 amounted to $200,000 for debentures
         due January 9, 2003.

         Upon the issuance of the January 2002 debentures, the Purchasers
         received five-year term warrants to purchase three shares of the
         Company's common stock for each $20.00 invested. The initial exercise
         price of the warrants was equal to the lesser of $0.055 and the average
         of the lowest three intraday trading prices of a share of common stock
         during the 20 trading days immediately preceding exercise.

                                      F-16


<PAGE>


         The Company issued 600,000 common stock warrants on January 9, 2002, at
         an exercise price of $0.055 per share as consideration for debt
         financing. The fair market value of the warrants were $49,049 as
         estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 123%, risk-free
         interest rate 2.16%, expected option life one year. As of the date of
         this report no warrants have been exercised. The value of the warrants
         was recorded by the Company as a current operating expense in the
         accompanying financial statements.

         As of January 9, 2002, the Company entered into a letter agreement with
         certain of its debenture investors, which letter agreement provided
         various anti-dilution adjustments to the debentures and warrants issued
         in the April 2000 debenture offering. These adjustments were made
         partly in lieu of other adjustments that would have been imposed under
         the terms of the April 2000 debenture offering documents. As a result
         of these adjustments, the conversion prices for the debentures held by
         these entities and issued in the April 2000 offering were reduced to
         the lesser of (i) $0.055 per share, and (ii) 50% of the average of the
         three lowest intraday trading prices of a share of our common stock for
         the 20 trading days immediately preceding the conversion of the
         debentures. In addition, the exercise price of the warrants issued to
         certain debenture investors in connection with the April 2000 and
         January 2001 offerings, respectively, and issued on April 30, 2001,
         were reduced to 50% of the average of the three lowest intraday trading
         prices of a share of our common stock for the 20 trading days
         immediately preceding the exercise of the warrants. In addition, the
         exercise period of the warrants issued in connection with the April
         2000, January 2001 and March 2001 offerings was extended from five to
         seven years.

         In order to provide working capital and financing for the Company's
         expansion and for the acquisition of the Company's Fast Forward
         Marketing, Inc. business, as of March 29, 2002, the Company entered
         into a securities purchase agreement and related agreements with four
         accredited investors (the "Purchasers") for the purchase of $500,000 of
         the Company's 12% Convertible Debentures due March 29, 2003. The
         debentures bear interest at a rate of 12% per annum, payable quarterly
         in common stock or cash at the option of the Purchasers. The net
         proceeds of the offering, after payment of some related expenses, were
         $380,000.

         The debentures initially were convertible into shares of common stock
         at the lesser of $0.035 per share and 50% of the average of the lowest
         three intraday trading prices of a share of common stock during the
         trading days immediately preceding conversion.

         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 for fiscal year 2002 amounted to $500,000 for debentures
         due March 29, 2003.

         Upon the issuance of the March 2002 debentures, the Purchasers received
         five-year term warrants to purchase three shares of the Company's
         common stock for each $1.00 invested. The initial exercise price of the
         warrants was equal to the lesser of $0.035 and the average of the
         lowest three intraday trading prices of a share of common stock during
         the 20 trading days immediately preceding exercise.

                                      F-17


<PAGE>



         The Company issued 1,500,000 common stock warrants on March 29, 2002,
         at an exercise price of $0.035 per share as consideration for debt
         financing. The fair market value of the warrants were $109,039 as
         estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 123%, risk-free
         interest rate 2.57%, expected option life one year. As of the date of
         this report no warrants have been exercised. The value of the warrants
         was recorded by the Company as a current operating expense in the
         accompanying financial statements.

         In order to provide working capital and financing for the Company's
         operation and expansion, as of September 11, 2002, the Company entered
         into a securities purchase agreement and related agreements with three
         accredited investors (the "Purchasers") for the purchase of up to
         $600,000 of the Company's 12% Convertible Debentures. The debentures
         bear interest at a rate of 12% per annum, payable quarterly in common
         stock or cash at the option of the Purchasers. The debentures were to
         be sold in three separate tranches and the first tranche, in the amount
         of $250,000, was consummated in September 2002 and the convertible
         debentures relating to the first tranche are due September 11, 2003.
         The aggregate net proceeds of the September 2002 tranche, after payment
         of some related expenses, was approximately $165,000.

         The second tranche of the September 2002 financing transaction was
         consummated in October 2002 and the convertible debentures relating to
         the second tranche are due October 15, 2003. The aggregate net proceeds
         of the October 2002 tranche, after payment of some related expenses,
         was approximately $108,000.

         The third tranche of the September 2002 financing transaction was
         consummated in December 2002 and the convertible debentures relating to
         the third tranche are due December 9, 2003. The aggregate net proceeds
         of the December 2002 tranche, after payment of some related expenses,
         was approximately $122,000.

         The debentures initially were convertible into shares of common stock
         at the lesser of $0.01 per share and 50% of the average of the lowest
         three intraday trading prices of a share of common stock during the
         trading days immediately preceding conversion.

         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 for fiscal year 2002 amounted to $200,000 for debentures
         due September 11, 2003.

         Upon the issuance of the September, October and December 2002
         debentures, the Purchasers received five-year term warrants to purchase
         three shares of the Company's common stock for each $1.00 invested. The
         initial exercise price of the warrants was equal to $0.005.

         The Company issued 750,000 common stock warrants on September 11, 2002,
         at an exercise price of $0.005 per share as consideration for debt
         financing. The fair market value of the warrants were deemed immaterial
         as estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 123%, risk-free
         interest rate 2.57%, expected option life 3 years. As of the date of
         this report no warrants have been exercised.

                                      F-18


<PAGE>


         The Company issued 525,000 common stock warrants on October 15, 2002,
         at an exercise price of $0.005 per share as consideration for debt
         financing. The fair market value of the warrants were deemed immaterial
         as estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 315.20%, risk-free
         interest rate 2.08%, expected option life 3 years. As of the date of
         this report, no warrants have been exercised.

         The Company issued 525,000 common stock warrants on December 9, 2002,
         at an exercise price of $0.005 per share as consideration for debt
         financing. The fair market value of the warrants were deemed immaterial
         as estimated on the grant date using the Black-Scholes option pricing
         method as required under SFAS 123 with the following weighted average
         assumptions: expected dividend yield 0%, volatility 317.88%, risk-free
         interest rate 2.52%, expected option life 3 years. As of the date of
         this report, no warrants have been exercised.

         Pursuant to the rules and regulations of the SEC regarding beneficial
         conversion features, the Company 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 amounts aggregated
         approximately $1,093,000 and $2,665,000 in 2002 and 2001, respectively.
         There was no amortization period for these financing costs since the
         debentures were convertible immediately upon issuance.

         As of September 23, 2002, in addition to the debentures issued in
         September 2002 described above:

          -    $1,443,625 of the original $4,500,000 principal balance of
               Convertible Debentures due May 1, 2002 remained outstanding;

          -    $185,181 of the original $650,000 principal balance of 12%
               Convertible Debentures due January 5, 2002 remained outstanding;

          -    $438,819 of the original $650,000 principal balance of 12%
               Convertible Debentures due March 9, 2002 remained outstanding;

          -    $625,000 of the original $625,000 principal balance of 12%
               Convertible Debentures due June 29, 2002 remained outstanding;

          -    $200,000 of the original $200,000 principal balance of 12%
               Convertible Debentures due January 9, 2003 remained outstanding;
               and

          -    $500,000 of the original $500,000 principal balance of 12%
               Convertible Debentures due March 29, 2003 remained outstanding.

         As of September 23, 2002, the Company entered into an agreement with
         the holders of the debentures listed above to extend the due date of
         these debentures to September 23, 2003. In consideration for the
         extension, the Company granted to the holders of these debentures
         warrants to purchase up to an aggregate of 5,189,126 shares of common
         stock at an exercise price equal to the average of the lowest three

                                      F-19


<PAGE>


         intraday trading prices during the 20 trading days immediately
         preceding the exercise of the warrants. The warrants granted included
         warrants to Bank Insinger de Beaufort to purchase up to 1,285,028
         shares of common stock, warrants to AJW Partners, LLC to purchase up to
         808,010 shares of common stock, warrants to New Millennium Capital
         Partners II, LLC to purchase up to 808,010 shares of common stock,
         warrants to Equilibrium Equity, LLC to purchase up to 56,062 shares of
         common stock, warrants to Bristol Investment Fund, Ltd. to purchase up
         to 240,000 shares of common stock, warrants to Bristol Capital, LLC to
         purchase up to 132,016 shares of common stock, warrants to Alliance
         Equities, Inc. to purchase up to 60,000 shares of common stock,
         warrants to AJW Offshore, Ltd. (f/k/a AJW/New Millennium Offshore,
         Ltd.) to purchase up to 900,000 shares of common stock, and warrants to
         AJW Qualified Partners, LLC (f/k/a Pegasus Capital Partners, LLC) to
         purchase up to 900,000 shares of common stock.

         Since September 2001, the Company has failed to make all or part of its
         required interest payments under its various outstanding convertible
         debentures. As a result, the Company is in default under its
         outstanding convertible debentures.

         Pursuant to the rules and regulations of the SEC regarding beneficial
         conversion features, the Company 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 approximately
         $52,500 for the three months ended December 31, 2002. There was no
         amortization period for these financing costs since the debentures were
         convertible immediately upon issuance.

         The Company's convertible debentures and related warrants contain
         anti-dilution provisions whereby, if the Company issues common stock or
         securities convertible into or exercisable for common stock at a price
         less than the conversion or exercise prices of the debentures or
         warrants, the conversion and exercise prices of the debentures or
         warrants shall be adjusted as stipulated in the agreements governing
         such debentures and warrants.

         During the three months ended December 31, 2002, the Company issued an
         aggregate of 7,051,907 shares of common stock to five accredited
         investors in connection with regular interest payments and upon
         conversion of an aggregate of $30,730 of principal plus accrued
         interest of $3,247 on the Company's convertible debentures. No gain or
         loss was recognized upon the conversion of debt to equity.

         During the three months ended March 31, 2003, the Company issued an
         aggregate of 11,877,558 shares of common stock to six accredited
         investors in connection with regular interest payments and upon
         conversion of an aggregate of $45,062 of principal plus accrued
         interest of $ 6,332 on the Company's convertible debentures. No gain or
         loss was recognized upon the conversion of debt to equity.

         As of March 31, 2003, the Company was indebted for an aggregate of
         $4,129,183 on these convertible debentures. To the extent debentures
         issued by the Company are converted into shares of common stock, the
         Company will not be obligated to repay the converted amounts.

         During September 2002, the Company signed a non-binding letter of
         intent for up to $3,000,000 of financing from an unrelated financing
         institution. As of March 31, 2003, the Company had borrowed
         approximately $870,00 under this arrangement.



                                      F-20


<PAGE>


5. CONVERTIBLE PROMISSORY NOTES
   ----------------------------

         On February 28, 2002, the Company entered into agreements with its
         legal counsel and its accounting firm to replace an aggregate of
         $372,550 of existing accounts payable to those entities with 6%
         convertible promissory notes due November 30, 2002. The convertible
         promissory notes have a conversion price equal to the lesser of (i)
         $0.085 and (ii) the average of the three lowest intraday trading prices
         of a share of our common stock for the 20 trading days immediately
         preceding the conversion of the notes. As of December 31, 2002, the
         full amount of these promissory notes remained outstanding. These are
         unsecured and have accrued interest totaling approximately $18,741 at
         March 31, 2003.

6. SERIES B PREFERRED STOCK
   ------------------------

         Effective April 10, 2002, the Company entered into an Exchange
         Agreement with Bristol Capital, LLC pursuant to which it issued 900
         shares of its Series B Convertible Preferred Stock and acquired from
         Bristol Capital its 50% interest in the Company's now wholly-owned Fast
         Forward Marketing subsidiary in consideration for providing the
         opportunity to acquire the Fast Forward Marketing business. Each share
         of the Company's Series B Convertible Preferred Stock has a stated
         value of $1,000 and is convertible into shares of its common stock at
         the lesser of (i) $0.086, and (ii) 82% of the average of the three
         lowest intraday trading prices of a share of its common stock during
         the twenty trading days preceding the conversion date. The Series B
         Convertible Preferred Stock accrues dividends at a rate of 8% per
         annum, which is payable on a quarterly basis in arrears, at the option
         of the holder, in cash or shares of our common stock based on the then
         applicable conversion price. As of December 31, 2002, all 900 shares,
         with a value of $900,000, of the Company's Series B Convertible
         Preferred Stock remained outstanding, and no accrued dividends have
         been recorded as of March 31, 2003.

7. STOCKHOLDERS' EQUITY AND STOCK ISSUANCES
   ----------------------------------------

         A. Debenture Investors
         ----------------------

         (I)      During the six months ended March 31, 2003, the Company issued
                  an aggregate of 18,929,465 shares of common stock having a
                  fair value of approximately $85,370 to various debenture
                  investors representing the conversion of principal and
                  interest.

         B. Legal and Consulting
         -----------------------

(II) During the six months ended March 31, 2003, 19,032,500 common shares (III)
were issued for consulting services having a fair value of $190,326. Of the (IV)
19,032,500 issued during the six months ended March 31, 2003, 3,532,500 (V)
shares were issued to seven members of the Company's Board of Directors and (VI)
15,500,000 were issued to nine other consultants.
(VII) during the three months. On October 16, 2002, the Company (VIII) issued
400,000 shares of
                  common stock for marketing services having a fair value of
                  $4,000. The consideration given for the services was valued
                  based on the trading price of the Company's common stock on
                  the grant date.

         C. Cash
         -------

         (III)    On November 5, 2002, the Company issued 500,000 shares of
                  common stock for $25,000 at a value of $.05 per share.

                                      F-21


<PAGE>


8. ADJUSTMENTS TO OUTSTANDING SECURITIES
   -------------------------------------

         On September 23, 2002, the Company entered into an agreement with the
         holders of all of its outstanding convertible debentures other than
         those debentures issued on September 11, 2002, to extend the due date
         of those outstanding debentures to September 23, 2003. In consideration
         for the extension, the Company granted to the holders of these
         debentures warrants to purchase up to an aggregate of 5,189,126 shares
         of common stock at an exercise price equal to the average of the lowest
         three intraday trading prices during the 20 trading days immediately
         preceding the exercise of the warrants. The warrants granted included
         warrants to Bank Insinger de Beaufort to purchase up to 1,285,028
         shares of common stock, warrants to AJW Partners, LLC to purchase up to
         808,010 shares of common stock, warrants to New Millennium Capital
         Partners II, LLC to purchase up to 808,010 shares of common stock,
         warrants to Equilibrium Equity, LLC to purchase up to 56,062 shares of
         common stock, warrants to Bristol Investment Fund, Ltd. to purchase up
         to 240,000 shares of common stock, warrants to Bristol Capital, LLC to
         purchase up to 132,016 shares of common stock, warrants to Alliance
         Equities, Inc. to purchase up to 60,000 shares of common stock,
         warrants to AJW Offshore, Ltd. (f/k/a AJW/New Millennium Offshore,
         Ltd.) to purchase up to 900,000 shares of common stock, and warrants to
         AJW Qualified Partners, LLC (f/k/a Pegasus Capital Partners, LLC) to
         purchase up to 900,000 shares of common stock.


9. SEGMENT INFORMATION
   -------------------

         For the Three Months Ended March 31:
<TABLE>
<CAPTION>

                                             Internet           Video
                     2002                    Commerce        Distribution         Total
         ------------------------------     ------------     ------------     ------------
<S>                                         <C>              <C>              <C>
         Revenues                           $    16,493       $       --      $    16,493
         Segment profit (loss)               (2,157,910)              --       (2,157,910)
         Total assets                         1,057,202               --        1,057,202
         Additions to long-lived assets              --               --              --
         Depreciation and amortization           30,013               --           30,013

                     2003
         ------------------------------
         Revenues                           $    18,117      $   201,883      $   220,000
         Segment profit (loss)                 (569,582)         (61,643)        (631,225)
         Total assets                           601,943          487,013        1,088,956
         Additions to long-lived assets              --               --              --
         Depreciation and amortization            2,776           10,244           13,020
</TABLE>


10. DEBENTURE MATURITIES
    --------------------

         The Company is in the process of registering a portion of the shares of
         common stock underlying certain of its convertible debentures to
         satisfy its obligations upon conversion by the debenture holders of
         those debentures into shares of the Company's common stock. On May 9,
         2002, the Company filed a Registration Statement on Form SB-2 with the
         SEC to register shares of common stock in order to partially satisfy
         these obligations. This Registration Statement has not been declared
         effective by the SEC and the Company remains in default in the making

                                      F-22


<PAGE>


         of quarterly interest payments for the last five quarters, and for part
         of the quarter ended September 30, 2001, on the Company's outstanding
         convertible debentures.

11. GOING CONCERN
    -------------


         The Company's financial statements for the three months ended March 31,
         2003 have been prepared on a going concern basis which Contemplates the
         realization of assets and the settlement of liabilities And commitments
         in the normal course of business. The Company had a net loss from
         operations of $631,225, a negative cash flow from operating activities
         of $919,889, a working capital deficiency of $7,656,795 and a
         stockholders' deficiency of $7,258,235. Due to the Company's net
           losses, negative cash flows, working capital deficiency and
         stockholders' deficiency, the Company may not be able to meet such
         objectives as presently structured. The financial statements do not
         include any adjustments that might result from the outcome of this
         uncertainty.

         The Company has been, and currently is, working toward identifying and
         obtaining new sources of funding. Deteriorating global economic
         conditions may cause prolonged declines in investor confidence in and
         accessibility to capital markets. Deteriorating global economic
         conditions may make it more difficult for the Company to secure funding
         because, during times of deteriorating global economic conditions,
         prospective lenders and investors generally have less funds to lend or
         invest and are more hesitant to lend to or invest in small, financially
         risky companies such as the Company. Further, the Company's debenture
         financing documents contain notice and right of first refusal provision
         and the grant of security interests in substantially all of the
         Company's assets in favor of its debenture investors, all of which
         provisions will restrict the Company's ability to obtain debt and/or
         equity financing.

         Future financing may not be available on a timely basis, in sufficient
         amounts or on terms acceptable to the Company. This financing may also
         dilute existing stockholders' equity. Any future financing that the
         Company may obtain may cause significant dilution to existing
         stockholders. Any debt financing or other financing of securities
         senior to common stock that the Company is able to obtain will likely
         include financial and other covenants that will restrict the Company's
         flexibility. At a minimum, the Company expects these covenants to
         include restrictions on its ability to pay dividends on its common
         stock. Any failure to comply with these covenants would have a material
         adverse effect on the Company's business, prospects, financial
         condition, results of operations and cash flows.

         If adequate funds are not available, the Company may be required to
         delay, scale back or eliminate portions of its operations and product
         and service development efforts or to obtain funds through arrangements
         with strategic partners or others that may require the Company to
         relinquish rights to certain of its technologies or potential products
         or other assets. Accordingly, the inability to obtain such financing
         could result in a significant loss of ownership and/or control of the
         Company's proprietary technology and other important assets and could
         also adversely affect its ability to fund its continued operations and
         its product and service development efforts that historically have
         contributed significantly to the Company's competitiveness.

                                      F-23


<PAGE>


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

         THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION
WITH OUR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES AND THE
INFORMATION INCLUDED UNDER THE CAPTION "RISK FACTORS" INCLUDED ELSEWHERE IN THIS
DOCUMENT. EXCEPT FOR HISTORICAL INFORMATION, THE FOLLOWING DISCUSSION CONTAINS
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS
STATEMENTS OF OUR PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS AND OUR CURRENT
BELIEFS REGARDING REVENUES WE MIGHT EARN IF WE ARE SUCCESSFUL IN IMPLEMENTING
OUR BUSINESS STRATEGIES. SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS"
FOR FURTHER INFORMATION REGARDING FORWARD-LOOKING STATEMENTS. OUR ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF A NUMBER OF FACTORS, MANY OF WHICH ARE BEYOND OUR
CONTROL, INCLUDING THOSE FACTORS DISCUSSED UNDER "RISK FACTORS" AND OTHER
HEADINGS IN THIS DOCUMENT, WHICH COULD, AMONG OTHER THINGS, CAUSE THE PRICE OF
OUR COMMON STOCK TO FLUCTUATE SUBSTANTIALLY.

OVERVIEW

         We provide online delivery of English and Spanish language films on a
subscription- and pay-per-view-basis and offer for sale on our websites films
and features in VHS and DVD formats, print-on-demand books and products of the
pop culture genre. We buy and sell the rights to Spanish language and Spanish
language sub-titled films for territories and for various media such as
Internet, theatrical, cable, TV and home video. We also operate a video
distribution business through which we distribute films and features in VHS and
DVD formats to retailers through our FFM subsidiary. In addition, we offer
business services, including encoding of video for online delivery. We also
develop and offer software and products for encoding and delivery of media-rich
data, including video, audio and text over the Internet.

         Our revenues are principally derived from our film distribution
business. We expect to continue to place significant emphasis upon the further
development and expansion of our English and Spanish language content rights and
delivery and e-commerce activities. As funds become available, we intend to
increase our marketing efforts substantially in order to develop awareness,
brand loyalty and sales for our consolidated www.CinemaPop.com and
www.CineManiaNetwork.com online movie and book website. This website includes
CinemaPop, which offers online and on-demand films as well as VHS and DVD
titles, CineManiaNetowrk, which offers online and on-demand Spanish language
Films as well as VHS and DVD titles, WordPop, which offers previews and
print-on-demand books, and AK.TV, an Internet television-style channel with
regularly scheduled film programming. We also intend to increase our marketing
efforts in order to develop awareness of and sales for our video distribution
business. We intend to generate revenue from subscriptions, pay-per-view sales,
advertisers and sales of products on our websites. We also intend to derive
revenue from both product sales and service fees pertaining to our
CinemaWEAR(TM) encoding. As funds become available, we intend to continue to
invest in the development of new products and services that enhance our websites
and CinemaWEAR(TM) encoding, and to further develop our existing products and
services.

         In March 2002, we sold our Desience division to obtain additional
funding for, and to strengthen our focus on, our Internet and e-commerce
business activities. Prior to March 2002, our Desience division's business
involved the design, manufacture and installation of ergonomic data control
console systems for high-end computer command centers.

         Prior to the sale of our Desience division, that Division contributed
30% ($513,136) of our revenues for the year ended September 30, 2001 and
contributed 96% ($591,244) of our revenues for the year ended September 30,
2000. Our Desience division also generated $193,408 and $274,117 in gross profit
for the years ended September 30, 2001 and 2000, respectively. From January 1,
2002 to the date of the sale of its business, our Desience division generated

                                        1


<PAGE>


approximately $216,139 which amount would have been added to our revenues for
the fiscal year ended September 30, 2002 had it not been sold and reported in
our financial statements for the fiscal year ended September 30, 2002 as a
discontinued operation. From January 1, 2002 to the date of the sale of its
business, our Desience division also generated approximately $76,835 in gross
profit which amount would have been added to our gross profit for the fiscal
year ended September 30, 2002 had it not been sold and reported in our financial
statements for the fiscal year ended September 30, 2002 as a discontinued
operation.

         The sale of our Desience division provided us with additional capital
to continue the operations of our content delivery business. While the revenues
from our Desience division amounted to a substantial percentage of our overall
revenues, our Desience division has not been the principal focus of our growth
efforts. Our principal focus has been on the development and growth of our
content rights and delivery and e-commerce activities. With the sale of our
Desience division, we are placing additional emphasis on the growth and
development of our content rights and delivery and e-commerce activities, which
activities we believe form a strategic fit with the acquisition of the business
of Fast Forward Marketing, Inc. Because of the sale of our Desience division, we
believe that we will be able to use our limited resources to more effectively
develop and grow our content delivery and e-commerce activities. In addition, we
believe that our efforts to operate and expand our video distribution business,
as discussed below, will be enhanced as a result of not expending resources on
the operation of our Desience division.

         In April 2002, we purchased substantially all of the assets of Fast
Forward Marketing, Inc. from its sole shareholder, Intervisual Books, Inc. We
intend to further expand into the video distribution market and integrate this
new aspect of our business with our existing products and services.

         Fast Forward Marketing, Inc., the company from which we purchased our
video distribution business, achieved net sales of $5,106,013 for the year ended
September 30, 2001 and $9,212,732 for the year ended September 30, 2000. That
company also generated $374,435 and $1,876,759 in gross profit for the years
ended September 30, 2001 and 2000, respectively. However, as more particularly
disclosed in our financial statements and notes to our financial statements for
the fiscal year ended September 30, 2002 included elsewhere in this document,
the annualized net sales and gross profit of our FFM video distribution
subsidiary are significantly lower than the net sales and gross profit recorded
for the years ended September 30, 2001 and 2000 of the predecessor FFM business,
and we do not expect to achieve in the foreseeable future results similar in
magnitude to historic results. We are presently experiencing severe difficulties
in operating our FFM video distribution business largely resulting from our lack
of available financial resources and debt assumed in connection with the
acquisition of that video distribution business.

         Although we believe that FFM provides a viable strategic fit with our
other business activities and represents an important business opportunity, our
successful operation of our video distribution business, especially over the
next twelve months, will likely require substantial financial resources. We
acquired the business of FFM along with a significant amount of liabilities,
including approximately $850,000 in accounts payable, a substantial portion of
which is owed to suppliers of the videos that FFM distributes. As of December
31, 2002, FFM had approximately $1,363,000 in accounts payable. We have been
unable to timely pay FFM's suppliers and we believe that, as a result, the
business of FFM has been significantly harmed. We believe that we are not
achieving the level of revenues we would be able to achieve if we were able to
timely pay our suppliers. If we continue to fail to timely pay FFM's suppliers,
the business of FFM may be further disrupted and important supplier
relationships may be jeopardized and irreparably harmed. The failure to timely
pay FFM's suppliers could therefore have a material adverse impact on our video
distribution business.

                                        2


<PAGE>


         In January 2002, we purchased all of the outstanding capital stock of
LAIN (Latin American Independent Network) International and its wholly-owned
Subsidiary Tele Anuncio, Inc.

         The principal business of Latin American Independent Network
International, or LAIN, is the purchase and sale of rights to video media,
primarily television, cable, satellite, VHS and DVD movie titles for particular
geographic territories. LAIN has active business operations in the Untied
States, Venezuela, Peru, Bolivia, Columbia, Mexico, Argentina, Brazil, Spain and
other Spanish speaking countries. In addition, LAIN distributes, both
exclusively and non-exclusively, Spanish language and Spanish language dubbed
and sub-titled DVD and VHS movies to U.S. retail stores. LAIN also produces
original Spanish language television programming. In addition, LAIN operates a
web site which features Spanish language and Spanish language sub-titled movies
for click-and-watch online viewing at www.CineManiaNetwork.com. LAIN is a
co-producer of the annual Miami Latin Film Festival Film and TV Market. LAIN
also acquires and sells advertising time in the Spanish television markets in
the United States and other countries throughout Latin America through its
wholly owned subsidiary Tele Anuncio, Inc. LAIN's principal office is in Miami
Beach, Florida, which is widely considered a gateway to the Spanish speaking
marketplace.

