<PAGE>

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

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

                                   FORM 10-QSB

(MARK ONE)
 [X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the quarterly period ended JUNE 30, 2002

 [ ]     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.)

                        2716 OCEAN PARK BLVD., SUITE 2005
                            SANTA MONICA, CA 90405
                    (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 18,385,517 on August 13, 2002.

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





<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                          INDEX TO FINANCIAL STATEMENTS
                       KANAKARIS WIRELESS AND SUBSIDIARIES

Condensed Consolidated Balance Sheet at June 30, 2002.....................F-1

Condensed Consolidated Statements of Operations for the Three Months
     and Nine Months Ended June 30, 2002 and 2001.........................F-3

Condensed Consolidated Statements of Comprehensive Loss for the
     Three Months and Nine Months Ended June 30, 2002 and 2001............F-4

Condensed Consolidated Statements of Cash Flows for the Nine Months
     Ended June 30, 2002 and 2001.........................................F-5

Condensed Consolidated Statement of Changes in Stockholders' Equity
     (Deficiency) for the Nine Months Ended June 30, 2002.................F-7

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

                                       2





<PAGE>

                       KANAKARIS WIRELESS AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheet
                                  June 30, 2002
                                   (Unaudited)

ASSETS
------

Current assets:
   Cash and cash equivalents                                         $   23,090
   Accounts receivable - net                                            243,288
   Inventories                                                           56,678
   Investments in marketable securities                                   4,709
   Current maturities of notes receivable -
      shareholders and related parties                                   36,280
   Notes receivable                                                     125,000
   Interest receivable                                                   49,103
   Prepaid expenses                                                      19,786
   Advances to suppliers                                                    700
                                                                     -----------

           TOTAL CURRENT ASSETS                                         558,634
                                                                     -----------

Property and equipment, net of accumulated
   depreciation and amortization                                        100,453
                                                                     -----------

Other assets:
   Film library - net of amortization                                   309,376
   Goodwill - net of amortization                                       657,629
   Other                                                                  1,750
                                                                     -----------

           TOTAL OTHER ASSETS                                           968,755
                                                                     -----------

           TOTAL ASSETS                                              $1,627,842
                                                                     ===========

     See accompanying notes to condensed consolidated financial statements.

                                      F-1





<PAGE>

                       KANAKARIS WIRELESS AND SUBSIDIARIES
                      Condensed Consolidated Balance Sheet
                                  June 30, 2002
                                   (Unaudited)

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

Current liabilities:
   Accounts payable and accrued expenses                           $  2,029,328
   Convertible debentures                                             3,413,100
   Convertible promissory notes                                         372,550
   Due to former shareholder of subsidiary                              113,183
                                                                   -------------

           TOTAL CURRENT LIABILITIES                                  5,928,161
                                                                   -------------

Stockholders' equity (deficiency):
   Preferred stock, $0.01 par value; 5,000,000 shares
       authorized; 1,000,000 Class A Convertible issued
       and outstanding                                                   10,000
   Common stock, $0.001 par value; 250,000,000
       shares authorized; 16,412,720 issued and
       outstanding                                                       16,412
   Additional paid-in capital                                        31,402,025
   Accumulated deficit                                              (34,996,285)
   Deferred expense                                                    (625,180)
   Comprehensive loss                                                  (107,291)
                                                                   -------------

           TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                   (4,300,319)
                                                                   -------------

           TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $  1,627,842
                                                                   =============

     See accompanying notes to condensed consolidated financial statements.

                                      F-2





<PAGE>

<TABLE>
                                      KANAKARIS WIRELESS AND SUBSIDIARIES
                                Condensed Consolidated Statements of Operations
                                                  (Unaudited)

<CAPTION>
                                                      Three Months   Three Months     Nine Months     Nine Months
                                                         Ended          Ended           Ended           Ended
                                                        June 30,       June 30,        June 30,        June 30,
                                                         2002            2001            2002            2001
                                                     -------------   -------------   -------------   -------------

<S>                                                  <C>             <C>             <C>             <C>
Net sales                                            $    317,108    $    369,383    $    348,696    $  1,147,847

Cost of sales                                             233,637         109,209         259,124         247,141
                                                     -------------   -------------   -------------   -------------

           GROSS PROFIT                                    83,471         260,174          89,572         900,706
                                                     -------------   -------------   -------------   -------------

Operating expenses:
   Executive compensation                                 335,882         460,535         848,829       1,223,585
   Salaries                                               112,810          95,116         135,019         281,764
   Payroll taxes and employee benefits                     11,914           9,374          16,990          25,053
   Consulting services                                    309,135         348,745       1,006,025       1,602,934
   Travel and entertainment                                18,194          33,964          54,239         131,608
   Telephone and utilities                                 18,260          10,629          28,247          36,433
   Marketing, advertising and investor relations           14,882          68,646          67,521         616,903
   Professional fees                                      150,771         226,332         547,138         656,452
   Rent                                                    21,675          39,616          21,675          64,939
   Office and other expenses                               97,642          28,516         200,548         173,948
   Equipment rental and expense                               143             671           1,161             671
   Insurance                                               22,418          18,361          57,533          52,505
   Depreciation and amortization                           38,786          37,090          98,821         109,440
   Bad debt expense                                        35,387              --          35,387              --
   Taxes - other                                              281           1,703             281           4,103
   Bank charges                                             1,259             289           1,819             901
   Website development                                         --           4,464             323          42,609
                                                     -------------   -------------   -------------   -------------