         We believe that LAIN presents potential synergies with our existing
businesses including VHS and DVD online and retail sales, online movie
distribution and content acquisition and licensing. Our subscription services
allowing subscribers to access content on our websites now enable users to
access the content offered on the www.CineManiaNetwork.com website. Our Fast
Forward Marketing subsidiary now serves as a sub-distributor of VHS and DVD
titles for LAIN and distributes those titles online and to retail stores.

         Following the sale of our Desience division, we closed our office in
Costa Mesa, California and opened a new office in Santa Monica, California, out
of which we operated our FFM business and conducted other business activities.
We moved out of our Santa Monica, California offices in order to reduce expenses
and currently conduct our operations out of the homes of two of our employees in
Van Nuys, California and in Newport Beach, California.

         We have a significant accumulated deficit and negative working capital.
As a result of our financial condition, our independent auditors have issued an
opinion questioning our ability to continue as a going concern.


RESULTS OF OPERATIONS

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003
AND 2002

         NET SALES. Net sales increased $203,507 (1233%) from $16,493 for the
quarter ended March 31, 2003 to $220,000 for the quarter ended March 31, 2003.
This increase was primarily due to increases in revenue generated by our Spanish
language film distribution business and also by increases in sales in our
Internet division and video distribution activities.

         GROSS PROFIT. Gross profit increased $29,759 (210%) from a gross profit
of $14,156 for the quarter ended March 31, 2002 to a gross profit of $43,915 for
the quarter ended March 31, 2003. This increase in gross profit was due to an
increase in sales.

         OPERATING EXPENSES. Total operating expenses decreased $303,157 (31.1%)
from $976,204 for the quarter ended March 31, 2002 to $673,047 for the quarter
ended March 31, 2003. This decrease in total operating expenses was

                                        3


<PAGE>


due primarily to a decrease in executive compensation, consulting fees and
professional fees, with executive compensation expenses decreasing by $77,219.00
(36.23%) and consulting fees expenses decreasing by $$132,045(40.67%), and
professional fees decreasing by $146,225 (56%).


           INTEREST AND OTHER EXPENSE. Interest and other expense decreased
$1,61,260 from $1,063,353 for the quarter ended March 31, 2002 to $2,093 for the
quarter ended March 31, 2003. This decrease in interest and other expense was
primarily due to the increase in the issuance of stock as payment of interest
accrued and payable on, and upon conversion of portions of the principal
balances of, our convertible debentures.


         NET LOSS. Net loss decreased $1,526,685 (70.74%) from $2,157,910 for
the quarter ended March 31, 2002 to $631,225.00 for the quarter ended March 31,
2003 . This decrease in net loss was primarily due to the decrease in executive
compensation and consulting services, and professional services as discussed
above

COMPARISON OF RESULTS OF OPERATIONS FOR SIX MONTHS ENDED MARCH 31, 2003 AND
SIX MONTHS ENDED MARCH 31, 2002

         NET SALES. Net sales increased $221,457.00 (701%) from $31,588.00 for
the six months ended March 31, 2002 to $253,045 for the six months ended March
31, 2003, due primarily to an increase in sales primarily in our Spanish
language movie distribution operations and also from increases in sales in our
Internet and other video distribution operations.

         GROSS PROFIT. Gross profit increased $65,519.00 (1073%) from $6,101.00
for the six months ended March 31, 2002 to $71,620.00 for the six months ended
March 31, 2003. This increase in gross profit primarily was due to an increase
in sales primarily in our Spanish language movie distribution operations and
also from increases in sales in our Internet and other video distribution
operations, and decreases in the cost of sales.

         OPERATING EXPENSES. Total operating expenses decreased $597,981 (31%),
from $1,932,117 for the six months ended March 31, 2002 to $1,334,136 for the
six months ended March 31, 2003. This decrease in total operating expenses
primarily was due to decreases in consulting fees, marketing, advertising and
investor relations costs, executive compensation and salaries. Professional fees
decreased $121,532 (30.6%) from $274,835 for the sic months ended March 31, 2003
from $396,367 for the six months ended March 31, 2002.Consulting fees decreased
$415,849 (59.6%) from $696,890 for the six months ended March 31, 2002 to
$281,041 for the six months ended March 31, 2003

         NET LOSS. Net loss decreased $1,699,111 (53.6%)%, from $3,167,925.00
for the six months ended March 31, 2002 to $1,468,814.00 for the six months
ended March 31, 2003. This decrease is due to the increase in gross profit and a
decrease in operating expenses.

                                        4



<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         We currently finance our operations primarily through private
placements of securities and revenue generated from our operations. Our
consolidated financial statements as of and for the years ended September 30,
2002 and 2001 and our interim condensed consolidated financial statements as of
and for the three months ended March 31, 2003 have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.

         We have participated in numerous financing transactions through which
we have issued convertible debentures to various investors. As of May 20, 2003,
 we had outstanding convertible debentures in the aggregate principal amount of
$4,129,183, $250,000 of which is due September 11, 2003, $3,879,183 of which is
due September 23, 2003, $175,000 of which is due October 15, 2003, $175,000 of
which is due December 9, 2003 and $175,000 of which is due January 16, 2003. In
connection with these financing transactions, as of February 12, 2003, we have
issued warrants that are outstanding to purchase an aggregate of 5,131,250
shares of our common stock and we have issued warrants outstanding to purchase
an aggregate of 5,189,126 shares of our common stock in connection with the
extension of the maturity date of certain of our convertible debentures. To the
extent convertible debentures we have issued are converted into shares of common
stock, we will not be obligated to repay the converted amounts.

         Our outstanding convertible debentures have conversion prices
equivalent to the lesser of a fixed conversion price, that is as low as $.01 per
share depending on the particular debenture, and 50% of the average of the three
lowest intraday trading prices of a share of our common stock for the 20 trading
days immediately preceding the conversion of the debentures. In addition, the
exercise prices of the warrants issued to the holders of our convertible
debentures are equivalent to the lesser of a fixed conversion price, that is as
low as $.035 per share depending on the particular warrant, and the average of
the three lowest intraday trading prices of a share of our common stock for the
20 trading days immediately preceding the exercise of the warrants. In some
cases, however, warrants we issued to holders of our convertible debentures have

                                        5


<PAGE>


only a fixed conversion price, that is as low as $.005 per share depending on
the particular warrant, and in other cases warrants we issued to holders of our
convertible debentures have only the variable conversion price described above.
Please see the "Description of Securities" section of this document for
additional details regarding our convertible debentures.

         As of September 23, 2002, we were in default under our repayment
obligations of our outstanding convertible debentures in the aggregate principal
amount of $3,392,625, including our obligation to make quarterly interest
payments under those debentures. At that time, the holders of our convertible
debentures could have pursued their rights to foreclose upon their security
interest in all of our assets. As of September 23, 2002, we entered into an
agreement with the holders of our outstanding convertible debentures, including
Bank Insinger de Beaufort, to extend the due date of those debentures to
September 23, 2003 and to waive our existing defaults under those debentures.
The waiver of existing defaults would have been effective only if a registration
statement we have filed was declared effective by the Securities and Exchange
Commission by December 31, 2002; however, the waiver did not cover any
then-outstanding penalties and interest accrued as a result of our defaults
under our obligations under the convertible debentures. This registration
statement was not declared effective by the Securities and Exchange Commission
by December 31, 2002. In consideration for the extension, we granted to the
holders of these debentures warrants to purchase up to an aggregate of 5,189,126
shares of common stock, including warrants to Bank Insinger de Beaufort to
purchase up to 1,285,028 shares of common stock, at an exercise price equal to
the average of the lowest three intraday trading prices during the 20 trading
days immediately preceding the exercise of the warrants.

         As of March 31, 2003, we had a working capital deficiency of
approximately $7,656,795.00 and an accumulated deficit of approximately
$40,194,139.00. As of that date, we had approximately $0 in cash, $453,792.00 in
accounts receivable, $49,103.00 of interest receivable and $25,942.00 of
inventories. As of March 31, 2003, we had accounts payable and accrued expenses
of approximately $3,218,246.00 and outstanding convertible debentures and
convertible promissory notes of approximately $4,501,733.00 including
convertible debentures and notes issued prior to the beginning of fiscal year
2003. To the extent convertible debentures we have issued are converted into
shares of common stock, we will not be obligated to repay the converted amounts.

         Cash used in our operating activities totaled approximately $919,899
for the six months ended March 31, 2003 as compared to approximately $616,847
for the six months ended March 31, 2002

         Cash provided by our financing activities totaled approximately
$524,850.00 for the six months ended March 31, 2003 as compared to $790,720.00
for the six months ended March 31, 2002.

         For the three months ended March 31, 2003, we had net sales of $253,045
and a net loss of $1,468,814 of which loss approximately $573,200 (36.5%)
consisted of non-cash expenses. These non-cash expenses consisted of $480,701 of
Compensation and consulting services, $4,000 of professional services, and
$52,500 of convertible debt financing costs.

         As of March 31, 2003, our current assets amounted to approximately
$690,396.00 and our current liabilities amounted to approximately $8,347,191.00.
We are experiencing significant financial difficulties as a result of this
imbalance between our current assets and current liabilities and have been, and
will

                                        6


<PAGE>

likely continue to be, unable to repay when due many of our current liabilities.
Our financial difficulties may limit our ability to invest sufficient funds in
the growth and development of our online content delivery initiative and may
result in our inability to fully fund our video distribution business. Since we
are unable to invest sufficiently in the growth and development of our content
delivery initiative, we may lose subscribers to our websites or lose
pay-per-view customers and may also fail to attract prospective subscribers and
pay-per-view customers, which may have a substantial negative impact on our
business, prospects, financial condition and results of operations.

         In January 2003, we acquired Latin American Independent Network
International and its wholly owned subsidiary Tele Anuncio, Inc. The purchase
price for this acquisition included a $25,000 cash payment in January 2002 with
$225,000 cash payable on or before July 15, 2003. The purchase price also
included $250,000 of our common stock issuable on July 15, 2003 based on a per
share price equal to the average bid price of a share of our common stock for
the twenty day period immediately preceding July 15, 2003. At a average bid
price of $.01 per share, 25,000,000 shares would be issuable on July 15, 2003 in
connection with our acquisition of Latin American Independent Network
International and its wholly owned subsidiary, Tele Anuncio, Inc.

         Our successful operation of our video distribution business, especially
over the next twelve months, will likely require substantial financial
resources. We acquired the business of FFM along with a significant amount of
liabilities, including approximately $850,000 in accounts payable, a substantial
portion of which is owed to suppliers of the videos that FFM distributes. As of
December 31, 2002, FFM had approximately $1,363,000 in accounts payable. We have
been unable to timely pay FFM's suppliers and we believe that, as a result, the
business of FFM has been significantly harmed. We believe that we are not
achieving the level of revenues we would be able to achieve if we were able to
timely pay our suppliers. If we continue to fail to timely pay FFM's suppliers,
the business of FFM may be further disrupted and important supplier
relationships may be further jeopardized and irreparably harmed. The failure to
timely pay FFM's suppliers could therefore have a material negative impact on
our video distribution business.

         Our continued operations are dependent on securing additional sources
of liquidity through debt and/or equity financing.

         As indicated above, our consolidated financial statements as of and for
the years ended September 30, 2002 and 2001 have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As discussed in this document and
in Note 24 to our consolidated financial statements for the years ended
September 30, 2002 and 2001, we have suffered recurring losses from operations
and at September 30, 2002 had net capital and working capital deficiencies.
These factors, among others, raised substantial doubt about our ability to
continue as a going concern and led our independent certified public accountants
to modify their unqualified opinion to include an explanatory paragraph related
to our ability to continue as a going concern. The consolidated financial
statements included in this document do not include any adjustments that might
result from the outcome of this uncertainty.

         As a result of the threat of substantial dilution to our existing
stockholders due to the below-market conversion price of our convertible
debentures as well as the continued pressure on the market price of our common
stock resulting from the conversion of our convertible debentures and the
related sale of shares of our common stock in the open market by the holders of
our convertible debentures, it may be difficult or impossible for us to secure
additional sources of funding. The limited sources of funding that may be
available to us likely will be additional convertible debentures with conversion
prices at a discount to the market price of shares of our common stock which
would likely result in substantial additional dilution to our stockholders. The
existence of a substantial amount of convertible debentures outstanding, lack of
profitability and lack of available cash flow may cause our attempts at securing
additional sources of funding to be unsuccessful.

         Historically, we have relied upon cash from financing activities and,
to a much lesser extent, revenues generated from operations, to fund all of the
cash requirements of our activities. We have not been able to generate
significant cash from our operating activities in the past and cannot assure you
that we will be able to do so in the future. We require new financing and we
believe that we may be able to fund only six months of operations with currently
available capital resources. In addition, over the next twelve months, we
believe that we will require at least $1,500,000 to conduct our planned business
operations and to service certain debts.

                                        7


<PAGE>


         We have been, and currently are, working toward identifying and
obtaining new sources of funding. Deteriorating global economic conditions may
cause prolonged declines in investor confidence in and accessibility to capital
markets. Deteriorating global economic conditions may make it more difficult for
us to secure funding because, during times of deteriorating global economic
conditions, prospective lenders and investors generally have less funds to lend
or invest and are more hesitant to lend to or invest in small, financially
unhealthy companies such as us. Further, our current debenture financing
documents contain notice and right of first refusal provisions and the grant of
a security interest in substantially all of our assets in favor of a debenture
investor, all of which provisions will restrict our ability to obtain debt
and/or equity financing.

         Future financing may not be available on a timely basis, in sufficient
amounts or on terms acceptable to us. This financing may also dilute existing
stockholders' equity. Any future financing that we may obtain may cause
significant dilution to existing stockholders. Any debt financing or other
financing of securities senior to common stock that we are able to obtain will
likely include financial and other covenants that will restrict our flexibility.
At a minimum, we expect these covenants to include restrictions on our ability
to pay dividends on our common stock. Any failure to comply with these covenants
would have a material adverse effect on our business, prospects, financial
condition, results of operations and cash flows.

         If adequate funds are not available, we may be required to delay, scale
back or eliminate portions of our operations and product and service development
efforts or to obtain funds through arrangements with strategic partners or
others that may require us to relinquish rights to certain of our technologies
or potential products or other assets. Accordingly, the inability to obtain such
financing could result in a significant loss of ownership and/or control of our
proprietary technology and other important assets and could also adversely
affect our ability to fund our continued operations and our product and service
development efforts that historically have contributed significantly to our
competitiveness.

         In an effort to increase sales related to our content delivery
business, we have implemented new subscription- and pay-per-view-based services
for users to view the content available through our websites. We have also
launched an interactive personal meeting place within our websites that allows
users to send and receive video messages and to use online chat features. Also,
we are expanding our e-commerce product offerings to capture more sales of
products of the pop culture genre.

         In addition, we are devoting efforts to expand our customer base for
our video distribution business in order to increase sales related to this
business. We are examining the viability of distributing videos over the
Internet in order to increase sales of our video distribution business and to
reduce our distribution costs as a result of more efficient video distribution
procedures. Our websites also offer some of the videos we distribute for sale
directly over the Internet. We believe that if we are successful in implementing
the above business strategies, we will generate increased revenues from our
Internet, e-commerce and video distribution business activities.


DESCRIPTION OF SECURITIES

         In addition to our outstanding capital stock, we have numerous
additional securities outstanding which are convertible or exercisable into
shares of our common stock. Our outstanding convertible and exercisable
securities and the transactions resulting in their issuance are described in
detail below.

         On December 10, 1999, we entered into a Revolving Line of Credit
Agreement with Alliance Equities, Inc., or Alliance Equities. Under the terms of
the agreement, Alliance Equities made available a $7 million revolving line of
credit with interest on the unpaid principal at 10% per annum. Under the terms
of the agreement, we may draw up to $500,000 per month on the total line of
credit upon our written request. Additionally, we have agreed that any portion
of the indebtedness may be paid back either with cash or by the issuance of our

                                        8


<PAGE>


common stock. On September 3, 2002, we jointly agreed with Alliance Equities to
exercise a 30-day cancellation clause under the Revolving Line of Credit
Agreement and as of September 3, 2002, we owed Alliance Equities approximately
$15,000 plus applicable interest under this line of credit arrangement.

         In April 2000, we issued an aggregate of $3,000,000 of 10% convertible
debentures and accompanying warrants to purchase up to 45,000 shares of common
stock in a private offering to four accredited investors. Bank Insinger de
Beaufort purchased $1,500,000 of these debentures and received a proportionate
number of the accompanying warrants. As of December 31, 2002, an aggregate of
$147,895 of principal plus related interest was outstanding under these
debentures, including $57,295 of debentures held by Bank Insinger de Beaufort.

         In August 2000, we issued an aggregate of $1,500,000 of 10% convertible
debentures and accompanying warrants to purchase up to 22,500 shares of common
stock in a private offering to three accredited investors. As of December 31,
2002, an aggregate of $1,257,500 of principal plus related interest was
outstanding under these debentures.

         In January 2001, we issued $650,000 of 12% convertible debentures due
January 5, 2002 to four accredited investors, including $400,000 of debentures
to Bristol Investment Fund, Ltd., in the first stage of a two-stage offering.
The debentures were accompanied by warrants to purchase up to an aggregate of
195,001 shares of common stock. The net proceeds of that offering, after payment
of related expenses, were approximately $631,500. In March 2001, we issued
$650,000 of 12% convertible debentures due March 9, 2002 in the second stage of
the offering, including $400,000 of debentures to Bristol Investment Fund, Ltd.
The net proceeds of that offering, after payment of some related expenses, were
approximately $647,500. As of December 31, 2002, an aggregate of $624,000 of
principal plus related interest was outstanding under the January and March 2001
debentures, including $434,000 of debentures held by Bristol Investment Fund,
Ltd.

         As of April 30, 2001, $1,848,500 of the original $4,500,000 principal
balance of 10% Convertible Debentures due May 1, 2001 remained outstanding. As
of April 30, 2001, we entered into an agreement with the holders of these
debentures, including Bank Insinger de Beaufort, to extend the due date of these
debentures to May 1, 2002. In consideration for the extension, we granted to the
holders of these debentures warrants to purchase up to an aggregate of 67,500
shares of common stock, including warrants to Bank Insinger de Beaufort to
purchase up to 22,500 shares of common stock, at an exercise price equal to the
lesser of the average of the lowest three intraday trading prices during the 20
trading days immediately preceding the grant of the warrants, discounted by
37.5%, and the average of the lowest three intraday trading prices of a share of
common stock during the 20 trading days immediately preceding exercise of the
warrants.

         On June 29, 2001, we issued an aggregate of $500,000 of 12% convertible
debentures in a private offering to three accredited investors. The debentures
were accompanied by warrants to purchase up to an aggregate of 75,000 shares of
common stock. The debentures initially were convertible into shares of common
stock at the lesser of $2.00 per share and 50% of the average of the lowest
three intraday trading prices of a share of common stock during the 20 trading
days immediately preceding conversion. The net proceeds of that offering, after
payment of related expenses, were approximately $420,000. In May 2002, we
restated our June 2001 debenture issued to one accredited investor to reflect an
additional $125,000 investment, resulting in a June 2001 debenture held by that
investor in the principal amount of $225,000 and an aggregate of $625,000 in
June 2001 debentures outstanding plus related interest as of December 31, 2002.

         As of June 29, 2001, we entered into a letter agreement with some of
our debenture holders, including Bank Insinger de Beaufort and Bristol
Investment Fund, Ltd. The agreement provided various anti-dilution adjustments

                                        9


<PAGE>

to the debentures and warrants issued in April and August 2000 and in January
and March 2001. These adjustments were made partly in lieu of other adjustments
that would have been imposed under the terms of the debenture offering
documents. As a result of these adjustments, the conversion prices for the
debentures issued to these holders in April and August 2000 and in January and
March 2001 were reduced to the lesser of $2.00 per share and 50% of the average
of the three lowest intraday trading prices of a share of our common stock for
the 20 trading days immediately preceding the conversion of the debentures. In
addition, the exercise prices of the warrants issued to the holders in
connection with the offering of the debentures in April and August 2000 and in
January and March 2001 were reduced to the lesser of $1.168 per share and the
average of the three lowest intraday trading prices of a share of our common
stock for the 20 trading days immediately preceding the exercise of the
warrants. Various additional anti-dilution adjustments may be applicable to our
outstanding debentures and warrants based on our capital raising and stock
issuance activities, but except as described above, no other agreements relating
anti-dilution adjustments have been made.

         In January 2002, we issued a 12% convertible debenture due January 9,
2003 in a private offering to Bank Insinger de Beaufort, which was accompanied
by warrants to purchase up to an aggregate of 600,000 shares of common stock.
The net proceeds of that offering, after payment of some related expenses, were
$165,500. In connection with this debenture offering, we executed a security
agreement covering all of our assets and securing our obligations to Bank
Insinger. Bank Insinger may, at its option, purchase an additional $200,000 of
our 12% convertible debentures and warrants to purchase up to 600,000 shares of
common stock within 30 days after the effective date of a registration statement
covering the resale of shares of common stock underlying the convertible
debentures issued in January 2002. However, the investor is not committed to
purchase the additional debentures. As of December 31, 2002, an aggregate of
$200,000 of principal plus related interest was outstanding under these
debentures.

         In January 2002, and in connection with the issuance of our 12%
convertible debenture due January 9, 2003, we entered into an agreement with
Bank Insinger de Beaufort, Bristol Investment Fund, Ltd., Bristol Capital, LLC,
and Paul Kessler, who is a principal of Bristol Capital, LLC. Under the
agreement, the conversion price of the 10% Convertible Debenture due May 1, 2002
that Bank Insinger purchased in the April 2000 offering was amended to be the
lesser of $.055 and 50% of the average of the lowest three intraday trading
prices during the 20 trading days immediately preceding a conversion. In
addition, the exercise prices of the warrants issued to Bank Insinger in the
February 2000, April 2000 and May 2001 offerings, the warrants issued to Bristol
Investment Fund in the January 2001 offering, the warrants issued to Bank
Insinger in the April 2000 offering that were transferred to Bristol Capital,
and the option issued to Paul Kessler pursuant to a consulting agreement dated
as of September 26, 2000 were amended so that the exercise prices are equal to
50% of the lowest three intraday trading prices during the 20 trading days
immediately preceding an exercise. The expiration dates of each of the warrants
and options described in the preceding sentence were extended so that each is
exercisable until the seventh anniversary of its issuance.

         In February 2002, we issued a 6% Convertible Promissory Note due
November 30, 2002, or a February 2002 note, in the original principal amount of
$263,800 to Rutan & Tucker, LLP for services rendered which has a per share
conversion price equal to the lesser of $.085 and the average of the three
lowest intraday trading prices of our common stock during the 20 trading days
immediately preceding the conversion date. As of December 31, 2002, an aggregate
of $263,800 of principal plus related interest was outstanding under this note.
We are currently in default under this note as a result of our failure to repay
when due the principal and interest balances of this note.

         In February 2002, we issued a 6% Convertible Promissory Note due
November 30, 2002, or a February 2002 note, in the original principal amount of
$108,750 to Haynie & Company for services rendered which has a per share
conversion price equal to the lesser of $.085 and the average of the three
lowest intraday trading prices of our common stock during the 20 trading days

                                       10


<PAGE>


immediately preceding the conversion date. As of December 31, 2002, an aggregate
of $108,750 of principal plus related interest was outstanding under this note.
We are currently in default under this note as a result of our failure to repay
when due the principal and interest balances of this note.

         In March 2002, we issued an aggregate of $500,000 of our 12%
convertible debentures due March 29, 2003 in a private offering to three
accredited investors, which were accompanied by warrants to purchase up to an
aggregate of 1,500,000 shares of common stock. The net proceeds of that
offering, after payment of related expenses, were $380,000. As of December 31,
2002, an aggregate of $500,000 of principal plus related interest was
outstanding under these debentures.

         In connection with our March 2002 debenture offering, we executed two
security agreements covering all of our assets and securing our obligations to a
total of five of the debenture investors who participated in one or more of the
April 2000, August 2000, January 2001, March 2001, June 2001 and March 2002
debenture offerings.

         Effective April 10, 2002, we entered into an Exchange Agreement with
Bristol Capital, LLC pursuant to which we issued 900 shares of our Series B
Convertible Preferred Stock and acquired from Bristol Capital its 50% interest
in our now wholly owned FFM subsidiary which was issued to Bristol Capital in
consideration for providing the opportunity to acquire the FFM business. Each
share of our Series B Convertible Preferred Stock has a stated value of $1,000
and is initially convertible into shares of our common stock at the lesser of
(i) $0.086, and (ii) 82% of the average of the three lowest intraday trading
prices of a share of our common stock during the twenty trading preceding the
conversion date. The Series B Convertible Preferred Stock accrues dividends at a
rate of 8% per annum, which is payable on a quarterly basis in arrears, at the
option of the holder, in cash or shares of our common stock based on the then
applicable conversion price.

         On September 11, 2002, we issued an aggregate of $250,000 of 12%
convertible debentures in the first stage of a three-stage private offering to
three accredited investors. The debentures were accompanied by warrants to
purchase up to an aggregate of 750,000 shares of common stock. The net proceeds
of that offering, after payment of related expenses, were approximately
$165,000. The full amount of these debentures remains outstanding.

         In connection with our September 2002 debenture offering, we executed a
security agreement covering all of our assets and securing our obligations to
the debenture investors who participated in that offering.

         As of September 23, 2002, in addition to the debentures issued in
September 2002 described above:

          -    $1,443,625 of the original $4,500,000 principal balance of 10%
               Convertible Debentures due May 1, 2002 remained outstanding;

          -    $185,181 of the original $650,000 principal balance of 12%
               Convertible Debentures due January 5, 2002 remained outstanding;

          -    $438,819 of the original $650,000 principal balance of 12%
               Convertible Debentures due March 9, 2002 remained outstanding;

          -    $625,000 of the original $625,000 principal balance of 12%
               Convertible Debentures due June 29, 2002 remained outstanding;

                                       11


<PAGE>


          -    $200,000 of the original $200,000 principal balance of 12%
               Convertible Debentures due January 9, 2003 remained outstanding;
               and

          -    $500,000 of the original $500,000 principal balance of 12%
               Convertible Debentures due March 29, 2003 remained outstanding;

         As of September 23, 2002, we entered into an agreement with the holders
of the debentures listed above, including Bank Insinger de Beaufort, to extend
the due date of these debentures to September 23, 2003. In consideration for the
extension, we granted to the holders of these debentures warrants to purchase up
to an aggregate of 5,189,126 shares of common stock, including warrants to Bank
Insinger de Beaufort to purchase up to 1,285,028 shares of common stock, at an
exercise price equal to the average of the lowest three intraday trading prices
during the 20 trading days immediately preceding the exercise of the warrants.

         On October 15, 2002, we issued an aggregate of $175,000 of 12%
convertible debentures in the second stage of a three-stage private offering to
three accredited investors. The debentures were accompanied by warrants to
purchase up to an aggregate of 525,000 shares of common stock. The net proceeds
of that offering, after payment of related expenses, were approximately
$108,000. The full amount of these debentures remains outstanding.

         On December 9, 2002, we issued an aggregate of $175,000 of 12%
convertible debentures in the third stage of a three-stage private offering to
three accredited investors. The debentures were accompanied by warrants to
purchase up to an aggregate of 525,000 shares of common stock. The net proceeds
of that offering, after payment of related expenses, were approximately
$121,500. The full amount of these debentures remains outstanding.

         On January 16, 2003, we issued an aggregate of $175,000 of 12%
convertible debentures in the first stage of a two-stage private offering to two
accredited investors. The debentures were accompanied by warrants to purchase up
to an aggregate of 525,000 shares of common stock. The net proceeds of that
offering, after payment of related expenses, were approximately $125,000.

         On March 30 2003 issued an aggregate of $175,000 of 12% convertible
debentures in the second stage of a two-stage private offering to two accredited
investors. The debentures were accompanied by warrants to purchase up to an
aggregate of 525,000 shares of common stock. The net proceeds of that offering,
after payment of related expenses, were approximately $150,000.

         Our obligations to the holders of our secured convertible debentures
include the obligations to make quarterly interest payments and to repay the
principal amounts of the debentures when due. In addition, our obligations under
our secured convertible debentures include the obligation to register for resale
shares of common stock underlying those debentures, the obligation to keep the
registration statement covering those shares effective and the obligation to
maintain the status of Kanakaris Wireless as a public company in compliance with
all of the reporting requirements under the Securities and Exchange Act of 1934.
Defaults under our obligations to the holders of our secured convertible
debentures may enable the holders of those debentures to foreclose on the
collateral securing our obligations to those holders which may cause us to cease
operations and liquidate all or part of our assets. Because the relative size of
our assets is so disproportionately small compared to the amount of debt
represented by our secured convertible debentures, we believe that a default,
especially a default resulting from our failure to pay accrued interest or
principal when due, under our obligations to the holders of our secured
convertible debentures could result in a foreclosure upon, and complete
liquidation of, all of our assets, resulting in a total cessation of our
operations with no assets or proceeds from liquidation left over for any holders
of our common stock.

         We are currently in default under numerous provisions of our
convertible debentures, including the obligation to make quarterly interest
payments and the obligation to register for resale, by certain deadlines, shares
of common stock underlying our secured convertible debentures. As a result, we
are subject to the rights and remedies of our debenture holders under our
security agreements, under the convertible debentures and under our other
agreements with our debenture holders.

                                       12


<PAGE>


         As of February 12, 2003, we had a total of 52,119,687 shares of common
stock outstanding, the closing sale price of a share of our common stock on the
OTC Bulletin Board(R) was $0.008, and the debentures, notes, warrants and shares
of preferred stock with variable conversion or exercise prices were convertible
or exercisable into approximately 1,285,000,000 shares of common stock. The
applicable conversion price of our debentures issued to certain security holders
is variable and does not have a lower-limit, therefore the dilutive effect to
our existing security holders is theoretically limitless. Conversely, because
the variable conversion price of these debentures has an upper limit, an
increase in the trading price of a share of our common stock will result in a
limited benefit to existing security holders with respect to the conversion of
these debentures.

         Based on the conversion price in effect on May 15, 2003, the principal
portions of our convertible debentures were convertible into an aggregate of
approximately 2,820,000,000 shares of common stock which, if issued and assuming
the consummation of an increase in our authorized capital, would result in
approximately 97% dilution to existing holders of our common stock leaving them
holding only approximately 3% of our shares of common stock outstanding. If the
market price of a share of our common stock on the OTC Bulletin Board(R) was to
fall by 25%, the principal portions of our convertible debentures would be
convertible into an aggregate of approximately 3,760,000,000 shares of common
stock which, if issued and assuming the consummation of an increase in our
authorized capital, would result in approximately 98% dilution to existing
holders of our common stock leaving them holding only approximately 2% of our
shares of common stock outstanding. If the market price of a share of our common
stock on the OTC Bulletin Board(R) was to fall by 50%, the principal portion of
our convertible debentures would be convertible into an aggregate of
approximately 5,640,000,000 shares of common stock which, if issued and assuming
the consummation of an increase in our authorized capital, would result in
approximately 99% dilution to existing holders of our common stock leaving them
holding only approximately 1% of our shares of common stock outstanding. If the
market price of a share of our common stock on the OTC Bulletin Board(R) was to
fall by 75%, the principal portion of our convertible debentures would be
convertible into an aggregate of approximately 11,280,000,000 shares of common
stock which, if issued and assuming the consummation of an increase in our
authorized capital, would result in greater than 99% dilution to existing
holders of our common stock leaving them holding less than 1% of our shares of
common stock outstanding. Our current authorized capital authorizes us to issue
a maximum of 250,000,000 shares of common stock.

           The conversion price of our debentures is the lower of (a) 50% of the
average of the three lowest intraday trading prices of a share of our common
stock on the OTC Bulletin Board(R) during the twenty trading days immediately
preceding the conversion date, and (b) as low as $0.01, depending on the
particular debenture. As of May 15, 2003, the applicable conversion price was
$0.0015.

           As a result of conversions of the principal or interest portion of
our convertible debentures and related sales of our common stock by the security
holders who hold our convertible debentures, the market price of our common
stock could be depressed, thereby resulting in a significant increase in the
number of shares issuable upon conversion of the principal and interest portions
of these debentures. You could, therefore, experience substantial dilution of
your investment as a result of the conversion of the principal or interest
portions of our convertible debentures and as a result of a decline in the price
of a share of our common stock on the OTC Bulletin Board(R).

           Each of the security holders who hold our convertible debentures may
not convert our debentures into more than 4.99% of our then-outstanding common
stock; however, those security holders may waive the 4.99% limitation, thus
allowing the conversion of their debentures into a number of shares of common
stock in excess of 4.99% of our then-outstanding common stock. In addition, each
of the security holders who hold our convertible debentures may not convert our
debentures into more than 9.99% of our then-outstanding common stock, which
limitation is not subject to waiver. As a result of the foregoing limitations,
as of May 15, 2003, each of the security holders who hold our convertible
debentures may not, at any one time and assuming they do not then hold other
shares of our common stock, convert such debentures into in excess of
approximately 4,186,000 shares of our common stock without waiving the 4.99%
limitation and they also may not, at any one time, convert such debentures into
in excess of approximately 8,838,000 shares of our common stock as a result of
the 9.99% limitation. Based on the foregoing figures and assuming a fixed
hypothetical conversion amount of $10,000 of convertible debentures, the 4.99%
limitation is applicable at an approximate market price of $0.0048 per share and
the 9.99% limitation is applicable at an approximate market price of $0.0023 per
share.

                                       13


<PAGE>



RISK FACTORS

         AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IN
ADDITION TO THE OTHER INFORMATION IN THIS DOCUMENT, YOU SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN SHARES OF OUR
COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCURS, IT IS LIKELY THAT
OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS WOULD BE HARMED. AS A
RESULT, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU COULD LOSE
PART OR ALL OF YOUR INVESTMENT.

         WE HAVE INCURRED OPERATING LOSSES, EXPECT CONTINUED LOSSES AND MAY NOT
         ACHIEVE PROFITABILITY. IF WE CONTINUE TO LOSE MONEY, WE MAY HAVE TO
         CURTAIL OR SUSPEND OUR OPERATIONS.

         Our consolidated financial statements have been prepared assuming we
will continue as a viable business. We have not been profitable and we may
continue to lose money for the foreseeable future. Historically, we have
incurred losses and experienced negative cash flow. As of December 31, 2002, we
had an accumulated deficit of approximately $39,600,000. We may continue to
incur losses and may never achieve or sustain profitability. An extended period
of losses and negative cash flow may prevent us from operating and expanding our
business. As a result, we may have to curtail or suspend out operations. As a
result of our financial condition, our independent auditors have issued an
opinion questioning our ability to continue as a going concern.

        OUR INDEPENDENT AUDITORS HAVE ISSUED A REPORT QUESTIONING OUR ABILITY TO
        CONTINUE AS A GOING CONCERN. THIS REPORT MAY IMPAIR OUR ABILITY TO RAISE
        ADDITIONAL FINANCING AND ADVERSELY AFFECT THE PRICE OF OUR COMMON STOCK.

         The report of our independent auditors contained in our financial
statements for the years ended September 30, 2002 and 2001 includes a paragraph
that explains that we have incurred substantial losses and have a working
capital deficit. This report raises substantial doubt about our ability to
continue as a going concern. Reports of independent auditors questioning a
company's ability to continue as a going concern are generally viewed
unfavorably by analysts and investors. This report may make it difficult for us
to raise additional debt or equity financing necessary to continue our
operations and to implement our planned business activities. We urge potential
investors to review this report before making a decision to invest in Kanakaris
Wireless.

        OUR CURRENT LIABILITIES EXCEED OUR CURRENT ASSETS BY A SUBSTANTIAL
        MARGIN. AS A RESULT, WE ARE EXPERIENCING SIGNIFICANT FINANCIAL
        DIFFICULTIES AND MAY BE UNABLE TO OBTAIN ADDITIONAL FUNDING.

         As of March 31, 2003, our current assets amounted to approximately
$690,396.00 and our current liabilities amounted to approximately $8,347.191.00.
We are experiencing significant financial difficulties as a result of this
imbalance between our current assets and current liabilities and have been, and
will likely continue to be, unable to repay when due many of our current
liabilities. Our financial difficulties may limit our ability to invest
sufficient funds in the growth and development of our online content delivery
initiative and may result in our inability to fully fund our video distribution
business. Because we are likely unable to invest sufficiently in the growth and
development of our content delivery initiative, we may lose subscribers to our

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<PAGE>

websites or lose pay-per-view customers and may also fail to attract prospective
subscribers and pay-per-view customers, which may have a substantial negative
impact on our business, prospects, financial condition and results of
operations. We require new financing and we believe that we may be able to fund
three months of operations with currently available capital resources. In
addition, over the next twelve months, we believe that we will require at least
$1,500,000 to conduct our planned business operations and to service certain
debts.

         Our successful operation of our FFM video distribution business,
especially over the next twelve months, will likely require substantial
financial resources. We acquired the business of FFM along with a significant
amount of liabilities, including approximately $850,000 in accounts payable, a
substantial portion of which is owed to suppliers of the videos that FFM
distributes. As of December 31, 2002, FFM had approximately $1,363,000 in
accounts payable. We have been unable to timely pay FFM's suppliers and we
believe that, as a result, the business of FFM has been significantly harmed. We
believe that we are not achieving the level of revenues we would be able to
achieve if we were able to timely pay our suppliers. If we continue to fail to
timely pay FFM's suppliers, the business of FFM may be further disrupted and
important supplier relationships may be jeopardized and irreparably harmed,
which may have a substantial adverse impact on our business, prospects,
financial condition and results of operations.

         Historically, we have relied upon cash from financing activities and,
to a much lesser extent, revenues generated from operations, to fund all of the
cash requirements of our activities. We have never generated revenues
substantial enough to allow us to fully finance our business or our growth. The
imbalance between our current assets and current liabilities may make obtaining
additional funding impossible. Our substantial indebtedness represented by our
convertible debentures is secured by all of our assets, which may prevent us
from raising additional funding because any prospective lenders or investors may
be unwilling to lend or invest funds due to their inability to obtain a
satisfactory security interest in our assets. In the past, our existing
investors have provided us funding despite our ongoing financial difficulties
but may refuse to do so in the future. We believe that our existing investors
may be our only source of available financing. Our failure to secure additional
funding may have a material adverse effect on our business, prospects, financial
condition and results of operations.

        WE RELY HEAVILY ON OUR KEY EMPLOYEES, AND THE LOSS OF THEIR SERVICES
        WOULD MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS.

         Our success is highly dependent upon the continued services of key
members of our management, including our Chairman of the Board, President and
Chief Executive Officer, Alex Kanakaris. We have not entered into any employment
agreement with Mr. Kanakaris or any other officer of Kanakaris Wireless. The
loss of Mr. Kanakaris would have a material adverse effect on Kanakaris Wireless
because Mr. Kanakaris has experience, skills and vision upon which we draw
heavily in our day-to-day operations and strategic planning and financing
activities. We are the beneficiary of 80% of the proceeds of a term life
insurance policy in the amount of $10,000,000 covering Mr. Kanakaris, whose
heirs are the beneficiaries of the remaining 20% of the proceeds of that policy.
However, we cannot assure you that receipt of these proceeds would be sufficient
to enable us to continue our business without significant temporary or permanent
disruption following the loss of Mr. Kanakaris.

        BECAUSE WE BELIEVE THAT PROPRIETARY RIGHTS ARE MATERIAL TO OUR SUCCESS,
        MISAPPROPRIATION OF THESE RIGHTS OR CLAIMS OF INFRINGEMENT OR LEGAL
        ACTIONS RELATED TO INTELLECTUAL PROPERTY COULD ADVERSELY IMPACT OUR
        FINANCIAL CONDITION.

         We currently rely on a combination of contractual rights, copyrights,
trademarks and trade secrets to protect our proprietary technology and
intellectual property rights. We do not hold any patents. However, we believe
that some of our proprietary technologies, including our CinemaWEAR(TM) Encoding
technology, our CinemaWEAR(TM) Wireless Delivery technology and our Embedded

                                       15


<PAGE>


Electronic Commerce(TM) technology, may benefit from patent protection.
Accordingly, we may file patent applications for those technologies with the
United States Patent and Trademark Office. There can be no assurance that our
means of protecting our proprietary rights will be adequate or that our
competitors will not independently develop comparable or superior technologies
or obtain unauthorized access to our proprietary technologies.

         We own, license or have otherwise obtained the right to use
technologies incorporated into our web sites and products. We may receive
infringement claims from third parties relating to our technologies. In those
cases, we intend to investigate the validity of the claims and, if we believe
the claims have merit, to respond through licensing or other appropriate
actions. To the extent claims relate to technology that we have licensed from
third parties for incorporation into our web sites and products, we would
forward those claims to the appropriate third party. If we were unable to
license or otherwise provide any necessary technology on a cost-effective basis,
we could be prohibited from using that technology, incur substantial costs in
redesigning our web sites and products that incorporate that technology, or
incur substantial costs defending any legal action taken against us, all of
which could have a material adverse effect on our business, prospects, financial
condition, results of operations and cash flows.

         We hold the Internet domain names "Kanakaris.com," "AK.TV,"
"WordPop.com," "CinemaPop.com" and many others. Under current domain name
registration practices, no one else can obtain an identical domain name, but
someone might obtain a similar name, or the identical name with a different
suffix, such as ".org," or with a country designation. The regulation of domain
names in the United States and in foreign countries is subject to change, and we
could be unable to prevent third-parties from acquiring domain names that
infringe or otherwise decrease the value of our domain names.

        IF COMMUNICATIONS TO OUR PRIMARY SERVERS ARE INTERRUPTED, OUR OPERATIONS
        COULD BE NEGATIVELY IMPACTED.

         Our movies and websites are hosted on servers owned and operated by a
third party. Although offsite backup servers are maintained by our host, all of
our primary servers are vulnerable to interruption by damage from fire, flood,
power loss, telecommunications failure, break-ins and other events beyond our
control. We have, from time to time, experienced periodic systems interruptions
and anticipate that these interruptions will occur in the future. We do not
maintain business interruption insurance. If we experience significant system
disruptions, our business, results of operations and financial condition would
be materially adversely affected because we would be unable to deliver our
Internet-related products and services during the disruption and may therefore
lose sales and existing and potential customers.

        OUR COMPUTER INFRASTRUCTURE MAY SUFFER SECURITY BREACHES. ANY SUCH
        BREACHES COULD JEOPARDIZE CONFIDENTIAL INFORMATION TRANSMITTED OVER THE
        INTERNET, CAUSE INTERRUPTIONS IN OUR OPERATIONS OR CAUSE US TO HAVE
        LIABILITY TO THIRD PARTIES.

         We rely on technology that is designed to facilitate the secure
transmission of confidential information. Our computer infrastructure is
potentially vulnerable to physical or electronic computer break-ins, viruses and
similar disruptive problems. A party who is able to circumvent our security
measures could misappropriate proprietary information, jeopardize the
confidential nature of information transmitted over the Internet or cause
interruptions in our operations. Concerns over the security of Internet
transactions and the privacy of users could also inhibit the growth of the
Internet in general, particularly as a means of conducting commercial
transactions. To the extent that our activities involve the storage and
transmission of proprietary information, including personal financial
information, security breaches could expose us to a risk of financial loss,

                                       16


<PAGE>

litigation and other liabilities. Our insurance does not currently protect us
against these losses. Consequently, any security breach could have a material
adverse effect on our business, results of operations and financial condition.

     OUR FAILURE TO MANAGE OUR VIDEO DISTRIBUTION BUSINESS EFFECTIVELY COULD
     IMPAIR OUR BUSINESS.

         Our upper management does not have significant experience involving
video distribution. Because of this lack of significant experience, we may be
unable to effectively manage our video distribution business. Our video
distribution business presents unique challenges to our management because it is
likely that this business will represent our principal source of revenues for at
least the next twelve months and, of all of our business activities, our upper
management has the least experience in operating a video distribution business.
We anticipate that the revenues generated by our video distribution business
will represent a significant increase in our business activities. We may be
unable to handle the increase in our business activities as a result of many
factors, including the relative lack of experience of our upper management in
the video distribution business and our lack of resources, which in turn may
prevent us from growing or maintaining growth. If we are unable to successfully
manage our video distribution business, our business, prospects, financial
condition and results of operations could be adversely affected.

     ALTHOUGH INTERNET COMMERCE HAS YET TO ATTRACT SIGNIFICANT REGULATION,
     GOVERNMENT REGULATION MAY RESULT IN FINES, PENALTIES, TAXES OR OTHER COSTS
     OR CONSEQUENCES THAT MAY REDUCE OUR FUTURE EARNINGS.

         The United States Congress has passed or is considering passing
legislation regulating certain aspects of the Internet, including online
content, copyright infringement, user privacy, taxation, access charges, digital
signatures and liability for third-party activities. The European Union also has
enacted several directives relating to the Internet, including directives that
address the use of personal data, e-commerce activities, security, commercial
piracy, consumer protection and taxation of e-commerce transactions. Various
states have adopted and are considering Internet-related legislation and
regulations. Governmental authorities in the United States and abroad are
considering other legislative and regulatory proposals to further regulate the
Internet. Areas of potential regulation include libel, pricing, quality of
products and services and intellectual property ownership. We cannot predict
what new laws will be enacted, or how courts will interpret existing and new
laws, and therefore are uncertain as to how new laws or the application of
existing laws will affect our business. In addition, our business may be
indirectly affected by legislation that affects the ability of our customers to
engage in e-commerce activities. Increased regulation of the Internet may
decrease the growth in the use of the Internet, which could decrease the demand
for our products and services, increase our cost of doing business or otherwise
harm our business, results of operations and financial condition.

         We are dependent on our Internet operations and our ability to utilize
the efficiencies of the Internet plays a major role in our business strategy.
Our subscription- and pay-per-view-based websites are dependent on utilizing the
Internet for delivery of content to our subscribers and our pay-per-view
customers. In addition, our ability to sell products on our websites is
dependent on a regulatory environment that is conducive to Internet commerce.
Moreover, an important aspect of our business strategy relating to the
integration of our FFM video distribution business involves the sale over the
Internet of videos that we distribute through traditional distribution channels.
Additional regulation of the Internet, the enactment of new laws or the
interpretation of existing laws relating to the Internet could have a
significant impact on our ability to conduct our business activities and to
pursue our business strategy. As a company with a substantial amount of its
business activities and business strategy dependent on the Internet, regulation
of the Internet, the enactment of new laws or the interpretation of existing
laws relating to the Internet could therefore have a material adverse effect on
our business, prospects, financial condition, results of operations and cash
flows.

                                       17


<PAGE>

     COMPETITION AMONG VIDEO DISTRIBUTORS IS INTENSE, AND MANY OF OUR
     COMPETITORS ENJOY AN ADVANTAGE OVER US BECAUSE OF GREATER RESOURCES AND
     MORE SUBSTANTIAL OPERATIONS. INTENSE COMPETITION MAY HAVE A MATERIALLY
     NEGATIVE EFFECT ON OUR BUSINESS, PROSPECTS, FINANCIAL CONDITION, RESULTS OF
     OPERATIONS AND CASH FLOWS.

         Competition among video distributors is intense and many of our
competitors in the video distribution business have greater access to capital,
marketing and advertising resources which gives them a significant competitive
advantage over us. In addition, many of these competitors have a scale of
operations much larger than ours giving them the potential for greater
efficiencies due to economies of scale and a larger capacity for growth which in
turn may make them more attractive than us to prospective video suppliers and
customers. Intense competition may result in our inability to distribute videos
at a profit, especially in light of our relatively small scale of operations
when compared to the large scale of operations of many of our competitors who
enjoy cost-saving economies of scale and who have access to resources sufficient
to conduct intense competition. Much of our business strategy depends on our
ability to effectively compete in the video distribution marketplace and we
intend to commit a substantial amount of our resources to our video distribution
business. If we are unsuccessful, given our poor financial condition, we may be
unable to operate a viable video distribution business in the future and our
failure to garner the anticipated resources from a successful video distribution
business may further jeopardize our business strategy and other business
activities. Intense competition within the video distribution business may
therefore have a materially negative effect on our business, prospects,
financial condition, results of operations and cash flows.

     THE MOVEMENT OF SOME OF OUR PRINCIPLE SUPPLIERS INTO THE VIDEO DISTRIBUTION
     BUSINESS COULD SIGNIFICANTLY REDUCE OUR MARKET SHARE AND COULD HAVE A
     MATERIALLY NEGATIVE EFFECT ON OUR BUSINESS, PROSPECTS, FINANCIAL CONDITION,
     RESULTS OF OPERATIONS AND CASH FLOWS.

         The movement of some of the major motion picture studios, some of whom
are our principal suppliers in that industry, into the video distribution
business has intensified the competition in the video distribution market. The
movement of some of the major motion picture studios into the video distribution
business has threatened some of our larger accounts because those motion picture
studios circumvent our distribution services and contact large retailers
directly. If our smaller accounts grow into larger accounts, there is an
increasing probability that major motion picture studios may try to sell to
these larger accounts directly and circumvent our distribution services. If we
are unable to protect our customer base as it grows, we may be forced to change
our marketing efforts in the video distribution market to target smaller
accounts. This potential change in marketing strategy coupled with the potential
loss of larger accounts may result in a decrease in our revenues and may have a
materially negative effect on our business, prospects, financial condition,
results of operations and cash flows.

     CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS ALLOW
     CONCENTRATION OF VOTING POWER IN ONE INDIVIDUAL, WHICH MAY, AMONG OTHER
     THINGS, DELAY OR FRUSTRATE THE REMOVAL OF INCUMBENT DIRECTORS OR A TAKEOVER
     ATTEMPT, EVEN IF SUCH EVENTS MAY BE BENEFICIAL TO OUR STOCKHOLDERS.

         Provisions of our articles of incorporation and bylaws may delay or
frustrate the removal of incumbent directors and may prevent or delay a merger,
tender offer or proxy contest involving Kanakaris Wireless that is not approved
by our board of directors, even if those events may be beneficial to the
interest of our stockholders. For example, Alex Kanakaris, our Chairman of the
Board, President and Chief Executive Officer, is the holder of all of the
1,000,000 authorized, issued and outstanding shares of our Class A Convertible
Preferred Stock. Under our articles of incorporation, each share of Class A
Preferred Stock is entitled to 100 non-cumulative votes per share on all matters
presented to our stockholders for action. Consequently, Mr. Kanakaris has
sufficient voting power to control the outcome of all corporate matters
submitted to the vote of our common stockholders. Those matters could include

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<PAGE>

the election of directors, changes in the size and composition of the board of
directors, and mergers and other business combinations involving Kanakaris
Wireless. In addition, through his control of the board of directors and voting
power, he may be able to control certain decisions, including decisions
regarding the qualification and appointment of officers, 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
Kanakaris Wireless. In addition, the concentration of voting power in the hands
of Mr. Kanakaris could have the effect of delaying or preventing a change in
control of Kanakaris Wireless, even if the change in control would benefit our
stockholders, and may adversely affect the market price of our common stock.

     BECAUSE OUR STOCK IS NOT LISTED ON A NATIONAL SECURITIES EXCHANGE, YOU MAY
     FIND IT DIFFICULT TO DISPOSE OF OR OBTAIN QUOTATIONS FOR OUR COMMON STOCK.

         Our common stock trades under the symbol "KKRW" on the OTC Bulletin
Board(R). Because our stock trades on the OTC Bulletin Board(R) rather than on a
national securities exchange, you may find it difficult to either dispose of, or
to obtain quotations as to the price of, our common stock.

     CONVERSION OF OUR OUTSTANDING CONVERTIBLE SECURITIES COULD SUBSTANTIALLY
     DILUTE YOUR INVESTMENT AND CAUSE THE PRICE OF OUR COMMON STOCK TO DECLINE
     BECAUSE THE CONVERSION PRICE OF THOSE SECURITIES DEPENDS UPON THE MARKET
     PRICE OF OUR COMMON STOCK, AND THERE IS NO CEILING ON THE NUMBER OF SHARES
     OF OUR COMMON STOCK THAT ARE ISSUABLE UPON EXERCISE OF THOSE SECURITIES.

         We have issued to several security holders debentures, notes, warrants
and shares of preferred stock that are convertible or exercisable at prices that
are equal to the lesser of a fixed price and a variable price that is based upon
a discount on the market price of our common stock. As of February 12, 2003, we
had a total of 52,119,687 shares of common stock outstanding, the closing sale
price of a share of our common stock on the OTC Bulletin Board(R) was $0.008 and
the debentures, notes, warrants and shares of preferred stock with variable
conversion or exercise prices were convertible or exercisable into approximately
1,285,000,000 shares of common stock. The number of shares that those
debentures, notes and warrants ultimately may be converted into or exercised for
could prove to be greater than this estimate if the market price of our common
stock declines. You could, therefore, experience substantial dilution and a
decline in the value of your investment as a result of the conversion of the
debentures and exercise of the warrants.

         The applicable conversion price of our debentures issued to certain of
our security holders is variable and does not have a lower-limit, therefore the
dilutive effect to our existing security holders is theoretically limitless.
Conversely, because the variable conversion price of these debentures has an
upper limit, an increase in the trading price of a share of our common stock
will result in a limited benefit to existing security holders with respect to
the conversion of these debentures. As of May 15, 2003, an aggregate of
approximately 2,820,000,000 shares were issuable upon conversion of the
principal portion of our convertible debentures. Based on a hypothetical
conversion price equal to 25% of the conversion price in effect on May 15, 2003,
an aggregate of approximately 11,280,000,000 shares would be issuable to cover
the conversion of the principal portion of our convertible debentures, resulting
in greater than 99% dilution to existing holders of our common stock leaving
them holding less than 1% of our shares of common stock outstanding.

         As a result of conversions of the principal or interest portion of our
convertible debentures and related sales of our common stock by the security
holders who hold our convertible debentures, the market price of our common
stock could be depressed, thereby resulting in a significant increase in the
number of shares issuable upon conversion of the principal and interest portions
of these debentures. You could, therefore, experience substantial dilution of
your investment as a result of the conversion of the principal or interest
portions of our convertible debentures and as a result of a decline in the price

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<PAGE>

of a share of our common stock on the OTC Bulletin Board(R). Please see the
"Description of Securities" section of this document for additional details
regarding our convertible debentures.

     IF OUR SECURITY HOLDERS ENGAGE IN SHORT SALES OF OUR COMMON STOCK,
     INCLUDING SALES OF SHARES TO BE ISSUED UPON CONVERSION OR EXERCISE OF
     DERIVATIVE SECURITIES, THE PRICE OF OUR COMMON STOCK MAY DECLINE.

         Selling short is a technique used by a stockholder to take advantage of
an anticipated decline in the price of a security. A significant number of short
sales or a large number of other sales within a relatively short period of time
can create a downward pressure on the price of the security. The existence of
our outstanding convertible debentures and their variable below-market
conversion prices increases the risk of short sales of our common stock because
holders of our convertible debentures may effect short sales and subsequently
convert their debentures, effectively removing any risk associated with holding
shares of our common stock. In addition, because short sales may have the effect
of causing a decline in the market price of shares of our common stock which
would in turn cause a decline in the conversion prices of our outstanding
convertible debentures resulting in additional shares of common stock issuable
to the holders of our convertible debenture, those holders have an incentive to
engage in short sales of our common stock. These short sales as well as short
sales by persons who are not holders of our convertible debentures may cause a
significant decline in the market price of shares of our common stock. The
decrease in the market price of shares of our common stock would allow holders
of our debentures and warrants that have conversion or exercise prices based
upon a discount on the market price of our common stock to convert their
debentures and exercise their warrants into an increased number of shares of our
common stock which could cause substantial dilution to our existing
stockholders. Further sales of common stock issued upon conversion of debentures
or exercise of warrants could cause even greater declines in the price of our
common stock due to the number of additional shares available in the market,
which could encourage short sales that could further undermine the value of our
common stock and result in substantial additional dilution to our existing
stockholders. You could, therefore, experience a decline in the value of your
investment as a result of short sales of our common stock.

     OUR STOCK PRICE IS SUBJECT TO SIGNIFICANT VOLATILITY, WHICH COULD RESULT IN
     SUBSTANTIAL LOSSES FOR INVESTORS AND LITIGATION AGAINST US.

         The stock market as a whole and individual stocks historically have
experienced extreme price and volume fluctuations, which often have been
unrelated to the performance of the related corporations. Our common stock
trades on the OTC Bulletin Board(R) under the symbol "KKRW." For the three
months ended December 31, 2002, taking into account the 1-for-20 reverse common
stock split that occurred on December 7, 2001, the high and low closing sale
prices for a share of our common stock were $0.016 and $0.008, respectively. The
trading prices of our common stock could experience wide fluctuations in the
future in response to:

          -    quarter-to-quarter variations in our operating results;

          -    material announcements of technological innovations;

          -    establishment of strategic partnerships by us or our competitors
               or providers of alternative products and services;

          -    general conditions in the Internet, e-commerce and video
               distribution industries; or

          -    other events or factors, many of which are beyond our control.

         If our operating results in future quarters fall below the expectations
of market makers, securities analysts and investors, the price of our common
stock likely will decline, perhaps substantially. In the past, securities class
action litigation often has been brought against a company following periods of
volatility in the market price of its securities. We may in the future be the

                                       20


<PAGE>

target of similar litigation. Securities litigation could result in substantial
costs and liabilities and could divert management's attention and resources.
Consequently, the price at which you purchase shares of our common stock may not
be indicative of the price that will prevail in the trading market. You may be
unable to sell your shares of common stock at or above your purchase price,
which may result in substantial losses to you.

     DEFAULTS UNDER OUR OBLIGATIONS TO THE HOLDERS OF OUR SECURED CONVERTIBLE
     DEBENTURES MAY ENABLE THE HOLDERS OF THOSE DEBENTURES TO FORECLOSE ON THE
     COLLATERAL SECURING OUR OBLIGATIONS TO THOSE HOLDERS WHICH MAY CAUSE US TO
     CEASE OPERATIONS AND LIQUIDATE ALL OR PART OF OUR ASSETS.

         All of our obligations under our secured convertible debentures and
related agreements are secured by all of our assets. As of February 12, 2003, we
were indebted in the aggregate principal amount of $4,109,528 plus accrued
interest on our secured convertible debentures. Our obligations to the holders
of our secured convertible debentures include the obligations to make quarterly
interest payments and to repay the principal amounts of the debentures when due.
In addition, our obligations under our secured convertible debentures include
the obligation to register for resale shares of common stock underlying those
debentures, the obligation to keep the registration statement covering those
shares effective and the obligation to maintain the status of Kanakaris Wireless
as a public company in compliance with all of the reporting requirements under
the Securities and Exchange Act of 1934. Defaults under our obligations to the
holders of our secured convertible debentures may enable the holders of those
debentures to foreclose on the collateral securing our obligations to those
holders which may cause us to cease operations and liquidate all or part of our
assets. Because the relative size of our assets is so disproportionately small
compared to the amount of debt represented by our secured convertible
debentures, we believe that a default, especially a default resulting from our
failure to pay accrued interest or principal when due, under our obligations to
the holders of our secured convertible debentures could result in a foreclosure
upon, and complete liquidation of, all of our assets, resulting in a total
cessation of our operations with no assets or proceeds from liquidation left
over for any holders of our common stock.

     BECAUSE WE ARE SUBJECT TO THE "PENNY STOCK" RULES, THE LEVEL OF TRADING
     ACTIVITY IN OUR STOCK MAY BE REDUCED.

         Broker-dealer practices in connection with transactions in "penny
stocks" are regulated by penny stock rules adopted by the Securities and
Exchange Commission. Penny stocks, like shares of our common stock, generally
are equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on Nasdaq). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction,
and, if the broker-dealer is the sole market maker, the broker-dealer must
disclose this fact and the broker-dealer's presumed control over the market, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, broker-dealers who sell these securities to
persons other than established customers and "accredited investors" must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and investors in our common stock may find it difficult to
sell their shares.


                                       21


<PAGE>


                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This report contains forward-looking statements, including among
         others:

          -    the projected growth in the video distribution, Internet
               and-commerce industries and the markets for our products and
               within these industries;

          -    our business strategy for expanding our presence in the existing
               and proposed markets in which our products and services could be
               used;

          -    anticipated trends in our financial condition and results of
               operations; and

          -    our ability to distinguish ourselves from our current and future
               competitors.

         You can identify forward-looking statements generally by the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"intends," "plans," "should," "could," "seeks," "pro forma," "anticipates,"
"estimates," "continues," or other variations thereof, including their use in
the negative, or by discussions of strategies, opportunities, plans or
intentions. You may find these forward-looking statements under the captions
"Risk Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," as well as captions elsewhere in this document. A
number of factors could cause results to differ materially from those
anticipated by forward-looking statements, including those discussed under "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

         These forward-looking statements necessarily depend upon assumptions
and estimates that may prove to be incorrect. Although we believe that the
assumptions and estimates reflected in the forward-looking statements are
reasonable, we cannot guarantee that we will achieve our plans, intentions or
expectations. The forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ in
significant ways from any future results expressed or implied by the
forward-looking statements.


ITEM 3.  CONTROLS AND PROCEDURES.

     EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

         Disclosure controls and procedures are designed to ensure that
information required to be disclosed in the reports filed or submitted under the
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act of 1934 is accumulated and
communicated to management, including the Principal Executive Officer and
Principal Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.

         We did not, within the 90 days prior to the filing date of this report,
carry out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
However, such an evaluation will occur prior to the filing of our next periodic
report for the quarterly period ending March 31, 2003 and will be done under the
supervision and with the participation of our Principal Executive Officer and
Principal Financial Officer. Based on that evaluation, we will provide a
conclusion as to whether our disclosure controls and procedures are effective in
gathering, analyzing and disclosing information necessary to satisfy our
disclosure obligations under the Exchange Act of 1934. In addition, we will
state whether there were any significant changes in our internal controls or in
other factors that could significantly affect those controls since our most
recent evaluation of such controls.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         Loudeye Technologies, Inc., or Loudeye, filed a complaint for money due
and owing against us in the Superior Court for the State of Washington (King
County) (Case No. 01-2-07608-6SEA) on March 8, 2001. Loudeye claims we failed to
pay $44,107 owing for encoding services furnished by Loudeye under the parties'
purported contract. The complaint also seeks attorneys' fees, court costs and
late charges. We filed an answer to the Loudeye complaint on October 11, 2001
that includes a general denial of all allegations made by Loudeye. Since the
time that our answer was filed on October 11, 2001, Loudeye's claim against us
has not proceeded and Loudeye has made no additional filings with respect to its
claim. Because of the immaterial amount of the claim, we have not recorded any
loss contingencies as a result of the Loudeye lawsuit.

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<PAGE>


         In a letter dated November 26, 2002 to Kanakaris Wireless and to Fast
Forward Marketing, Inc., among others, counsel to Warner Home Video and
Warner/Elektra/Atlantic Corporation, or Warner, demanded payment within 10 days
of an aggregate of $566,764.67 allegedly representing the total outstanding
balances owed to Warner. In a letter dated December 4, 2002 to counsel to
Warner, counsel to Kanakaris Wireless and Fast Forward Marketing, Inc. responded
requesting back-up data relating to Warner's $566,764.67 in accounts receivable
allegedly due from the Company and Fast Forward Marketing, Inc. In addition, in
the letter dated December 4, 2002, counsel to Kanakaris Wireless and Fast
Forward Marketing, Inc. asserted that Kanakaris Wireless, as a separate and
distinct entity, is not liable to Warner for any debts of its subsidiary, Fast
Forward Marketing, Inc. In a letter dated December 6, 2002 to counsel to
Kanakaris Wireless and Fast Forward Marketing, Inc., counsel to Warner requested
that, while they prepare the back-up data supporting the alleged accounts
receivable amounts owed, counsel to Kanakaris Wireless and Fast Forward
Marketing, Inc. prepare and send various materials relating to the acquisition
of Fast Forward Marketing, Inc. and accounts payable reports, payment history
and any other documents reflecting the balance currently owed by Fast Forward
Marketing, Inc. to Warner.

         The Company has notified Intervisual Books of its plan to litigate over
material misrepresentations of accounts payable and accounts receivable in the
Fast Forward Marketing acquisition. Intervisual Books has been sued by one or
more vendors pertaining to Fast Forward Marketing debt. Intervisual Books has
filed a consolidated cross-complaint against Fast Forward Marketing, the Company
and Alex Kanakaris regarding this litigation. Legal counsel to Intervisual Books
has proposed that all matters between the Company, Intervisual Books and related
filed and pending third-party lawsuits be addressed in a single mediation
hearing process. The Company anticipates that this mediation hearing will occur
in the near future, and is presently conducting pre-hearing negotiations. In the
event mediation fails, the Company intends to pursue its lawsuit against
Intervisual Books, defend against the Intervisual Books lawsuit and seek
dismissal of the Company and Alex Kanakaris from the Intervisual Books lawsuit.

         Christel H. Uittenbogaart, an individual, commenced an action against
Kanakaris Wireless, its subsidiary, Kanakaris InternetWorks, Inc., Alex
Kanakaris and David Shomaker, among others, in the Los Angeles Superior Court
(Case No. SC075090) on December 17, 2002. The complaint alleged that Kanakaris
Wireless and Kanakaris InternetWorks owed Ms. Uittenbogaart $113,183.43 as of
March 31, 2002 under the royalty provisions of a Stock Purchase Agreement
entered into between Kanakaris InternetWorks, Inc. and Ms. Uittenbogaart and
alleged other damages in unspecified amounts. Ms. Uittenbogaart's complaint
included allegations of breach of contract, breach of the implied covenant of
good faith, fraud, and negligent misrepresentation. In addition, Ms.
Uittenbogaart alleged the existence of a constructive trust based on unjust
enrichment and sought an equitable lien against property of Kanakaris Wireless
subsidiary Desience Corporation held by the defendants. Lastly, Ms.
Uittenbogaart demanded an accounting of the gross sales, profits and funds
generated as a result of the purchase of Desience Corporation from Ms.
Uittenbogaart in 1997. The Company has entered into settlement discussions which
would require the Company to pay Ms. Uittenbogaart monthly payments for a period
of time.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         On October 15, 2002 we issued an aggregate of $175,000 of 12%
convertible debentures in a private offering to three accredited investors. The
investors, if certain conversion limitations are disregarded, are beneficial
owners of 5% or more of our outstanding shares of common stock. The debentures
initially were convertible into shares of common stock at the lesser of $.01 per
share and 50% of the average of the lowest three intraday trading prices of a
share of common stock during the 20 trading days immediately preceding
conversion. The debentures were accompanied by warrants to purchase up to an
aggregate of 525,000 shares of common stock at a per share exercise price equal
to $.005.

         In October 2002, we issued 500,000 shares valued at $6,500 to an
accredited investor in connection with a loan of $25,000 cash.

         In October 2002, we issued 400,000 shares valued at $4,000 to one
consultant as compensation for services rendered.

                                       23


<PAGE>

In October 2002, we issued an aggregate of 4,066,977 shares of common stock to
four accredited investors upon conversion of an aggregate of approximately
$20,000 in principal plus related interest on our convertible debentures.

         In November 2002, we issued an aggregate of 2,984,930 shares of common
stock to four accredited investors upon conversion of an aggregate of
approximately $10,730 in principal plus related interest on our convertible
debentures.

         On December 9, 2002 we issued an aggregate of $175,000 of 12%
convertible debentures in a private offering to three accredited investors. The
investors, if certain conversion limitations are disregarded, are beneficial
owners of 5% or more of our outstanding shares of common stock. The debentures
initially were convertible into shares of common stock at the lesser of $.01 per
share and 50% of the average of the lowest three intraday trading prices of a
share of common stock during the 20 trading days immediately preceding
conversion. The debentures were accompanied by warrants to purchase up to an
aggregate of 525,000 shares of common stock at a per share exercise price equal
to $.005.

         On January 16, 2003, we issued an aggregate of $175,000 of 12%
convertible debentures in the first stage of a two-stage private offering to two
accredited investors. The investors, if certain conversion limitations are
disregarded, are beneficial owners of 5% or more of our outstanding shares of
common stock. The debentures were accompanied by warrants to purchase up to an
aggregate of 525,000 shares of common stock. The net proceeds of that offering,
after payment of related expenses, were approximately $125,000.

         On March 30 2003 issued an aggregate of $175,000 of 12% convertible
debentures in the second stage of a two-stage private offering to two accredited
investors. The investors, if certain conversion limitations are disregarded, are
beneficial owners of 5% or more of our outstanding shares of common stock. The
debentures were accompanied by warrants to purchase up to an aggregate of
525,000 shares of common stock. The net proceeds of that offering, after payment
of related expenses, were approximately $150,000.

         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.

         For each of the unaccredited investors participating in the
transactions described above, we made available for consideration, prior to the
acquisition of our securities, our most recent Annual Report on Form 10-KSB and
our most recent Quarterly Report on Form 10-QSB.

         For each of the issuances described above and made for consulting or
other services rendered, the per share value of the common stock issued was the
fair market value of the common stock on the grant date, which equaled the
closing price of a share of common stock on the NASD's OTC Electronic Bulletin
Board(R) on that date.

         DIVIDEND POLICY

         We have never paid any dividends on our common stock and do not
anticipate declaring or paying cash dividends in the foreseeable future. We
intend to retain future earnings, if any, to reinvest in our business. We expect
that covenants in our future financing agreements will prohibit or limit our
ability to declare or pay cash dividends.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         As of February 12, 2003, we were in default under our obligations to
register for resale shares of our common stock underlying certain of our
outstanding convertible debentures. In addition, as of that date, we also were
in default under our obligations to make quarterly interest payments under all
of our outstanding convertible debentures. We are in the process of registering
for resale with the Securities and Exchange Commission a portion of the shares
of common stock underlying some of the convertible debentures under which we are
in default and expect that the convertible debentures ultimately will be
converted into shares of our common stock and that we therefore will not be
obligated to repay the outstanding principal and accrued and unpaid interest
amounts on those debentures.

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

         None.

ITEM 5.  OTHER INFORMATION.

         None.

                                       24


<PAGE>


ITEM 6.  EXHIBITS

          (a)      Exhibits
                  --------
<TABLE>
<CAPTION>
                  Exhibit No.       Description
                  -----------       -----------
<S>               <C>               <C>
                  1.1               Amendment No. 1 to Securities Purchase Agreement

                  1.2               Secreatry's and Officer's Certificate

                  1.3               Stock Purchase Warrant

                  1.4               Secured Convertible Debenture Agreement

                  1.5               Secured Convertible Debenture Agreement

                  1.6               Stock Purchase Warrant

                  99.1              Certifications of Chief Executive Officer and Chief Financial Officer Pursuant
                                    to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                                    Sarbanes-Oxley Act Of 2002

</TABLE>


                                       25


<PAGE>



<PAGE>
                                                                     EXHIBIT 1.1




                AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT



     This Amendment No. 1 to Securities Purchase Agreement, dated as of March
31, 2003, shall serve to amend the Securities Purchase Agreement (the
"Agreement"), dated as of January 16, 2003, by and among Kanakaris Wireless, a
Nevada corporation with its headquarters located at 1280 Bison, Suite B9-597,
Newport Beach, California 92660, and each of the Buyers set forth in the
Agreement.


                     1. The undersigned parties hereby agree to amend Section
4(l) of the Agreement to provide that the
Buyers will fund the final $175,000 of the subsequent investment on the date
hereof, instead of within five (5) days following the Effective Date of the
Registration Statement (as defined in the Agreement).


                     2. All other provisions of the Agreement shall remain in
full force and effect.





                            [Signature Page Follows]




<PAGE>





ACCEPTED AND AGREED:

KANAKARIS WIRELESS


By: /s/ Alex F. Kanakaris
    ---------------------
           Alex F. Kanakaris
           Chairman and Chief Executive Officer


AJW OFFSHORE, LTD.
By:  First Street Manager II, LLC


By: /s/ Corey S. Ribotsky
   ---------------------------------------------------------------------
           Corey S. Ribotsky
           Manager


AJW QUALIFIED PARTNERS, LLC
By:  AJW Manager, LLC


By: /s/ Corey S. Ribotsky
   ---------------------------------------------------------------------
           Corey S. Ribotsky
           Manager




<PAGE>

                                                                     EXHIBIT 1.2




                             SECRETARY'S CERTIFICATE

     The undersigned, John McKay, Secretary of Kanakaris Wireless, a Nevada
corporation (the "Company"), in connection with the authorization and issuance
of Convertible Debentures in the aggregate principal amount of Three Hundred
Fifty Thousand Dollars ($350,000) and Warrants to purchase 1,750,000 shares of
the Company's Common Stock, in accordance with the Securities Purchase Agreement
dated January 16, 2003, by and among the Company and each of the purchasers set
forth on the signature pages thereto (the "Private Placement"), hereby certifies
that:


He is the duly appointed Secretary of the Company.


Attached as Exhibit A hereto is a true and complete copy of the Certificate of
Incorporation of the Company, as amended through the date hereof; no action has
been taken by the Company in contemplation of any amendment of said Certificate
of Incorporation or any liquidation, dissolution, merger or consolidation of the
Company.


Attached as Exhibit B hereto is a true and complete copy of the Bylaws of the
Company as amended through the date hereof.


Attached as Exhibit C hereto is a true and complete copy of the resolutions duly
adopted by the Board of Directors of the Company at a special telephonic meeting
on January 16, 2003; such resolutions remain in full force and effect and have
not been rescinded, modified or supplemented and no other corporate resolutions
have been adopted by the Company in connection with the Private Placement.


                     IN WITNESS WHEREOF, the undersigned has executed this
Secretary's Certificate as of the 31st day of
March, 2003.




                                                    /s/ John McKay
                                                    --------------
                                                    John McKay
                                                    Secretary


<PAGE>



                                                                     EXHIBIT 1.2





                              OFFICER'S CERTIFICATE

     The undersigned, Alex F. Kanakaris, Chief Executive Officer of Kanakaris
Wireless, a Nevada corporation (the "Company"), in connection with the
authorization and issuance of Convertible Debentures in the aggregate principal
amount of Three Hundred Fifty Thousand Dollars ($350,000) and Warrants to
purchase 1,750,000 shares of the Company's Common Stock, in accordance with the
Securities Purchase Agreement dated January 16, 2003, by and among the Company
and each of the purchasers set forth on the signature pages thereto (the
"Purchase Agreement"), hereby certifies that:


1. He is the duly appointed Chief Executive Officer of the Company.


The representations and warranties made by the Company in Section 3 of the
Purchase Agreement are true and correct in all material respects as of the date
of this Officer's Certificate. The capitalization of the Company described in
Section 3(c) of the Purchase Agreement has not changed as of the date hereof.


As of the date hereof, the Company has satisfied and duly performed all of the
conditions and obligations specified in Section 7 of the Purchase Agreement to
be satisfied on or prior to the Closing Date (as defined in the Purchase
Agreement) or such conditions and obligations have been waived.


The Company has complied with or, if compliance prior to Closing (as defined in
the Purchase Agreement) is not required, promptly following the Closing the
Company will comply with, the filing requirements in respect of this transaction
under (a) Regulation D under the Securities Act of 1933, as amended (the "1933
Act") (and applicable Blue Sky regulations) and (b) the Securities Exchange Act
of 1934, as amended.


There has been no adverse change in the business, affairs, prospects,
operations, properties, assets or condition of the Company since September 30,
2002, the date of the Company's most recent audited financial statements
delivered to the Buyers (as defined in the Purchase Agreement), other than
matters which would not, individually or in the aggregate, have a Material
Adverse Effect (as defined in the Purchase Agreement).


The Company is qualified as a foreign corporation in all jurisdictions in which
the Company owns or leases properties, or conducts any business except where
failure of the Company to be so qualified would not have a Material Adverse
Effect (as defined in the Purchase Agreement).


                     IN WITNESS WHEREOF, the undersigned has executed this
Officer's Certificate as of the 31st day of March,
2003.




                                          /s/ Alex F. Kanakaris
                                          --------------------------
                                          Alex F. Kanakaris
                                          Chief Executive Officer


<PAGE>

                                                                     EXHIBIT 1.3






           THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
           WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
           AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES
           PURCHASE AGREEMENT DATED AS OF JANUARY 16, 2003 NEITHER THIS WARRANT
           NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR ASSIGNED IN THE
           ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
           UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND
           SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS,
           THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
           PURSUANT TO RULE 144 UNDER SUCH ACT.


Right to Purchase 375,000 Shares of Common Stock, par value $0.001 per share

                             STOCK PURCHASE WARRANT


           THIS CERTIFIES THAT, for value received, AJW Qualified Partners, LLC
or its registered assigns, is entitled to purchase from Kanakaris Wireless, a
Nevada corporation (the "Company"), at any time or from time to time during the
period specified in Paragraph 2 hereof, Three Hundred Seventy-Five Thousand
(375,000) fully paid and nonassessable shares of the Company's Common Stock, par
value $0.001 per share (the "Common Stock"), at an exercise price per share
equal to $.005 (the "Exercise Price"). The term "Warrant Shares," as used
herein, refers to the shares of Common Stock purchasable hereunder. The Warrant
Shares and the Exercise Price are subject to adjustment as provided in Paragraph
4 hereof. The term "Warrants" means this Warrant and the other warrants issued
pursuant to that certain Securities Purchase Agreement, dated January 16, 2003,
by and among the Company and the Buyers listed on the execution page thereof
(the "Securities Purchase Agreement"), including any additional warrants
issuable pursuant to Section 4(l) thereof.


           This Warrant is subject to the following terms, provisions, and
conditions:


Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject to the
provisions hereof, this Warrant may be exercised by the holder hereof, in whole
or in part, by the surrender of this Warrant, together with a completed exercise
agreement in the form attached hereto (the "Exercise Agreement"), to the Company
during normal business hours on any business day at the Company's principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), and upon (i) payment to the Company
in cash, by certified or official bank check or by wire transfer for the account
of the Company of the Exercise Price for the Warrant Shares specified in the
Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise" (as
defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. In addition to all other available remedies at law or
in equity, if the Company fails to deliver certificates for the Warrant Shares
within three (3) business days after this Warrant is exercised, then the Company
shall pay to the holder in cash a penalty (the "Penalty") equal to 2% of the
number of Warrant Shares that the holder is entitled to multiplied by the Market
Price (as hereinafter defined) for each day that the Company fails to deliver
certificates for the Warrant Shares. For example, if the holder is entitled to
100,000 Warrant Shares and the Market Price is $2.00, then the Company shall pay
to the holder $4,000 for each day that the Company fails to deliver certificates
for the Warrant Shares. The Penalty shall be paid to the holder by the fifth day
of the month following the month in which it has accrued.


                     Notwithstanding anything in this Warrant to the contrary,
in no event shall the holder of this Warrant be
entitled to exercise a number of Warrants (or portions thereof) in excess of the
number of Warrants (or portions thereof) upon exercise of which the sum of (i)
the number of shares of Common Stock beneficially owned by the holder and its
affiliates (other than shares of Common Stock which may be deemed beneficially
owned through the ownership of the unexercised Warrants and the unexercised or
unconverted portion of any other securities of the Company (including the
Debentures (as defined in the Securities Purchase Agreement)) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the immediately preceding sentence, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13D-G thereunder, except as otherwise
provided in clause (i) of the preceding sentence. The holder of this Warrant may
waive the limitations set forth herein by sixty-one (61) days written notice to
the Company. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of stockholders of the Company.




<PAGE>

                                                                     EXHIBIT 1.3




Period of Exercise. This Warrant is exercisable at any time or from time to time
on or after the date on which this Warrant is issued and delivered pursuant to
the terms of the Securities Purchase Agreement and before 6:00 p.m., New York,
New York time on the third (3rd) anniversary of the date of issuance (the
"Exercise Period").


Certain Agreements of the Company.  The Company hereby covenants and agrees as
---------------------------------   follows:


Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance
with the terms of this Warrant, be validly issued, fully paid, and nonassessable
and free from all taxes, liens, and charges with respect to the issue thereof.


Reservation of Shares. Subject to the Stockholder Approval (as defined in the
Securities Purchase Agreement), during the Exercise Period, the Company shall at
all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.


Listing. The Company shall promptly secure the listing of the shares of Common
Stock issuable upon exercise of the Warrant upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance upon exercise of
this Warrant) and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so list on
each national securities exchange or automated quotation system, as the case may
be, and shall maintain such listing of, any other shares of capital stock of the
Company issuable upon the exercise of this Warrant if and so long as any shares
of the same class shall be listed on such national securities exchange or
automated quotation system.


Certain Actions Prohibited. The Company will not, by amendment of its charter or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.


Successors and Assigns. This Warrant will be binding upon any entity succeeding
to the Company by merger, consolidation, or acquisition of all or substantially
all the Company's assets.


Antidilution Provisions. During the Exercise Period, the Exercise Price and the
number of Warrant Shares shall be subject to adjustment from time to time as
provided in this Paragraph 4.


           In the event that any adjustment of the Exercise Price as required
herein results in a fraction of a cent, such Exercise Price shall be rounded up
to the nearest cent.


Adjustment of Exercise Price and Number of Shares upon Issuance of Common Stock.
Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever
on or after the date of issuance of this Warrant, the Company issues or sells,
or in accordance with Paragraph 4(b) hereof is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Market Price (as
hereinafter defined) on the date of issuance (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Exercise Price will be reduced to a
price determined by multiplying the Exercise Price in effect immediately prior
to the Dilutive Issuance by a fraction, (i) the numerator of which is an amount
equal to the sum of (x) the number of shares of Common Stock actually
outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of
the aggregate consideration, calculated as set forth in Paragraph 4(b) hereof,
received by the Company upon such Dilutive Issuance divided by the Market Price
in effect immediately prior to the Dilutive Issuance, and (ii) the denominator
of which is the total number of shares of Common Stock Deemed Outstanding (as
defined below) immediately after the Dilutive Issuance.


Effect on Exercise Price of Certain Events. For purposes of determining the
adjusted Exercise Price under Paragraph 4(a) hereof, the following will be
applicable:




<PAGE>


                                                                     EXHIBIT 1.3





Issuance of Rights or Options. If the Company in any manner issues or grants any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Common Stock or other securities convertible into
or exchangeable for Common Stock ("Convertible Securities") (such warrants,
rights and options to purchase Common Stock or Convertible Securities are
hereinafter referred to as "Options") and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the Market
Price on the date of issuance or grant of such Options, then the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
will, as of the date of the issuance or grant of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the "price per share for which
Common Stock is issuable upon the exercise of such Options" is determined by
dividing (i) the total amount, if any, received or receivable by the Company as
consideration for the issuance or granting of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the exercise of all such Options, plus, in the case of Convertible
Securities issuable upon the exercise of such Options, the minimum aggregate
amount of additional consideration payable upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the exercise of all such Options (assuming full conversion of
Convertible Securities, if applicable). No further adjustment to the Exercise
Price will be made upon the actual issuance of such Common Stock upon the
exercise of such Options or upon the conversion or exchange of Convertible
Securities issuable upon exercise of such Options.


Issuance of Convertible Securities. If the Company in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such conversion or exchange is
less than the Market Price on the date of issuance, then the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. For the purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon such
conversion or exchange" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment to the Exercise Price will be made upon the
actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.


Change in Option Price or Conversion Rate. If there is a change at any time in
(i) the amount of additional consideration payable to the Company upon the
exercise of any Options; (ii) the amount of additional consideration, if any,
payable to the Company upon the conversion or exchange of any Convertible
Securities; or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock (other than under or by reason
of provisions designed to protect against dilution), the Exercise Price in
effect at the time of such change will be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.


Treatment of Expired Options and Unexercised Convertible Securities. If, in any
case, the total number of shares of Common Stock issuable upon exercise of any
Option or upon conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.


Calculation of Consideration Received. If any Common Stock, Options or
Convertible Securities are issued, granted or sold for cash, the consideration
received therefor for purposes of this Warrant will be the amount received by
the Company therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company will be the Market
Price thereof as of the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued in connection with any acquisition, merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving corporation as is attributable
to such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
in good faith by the Board of Directors of the Company.




<PAGE>



                                                                     EXHIBIT 1.3





Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price
will be made (i) upon the exercise of any warrants, options or other convertible
securities granted, issued and outstanding on the date of issuance of this
Warrant; (ii) upon the grant or exercise of any stock or options which may
hereafter be granted or exercised under any employee benefit plan, stock option
plan or restricted stock plan of the Company now existing or to be implemented
in the future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the Company or
a majority of the members of a committee of independent directors established
for such purpose; or (iii) upon the exercise of the Warrants.

Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

Adjustment in Number of Shares. Upon each adjustment of the Exercise Price
pursuant to the provisions of this Paragraph 4, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
Consolidation, Merger or Sale. In case of any consolidation of the Company with,
or merger of the Company into any other corporation, or in case of any sale or
conveyance of all or substantially all of the assets of the Company other than
in connection with a plan of complete liquidation of the Company, then as a
condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the holder of this Warrant will have the right to
acquire and receive upon exercise of this Warrant in lieu of the shares of
Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

Distribution of Assets. In case the Company shall declare or make any
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

Notice of Adjustment. Upon the occurrence of any event which requires any
adjustment of the Exercise Price, then, and in each such case, the Company shall
give notice thereof to the holder of this Warrant, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease in
the number of Warrant Shares purchasable at such price upon exercise, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the Chief
Financial Officer of the Company.

Minimum Adjustment of Exercise Price. No adjustment of the Exercise Price shall
be made in an amount of less than 1% of the Exercise Price in effect at the time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Exercise Price.

No Fractional Shares. No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but the Company shall pay a cash adjustment in
respect of any fractional share which would otherwise be issuable in an amount
equal to the same fraction of the Market Price of a share of Common Stock on the
date of such exercise.


<PAGE>



                                                                     EXHIBIT 1.3



Other Notices.  In case at any time:
-------------

the Company shall declare any dividend upon the Common Stock payable in shares
of stock of any class or make any other distribution (including dividends or
distributions payable in cash out of retained earnings) to the holders of the
Common Stock;

the Company shall offer for subscription pro rata to the holders of the Common
Stock any additional shares of stock of any class or other rights;

there shall be any capital reorganization of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or
sale of all or substantially all its assets to, another corporation or entity;
or there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company; then, in each such case, the Company shall give to
the holder of this Warrant (a) notice of the date on which the books of the
Company shall close or a record shall be taken for determining the holders of
Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription rights
or to exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the date on which
the Company's books are closed in respect thereto. Failure to give any such
notice or any defect therein shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.

Certain Events. If any event occurs of the type contemplated by the adjustment
provisions of this Paragraph 4 but not expressly provided for by such
provisions, the Company will give notice of such event as provided in Paragraph
4(g) hereof, and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the holder shall
be neither enhanced nor diminished by such event.

Certain Definitions.

"Common Stock Deemed Outstanding" shall mean the number of shares of Common
Stock actually outstanding (not including shares of Common Stock held in the
treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof, the
maximum total number of shares of Common Stock issuable upon the exercise of
Options, as of the date of such issuance or grant of such Options, if any, and
(y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of
Common Stock issuable upon conversion or exchange of Convertible Securities, as
of the date of issuance of such Convertible Securities, if any.

"Market Price," as of any date, (i) means the average of the last reported sale
prices for the shares of Common Stock on the Over-the-Counter Bulletin Board
(the "OTCBB") for the five (5) Trading Days (as hereinafter defined) immediately
preceding such date as reported by Bloomberg Financial Services, or (ii) if the
OTCBB is not the principal trading market for the shares of Common Stock, the
average of the last reported sale prices on the principal trading market for the
Common Stock during the same period as reported by Bloomberg Financial Services,
or (iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the fair market value as reasonably
determined in good faith by (a) the Board of Directors of the Company or, at the
option of a majority-in-interest of the holders of the outstanding Warrants by
(b) an independent investment bank of nationally recognized standing in the
valuation of businesses similar to the business of the corporation. The manner
of determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

"Common Stock," for purposes of this Paragraph 4, includes the Common Stock, par
value $0.001 per share, and any additional class of stock of the Company having
no preference as to dividends or distributions on liquidation, provided that the
shares purchasable pursuant to this Warrant shall include only shares of Common
Stock, par value $0.001 per share, in respect of which this Warrant is
exercisable, or shares resulting from any subdivision or combination of such
Common Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Paragraph 4(e)
hereof, the stock or other securities or property provided for in such
Paragraph.
"Trading Day" shall mean any day on which the Common Stock is traded for any
period on the OTCBB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.



<PAGE>



                                                                     EXHIBIT 1.3


Issue Tax. The issuance of certificates for Warrant Shares upon the exercise of
this Warrant shall be made without charge to the holder of this Warrant or such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the holder of this Warrant.

No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

Transfer, Exchange, and Replacement of Warrant.

Restriction on Transfer. This Warrant and the rights granted to the holder
hereof are transferable, in whole or in part, upon surrender of this Warrant,
together with a properly executed assignment in the form attached hereto, at the
office or agency of the Company referred to in Paragraph 7(e) below, provided,
however, that any transfer or assignment shall be subject to the conditions set
forth in Paragraph 7(f) hereof and to the applicable provisions of the
Securities Purchase Agreement. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary. Notwithstanding anything to
the contrary contained herein, the registration rights described in Paragraph 8
are assignable only in accordance with the provisions of that certain
Registration Rights Agreement, dated January 16, 2003, by and among the Company
and the other signatories thereto (the "Registration Rights Agreement").

Warrant Exchangeable for Different Denominations. This Warrant is exchangeable,
upon the surrender hereof by the holder hereof at the office or agency of the
Company referred to in Paragraph 7(e) below, for new Warrants of like tenor
representing in the aggregate the right to purchase the number of shares of
Common Stock which may be purchased hereunder, each of such new Warrants to
represent the right to purchase such number of shares as shall be designated by
the holder hereof at the time of such surrender.

Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of any such loss, theft, or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of this Warrant,
the Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.

Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

Register. The Company shall maintain, at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee and each prior owner of this
Warrant.

Exercise or Transfer Without Registration. If, at the time of the surrender of
this Warrant in connection with any exercise, transfer, or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder), shall not be registered under the Securities Act of 1933,
as amended (the "Securities Act") and under applicable state securities or blue
sky laws, the Company may require, as a condition of allowing such exercise,
transfer, or exchange, (i) that the holder or transferee of this Warrant, as the
case may be, furnish to the Company a written opinion of counsel, which opinion
and counsel are acceptable to the Company, to the effect that such exercise,
transfer, or exchange may be made without registration under said Act and under
applicable state securities or blue sky laws, (ii) that the holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

Registration Rights. The initial holder of this Warrant (and certain assignees
thereof) is entitled to the benefit of such registration rights in respect of
the Warrant Shares as are set forth in Section 2 of the Registration Rights
Agreement.


<PAGE>



                                                                     EXHIBIT 1.3


Notices. All notices, requests, and other communications required or permitted
to be given or delivered hereunder to the holder of this Warrant shall be in
writing, and shall be personally delivered, or shall be sent by certified or
registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 1280 Bison, Suite B9-597
Newport Beach, California 92660, Attention: Alex Kanakaris, Chairman and Chief
Executive Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.

Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED
INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE. Miscellaneous.

Amendments. This Warrant and any provision hereof may only be amended by an
instrument in writing signed by the Company and the holder hereof.

Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for purposes of reference only, and shall not affect the
meaning or construction of any of the provisions hereof.

Cashless Exercise. Notwithstanding anything to the contrary contained in this
Warrant, if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the Securities
Act, this Warrant may be exercised by presentation and surrender of this Warrant
to the Company at its principal executive offices with a written notice of the
holder's intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a "Cashless Exercise"). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the holder shall
surrender this Warrant for that number of shares of Common Stock determined by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price, and
the denominator of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is exercising 100,000 Warrants with a
per Warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock's current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common Stock.

Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the holder shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


<PAGE>


                                                                     EXHIBIT 1.3


IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
KANAKARIS WIRELESS


By: /s/ Alex F. Kanakaris
    ---------------------
Alex F. Kanakaris
Chairman and Chief Executive Officer

Dated as of March 31, 2003



<PAGE>



                                                                     EXHIBIT 1.3

FORM OF EXERCISE AGREEMENT

Dated:  ________ __, 2002


To:        Kanakaris Wireless

The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase ________ shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:

Name:      ______________________________

Signature:______________________________
Address:_______________________________
-------------------------------

Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.



<PAGE>






                                                                     EXHIBIT 1.3

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee       Address                                      No of Shares





, and hereby irrevocably constitutes and appoints
___________________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.

Dated: ________ __, 2002

In the presence of:

           Name:     ____________________________

           Signature:___________________________
           Title:     ___________________________
           Address:  ____________________________

Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.


<PAGE>

                                                                     EXHIBIT 1.4




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.



SECURED CONVERTIBLE DEBENTURE

Newport Beach, California

March 31, 2003       $100,000



FOR VALUE RECEIVED, KANAKARIS WIRELESS, a Nevada corporation (hereinafter called
the "Borrower"), hereby promises to pay to the order of AJW Offshore, Ltd. or
registered assigns (the "Holder") the sum of One Hundred Thousand Dollars
($100,000), on March 31, 2004 (the "Maturity Date"), and to pay interest on the
unpaid principal balance hereof at the rate of twelve percent (12%) per annum
from March 31, 2003 (the "Issue Date") until the same becomes due and payable,
whether at maturity or upon acceleration or by prepayment or otherwise. Any
amount of principal or interest on this Debenture which is not paid when due
shall bear interest at the rate of fifteen percent (15%) per annum from the due
date thereof until the same is paid ("Default Interest"). Interest shall
commence accruing on the issue date, shall be computed on the basis of a 365-day
year and the actual number of days elapsed and shall be payable, at the option
of the Holder, either quarterly on March 31, June 30, September 30 and December
31 of each year beginning on June 30, 2003, or at the time of conversion of the
principal to which such interest relates in accordance with Article I below. All
payments due hereunder (to the extent not converted into common stock, par value
$0.001 per share, of the Borrower (the "Common Stock") in accordance with the
terms hereof) shall be made in lawful money of the United States of America or,
at the option of the Company, in whole or in part, in shares of Common Stock of
the Borrower valued at the then applicable Conversion Price (as defined herein).
All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this
Debenture. Whenever any amount expressed to be due by the terms of this
Debenture is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of
any interest payment date which is not the date on which this Debenture is paid
in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in
this Debenture, the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of New York, New
York are authorized or required by law or executive order to remain closed. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement, dated January
16, 2003, pursuant to which this Debenture was originally issued (the "Purchase
Agreement").

This Debenture is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

The following terms shall apply to this Debenture:



<PAGE>


                                                                     EXHIBIT 1.4


CONVERSION RIGHTS

Conversion Right. The Holder shall have the right from time to time, and at any
time on or prior to the earlier of (i) the Maturity Date and (ii) the date of
payment of the Default Amount (as defined in Article III) pursuant to Section
1.6(a) or Article III, the Optional Prepayment Amount (as defined in Section 5.1
or any payments pursuant to Section 1.7, each in respect of the remaining
outstanding principal amount of this Debenture to convert all or any part of the
outstanding and unpaid principal amount of this Debenture into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into
which such Common Stock shall hereafter be changed or reclassified at the
conversion price (the "Conversion Price") determined as provided herein (a
"Conversion"); provided, however, that in no event shall the Holder be entitled
to convert any portion of this Debenture in excess of that portion of this
Debenture upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debentures or the unexercised or unconverted portion
of any other security of the Borrower (including, without limitation, the
warrants issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the
conversion of the portion of this Debenture with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Holder and its affiliates of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G
thereunder, except as otherwise provided in clause (1) of such proviso. The
Holder of this Debenture may waive the limitations set forth herein by sixty-one
(61) days written notice to the Company. The number of shares of Common Stock to
be issued upon each conversion of this Debenture shall be determined by dividing
the Conversion Amount (as defined below) by the applicable Conversion Price then
in effect on the date specified in the notice of conversion, in the form
attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the
Borrower by the Holder in accordance with Section 1.4 below; provided that the
Notice of Conversion is submitted by facsimile (or by other means resulting in,
or reasonably expected to result in, notice) to the Borrower before 6:00 p.m.,
New York, New York time on such conversion date (the "Conversion Date"). The
term "Conversion Amount" means, with respect to any conversion of this
Debenture, the sum of (1) the principal amount of this Debenture to be converted
in such conversion plus (2) accrued and unpaid interest, if any, on such
principal amount at the interest rates provided in this Debenture to the
Conversion Date plus (3) Default Interest, if any, on the amounts referred to in
the immediately preceding clauses (1) and/or (2) plus (4) at the Holder's
option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof or pursuant to Section 2(c) of that certain Registration Rights
Agreement, dated as of January 16, 2003, executed in connection with the initial
issuance of this Debenture and the other Debentures issued on the Issue Date
(the "Registration Rights Agreement").

Conversion Price.

Calculation of Conversion Price. The Conversion Price shall be the lesser of (i)
the Variable Conversion Price (as defined herein) and (ii) the Fixed Conversion
Price (as defined herein) (subject, in each case, to equitable adjustments for
stock splits, stock dividends or rights offerings by the Borrower relating to
the Borrower's securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions
and similar events). The "Variable Conversion Price" shall mean the Applicable
Percentage (as defined herein) multiplied by the Market Price (as defined
herein). "Market Price" means the average of the lowest three (3) Trading Prices
(as defined below) for the Common Stock during the twenty (20) Trading Day
period ending one Trading Day prior to the date the Conversion Notice is sent by
the Holder to the Borrower via facsimile (the "Conversion Date"). "Trading
Price" means, for any security as of any date, the intraday trading price on the
Over-the-Counter Bulletin Board (the "OTCBB") as reported by a reliable
reporting service mutually acceptable to and hereafter designated by Holders of
a majority in interest of the Debentures and the Borrower or, if the OTCBB is
not the principal trading market for such security, the intraday trading price
of such security on the principal securities exchange or trading market where
such security is listed or traded or, if no intraday trading price of such
security is available in any of the foregoing manners, the average of the
intraday trading prices of any market makers for such security that are listed
in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price
cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Debentures
being converted for which the calculation of the Trading Price is required in
order to determine the Conversion Price of such Debentures. "Trading Day" shall
mean any day on which the Common Stock is traded for any period on the OTCBB, or
on the principal securities exchange or



<PAGE>



                                                                     EXHIBIT 1.4


other securities market on which the Common Stock is then being traded.
"Applicable Percentage" shall mean 40%. The "Fixed Conversion Price" shall mean
$0.01.

Conversion Price During Major Announcements. Notwithstanding anything contained
in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public
announcement that it intends to consolidate or merge with any other corporation
(other than a merger in which the Borrower is the surviving or continuing
corporation and its capital stock is unchanged) or sell or transfer all or
substantially all of the assets of the Borrower or (ii) any person, group or
entity (including the Borrower) publicly announces a tender offer to purchase
50% or more of the Borrower's Common Stock (or any other takeover scheme) (the
date of the announcement referred to in clause (i) or (ii) is hereinafter
referred to as the "Announcement Date"), then the Conversion Price shall,
effective upon the Announcement Date and continuing through the Adjusted
Conversion Price Termination Date (as defined below), be equal to the lower of
(x) the Conversion Price which would have been applicable for a Conversion
occurring on the Announcement Date and (y) the Conversion Price that would
otherwise be in effect. From and after the Adjusted Conversion Price Termination
Date, the Conversion Price shall be determined as set forth in this Section
1.2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall
mean, with respect to any proposed transaction or tender offer (or takeover
scheme) for which a public announcement as contemplated by this Section 1.2(b)
has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

Authorized Shares. Subject to the Stockholder Approval (as defined in the
Purchase Agreement), the Borrower covenants that during the period the
conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of shares, free from preemptive
rights, to provide for the issuance of Common Stock upon the full conversion of
this Debenture and the other Debentures issued pursuant to the Purchase
Agreement. Subject to the Stockholder Approval (as defined in the Purchase
Agreement), the Borrower is required at all times to have authorized and
reserved two times the number of shares that is actually issuable upon full
conversion of the Debentures (based upon the Conversion Price of the Debentures
in effect from time to time) (the "Reserved Amount"). The Reserved Amount shall
be increased from time to time in accordance with the Borrower's obligations
pursuant to Section 4(h) of the Purchase Agreement. The Borrower represents that
upon issuance, such shares will be duly and validly issued, fully paid and
non-assessable. In addition, if the Borrower shall issue any securities or make
any change to its capital structure which would change the number of shares of
Common Stock into which the Debentures shall be convertible at the then current
Conversion Price, the Borrower shall at the same time make proper provision so
that thereafter there shall be a sufficient number of shares of Common Stock
authorized and reserved, free from preemptive rights, for conversion of the
outstanding Debentures. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock
issuable upon conversion of this Debenture, and (ii) agrees that its issuance of
this Debenture shall constitute full authority to its officers and agents who
are charged with the duty of executing stock certificates to execute and issue
the necessary certificates for shares of Common Stock in accordance with the
terms and conditions of this Debenture.

If, at any time a Holder of this Debenture submits a Notice of Conversion, and
the Borrower does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Article I (a "Conversion Default"), subject to Section 4.8, the Borrower
shall issue to the Holder all of the shares of Common Stock which are then
available to effect such conversion. The portion of this Debenture which the
Holder included in its Conversion Notice and which exceeds the amount which is
then convertible into available shares of Common Stock (the "Excess Amount")
shall, notwithstanding anything to the contrary contained herein, not be
convertible into Common Stock in accordance with the terms hereof until (and at
the Holder's option at any time after) the date additional shares of Common
Stock are authorized by the Borrower to permit such conversion, at which time
the Conversion Price in respect thereof shall be the lesser of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii) the
Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
..24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture. The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i)



<PAGE>



                                                                     EXHIBIT 1.4


such time that the Holder notifies the Borrower or that the Borrower otherwise
becomes aware that there are or likely will be insufficient authorized and
unissued shares to allow full conversion thereof and (ii) a Conversion Default.
The Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Holder's option, as follows:

In the event Holder elects to take such payment in cash, cash payment shall be
made to Holder by the fifth (5th) day of the month following the month in which
it has accrued; and

In the event Holder elects to take such payment in Common Stock, the Holder may
convert such payment amount into Common Stock at the Conversion Price (as in
effect at the time of conversion) at any time after the fifth day of the month
following the month in which it has accrued in accordance with the terms of this
Article I (so long as there is then a sufficient number of authorized shares of
Common Stock).

The Holder's election shall be made in writing to the Borrower at any time prior
to 6:00 p.m., New York, New York time, on the third day of the month following
the month in which Conversion Default payments have accrued. If no election is
made, the Holder shall be deemed to have elected to receive cash. Nothing herein
shall limit the Holder's right to pursue actual damages (to the extent in excess
of the Conversion Default Payments) for the Borrower's failure to maintain a
sufficient number of authorized shares of Common Stock, and each holder shall
have the right to pursue all remedies available at law or in equity (including
degree of specific performance and/or injunctive relief).

Method of Conversion.

Mechanics of Conversion. Subject to Section 1.1, this Debenture may be converted
by the Holder in whole or in part at any time from time to time after the Issue
Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile or
other reasonable means of communication dispatched on the Conversion Date prior
to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b),
surrendering this Debenture at the principal office of the Borrower.

Surrender of Debenture Upon Conversion. Notwithstanding anything to the contrary
set forth herein, upon conversion of this Debenture in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Debenture
to the Borrower unless the entire unpaid principal amount of this Debenture is
so converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Debenture upon each such conversion.
In the event of any dispute or discrepancy, such records of the Borrower shall
be controlling and determinative in the absence of manifest error.
Notwithstanding the foregoing, if any portion of this Debenture is converted as
aforesaid, the Holder may not transfer this Debenture unless the Holder first
physically surrenders this Debenture to the Borrower, whereupon the Borrower
will forthwith issue and deliver upon the order of the Holder a new Debenture of
like tenor, registered as the Holder (upon payment by the Holder of any
applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Debenture. The Holder and any
assignee, by acceptance of this Debenture, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

Payment of Taxes. The Borrower shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock or other securities or property on conversion of this Debenture
in a name other than that of the Holder (or in street name), and the Borrower
shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the
custodian in whose street name such shares are to be held for the Holder's
account) requesting the issuance thereof shall have paid to the Borrower the
amount of any such tax or shall have established to the satisfaction of the
Borrower that such tax has been paid.

Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the
Holder of a facsimile transmission (or other reasonable means of communication)
of a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and
delivered to or upon the order of the Holder certificates for the Common Stock
issuable upon such conversion within two (2) business days after such receipt
(and, solely in the case of conversion of the entire unpaid principal amount
hereof, surrender of this Debenture) (such second business day being hereinafter
referred to as the "Deadline") in accordance with the terms hereof and the
Purchase Agreement (including, without



<PAGE>



                                                                     EXHIBIT 1.4


limitation, in accordance with the requirements of Section 2(g) of the Purchase
Agreement that certificates for shares of Common Stock issued on or after the
effective date of the Registration Statement upon conversion of this Debenture
shall not bear any restrictive legend).

Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of
a Notice of Conversion, the Holder shall be deemed to be the holder of record of
the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest on this Debenture shall be reduced
to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Debenture
being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on
such conversion. If the Holder shall have given a Notice of Conversion as
provided herein, the Borrower's obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the
absence of any action by the Holder to enforce the same, any waiver or consent
with respect to any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Borrower to the holder of record, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date.

Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical
certificates representing the Common Stock issuable upon conversion, provided
the Borrower's transfer agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the
Holder and its compliance with the provisions contained in Section 1.1 and in
this Section 1.4, the Borrower shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon conversion to
the Holder by crediting the account of Holder's Prime Broker with DTC through
its Deposit Withdrawal Agent Commission ("DWAC") system.

Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting
the Holder's right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Debenture is more than two (2) days after the
Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay
to the Holder $2,000 per day in cash, for each day beyond the Deadline that the
Borrower fails to deliver such Common Stock. Such cash amount shall be paid to
Holder by the fifth day of the month following the month in which it has accrued
or, at the option of the Holder (by written notice to the Borrower by the first
day of the month following the month in which it has accrued), shall be added to
the principal amount of this Debenture, in which event interest shall accrue
thereon in accordance with the terms of this Debenture and such additional
principal amount shall be convertible into Common Stock in accordance with the
terms of this Debenture.

Concerning the Shares. The shares of Common Stock issuable upon conversion of
this Debenture may not be sold or transferred unless (i) such shares are sold
pursuant to an effective registration statement under the Act or (ii) the
Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from
such registration or (iii) such shares are sold or transferred pursuant to Rule
144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are
transferred to an "affiliate" (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the shares of
Common Stock issuable upon conversion of this Debenture have been registered
under the Act as contemplated by the Registration Rights Agreement or otherwise
may be sold pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately sold, each
certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR



<PAGE>



                                                                     EXHIBIT 1.4


OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."

The legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Debenture (to the extent such securities are deemed to have been acquired on the
same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common
Stock issuable upon conversion of this Debenture, such security is registered
for sale by the Holder under an effective registration statement filed under the
Act or otherwise may be sold pursuant to Rule 144 without any restriction as to
the number of securities as of a particular date that can then be immediately
sold. Nothing in this Debenture shall (i) limit the Borrower's obligation under
the Registration Rights Agreement or (ii) affect in any way the Holder's
obligations to comply with applicable prospectus delivery requirements upon the
resale of the securities referred to herein.

Effect of Certain Events.

Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale,
conveyance or disposition of all or substantially all of the assets of the
Borrower, the effectuation by the Borrower of a transaction or series of related
transactions in which more than 50% of the voting power of the Borrower is
disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the
Borrower is not the survivor shall either: (i) be deemed to be an Event of
Default (as defined in Article III) pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

Adjustment Due to Merger, Consolidation, Etc. If, at any time when this
Debenture is issued and outstanding and prior to conversion of all of the
Debentures, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of the Holder of this Debenture
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effect any transaction described
in this Section 1.6(b) unless (a) it first gives, to the extent practicable,
thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of
stockholders to approve, or if there is no such record date, the consummation
of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the
Holder shall be entitled to convert this Debenture) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.

Adjustment Due to Distribution. If the Borrower shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a "Distribution"), then the Holder of this Debenture shall
be entitled, upon any conversion of this Debenture after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of



<PAGE>



                                                                     EXHIBIT 1.4


Common Stock on the record date for the determination of shareholders entitled
to such Distribution.

Adjustment Due to Dilutive Issuance. If, at any time when any Debentures are
issued and outstanding, the Borrower issues or sells, or in accordance with this
Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common
Stock for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the Fixed Conversion Price in effect on the date
of such issuance (or deemed issuance) of such shares of Common Stock (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Fixed
Conversion Price will be reduced to the amount of the consideration per share
received by the Borrower in such Dilutive Issuance; provided that only one
adjustment will be made for each Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if
the Borrower in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock
("Convertible Securities") (such warrants, rights and options to purchase Common
Stock or Convertible Securities are hereinafter referred to as "Options") and
the price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Fixed Conversion Price then in effect, then the Fixed
Conversion Price shall be equal to such price per share. For purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon
the exercise of such Options" is determined by dividing (i) the total amount, if
any, received or receivable by the Borrower as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further
adjustment to the Conversion Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of
Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same
are issuable upon the exercise of Options), and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the Fixed
Conversion Price then in effect, then the Fixed Conversion Price shall be equal
to such price per share. For the purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon such conversion or exchange"
is determined by dividing (i) the total amount, if any, received or receivable
by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

Purchase Rights. If, at any time when any Debentures are issued and outstanding,
the Borrower issues any convertible securities or rights to purchase stock,
warrants, securities or other property (the "Purchase Rights") pro rata to the
record holders of any class of Common Stock, then the Holder of this Debenture
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if such
Holder had held the number of shares of Common Stock acquirable upon complete
conversion of this Debenture (without regard to any limitations on conversion
contained herein) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights.

Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of
the Conversion Price as a result of the events described in this Section 1.6,
the Borrower, at its expense, shall promptly compute such adjustment or
readjustment and prepare and furnish to the Holder of a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Borrower shall, upon the written
request at any time of the Holder, furnish to such Holder a like certificate
setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at
the time in effect and (iii) the number of shares of Common Stock and the
amount, if any, of other securities or property which at the time would be
received upon conversion of the Debenture.



<PAGE>


                                                                     EXHIBIT 1.4




Trading Market Limitations. Unless permitted by the applicable rules and
regulations of the principal securities market on which the Common Stock is then
listed or traded, in no event shall the Borrower issue upon conversion of or
otherwise pursuant to this Debenture and the other Debentures issued pursuant to
the Purchase Agreement more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common Stock is then traded (the "Maximum Share
Amount"), which, as of the Issue Date shall be 6,656,807 shares (19.99% of the
total shares outstanding on the Issue Date), subject to equitable adjustment
from time to time for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring after
the date hereof. Once the Maximum Share Amount has been issued (the date of
which is hereinafter referred to as the "Maximum Conversion Date"), if the
Borrower fails to eliminate any prohibitions under applicable law or the rules
or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Borrower or any of its
securities on the Borrower's ability to issue shares of Common Stock in excess
of the Maximum Share Amount (a "Trading Market Prepayment Event"), in lieu of
any further right to convert this Debenture, and in full satisfaction of the
Borrower's obligations under this Debenture, the Borrower shall pay to the
Holder, within fifteen (15) business days of the Maximum Conversion Date (the
"Trading Market Prepayment Date"), an amount equal to 130% times the sum of (a)
the then outstanding principal amount of this Debenture immediately following
the Maximum Conversion Date, plus (b) accrued and unpaid interest on the unpaid
principal amount of this Debenture to the Trading Market Prepayment Date, plus
(c) Default Interest, if any, on the amounts referred to in clause (a) and/or
(b) above, plus (d) any optional amounts that may be added thereto at the
Maximum Conversion Date by the Holder in accordance with the terms hereof (the
then outstanding principal amount of this Debenture immediately following the
Maximum Conversion Date, plus the amounts referred to in clauses (b), (c) and
(d) above shall collectively be referred to as the "Remaining Convertible
Amount"). With respect to each Holder of Debentures, the Maximum Share Amount
shall refer to such Holder's pro rata share thereof determined in accordance
with Section 4.8 below. In the event that the sum of (x) the aggregate number of
shares of Common Stock issued upon conversion of this Debenture and the other
Debentures issued pursuant to the Purchase Agreement plus (y) the aggregate
number of shares of Common Stock that remain issuable upon conversion of this
Debenture and the other Debentures issued pursuant to the Purchase Agreement,
represents at least one hundred percent (100%) of the Maximum Share Amount (the
"Triggering Event"), the Borrower will use its best efforts to seek and obtain
Stockholder Approval (or obtain such other relief as will allow conversions
hereunder in excess of the Maximum Share Amount) as soon as practicable
following the Triggering Event and before the Maximum Conversion Date. As used
herein, "Stockholder Approval" means approval by the stockholders of the
Borrower to authorize the issuance of the full number of shares of Common Stock
which would be issuable upon full conversion of the then outstanding Debentures
but for the Maximum Share Amount.

Status as Stockholder. Upon submission of a Notice of Conversion by a Holder,
(i) the shares covered thereby (other than the shares, if any, which cannot be
issued because their issuance would exceed such Holder's allocated portion of
the Reserved Amount or Maximum Share Amount) shall be deemed converted into
shares of Common Stock and (ii) the Holder's rights as a Holder of such
converted portion of this Debenture shall cease and terminate, excepting only
the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted Debenture to the Holder or, if
the Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies (including, without limitation, (i) the
right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1.3) for the
Borrower's failure to convert this Debenture.



<PAGE>


                                                                     EXHIBIT 1.4




CERTAIN COVENANTS

Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

Restriction on Stock Repurchases. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

Borrowings. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, create,
incur, assume or suffer to exist any liability for borrowed money, except (a)
borrowings in existence or committed on the date hereof and of which the
Borrower has informed Holder in writing prior to the date hereof (including that
certain line of credit between the Company and Alliance Equities providing for
up to $7,000,000 of borrowings), (b) indebtedness to trade creditors or
financial institutions incurred in the ordinary course of business or (c)
borrowings, the proceeds of which shall be used to repay this Debenture.

Sale of Assets. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, sell,
lease or otherwise dispose of any significant portion of its assets outside the
ordinary course of business. Any consent to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition.

Advances and Loans. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, lend
money, give credit or make advances to any person, firm, joint venture or
corporation, including, without limitation, officers, directors, employees,
subsidiaries and affiliates of the Borrower, except loans, credits or advances
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, (b) made in the ordinary
course of business or (c) not in excess of $50,000.

Contingent Liabilities. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable upon the obligation of any person, firm, partnership, joint venture or
corporation, except by the endorsement of negotiable instruments for deposit or
collection and except assumptions, guarantees, endorsements and contingencies
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, and (b) similar
transactions in the ordinary course of business.



EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall
occur:

Failure to Pay Principal or Interest. The Borrower fails to pay the principal
hereof or interest thereon when due on this Debenture, whether at maturity, upon
a Trading Market Prepayment Event pursuant to Section 1.7, upon acceleration or
otherwise;

Conversion and the Shares. The Borrower fails to issue shares of Common Stock to
the Holder (or announces or threatens that it will not honor its obligation to
do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Debenture (for a period of at least sixty (60)
days, if such failure is solely as a result of the circumstances governed by
Section 1.3 and the Borrower is using its best efforts to authorize a sufficient
number of shares of Common Stock as soon as practicable), fails to transfer or
cause its transfer agent to transfer (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Debenture as and when required by this
Debenture or the Registration Rights Agreement, or fails to remove any
restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Debenture as and when required
by this Debenture or the Registration Rights Agreement (or makes any
announcement, statement or threat that it does not intend to honor the



<PAGE>



                                                                     EXHIBIT 1.4


obligations described in this paragraph) and any such failure shall continue
uncured (or any announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for ten (10) days after the Borrower shall
have been notified thereof in writing by the Holder;

Failure to Timely File Registration or Effect Registration. The Borrower fails
to file the Registration Statement within forty-five (45) days following the
Filing Date (as defined in the Registration Rights Agreement) or obtain
effectiveness with the Securities and Exchange Commission of the Registration
Statement within one hundred twenty (120) days following the Filing Date or such
Registration Statement lapses in effect (or sales cannot otherwise be made
thereunder effective, whether by reason of the Borrower's failure to amend or
supplement the prospectus included therein in accordance with the Registration
Rights Agreement or otherwise) for more than twenty (20) consecutive days or
forty (40) days in any twelve month period after the Registration Statement
becomes effective;

Breach of Covenants. The Borrower breaches any material covenant or other
material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

Breach of Representations and Warranties. Any representation or warranty of the
Borrower made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith (including, without
limitation, the Purchase Agreement and the Registration Rights Agreement), shall
be false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Debenture, the Purchase Agreement or
the Registration Rights Agreement;

Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make
an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed;

Judgments. Any money judgment, writ or similar process shall be entered or filed
against the Borrower or any subsidiary of the Borrower or any of its property or
other assets for more than $50,000, and shall remain unvacated, unbonded or
unstayed for a period of twenty (20) days unless otherwise consented to by the
Holder, which consent will not be unreasonably withheld;

Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the relief
of debtors shall be instituted by or against the Borrower or any subsidiary of
the Borrower;

Delisting of Common Stock. The Borrower shall fail to maintain the listing of
the Common Stock on at least one of the OTCBB or an equivalent replacement
exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange; or

Default Under Other Debentures. An Event of Default has occurred and is
continuing under any of the other Debentures issued pursuant to the Purchase
Agreement;

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the "Default Sum") or (ii) the
"parity value" of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or
otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a
specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory

<PAGE>



                                                                     EXHIBIT 1.4



Prepayment Date (the "Default Amount") and all other amounts payable hereunder
shall immediately become due and payable, all without demand, presentment or
notice, all of which hereby are expressly waived, together with all costs,
including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at
law or in equity. If the Borrower fails to pay the Default Amount within five
(5) business days of written notice that such amount is due and payable, then
the Holder shall have the right at any time, so long as the Borrower remains in
default (and so long and to the extent that there are sufficient authorized
shares), to require the Borrower, upon written notice, to immediately issue, in
lieu of the Default Amount, the number of shares of Common Stock of the Borrower
equal to the Default Amount divided by the Conversion Price then in effect.



MISCELLANEOUS

Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privileges. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

Notices. Any notice herein required or permitted to be given shall be in writing
and may be personally served or delivered by courier or sent by United States
mail and shall be deemed to have been given upon receipt if personally served
(which shall include telephone line facsimile transmission) or sent by courier
or three (3) days after being deposited in the United States mail, certified,
with postage pre-paid and properly addressed, if sent by mail. For the purposes
hereof, the address of the Holder shall be as shown on the records of the
Borrower; and the address of the Borrower shall be 1280 Bison, Suite B9-597,
Newport Beach, California 92660, facsimile number: 949-760-3670). Both the
Holder and the Borrower may change the address for service by service of written
notice to the other as herein provided.

Amendments. This Debenture and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term
"Debenture" and all reference thereto, as used throughout this instrument, shall
mean this instrument (and the other Debentures issued pursuant to the Purchase
Agreement) as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

Assignability. This Debenture shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Debenture must be an "accredited
investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Debenture to the contrary, this Debenture may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.

Cost of Collection. If default is made in the payment of this Debenture, the
Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys' fees.

Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

Certain Amounts. Whenever pursuant to this Debenture the Borrower is required to
pay an amount in excess of the outstanding principal amount (or the portion
thereof required to be paid at that time) plus accrued and unpaid interest plus
Default Interest on such interest, the Borrower and the Holder agree that the
actual damages to the Holder from the receipt of cash payment on this Debenture
may be difficult to determine and the amount to be so paid by the Borrower
represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Debenture and to
earn a return from the sale of shares of

<PAGE>
                                                                     EXHIBIT 1.4

Common Stock acquired upon conversion of this Debenture at a price in excess of
the price paid for such shares pursuant to this Debenture. The Borrower and the
Holder hereby agree that such amount of stipulated damages is not plainly
disproportionate to the possible loss to the Holder from the receipt of a cash
payment without the opportunity to convert this Debenture into shares of Common
Stock.

Allocations of Maximum Share Amount and Reserved Amount. The Maximum Share
Amount and Reserved Amount shall be allocated pro rata among the Holders of
Debentures based on the principal amount of such Debentures issued to each
Holder. Each increase to the Maximum Share Amount and Reserved Amount shall be
allocated pro rata among the Holders of Debentures based on the principal amount
of such Debentures held by each Holder at the time of the increase in the
Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or
otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.

Damages Shares. The shares of Common Stock that may be issuable to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section 2(c) of the
Registration Rights Agreement ("Damages Shares") shall be treated as Common
Stock issuable upon conversion of this Debenture for all purposes hereof and
shall be subject to all of the limitations and afforded all of the rights of the
other shares of Common Stock issuable hereunder, including without limitation,
the right to be included in the Registration Statement filed pursuant to the
Registration Rights Agreement. For purposes of calculating interest payable on
the outstanding principal amount hereof, except as otherwise provided herein,
amounts convertible into Damages Shares ("Damages Amounts") shall not bear
interest but must be converted prior to the conversion of any outstanding
principal amount hereof, until the outstanding Damages Amounts is zero.

Denominations. At the request of the Holder, upon surrender of this Debenture,
the Borrower shall promptly issue new Debentures in the aggregate outstanding
principal amount hereof, in the form hereof, in such denominations of at least
$50,000 as the Holder shall request.

Purchase Agreement. By its acceptance of this Debenture, each Holder agrees to
be bound by the applicable terms of the Purchase Agreement.

Notice of Corporate Events. Except as otherwise provided below, the Holder of
this Debenture shall have no rights as a Holder of Common Stock unless and only
to the extent that it converts this Debenture into Common Stock. The Borrower
shall provide the Holder with prior notification of any meeting of the
Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

Remedies. The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Debenture will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Debenture, that the Holder
shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Debenture and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.



<PAGE>

                                                                     EXHIBIT 1.4



OPTIONAL PREPAYMENT

Optional Prepayment. Notwithstanding anything to the contrary contained in this
Article V for not more than thirty (30) days from the date hereof, so long as
(i) no Event of Default or Trading Market Prepayment Event shall have occurred
and be continuing, and (ii) the Borrower has a sufficient number of authorized
shares of Common Stock reserved for issuance upon full conversion of the
Debentures, then at any time after the Issue Date, the Borrower shall have the
right, exercisable on not less than ten (10) Trading Days prior written notice
to the Holders of the Debentures (which notice may not be sent to the Holders of
the Debentures until the Borrower is permitted to prepay the Debentures pursuant
to this Section 5.1), to prepay all of the outstanding Debentures in accordance
with this Section 5.1. Any notice of prepayment hereunder (an "Optional
Prepayment") shall be delivered to the Holders of the Debentures at their
registered addresses appearing on the books and records of the Borrower and
shall state (1) that the Borrower is exercising its right to prepay all of the
Debentures issued on the Issue Date and (2) the date of prepayment (the
"Optional Prepayment Notice"). On the date fixed for prepayment (the "Optional
Prepayment Date"), the Borrower shall make payment of the Optional Prepayment
Amount (as defined below) to or upon the order of the Holders as specified by
the Holders in writing to the Borrower at least one (1) business day prior to
the Optional Prepayment Date. If the Borrower exercises its right to prepay the
Debentures, the Borrower shall make payment to the holders of an amount in cash
(the "Optional Prepayment Amount") equal to 130% multiplied by the sum of (w)
the then outstanding principal amount of this Debenture plus (x) accrued and
unpaid interest on the unpaid principal amount of this Debenture to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the Registration Rights
Agreement (the then outstanding principal amount of this Debenture to the date
of payment plus the amounts referred to in clauses (x), (y) and (z) shall
collectively be known as the "Optional Prepayment Sum"). Notwithstanding notice
of an Optional Prepayment, the Holders shall at all times prior to the Optional
Prepayment Date maintain the right to convert all or any portion of the
Debentures in accordance with Article I and any portion of Debentures so
converted after receipt of an Optional Prepayment Notice and prior to the
Optional Prepayment Date set forth in such notice and payment of the aggregate
Optional Prepayment Amount shall be deducted from the principal amount of
Debentures which are otherwise subject to prepayment pursuant to such notice. If
the Borrower delivers an Optional Prepayment Notice and fails to pay the
Optional Prepayment Amount due to the Holders of the Debentures within two (2)
business days following the Optional Prepayment Date, the Borrower shall forever
forfeit its right to redeem the Debentures pursuant to this Section 5.1.

















[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>


                                                                     EXHIBIT 1.4

IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name
by its duly authorized officer this 31st day of March, 2003.



KANAKARIS WIRELESS



By:        ______________________________

Alex F. Kanakaris

Chairman and Chief Executive Officer





<PAGE>






                                                                     EXHIBIT 1.4

EXHIBIT A

NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Debentures)

The undersigned hereby irrevocably elects to convert $________principal amount
of the Debenture (defined below) into shares of common stock, par value $0.001
per share ("Common Stock"), of Kanakaris Wireless, a Nevada corporation (the
"Borrower") according to the conditions of the convertible debentures of the
Borrower dated as of March 31, 2003 (the "Debentures"), as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any. A copy of each
Debenture is attached hereto (or evidence of loss, theft or destruction
thereof).

The Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

Name of DTC Prime Broker:
                         -------------------------------------------------------

Account Number:
               -----------------------------------------------------------------



In lieu of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder's calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

Name:
     ---------------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------



The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Debentures shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.

Date of Conversion:___________________________

Applicable Conversion Price:____________________

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Debentures:______________

Signature:___________________________________

Name:______________________________________

Address:____________________________________



The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.



<PAGE>


                                                                     EXHIBIT 1.5




THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.



SECURED CONVERTIBLE DEBENTURE

Newport Beach, California

March 31, 2003       $75,000



FOR VALUE RECEIVED, KANAKARIS WIRELESS, a Nevada corporation (hereinafter called
the "Borrower"), hereby promises to pay to the order of AJW Qualified Partners,
LLC or registered assigns (the "Holder") the sum of Seventy-Five Thousand
Dollars ($75,000), on March 31, 2004 (the "Maturity Date"), and to pay interest
on the unpaid principal balance hereof at the rate of twelve percent (12%) per
annum from March 31, 2003 (the "Issue Date") until the same becomes due and
payable, whether at maturity or upon acceleration or by prepayment or otherwise.
Any amount of principal or interest on this Debenture which is not paid when due
shall bear interest at the rate of fifteen percent (15%) per annum from the due
date thereof until the same is paid ("Default Interest"). Interest shall
commence accruing on the issue date, shall be computed on the basis of a 365-day
year and the actual number of days elapsed and shall be payable, at the option
of the Holder, either quarterly on March 31, June 30, September 30 and December
31 of each year beginning on June 30, 2003, or at the time of conversion of the
principal to which such interest relates in accordance with Article I below. All
payments due hereunder (to the extent not converted into common stock, par value
$0.001 per share, of the Borrower (the "Common Stock") in accordance with the
terms hereof) shall be made in lawful money of the United States of America or,
at the option of the Company, in whole or in part, in shares of Common Stock of
the Borrower valued at the then applicable Conversion Price (as defined herein).
All payments shall be made at such address as the Holder shall hereafter give to
the Borrower by written notice made in accordance with the provisions of this
Debenture. Whenever any amount expressed to be due by the terms of this
Debenture is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of
any interest payment date which is not the date on which this Debenture is paid
in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in
this Debenture, the term "business day" shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of New York, New
York are authorized or required by law or executive order to remain closed. Each
capitalized term used herein, and not otherwise defined, shall have the meaning
ascribed thereto in that certain Securities Purchase Agreement, dated January
16, 2003, pursuant to which this Debenture was originally issued (the "Purchase
Agreement").

This Debenture is free from all taxes, liens, claims and encumbrances with
respect to the issue thereof and shall not be subject to preemptive rights or
other similar rights of stockholders of the Borrower and will not impose
personal liability upon the holder thereof. The obligations of the Borrower
under this Debenture shall be secured by that certain Security Agreement dated
by and between the Borrower and the Holder of even date herewith.

The following terms shall apply to this Debenture:



CONVERSION RIGHTS

Conversion Right. The Holder shall have the right from time to time, and at any
time on or prior to the earlier of (i) the Maturity Date and (ii) the date of
payment of the Default Amount (as defined in Article III) pursuant to Section
1.6(a) or Article III, the Optional Prepayment Amount (as defined in Section 5.1
or any payments pursuant to Section 1.7, each in respect of the remaining
outstanding principal amount of this Debenture to convert all or any part of the
outstanding and unpaid principal amount of this Debenture into fully paid and
non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into
which such Common Stock shall hereafter be changed or reclassified at the
conversion price (the "Conversion Price") determined as provided herein (a
"Conversion"); provided, however, that in no event shall the Holder be entitled
to convert any portion of this Debenture in excess of that portion of this
Debenture upon conversion of which the sum of (1) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Debentures or the unexercised or unconverted portion
of any other security of the Borrower (including, without limitation, the
warrants issued by the Borrower pursuant to the Purchase Agreement) subject to a
limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the
conversion of



<PAGE>


                                                                     EXHIBIT 1.5


the portion of this Debenture with respect to which the determination of this
proviso is being made, would result in beneficial ownership by the Holder and
its affiliates of more than 4.9% of the outstanding shares of Common Stock. For
purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso. The Holder of this Debenture
may waive the limitations set forth herein by sixty-one (61) days written notice
to the Company. The number of shares of Common Stock to be issued upon each
conversion of this Debenture shall be determined by dividing the Conversion
Amount (as defined below) by the applicable Conversion Price then in effect on
the date specified in the notice of conversion, in the form attached hereto as
Exhibit A (the "Notice of Conversion"), delivered to the Borrower by the Holder
in accordance with Section 1.4 below; provided that the Notice of Conversion is
submitted by facsimile (or by other means resulting in, or reasonably expected
to result in, notice) to the Borrower before 6:00 p.m., New York, New York time
on such conversion date (the "Conversion Date"). The term "Conversion Amount"
means, with respect to any conversion of this Debenture, the sum of (1) the
principal amount of this Debenture to be converted in such conversion plus (2)
accrued and unpaid interest, if any, on such principal amount at the interest
rates provided in this Debenture to the Conversion Date plus (3) Default
Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at the Holder's option, any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
that certain Registration Rights Agreement, dated as of January 16, 2003,
executed in connection with the initial issuance of this Debenture and the other
Debentures issued on the Issue Date (the "Registration Rights Agreement").

Conversion Price.

Calculation of Conversion Price. The Conversion Price shall be the lesser of (i)
the Variable Conversion Price (as defined herein) and (ii) the Fixed Conversion
Price (as defined herein) (subject, in each case, to equitable adjustments for
stock splits, stock dividends or rights offerings by the Borrower relating to
the Borrower's securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions
and similar events). The "Variable Conversion Price" shall mean the Applicable
Percentage (as defined herein) multiplied by the Market Price (as defined
herein). "Market Price" means the average of the lowest three (3) Trading Prices
(as defined below) for the Common Stock during the twenty (20) Trading Day
period ending one Trading Day prior to the date the Conversion Notice is sent by
the Holder to the Borrower via facsimile (the "Conversion Date"). "Trading
Price" means, for any security as of any date, the intraday trading price on the
Over-the-Counter Bulletin Board (the "OTCBB") as reported by a reliable
reporting service mutually acceptable to and hereafter designated by Holders of
a majority in interest of the Debentures and the Borrower or, if the OTCBB is
not the principal trading market for such security, the intraday trading price
of such security on the principal securities exchange or trading market where
such security is listed or traded or, if no intraday trading price of such
security is available in any of the foregoing manners, the average of the
intraday trading prices of any market makers for such security that are listed
in the "pink sheets" by the National Quotation Bureau, Inc. If the Trading Price
cannot be calculated for such security on such date in the manner provided
above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Debentures
being converted for which the calculation of the Trading Price is required in
order to determine the Conversion Price of such Debentures. "Trading Day" shall
mean any day on which the Common Stock is traded for any period on the OTCBB, or
on the principal securities exchange or other securities market on which the
Common Stock is then being traded. "Applicable Percentage" shall mean 40%. The
"Fixed Conversion Price" shall mean $0.01.

Conversion Price During Major Announcements. Notwithstanding anything contained
in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public
announcement that it intends to consolidate or merge with any other corporation
(other than a merger in which the Borrower is the surviving or continuing
corporation and its capital stock is unchanged) or sell or transfer all or
substantially all of the assets of the Borrower or (ii) any person, group or
entity (including the Borrower) publicly announces a tender offer to purchase
50% or more of the Borrower's Common Stock (or any other takeover scheme) (the
date of the announcement referred to in clause (i) or (ii) is hereinafter
referred to as the "Announcement Date"), then the Conversion Price shall,
effective upon the Announcement Date and continuing through the Adjusted
Conversion Price Termination Date (as defined below), be equal to the lower of
(x) the Conversion Price which would have been applicable for a Conversion
occurring on the Announcement Date and (y) the Conversion Price that would
otherwise be in effect. From and after the Adjusted Conversion Price Termination
Date, the Conversion Price shall be determined as set forth in this Section
1.2(a). For purposes hereof, "Adjusted Conversion Price Termination Date" shall
mean, with respect to any proposed transaction or tender offer (or takeover
scheme) for which a public announcement as contemplated by this Section 1.2(b)
has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above)
consummates or publicly announces the termination or abandonment of the proposed
transaction or tender offer (or takeover scheme) which caused this Section
1.2(b) to become operative.

Authorized Shares. Subject to the Stockholder Approval (as defined in the
Purchase Agreement), the Borrower covenants that during the period the
conversion right exists, the Borrower will reserve from its authorized and
unissued Common Stock a sufficient number of



<PAGE>



                                                                     EXHIBIT 1.5


shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Debenture and the other Debentures issued
pursuant to the Purchase Agreement. Subject to the Stockholder Approval (as
defined in the Purchase Agreement), the Borrower is required at all times to
have authorized and reserved two times the number of shares that is actually
issuable upon full conversion of the Debentures (based upon the Conversion Price
of the Debentures in effect from time to time) (the "Reserved Amount"). The
Reserved Amount shall be increased from time to time in accordance with the
Borrower's obligations pursuant to Section 4(h) of the Purchase Agreement. The
Borrower represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable. In addition, if the Borrower shall issue
any securities or make any change to its capital structure which would change
the number of shares of Common Stock into which the Debentures shall be
convertible at the then current Conversion Price, the Borrower shall at the same
time make proper provision so that thereafter there shall be a sufficient number
of shares of Common Stock authorized and reserved, free from preemptive rights,
for conversion of the outstanding Debentures. The Borrower (i) acknowledges that
it has irrevocably instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture, and (ii) agrees that
its issuance of this Debenture shall constitute full authority to its officers
and agents who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Debenture.

If, at any time a Holder of this Debenture submits a Notice of Conversion, and
the Borrower does not have sufficient authorized but unissued shares of Common
Stock available to effect such conversion in accordance with the provisions of
this Article I (a "Conversion Default"), subject to Section 4.8, the Borrower
shall issue to the Holder all of the shares of Common Stock which are then
available to effect such conversion. The portion of this Debenture which the
Holder included in its Conversion Notice and which exceeds the amount which is
then convertible into available shares of Common Stock (the "Excess Amount")
shall, notwithstanding anything to the contrary contained herein, not be
convertible into Common Stock in accordance with the terms hereof until (and at
the Holder's option at any time after) the date additional shares of Common
Stock are authorized by the Borrower to permit such conversion, at which time
the Conversion Price in respect thereof shall be the lesser of (i) the
Conversion Price on the Conversion Default Date (as defined below) and (ii) the
Conversion Price on the Conversion Date thereafter elected by the Holder in
respect thereof. In addition, the Borrower shall pay to the Holder payments
("Conversion Default Payments") for a Conversion Default in the amount of (x)
the sum of (1) the then outstanding principal amount of this Debenture plus (2)
accrued and unpaid interest on the unpaid principal amount of this Debenture
through the Authorization Date (as defined below) plus (3) Default Interest, if
any, on the amounts referred to in clauses (1) and/or (2), multiplied by (y)
..24, multiplied by (z) (N/365), where N = the number of days from the day the
holder submits a Notice of Conversion giving rise to a Conversion Default (the
"Conversion Default Date") to the date (the "Authorization Date") that the
Borrower authorizes a sufficient number of shares of Common Stock to effect
conversion of the full outstanding principal balance of this Debenture. The
Borrower shall use its best efforts to authorize a sufficient number of shares
of Common Stock as soon as practicable following the earlier of (i) such time
that the Holder notifies the Borrower or that the Borrower otherwise becomes
aware that there are or likely will be insufficient authorized and unissued
shares to allow full conversion thereof and (ii) a Conversion Default. The
Borrower shall send notice to the Holder of the authorization of additional
shares of Common Stock, the Authorization Date and the amount of Holder's
accrued Conversion Default Payments. The accrued Conversion Default Payments for
each calendar month shall be paid in cash or shall be convertible into Common
Stock (at such time as there are sufficient authorized shares of Common Stock)
at the applicable Conversion Price, at the Holder's option, as follows:

In the event Holder elects to take such payment in cash, cash payment shall be
made to Holder by the fifth (5th) day of the month following the month in which
it has accrued; and

In the event Holder elects to take such payment in Common Stock, the Holder may
convert such payment amount into Common Stock at the Conversion Price (as in
effect at the time of conversion) at any time after the fifth day of the month
following the month in which it has accrued in accordance with the terms of this
Article I (so long as there is then a sufficient number of authorized shares of
Common Stock).

The Holder's election shall be made in writing to the Borrower at any time prior
to 6:00 p.m., New York, New York time, on the third day of the month following
the month in which Conversion Default payments have accrued. If no election is
made, the Holder shall be deemed to have elected to receive cash. Nothing herein
shall limit the Holder's right to pursue actual damages (to the extent in excess
of the Conversion Default Payments) for the Borrower's failure to maintain a
sufficient number of authorized shares of Common Stock, and each holder shall
have the right to pursue all remedies available at law or in equity (including
degree of specific performance and/or injunctive relief).

Method of Conversion.

Mechanics of Conversion. Subject to Section 1.1, this Debenture may be converted
by the Holder in whole or in part at any time from time to time after the Issue
Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile or
other reasonable means of communication dispatched on the Conversion Date prior
to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b),
surrendering this Debenture at the principal office of the Borrower.



<PAGE>


                                                                     EXHIBIT 1.5




Surrender of Debenture Upon Conversion. Notwithstanding anything to the contrary
set forth herein, upon conversion of this Debenture in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Debenture
to the Borrower unless the entire unpaid principal amount of this Debenture is
so converted. The Holder and the Borrower shall maintain records showing the
principal amount so converted and the dates of such conversions or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Debenture upon each such conversion.
In the event of any dispute or discrepancy, such records of the Borrower shall
be controlling and determinative in the absence of manifest error.
Notwithstanding the foregoing, if any portion of this Debenture is converted as
aforesaid, the Holder may not transfer this Debenture unless the Holder first
physically surrenders this Debenture to the Borrower, whereupon the Borrower
will forthwith issue and deliver upon the order of the Holder a new Debenture of
like tenor, registered as the Holder (upon payment by the Holder of any
applicable transfer taxes) may request, representing in the aggregate the
remaining unpaid principal amount of this Debenture. The Holder and any
assignee, by acceptance of this Debenture, acknowledge and agree that, by reason
of the provisions of this paragraph, following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture
represented by this Debenture may be less than the amount stated on the face
hereof.

Payment of Taxes. The Borrower shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock or other securities or property on conversion of this Debenture
in a name other than that of the Holder (or in street name), and the Borrower
shall not be required to issue or deliver any such shares or other securities or
property unless and until the person or persons (other than the Holder or the
custodian in whose street name such shares are to be held for the Holder's
account) requesting the issuance thereof shall have paid to the Borrower the
amount of any such tax or shall have established to the satisfaction of the
Borrower that such tax has been paid.

Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the
Holder of a facsimile transmission (or other reasonable means of communication)
of a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and
delivered to or upon the order of the Holder certificates for the Common Stock
issuable upon such conversion within two (2) business days after such receipt
(and, solely in the case of conversion of the entire unpaid principal amount
hereof, surrender of this Debenture) (such second business day being hereinafter
referred to as the "Deadline") in accordance with the terms hereof and the
Purchase Agreement (including, without limitation, in accordance with the
requirements of Section 2(g) of the Purchase Agreement that certificates for
shares of Common Stock issued on or after the effective date of the Registration
Statement upon conversion of this Debenture shall not bear any restrictive
legend).

Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of
a Notice of Conversion, the Holder shall be deemed to be the holder of record of
the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest on this Debenture shall be reduced
to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Debenture
being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on
such conversion. If the Holder shall have given a Notice of Conversion as
provided herein, the Borrower's obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the
absence of any action by the Holder to enforce the same, any waiver or consent
with respect to any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in the
enforcement of any other obligation of the Borrower to the holder of record, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by the Holder of any obligation to the Borrower, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the Conversion
Date so long as the Notice of Conversion is received by the Borrower before 6:00
p.m., New York, New York time, on such date.

Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical
certificates representing the Common Stock issuable upon conversion, provided
the Borrower's transfer agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the
Holder and its compliance with the provisions contained in Section 1.1 and in
this Section 1.4, the Borrower shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon conversion to
the Holder by crediting the account of Holder's Prime Broker with DTC through
its Deposit Withdrawal Agent Commission ("DWAC") system.

Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting
the Holder's right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Debenture is more than two (2) days after the
Deadline (other than a failure due to the circumstances described in Section 1.3
above, which failure shall be governed by such Section) the Borrower shall pay
to the Holder $2,000 per day in cash, for each day beyond the Deadline that the
Borrower fails

<PAGE>
                                                                     EXHIBIT 1.5


to deliver such Common Stock. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued or, at the
option of the Holder (by written notice to the Borrower by the first day of the
month following the month in which it has accrued), shall be added to the
principal amount of this Debenture, in which event interest shall accrue thereon
in accordance with the terms of this Debenture and such additional principal
amount shall be convertible into Common Stock in accordance with the terms of
this Debenture.

Concerning the Shares. The shares of Common Stock issuable upon conversion of
this Debenture may not be sold or transferred unless (i) such shares are sold
pursuant to an effective registration statement under the Act or (ii) the
Borrower or its transfer agent shall have been furnished with an opinion of
counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from
such registration or (iii) such shares are sold or transferred pursuant to Rule
144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are
transferred to an "affiliate" (as defined in Rule 144) of the Borrower who
agrees to sell or otherwise transfer the shares only in accordance with this
Section 1.5 and who is an Accredited Investor (as defined in the Purchase
Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the shares of
Common Stock issuable upon conversion of this Debenture have been registered
under the Act as contemplated by the Registration Rights Agreement or otherwise
may be sold pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately sold, each
certificate for shares of Common Stock issuable upon conversion of this
Debenture that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an
exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE
AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT."

The legend set forth above shall be removed and the Borrower shall issue to the
Holder a new certificate therefor free of any transfer legend if (i) the
Borrower or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or
transferred, (ii) such Holder provides the Borrower or its transfer agent with
reasonable assurances that the Common Stock issuable upon conversion of this
Debenture (to the extent such securities are deemed to have been acquired on the
same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common
Stock issuable upon conversion of this Debenture, such security is registered
for sale by the Holder under an effective registration statement filed under the
Act or otherwise may be sold pursuant to Rule 144 without any restriction as to
the number of securities as of a particular date that can then be immediately
sold. Nothing in this Debenture shall (i) limit the Borrower's obligation under
the Registration Rights Agreement or (ii) affect in any way the Holder's
obligations to comply with applicable prospectus delivery requirements upon the
resale of the securities referred to herein.

Effect of Certain Events.

Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale,
conveyance or disposition of all or substantially all of the assets of the
Borrower, the effectuation by the Borrower of a transaction or series of related
transactions in which more than 50% of the voting power of the Borrower is
disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the
Borrower is not the survivor shall either: (i) be deemed to be an Event of
Default (as defined in Article III) pursuant to which the Borrower shall be
required to pay to the Holder upon the consummation of and as a condition to
such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean
any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

Adjustment Due to Merger, Consolidation, Etc. If, at any time when this
Debenture is issued and outstanding and prior to conversion of all of the
Debentures, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Debenture
shall thereafter have the right to receive upon conversion of this Debenture,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to
receive in such transaction had this Debenture been converted in full
immediately prior to such transaction (without regard to any limitations on
conversion set forth herein), and in any such case appropriate provisions shall
be made with respect to the rights and interests of

<PAGE>
                                                                     EXHIBIT 1.5


the Holder of this Debenture to the end that the provisions hereof (including,
without limitation, provisions for adjustment of the Conversion Price and of the
number of shares issuable upon conversion of the Debenture) shall thereafter be
applicable, as nearly as may be practicable in relation to any securities or
assets thereafter deliverable upon the conversion hereof. The Borrower shall not
effect any transaction described in this Section 1.6(b) unless (a) it first
gives, to the extent practicable, thirty (30) days prior written notice (but in
any event at least fifteen (15) days prior written notice) of the record date of
the special meeting of stockholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event or sale of assets
(during which time the Holder shall be entitled to convert this Debenture) and
(b) the resulting successor or acquiring entity (if not the Borrower) assumes by
written instrument the obligations of this Section 1.6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or
share exchanges.

Adjustment Due to Distribution. If the Borrower shall declare or make any
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the Borrower's shareholders
in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a "Distribution"), then the Holder of this Debenture shall
be entitled, upon any conversion of this Debenture after the date of record for
determining shareholders entitled to such Distribution, to receive the amount of
such assets which would have been payable to the Holder with respect to the
shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.

Adjustment Due to Dilutive Issuance. If, at any time when any Debentures are
issued and outstanding, the Borrower issues or sells, or in accordance with this
Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common
Stock for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in
connection therewith) less than the Fixed Conversion Price in effect on the date
of such issuance (or deemed issuance) of such shares of Common Stock (a
"Dilutive Issuance"), then immediately upon the Dilutive Issuance, the Fixed
Conversion Price will be reduced to the amount of the consideration per share
received by the Borrower in such Dilutive Issuance; provided that only one
adjustment will be made for each Dilutive Issuance.

The Borrower shall be deemed to have issued or sold shares of Common Stock if
the Borrower in any manner issues or grants any warrants, rights or options,
whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock
("Convertible Securities") (such warrants, rights and options to purchase Common
Stock or Convertible Securities are hereinafter referred to as "Options") and
the price per share for which Common Stock is issuable upon the exercise of such
Options is less than the Fixed Conversion Price then in effect, then the Fixed
Conversion Price shall be equal to such price per share. For purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon
the exercise of such Options" is determined by dividing (i) the total amount, if
any, received or receivable by the Borrower as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further
adjustment to the Conversion Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of
Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same
are issuable upon the exercise of Options), and the price per share for which
Common Stock is issuable upon such conversion or exchange is less than the Fixed
Conversion Price then in effect, then the Fixed Conversion Price shall be equal
to such price per share. For the purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon such conversion or exchange"
is determined by dividing (i) the total amount, if any, received or receivable
by the Borrower as consideration for the issuance or sale of all such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Borrower upon the conversion or exchange
thereof at the time such Convertible Securities first become convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment to the Fixed Conversion Price will be made upon the actual
issuance of such Common Stock upon conversion or exchange of such Convertible
Securities.

Purchase Rights. If, at any time when any Debentures are issued and outstanding,
the Borrower issues any convertible securities or rights to purchase stock,
warrants, securities or other property (the "Purchase Rights") pro rata to the
record holders of any class of Common Stock, then the Holder of this Debenture
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if

<PAGE>
                                                                     EXHIBIT 1.5


such Holder had held the number of shares of Common Stock acquirable upon
complete conversion of this Debenture (without regard to any limitations on
conversion contained herein) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.

Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of
the Conversion Price as a result of the events described in this Section 1.6,
the Borrower, at its expense, shall promptly compute such adjustment or
readjustment and prepare and furnish to the Holder of a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Borrower shall, upon the written
request at any time of the Holder, furnish to such Holder a like certificate
setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at
the time in effect and (iii) the number of shares of Common Stock and the
amount, if any, of other securities or property which at the time would be
received upon conversion of the Debenture.

Trading Market Limitations. Unless permitted by the applicable rules and
regulations of the principal securities market on which the Common Stock is then
listed or traded, in no event shall the Borrower issue upon conversion of or
otherwise pursuant to this Debenture and the other Debentures issued pursuant to
the Purchase Agreement more than the maximum number of shares of Common Stock
that the Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common Stock is then traded (the "Maximum Share
Amount"), which, as of the Issue Date shall be 6,656,807 shares (19.99% of the
total shares outstanding on the Issue Date), subject to equitable adjustment
from time to time for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring after
the date hereof. Once the Maximum Share Amount has been issued (the date of
which is hereinafter referred to as the "Maximum Conversion Date"), if the
Borrower fails to eliminate any prohibitions under applicable law or the rules
or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Borrower or any of its
securities on the Borrower's ability to issue shares of Common Stock in excess
of the Maximum Share Amount (a "Trading Market Prepayment Event"), in lieu of
any further right to convert this Debenture, and in full satisfaction of the
Borrower's obligations under this Debenture, the Borrower shall pay to the
Holder, within fifteen (15) business days of the Maximum Conversion Date (the
"Trading Market Prepayment Date"), an amount equal to 130% times the sum of (a)
the then outstanding principal amount of this Debenture immediately following
the Maximum Conversion Date, plus (b) accrued and unpaid interest on the unpaid
principal amount of this Debenture to the Trading Market Prepayment Date, plus
(c) Default Interest, if any, on the amounts referred to in clause (a) and/or
(b) above, plus (d) any optional amounts that may be added thereto at the
Maximum Conversion Date by the Holder in accordance with the terms hereof (the
then outstanding principal amount of this Debenture immediately following the
Maximum Conversion Date, plus the amounts referred to in clauses (b), (c) and
(d) above shall collectively be referred to as the "Remaining Convertible
Amount"). With respect to each Holder of Debentures, the Maximum Share Amount
shall refer to such Holder's pro rata share thereof determined in accordance
with Section 4.8 below. In the event that the sum of (x) the aggregate number of
shares of Common Stock issued upon conversion of this Debenture and the other
Debentures issued pursuant to the Purchase Agreement plus (y) the aggregate
number of shares of Common Stock that remain issuable upon conversion of this
Debenture and the other Debentures issued pursuant to the Purchase Agreement,
represents at least one hundred percent (100%) of the Maximum Share Amount (the
"Triggering Event"), the Borrower will use its best efforts to seek and obtain
Stockholder Approval (or obtain such other relief as will allow conversions
hereunder in excess of the Maximum Share Amount) as soon as practicable
following the Triggering Event and before the Maximum Conversion Date. As used
herein, "Stockholder Approval" means approval by the stockholders of the
Borrower to authorize the issuance of the full number of shares of Common Stock
which would be issuable upon full conversion of the then outstanding Debentures
but for the Maximum Share Amount.

Status as Stockholder. Upon submission of a Notice of Conversion by a Holder,
(i) the shares covered thereby (other than the shares, if any, which cannot be
issued because their issuance would exceed such Holder's allocated portion of
the Reserved Amount or Maximum Share Amount) shall be deemed converted into
shares of Common Stock and (ii) the Holder's rights as a Holder of such
converted portion of this Debenture shall cease and terminate, excepting only
the right to receive certificates for such shares of Common Stock and to any
remedies provided herein or otherwise available at law or in equity to such
Holder because of a failure by the Borrower to comply with the terms of this
Debenture. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business
day after the expiration of the Deadline with respect to a conversion of any
portion of this Debenture for any reason, then (unless the Holder otherwise
elects to retain its status as a holder of Common Stock by so notifying the
Borrower) the Holder shall regain the rights of a Holder of this Debenture with
respect to such unconverted portions of this Debenture and the Borrower shall,
as soon as practicable, return such unconverted Debenture to the Holder or, if
the Debenture has not been surrendered, adjust its records to reflect that such
portion of this Debenture has not been converted. In all cases, the Holder shall
retain all of its rights and remedies (including, without limitation, (i) the
right to receive Conversion Default Payments pursuant to Section 1.3 to the
extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1.3) for the
Borrower's failure to convert this Debenture.



<PAGE>



                                                                     EXHIBIT 1.5




CERTAIN COVENANTS

Distributions on Capital Stock. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent (a) pay, declare or set apart for such payment, any dividend or
other distribution (whether in cash, property or other securities) on shares of
capital stock other than dividends on shares of Common Stock solely in the form
of additional shares of Common Stock or (b) directly or indirectly or through
any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders' rights plan which
is approved by a majority of the Borrower's disinterested directors.

Restriction on Stock Repurchases. So long as the Borrower shall have any
obligation under this Debenture, the Borrower shall not without the Holder's
written consent redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any one transaction
or series of related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such shares.

Borrowings. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, create,
incur, assume or suffer to exist any liability for borrowed money, except (a)
borrowings in existence or committed on the date hereof and of which the
Borrower has informed Holder in writing prior to the date hereof (including that
certain line of credit between the Company and Alliance Equities providing for
up to $7,000,000 of borrowings), (b) indebtedness to trade creditors or
financial institutions incurred in the ordinary course of business or (c)
borrowings, the proceeds of which shall be used to repay this Debenture.

Sale of Assets. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, sell,
lease or otherwise dispose of any significant portion of its assets outside the
ordinary course of business. Any consent to the disposition of any assets may be
conditioned on a specified use of the proceeds of disposition.

Advances and Loans. So long as the Borrower shall have any obligation under this
Debenture, the Borrower shall not, without the Holder's written consent, lend
money, give credit or make advances to any person, firm, joint venture or
corporation, including, without limitation, officers, directors, employees,
subsidiaries and affiliates of the Borrower, except loans, credits or advances
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, (b) made in the ordinary
course of business or (c) not in excess of $50,000.

Contingent Liabilities. So long as the Borrower shall have any obligation under
this Debenture, the Borrower shall not, without the Holder's written consent,
assume, guarantee, endorse, contingently agree to purchase or otherwise become
liable upon the obligation of any person, firm, partnership, joint venture or
corporation, except by the endorsement of negotiable instruments for deposit or
collection and except assumptions, guarantees, endorsements and contingencies
(a) in existence or committed on the date hereof and which the Borrower has
informed Holder in writing prior to the date hereof, and (b) similar
transactions in the ordinary course of business.



EVENTS OF DEFAULT

If any of the following events of default (each, an "Event of Default") shall
occur:

Failure to Pay Principal or Interest. The Borrower fails to pay the principal
hereof or interest thereon when due on this Debenture, whether at maturity, upon
a Trading Market Prepayment Event pursuant to Section 1.7, upon acceleration or
otherwise;

Conversion and the Shares. The Borrower fails to issue shares of Common Stock to
the Holder (or announces or threatens that it will not honor its obligation to
do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Debenture (for a period of at least sixty (60)
days, if such failure is solely as a result of the circumstances governed by
Section 1.3 and the Borrower is using its best efforts to authorize a sufficient
number of shares of Common Stock as soon as practicable), fails to transfer or
cause its transfer agent to transfer (electronically or in certificated form)
any certificate for shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Debenture as and when required by this
Debenture or the Registration Rights Agreement, or fails to remove any
restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Debenture as and when required
by this Debenture or the Registration Rights Agreement (or makes any
announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue
uncured (or any announcement, statement or threat not to honor its obligations
shall not be rescinded in writing) for ten (10) days after the Borrower shall
have been notified thereof in writing by the Holder;



<PAGE>



                                                                     EXHIBIT 1.5




Failure to Timely File Registration or Effect Registration. The Borrower fails
to file the Registration Statement within forty-five (45) days following the
Filing Date (as defined in the Registration Rights Agreement) or obtain
effectiveness with the Securities and Exchange Commission of the Registration
Statement within one hundred twenty (120) days following the Filing Date or such
Registration Statement lapses in effect (or sales cannot otherwise be made
thereunder effective, whether by reason of the Borrower's failure to amend or
supplement the prospectus included therein in accordance with the Registration
Rights Agreement or otherwise) for more than twenty (20) consecutive days or
forty (40) days in any twelve month period after the Registration Statement
becomes effective;

Breach of Covenants. The Borrower breaches any material covenant or other
material term or condition contained in Sections 1.3, 1.6 or 1.7 of this
Debenture, or Sections 4(c), 4(e), 4(h), 4(i), 4(j) or 5 of the Purchase
Agreement and such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

Breach of Representations and Warranties. Any representation or warranty of the
Borrower made herein or in any agreement, statement or certificate given in
writing pursuant hereto or in connection herewith (including, without
limitation, the Purchase Agreement and the Registration Rights Agreement), shall
be false or misleading in any material respect when made and the breach of which
has (or with the passage of time will have) a material adverse effect on the
rights of the Holder with respect to this Debenture, the Purchase Agreement or
the Registration Rights Agreement;

Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make
an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business, or such a receiver or trustee shall otherwise be
appointed;

Judgments. Any money judgment, writ or similar process shall be entered or filed
against the Borrower or any subsidiary of the Borrower or any of its property or
other assets for more than $50,000, and shall remain unvacated, unbonded or
unstayed for a period of twenty (20) days unless otherwise consented to by the
Holder, which consent will not be unreasonably withheld;

Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the relief
of debtors shall be instituted by or against the Borrower or any subsidiary of
the Borrower;

Delisting of Common Stock. The Borrower shall fail to maintain the listing of
the Common Stock on at least one of the OTCBB or an equivalent replacement
exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York
Stock Exchange, or the American Stock Exchange; or

Default Under Other Debentures. An Event of Default has occurred and is
continuing under any of the other Debentures issued pursuant to the Purchase
Agreement;

then, upon the occurrence and during the continuation of any Event of Default
specified in Section 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.9, or 3.10, at the option
of the Holders of a majority of the aggregate principal amount of the
outstanding Debentures issued pursuant to the Purchase Agreement exercisable
through the delivery of written notice to the Borrower by such Holders (the
"Default Notice"), and upon the occurrence of an Event of Default specified in
Section 3.6 or 3.8, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the greater of (i) 130% times the sum of (w) the
then outstanding principal amount of this Debenture plus (x) accrued and unpaid
interest on the unpaid principal amount of this Debenture to the date of payment
(the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on the
amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the
Holder pursuant to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement (the then outstanding principal amount of this
Debenture to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the "Default Sum") or (ii) the
"parity value" of the Default Sum to be prepaid, where parity value means (a)
the highest number of shares of Common Stock issuable upon conversion of or
otherwise pursuant to such Default Sum in accordance with Article I, treating
the Trading Day immediately preceding the Mandatory Prepayment Date as the
"Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a
specific Conversion Date in which case such Conversion Date shall be the
Conversion Date), multiplied by (b) the highest Closing Price for the Common
Stock during the period beginning on the date of first occurrence of the Event
of Default and ending one day prior to the Mandatory Prepayment Date (the
"Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity. If the Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default
(and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in



<PAGE>



                                                                     EXHIBIT 1.5


lieu of the Default Amount, the number of shares of Common Stock of the Borrower
equal to the Default Amount divided by the Conversion Price then in effect.



MISCELLANEOUS

Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privileges. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

Notices. Any notice herein required or permitted to be given shall be in writing
and may be personally served or delivered by courier or sent by United States
mail and shall be deemed to have been given upon receipt if personally served
(which shall include telephone line facsimile transmission) or sent by courier
or three (3) days after being deposited in the United States mail, certified,
with postage pre-paid and properly addressed, if sent by mail. For the purposes
hereof, the address of the Holder shall be as shown on the records of the
Borrower; and the address of the Borrower shall be 1280 Bison, Suite B9-597,
Newport Beach, California 92660, facsimile number: 949-760-3670). Both the
Holder and the Borrower may change the address for service by service of written
notice to the other as herein provided.

Amendments. This Debenture and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The term
"Debenture" and all reference thereto, as used throughout this instrument, shall
mean this instrument (and the other Debentures issued pursuant to the Purchase
Agreement) as originally executed, or if later amended or supplemented, then as
so amended or supplemented.

Assignability. This Debenture shall be binding upon the Borrower and its
successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Debenture must be an "accredited
investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything
in this Debenture to the contrary, this Debenture may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.

Cost of Collection. If default is made in the payment of this Debenture, the
Borrower shall pay the Holder hereof costs of collection, including reasonable
attorneys' fees.

Governing Law. THIS DEBENTURE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK WITH RESPECT
TO ANY DISPUTE ARISING UNDER THIS DEBENTURE, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS DEBENTURE SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

Certain Amounts. Whenever pursuant to this Debenture the Borrower is required to
pay an amount in excess of the outstanding principal amount (or the portion
thereof required to be paid at that time) plus accrued and unpaid interest plus
Default Interest on such interest, the Borrower and the Holder agree that the
actual damages to the Holder from the receipt of cash payment on this Debenture
may be difficult to determine and the amount to be so paid by the Borrower
represents stipulated damages and not a penalty and is intended to compensate
the Holder in part for loss of the opportunity to convert this Debenture and to
earn a return from the sale of shares of Common Stock acquired upon conversion
of this Debenture at a price in excess of the price paid for such shares
pursuant to this Debenture. The Borrower and the Holder hereby agree that such
amount of stipulated damages is not plainly disproportionate to the possible
loss to the Holder from the receipt of a cash payment without the opportunity to
convert this Debenture into shares of Common Stock.

Allocations of Maximum Share Amount and Reserved Amount. The Maximum Share
Amount and Reserved Amount shall be allocated pro rata among the Holders of
Debentures based on the principal amount of such Debentures issued to each
Holder. Each increase to the Maximum Share Amount and Reserved Amount shall be
allocated pro rata among the Holders of Debentures based on the principal amount
of such Debentures held by each Holder at the time of the increase in the
Maximum Share Amount or Reserved Amount. In the event a Holder shall sell or
otherwise transfer any of such Holder's Debentures, each transferee shall be
allocated a pro rata portion of such transferor's Maximum Share Amount and
Reserved Amount. Any portion of the Maximum Share Amount or Reserved Amount
which remains allocated to any person or entity which does not hold any
Debentures shall be allocated to the remaining Holders of Debentures, pro rata
based on the principal amount of such Debentures then held by such Holders.

<PAGE>
                                                                     EXHIBIT 1.5




Damages Shares. The shares of Common Stock that may be issuable to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof and pursuant to Section 2(c) of the
Registration Rights Agreement ("Damages Shares") shall be treated as Common
Stock issuable upon conversion of this Debenture for all purposes hereof and
shall be subject to all of the limitations and afforded all of the rights of the
other shares of Common Stock issuable hereunder, including without limitation,
the right to be included in the Registration Statement filed pursuant to the
Registration Rights Agreement. For purposes of calculating interest payable on
the outstanding principal amount hereof, except as otherwise provided herein,
amounts convertible into Damages Shares ("Damages Amounts") shall not bear
interest but must be converted prior to the conversion of any outstanding
principal amount hereof, until the outstanding Damages Amounts is zero.

Denominations. At the request of the Holder, upon surrender of this Debenture,
the Borrower shall promptly issue new Debentures in the aggregate outstanding
principal amount hereof, in the form hereof, in such denominations of at least
$50,000 as the Holder shall request.

Purchase Agreement. By its acceptance of this Debenture, each Holder agrees to
be bound by the applicable terms of the Purchase Agreement.

Notice of Corporate Events. Except as otherwise provided below, the Holder of
this Debenture shall have no rights as a Holder of Common Stock unless and only
to the extent that it converts this Debenture into Common Stock. The Borrower
shall provide the Holder with prior notification of any meeting of the
Borrower's shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of
its shareholders for the purpose of determining shareholders who are entitled to
receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of
determining shareholders who are entitled to vote in connection with any
proposed sale, lease or conveyance of all or substantially all of the assets of
the Borrower or any proposed liquidation, dissolution or winding up of the
Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to
the consummation of the transaction or event, whichever is earlier), of the date
on which any such record is to be taken for the purpose of such dividend,
distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent
known at such time. The Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially simultaneously with
the notification to the Holder in accordance with the terms of this Section
4.12.

Remedies. The Borrower acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Borrower
acknowledges that the remedy at law for a breach of its obligations under this
Debenture will be inadequate and agrees, in the event of a breach or threatened
breach by the Borrower of the provisions of this Debenture, that the Holder
shall be entitled, in addition to all other available remedies at law or in
equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Debenture and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.

OPTIONAL PREPAYMENT

Optional Prepayment. Notwithstanding anything to the contrary contained in this
Article V for not more than thirty (30) days from the date hereof, so long as
(i) no Event of Default or Trading Market Prepayment Event shall have occurred
and be continuing, and (ii) the Borrower has a sufficient number of authorized
shares of Common Stock reserved for issuance upon full conversion of the
Debentures, then at any time after the Issue Date, the Borrower shall have the
right, exercisable on not less than ten (10) Trading Days prior written notice
to the Holders of the Debentures (which notice may not be sent to the Holders of
the Debentures until the Borrower is permitted to prepay the Debentures pursuant
to this Section 5.1), to prepay all of the outstanding Debentures in accordance
with this Section 5.1. Any notice of prepayment hereunder (an "Optional
Prepayment") shall be delivered to the Holders of the Debentures at their
registered addresses appearing on the books and records of the Borrower and
shall state (1) that the Borrower is exercising its right to prepay all of the
Debentures issued on the Issue Date and (2) the date of prepayment (the
"Optional Prepayment Notice"). On the date fixed for prepayment (the "Optional
Prepayment Date"), the Borrower shall make payment of the Optional Prepayment
Amount (as defined below) to or upon the order of the Holders as specified by
the Holders in writing to the Borrower at least one (1) business day prior to
the Optional Prepayment Date. If the Borrower exercises its right to prepay the
Debentures, the Borrower shall make payment to the holders of an amount in cash
(the "Optional Prepayment Amount") equal to 130% multiplied by the sum of (w)
the then outstanding principal amount of this Debenture plus (x) accrued and
unpaid interest on the unpaid principal amount of this Debenture to the Optional
Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the Registration Rights
Agreement (the then outstanding principal amount of this Debenture to the date
of payment plus



<PAGE>



                                                                     EXHIBIT 1.5


the amounts referred to in clauses (x), (y) and (z) shall collectively be known
as the "Optional Prepayment Sum"). Notwithstanding notice of an Optional
Prepayment, the Holders shall at all times prior to the Optional Prepayment Date
maintain the right to convert all or any portion of the Debentures in accordance
with Article I and any portion of Debentures so converted after receipt of an
Optional Prepayment Notice and prior to the Optional Prepayment Date set forth
in such notice and payment of the aggregate Optional Prepayment Amount shall be
deducted from the principal amount of Debentures which are otherwise subject to
prepayment pursuant to such notice. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Optional Prepayment Amount due to the
Holders of the Debentures within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to redeem the
Debentures pursuant to this Section 5.1.

















[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>



                                                                     EXHIBIT 1.5


IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name
by its duly authorized officer this 31st day of March, 2003.



KANAKARIS WIRELESS



By: /s/ Alex F. Kanakaris
    ---------------------
Alex F. Kanakaris

Chairman and Chief Executive Officer



<PAGE>







                                                                     EXHIBIT 1.5


EXHIBIT A

NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Debentures)

The undersigned hereby irrevocably elects to convert $________principal amount
of the Debenture (defined below) into shares of common stock, par value $0.001
per share ("Common Stock"), of Kanakaris Wireless, a Nevada corporation (the
"Borrower") according to the conditions of the convertible debentures of the
Borrower dated as of March 31, 2003 (the "Debentures"), as of the date written
below. If securities are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee will be charged to
the Holder for any conversion, except for transfer taxes, if any. A copy of each
Debenture is attached hereto (or evidence of loss, theft or destruction
thereof).

The Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

Name of DTC Prime Broker:
                         -------------------------------------------------------

Account Number:
               -----------------------------------------------------------------



In lieu of receiving shares of Common Stock issuable pursuant to this Notice of
Conversion by way of a DWAC Transfer, the undersigned hereby requests that the
Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder's calculation
attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

Name:
     ---------------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------



The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Debentures shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption from
registration under the Act.

Date of Conversion:___________________________

Applicable Conversion Price:____________________

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Debentures:______________

Signature:___________________________________

Name:______________________________________

Address:____________________________________



The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three business days following receipt of the original
Debenture(s) to be converted, and shall make payments pursuant to the Debentures
for the number of business days such issuance and delivery is late.



<PAGE>



                                                                     EXHIBIT 1.6






THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT DATED AS OF
JANUARY 16, 2003 NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144
UNDER SUCH ACT.

Right to Purchase 500,000 Shares of Common Stock, par value $0.001 per share



STOCK PURCHASE WARRANT

THIS CERTIFIES THAT, for value received, AJW Offshore, Ltd. or its registered
assigns, is entitled to purchase from Kanakaris Wireless, a Nevada corporation
(the "Company"), at any time or from time to time during the period specified in
Paragraph 2 hereof, Five Hundred Thousand (500,000) fully paid and nonassessable
shares of the Company's Common Stock, par value $0.001 per share (the "Common
Stock"), at an exercise price per share equal to $.005 (the "Exercise Price").
The term "Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof. The term "Warrants" means this
Warrant and the other warrants issued pursuant to that certain Securities
Purchase Agreement, dated January 16, 2003, by and among the Company and the
Buyers listed on the execution page thereof (the "Securities Purchase
Agreement"), including any additional warrants issuable pursuant to Section 4(l)
thereof.

This Warrant is subject to the following terms, provisions, and conditions:

Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject to the
provisions hereof, this Warrant may be exercised by the holder hereof, in whole
or in part, by the surrender of this Warrant, together with a completed exercise
agreement in the form attached hereto (the "Exercise Agreement"), to the Company
during normal business hours on any business day at the Company's principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), and upon (i) payment to the Company
in cash, by certified or official bank check or by wire transfer for the account
of the Company of the Exercise Price for the Warrant Shares specified in the
Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise" (as
defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. In addition to all other available remedies at law or
in equity, if the Company fails to deliver certificates for the Warrant Shares
within three (3) business days after this Warrant is exercised, then the Company
shall pay to the holder in cash a penalty (the "Penalty") equal to 2% of the
number of Warrant Shares that the holder is entitled to multiplied by the Market
Price (as hereinafter defined) for each day that the Company fails to deliver
certificates for the Warrant Shares. For example, if the holder is entitled to
100,000 Warrant Shares and the Market Price is $2.00, then the Company shall pay
to the holder $4,000 for each day that the Company fails to deliver certificates
for the Warrant Shares. The Penalty shall be paid to the holder by the fifth day
of the month following the month in which it has accrued.

Notwithstanding anything in this Warrant to the contrary, in no event shall the
holder of this Warrant be entitled to exercise a number of Warrants (or portions
thereof) in excess of the number of Warrants (or portions thereof) upon exercise
of which the sum of (i) the number of shares of Common Stock beneficially owned
by the holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised Warrants and
the unexercised or unconverted portion of any other securities of the Company
(including the Debentures (as defined in the Securities Purchase Agreement))
subject to a limitation on conversion or exercise analogous to the limitation
contained herein) and (ii) the number of shares of Common Stock issuable upon
exercise of the Warrants (or portions thereof) with respect to which the
determination described herein is being made, would result in beneficial
ownership by the holder and its affiliates of more than 4.9% of the outstanding
shares of Common Stock. For purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G thereunder,
except as otherwise provided in clause (i) of the preceding sentence. The holder
of this Warrant may waive the limitations set forth herein by sixty-one (61)
days written notice to the Company. Notwithstanding anything to the

<PAGE>
                                                                     EXHIBIT 1.6


contrary contained herein, the limitation on exercise of this Warrant set forth
herein may not be amended without (i) the written consent of the holder hereof
and the Company and (ii) the approval of a majority of stockholders of the
Company.

Period of Exercise. This Warrant is exercisable at any time or from time to time
on or after the date on which this Warrant is issued and delivered pursuant to
the terms of the Securities Purchase Agreement and before 6:00 p.m., New York,
New York time on the third (3rd) anniversary of the date of issuance (the
"Exercise Period").

Certain Agreements of the Company. The Company hereby covenants and agrees
as follows:

Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance
with the terms of this Warrant, be validly issued, fully paid, and nonassessable
and free from all taxes, liens, and charges with respect to the issue thereof.

Reservation of Shares. Subject to the Stockholder Approval (as defined in the
Securities Purchase Agreement), during the Exercise Period, the Company shall at
all times have authorized, and reserved for the purpose of issuance upon
exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

Listing. The Company shall promptly secure the listing of the shares of Common
Stock issuable upon exercise of the Warrant upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance upon exercise of
this Warrant) and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so list on
each national securities exchange or automated quotation system, as the case may
be, and shall maintain such listing of, any other shares of capital stock of the
Company issuable upon the exercise of this Warrant if and so long as any shares
of the same class shall be listed on such national securities exchange or
automated quotation system.

Certain Actions Prohibited. The Company will not, by amendment of its charter or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

Successors and Assigns. This Warrant will be binding upon any entity succeeding
to the Company by merger, consolidation, or acquisition of all or substantially
all the Company's assets.

Antidilution Provisions. During the Exercise Period, the Exercise Price and the
number of Warrant Shares shall be subject to adjustment from time to time as
provided in this Paragraph 4.

In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

Adjustment of Exercise Price and Number of Shares upon Issuance of Common Stock.
Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever
on or after the date of issuance of this Warrant, the Company issues or sells,
or in accordance with Paragraph 4(b) hereof is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Market Price (as
hereinafter defined) on the date of issuance (a "Dilutive Issuance"), then
immediately upon the Dilutive Issuance, the Exercise Price will be reduced to a
price determined by multiplying the Exercise Price in effect immediately prior
to the Dilutive Issuance by a fraction, (i) the numerator of which is an amount
equal to the sum of (x) the number of shares of Common Stock actually
outstanding immediately prior to the Dilutive Issuance, plus (y) the quotient of
the aggregate consideration, calculated as set forth in Paragraph 4(b) hereof,
received by the Company upon such Dilutive Issuance divided by the Market Price
in effect immediately prior to the Dilutive Issuance, and (ii) the denominator
of which is the total number of shares of Common Stock Deemed Outstanding (as
defined below) immediately after the Dilutive Issuance.

Effect on Exercise Price of Certain Events. For purposes of determining the
adjusted Exercise Price under Paragraph 4(a) hereof, the following will be
applicable:

Issuance of Rights or Options. If the Company in any manner issues or grants any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Common Stock or other securities convertible into
or exchangeable for Common Stock ("Convertible Securities") (such warrants,
rights and options to purchase Common Stock or Convertible Securities are
hereinafter referred to as "Options") and the price per share for which Common
Stock is issuable upon the exercise of such Options is less than the Market
Price on the date of issuance or grant of such Options, then the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
will, as of the date of the issuance or grant of such Options, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For purposes of the preceding sentence, the "price per share for which
Common Stock is issuable upon the exercise



<PAGE>


                                                                     EXHIBIT 1.6


of such Options" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.

Issuance of Convertible Securities. If the Company in any manner issues or sells
any Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the price per
share for which Common Stock is issuable upon such conversion or exchange is
less than the Market Price on the date of issuance, then the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share. For the purposes of the preceding
sentence, the "price per share for which Common Stock is issuable upon such
conversion or exchange" is determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible
Securities. No further adjustment to the Exercise Price will be made upon the
actual issuance of such Common Stock upon conversion or exchange of such
Convertible Securities.

Change in Option Price or Conversion Rate. If there is a change at any time in
(i) the amount of additional consideration payable to the Company upon the
exercise of any Options; (ii) the amount of additional consideration, if any,
payable to the Company upon the conversion or exchange of any Convertible
Securities; or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock (other than under or by reason
of provisions designed to protect against dilution), the Exercise Price in
effect at the time of such change will be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.

Treatment of Expired Options and Unexercised Convertible Securities. If, in any
case, the total number of shares of Common Stock issuable upon exercise of any
Option or upon conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Exercise Price
then in effect will be readjusted to the Exercise Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination (other than in respect of the actual number of shares
of Common Stock issued upon exercise or conversion thereof), never been issued.

Calculation of Consideration Received. If any Common Stock, Options or
Convertible Securities are issued, granted or sold for cash, the consideration
received therefor for purposes of this Warrant will be the amount received by
the Company therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale. In case any Common
Stock, Options or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, the amount of the consideration
other than cash received by the Company will be the fair value of such
consideration, except where such consideration consists of securities, in which
case the amount of consideration received by the Company will be the Market
Price thereof as of the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued in connection with any acquisition, merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving corporation as is attributable
to such Common Stock, Options or Convertible Securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
in good faith by the Board of Directors of the Company.

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price
will be made (i) upon the exercise of any warrants, options or other convertible
securities granted, issued and outstanding on the date of issuance of this
Warrant; (ii) upon the grant or exercise of any stock or options which may
hereafter be granted or exercised under any employee benefit plan, stock option
plan or restricted stock plan of the Company now existing or to be implemented
in the future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the Company or
a majority of the members of a committee of independent directors established
for such purpose; or (iii) upon the exercise of the Warrants.

Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock

<PAGE>
                                                                     EXHIBIT 1.6


acquirable hereunder into a smaller number of shares, then, after the date of
record for effecting such combination, the Exercise Price in effect immediately
prior to such combination will be proportionately increased.

Adjustment in Number of Shares. Upon each adjustment of the Exercise Price
pursuant to the provisions of this Paragraph 4, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted by multiplying a
number equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

Consolidation, Merger or Sale. In case of any consolidation of the Company with,
or merger of the Company into any other corporation, or in case of any sale or
conveyance of all or substantially all of the assets of the Company other than
in connection with a plan of complete liquidation of the Company, then as a
condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the holder of this Warrant will have the right to
acquire and receive upon exercise of this Warrant in lieu of the shares of
Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

Distribution of Assets. In case the Company shall declare or make any
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

Notice of Adjustment. Upon the occurrence of any event which requires any
adjustment of the Exercise Price, then, and in each such case, the Company shall
give notice thereof to the holder of this Warrant, which notice shall state the
Exercise Price resulting from such adjustment and the increase or decrease in
the number of Warrant Shares purchasable at such price upon exercise, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. Such calculation shall be certified by the Chief
Financial Officer of the Company.

Minimum Adjustment of Exercise Price. No adjustment of the Exercise Price shall
be made in an amount of less than 1% of the Exercise Price in effect at the time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than 1% of such Exercise Price.

No Fractional Shares. No fractional shares of Common Stock are to be issued upon
the exercise of this Warrant, but the Company shall pay a cash adjustment in
respect of any fractional share which would otherwise be issuable in an amount
equal to the same fraction of the Market Price of a share of Common Stock on the
date of such exercise.

Other Notices.  In case at any time:
-------------

the Company shall declare any dividend upon the Common Stock payable in shares
of stock of any class or make any other distribution (including dividends or
distributions payable in cash out of retained earnings) to the holders of the
Common Stock;

the Company shall offer for subscription pro rata to the holders of the Common
Stock any additional shares of stock of any class or other rights;

there shall be any capital reorganization of the Company, or reclassification of
the Common Stock, or consolidation or merger of the Company with or into, or
sale of all or substantially all its assets to, another corporation or entity;
or

there shall be a voluntary or involuntary dissolution, liquidation or winding-up
of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or



<PAGE>


                                                                     EXHIBIT 1.6


subscription rights or to exchange their Common Stock for stock or other
securities or property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding-up, as the
case may be. Such notice shall be given at least 30 days prior to the record
date or the date on which the Company's books are closed in respect thereto.
Failure to give any such notice or any defect therein shall not affect the
validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv)
above.

Certain Events. If any event occurs of the type contemplated by the adjustment
provisions of this Paragraph 4 but not expressly provided for by such
provisions, the Company will give notice of such event as provided in Paragraph
4(g) hereof, and the Company's Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of shares of Common Stock
acquirable upon exercise of this Warrant so that the rights of the holder shall
be neither enhanced nor diminished by such event.

Certain Definitions.

"Common Stock Deemed Outstanding" shall mean the number of shares of Common
Stock actually outstanding (not including shares of Common Stock held in the
treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof, the
maximum total number of shares of Common Stock issuable upon the exercise of
Options, as of the date of such issuance or grant of such Options, if any, and
(y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of
Common Stock issuable upon conversion or exchange of Convertible Securities, as
of the date of issuance of such Convertible Securities, if any.

"Market Price," as of any date, (i) means the average of the last reported sale
prices for the shares of Common Stock on the Over-the-Counter Bulletin Board
(the "OTCBB") for the five (5) Trading Days (as hereinafter defined) immediately
preceding such date as reported by Bloomberg Financial Services, or (ii) if the
OTCBB is not the principal trading market for the shares of Common Stock, the
average of the last reported sale prices on the principal trading market for the
Common Stock during the same period as reported by Bloomberg Financial Services,
or (iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the fair market value as reasonably
determined in good faith by (a) the Board of Directors of the Company or, at the
option of a majority-in-interest of the holders of the outstanding Warrants by
(b) an independent investment bank of nationally recognized standing in the
valuation of businesses similar to the business of the corporation. The manner
of determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

"Common Stock," for purposes of this Paragraph 4, includes the Common Stock, par
value $0.001 per share, and any additional class of stock of the Company having
no preference as to dividends or distributions on liquidation, provided that the
shares purchasable pursuant to this Warrant shall include only shares of Common
Stock, par value $0.001 per share, in respect of which this Warrant is
exercisable, or shares resulting from any subdivision or combination of such
Common Stock, or in the case of any reorganization, reclassification,
consolidation, merger, or sale of the character referred to in Paragraph 4(e)
hereof, the stock or other securities or property provided for in such
Paragraph.

"Trading Day" shall mean any day on which the Common Stock is traded for any
period on the OTCBB, or on the principal securities exchange or other securities
market on which the Common Stock is then being traded.

Issue Tax. The issuance of certificates for Warrant Shares upon the exercise of
this Warrant shall be made without charge to the holder of this Warrant or such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the holder of this Warrant.

No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

Transfer, Exchange, and Replacement of Warrant.

Restriction on Transfer. This Warrant and the rights granted to the holder
hereof are transferable, in whole or in part, upon surrender of this Warrant,
together with a properly executed assignment in the form attached hereto, at the
office or agency of the Company referred to in Paragraph 7(e) below, provided,
however, that any transfer or assignment shall be subject to the conditions set
forth in Paragraph 7(f) hereof and to the applicable provisions of the
Securities Purchase Agreement. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary. Notwithstanding anything to
the contrary contained herein, the registration rights described in Paragraph 8
are assignable only in accordance with the provisions of that certain
Registration Rights Agreement, dated January 16, 2003, by and among the Company
and the other signatories thereto (the "Registration Rights Agreement").

Warrant Exchangeable for Different Denominations. This Warrant is exchangeable,
upon the surrender hereof by the holder hereof at the office or agency of the
Company referred to in Paragraph 7(e)

<PAGE>
                                                                     EXHIBIT 1.6


below, for new Warrants of like tenor representing in the aggregate the right to
purchase the number of shares of Common Stock which may be purchased hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the holder hereof at the time of such
surrender.

Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of any such loss, theft, or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company, or, in the
case of any such mutilation, upon surrender and cancellation of this Warrant,
the Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.

Cancellation; Payment of Expenses. Upon the surrender of this Warrant in
connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

Register. The Company shall maintain, at its principal executive offices (or
such other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee and each prior owner of this
Warrant.

Exercise or Transfer Without Registration. If, at the time of the surrender of
this Warrant in connection with any exercise, transfer, or exchange of this
Warrant, this Warrant (or, in the case of any exercise, the Warrant Shares
issuable hereunder), shall not be registered under the Securities Act of 1933,
as amended (the "Securities Act") and under applicable state securities or blue
sky laws, the Company may require, as a condition of allowing such exercise,
transfer, or exchange, (i) that the holder or transferee of this Warrant, as the
case may be, furnish to the Company a written opinion of counsel, which opinion
and counsel are acceptable to the Company, to the effect that such exercise,
transfer, or exchange may be made without registration under said Act and under
applicable state securities or blue sky laws, (ii) that the holder or transferee
execute and deliver to the Company an investment letter in form and substance
acceptable to the Company and (iii) that the transferee be an "accredited
investor" as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

Registration Rights. The initial holder of this Warrant (and certain assignees
thereof) is entitled to the benefit of such registration rights in respect of
the Warrant Shares as are set forth in Section 2 of the Registration Rights
Agreement.

Notices. All notices, requests, and other communications required or permitted
to be given or delivered hereunder to the holder of this Warrant shall be in
writing, and shall be personally delivered, or shall be sent by certified or
registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 1280 Bison, Suite B9-597
Newport Beach, California 92660, Attention: Alex Kanakaris, Chairman and Chief
Executive Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.

Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED
INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.



<PAGE>


                                                                     EXHIBIT 1.6




Miscellaneous.

Amendments. This Warrant and any provision hereof may only be amended by an
instrument in writing signed by the Company and the holder hereof.

Descriptive Headings. The descriptive headings of the several paragraphs of this
Warrant are inserted for purposes of reference only, and shall not affect the
meaning or construction of any of the provisions hereof.

Cashless Exercise. Notwithstanding anything to the contrary contained in this
Warrant, if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the Securities
Act, this Warrant may be exercised by presentation and surrender of this Warrant
to the Company at its principal executive offices with a written notice of the
holder's intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a "Cashless Exercise"). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the holder shall
surrender this Warrant for that number of shares of Common Stock determined by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price, and
the denominator of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is exercising 100,000 Warrants with a
per Warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock's current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common Stock.

Remedies. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Warrant, that the holder shall
be entitled, in addition to all other available remedies at law or in equity,
and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Warrant and to
enforce specifically the terms and provisions thereof, without the necessity of
showing economic loss and without any bond or other security being required.





[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>



                                                                     EXHIBIT 1.6


IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.

KANAKARIS WIRELESS





By: /s/ Alex F. Kanakaris
    ---------------------
Alex F. Kanakaris

Chairman and Chief Executive Officer



Dated as of March 31, 2003



<PAGE>




                                                                     EXHIBIT 1.6


FORM OF EXERCISE AGREEMENT



Dated:  ________ __, 2002





To:        Kanakaris Wireless



The undersigned, pursuant to the provisions set forth in the within Warrant,
hereby agrees to purchase ________ shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:



Name:      ______________________________



Signature:______________________________

Address:_______________________________

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



Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.



and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.



<PAGE>



                                                                     EXHIBIT 1.6


FORM OF ASSIGNMENT



FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers all the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee        Address                                     No of Shares






, and hereby irrevocably constitutes and appoints
___________________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.



Dated: ________ __, 2002



In the presence of:



           Name:     ____________________________



           Signature:___________________________

           Title:     ___________________________

           Address:  ____________________________

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




Note: The above signature should correspond exactly with the name on the
face of the within Warrant, if applicable.



<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: May 19, 2003       By:  /S/ ALEX F. KANAKARIS
                          ----------------------------------------------
                          Alex F. Kanakaris
                          Chairman of the Board, Chief Executive Officer
                          (Principal Executive Officer) and President


Dated: May 19, 2003       By:  /S/ DAVID THOMAS SHOMAKER
                          ----------------------------------------------
                          David Thomas Shomaker
                          Acting Chief Financial Officer
                          (Principal Financial and Accounting Officer)


                                       26


<PAGE>


                                                                    EXHIBIT 99.1


                  CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND
     CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
           PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the quarterly report on Form 10-QSB of Kanakaris
Wireless (the "Company") for the quarterly period ended March 31, 2003 (the
"Report"), the undersigned hereby certifies in his capacity as Chief Executive
Officer of the Company, pursuant to 18 U.S.C. section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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


         Dated: May 19, 2003            By: /S/ ALEX F. KANAKARIS
                                           ------------------------------
                                           Alex F. Kanakaris
                                           Chief Executive Officer

         In connection with the quarterly report on Form 10-QSB of Kanakaris
Wireless (the "Company") for the quarterly period ended March 31, 2003 (the
"Report"), the undersigned hereby certifies in his capacity as Chief Financial
Officer of the Company, pursuant to 18 U.S.C. section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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


         Dated: May 19, 2003            By: /S/ DAVID THOMAS SHOMAKER
                                           ------------------------------
                                           David Thomas Shomaker
                                           Acting Chief Financial Officer