           TOTAL OPERATING EXPENSES                     1,189,439       1,384,051       3,121,556       5,023,848
                                                     -------------   -------------   -------------   -------------

       Loss from operations                            (1,105,968)     (1,123,877)     (3,031,984)     (4,123,142)

       Financing and other income (expense), net         (151,662)     (1,780,339)     (1,316,707)     (3,000,812)
                                                     -------------   -------------   -------------   -------------

       Loss before discontinued operations             (1,257,630)     (2,904,216)     (4,348,691)     (7,123,954)

       Discontinued operations                             (5,825)        (58,123)        (82,689)        (11,649)
                                                     -------------   -------------   -------------   -------------

       Net loss                                      $ (1,263,455)   $ (2,962,339)   $ (4,431,380)   $ (7,135,603)
                                                     =============   =============   =============   =============

       Net (loss) income per common share:
         Basic and diluted-continuing operations     $       (.10)   $      (1.08)   $       (.46)   $      (2.87)
         Basic and diluted-discontinued operations             --            (.02)           (.01)             --
                                                     -------------   -------------   -------------   -------------

         Net loss per share                          $       (.10)   $      (1.10)   $       (.47)   $      (2.87)
                                                     =============   =============   =============   =============

       Weighted average common shares
          outstanding - basic and diluted              12,915,386       2,687,673       9,366,530       2,487,638
                                                     =============   =============   =============   =============

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

                                                     F-3





<PAGE>

<TABLE>
                                 KANAKARIS WIRELESS AND SUBSIDIARIES
                       Condensed Consolidated Statements of Comprehensive Loss
                                             (Unaudited)

<CAPTION>
                                    Three Months  Three Months    Nine Months    Nine Months
                                       Ended         Ended          Ended          Ended
                                      June 30,      June 30,       June 30,       June 30,
                                       2002           2001           2002           2001
                                   ------------   ------------   ------------   ------------
<S>                                <C>            <C>            <C>            <C>
Net loss                           $(1,263,455)   $(2,962,339)   $(4,431,380)   $(7,135,603)

Other comprehensive loss:
   Unrealized loss on securities       (18,491)          (880)       (59,291)      (938,400)
                                   ------------   ------------   ------------   ------------

Comprehensive loss                 $(1,281,946)   $(2,963,219)   $(4,490,671)   $(8,074,003)
                                   ============   ============   ============   ============

               See accompanying notes to condensed consolidated financial statements.

                                                F-4
</TABLE>





<PAGE>

<TABLE>
                       KANAKARIS WIRELESS AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                For the Nine Months Ended June 30, 2002 and 2001
                                   (Unaudited)

<CAPTION>
                                                                   2002           2001
                                                               ------------   ------------
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                    $(4,431,380)   $(7,135,603)
   Adjustments to reconcile net loss
       to net cash used in operating activities:
           Amortization of goodwill                                     --          8,463
           Depreciation and amortization                            98,821         88,323
           Write-off of goodwill                                   337,052             --
           Netbooks.com settlement                                      --          3,750
           Settlement agreement                                     51,675             --
           Provision for bad debts                                  35,405             --
           Gain on sale of assets                                 (247,301)            --
           Deferred advertising income realized                         --     (1,092,000)
           Compensation, consulting, marketing and
             professional services, incurred in exchange
             for common stock                                    1,500,227      1,991,283
           Consulting services incurred in exchange
             for stock options                                      46,841        334,706
           Convertible debt-marketing cost                         199,500        190,100
           Convertible debt-financing cost                         893,452      2,621,018
           Convertible debt-interest cost                           62,339        254,863
   Changes in assets and liabilities
       (Increase) decrease in:
              Accounts receivable                                 (156,600)       267,049
              Inventory                                            (54,718)         2,495
              Prepaid expenses                                         277         71,362
              Advances to suppliers and security deposits              386         (6,585)
              Interest receivable                                  (13,798)       (16,534)
       Increase (decrease) in:
              Accounts payable and accrued expenses              1,192,309        124,355
              Royalties payable                                         --         12,841
              Other current liabilities                            122,238          3,823
                                                               ------------   ------------

           NET CASH USED IN OPERATING ACTIVITIES                  (363,275)    (2,050,645)
                                                               ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                             (735,358)       (17,824)
   Increase in notes receivable -
      shareholders and related parties                              74,530        234,529
   Notes receivable collections                                    125,000         47,000
   Acquisition of film library                                          --        (31,397)
                                                               ------------   ------------

           NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES    (535,828)       232,308
                                                               ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from sale of common stock                              245,220        100,000
   Payment to former shareholder of subsidiary                          --         (5,000)
   Proceeds from convertible debt                                  625,500      1,109,900
                                                               ------------   ------------

           NET CASH PROVIDED BY FINANCING ACTIVITIES               870,720      1,204,900
                                                               ------------   ------------

Net decrease in cash and cash equivalents                          (28,383)      (613,437)

Cash and cash equivalents, beginning of period                      51,473        615,101
                                                               ------------   ------------

Cash and cash equivalents, end of period                       $    23,090    $     1,664
                                                               ============   ============
</TABLE>

                                      F-5





<PAGE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the nine months ended June 30, 2002, the Company issued 4,192,128 shares
of common stock for consulting services having a fair value of $738,626. The
4,192,128 shares issued during the nine months ended June 30, 2002, were issued
to a variety of business consultants including 5,000 shares to one non-employee
member of the Company's board of directors, 10,000 shares to one member of the
Company's board of directors who was also an employee of the Company, and
4,177,128 shares to twenty other consultants.

During the nine months ended June 30, 2002, the Company issued an aggregate of
285,000 shares of common stock having a fair market value of $51,675 to a former
officer in satisfaction of certain claims.

During the nine months ended June 30, 2002, the Company issued 65,200 shares of
common stock for legal services having a fair value of $7,500.

During the nine months ended June 30, 2002, the Company issued 4,005,000 shares
of common stock in lieu of compensation of $271,180. Of the 4,005,000 shares
issued during the nine months ended June 30, 2002, 2,350,000 shares were issued
to the Company's Chairman of the Board, Chief Executive Officer and President,
935,000 shares were issued to one employee of the Company who was also a member
of the Company's board of directors, 140,000 shares were issued to four
directors who were then employees of the Company, 125,000 shares were issued to
two non-employee directors of the Company and 455,000 shares were issued to
fifteen non-director employees of the Company, including employees of the
Company's Fast Forward Marketing subsidiary.

During the nine months ended June 30, 2002, the Company issued an aggregate of
2,644,438 shares of common stock having a fair value of approximately $231,000
to various debenture investors representing the conversion of principal and
interest.

During the nine months ended June 30, 2002, the Company converted $372,550 of
accounts payable to convertible promissory notes.

During the nine months ended June 30, 2001, the Company issued 205,897 shares of
common stock for consulting, marketing and professional services having a fair
value of $1,286,612. Of the 205,897 shares issued during the nine months ended
June 30, 2001, 2,500 shares were issued for legal consulting services, 12,500
shares were issued for accounting services, and 190,897 shares were issued to a
variety of business consultants including 10,000 shares to three members of the
Company's board of directors and 180,897 shares to six other consultants.

During the nine months ended June 30, 2001, the Company issued 587,380 shares of
common stock in lieu of compensation of $1,828,874. Of the 587,380 shares issued
during the nine months ended June 30, 2001, 525,000 shares were issued to the
Company's Chairman of the Board, Chief Executive Officer and President, 47,380
shares were issued to two employees of the Company who were also members of the
Company's board of directors, and 15,000 shares were issued to six non-director
employees of the Company.

During the nine months ended June 30, 2001, the Company issued an aggregate of
873,297 shares of common stock having a fair value of approximately $2,686,000
to various debenture investors representing the conversion of principal and
interest.

     See accompanying notes to condensed consolidated financial statements.

                                      F-6





<PAGE>

<TABLE>
                                      KANAKARIS WIRELESS AND SUBSIDIARIES
                Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
                                    For the Nine Months Ended June 30, 2002
                                                  (Unaudited)

<CAPTION>
                                           Common Stock Issued                    Preferred Stock
                               -------------------------------------------  ----------------------------
                                  Shares          Amount         Shares         Amount         APIC
                               -------------  -------------  -------------  -------------  -------------

<S>                              <C>          <C>               <C>         <C>            <C>
Balances
September 30, 2001                4,514,704   $      4,514      1,000,000   $     10,000   $ 28,928,690

  Stock issued for cash:            706,250            707             --             --        244,513

  Stock issued for:
    Compensation                  4,005,000          4,005             --             --        267,175
    Consulting services           4,192,128          4,192             --             --        734,434
    Professional services            65,200             65             --             --          7,435

  Settlement Agreement              285,000            285             --             --         51,390

  Converted debentures            2,644,438          2,644             --             --        228,095

  Convertible debt financing
    Costs                                --             --             --             --        893,452

  Issuance of common
    stock option for
    consultants                          --             --             --             --         46,841

  Unrealized loss on
   investment                            --             --             --             --             --

  Net (loss)                             --             --             --             --             --
                               -------------  -------------  -------------  -------------  -------------

BALANCES JUNE 30, 2002           16,412,720   $     16,412      1,000,000   $     10,000   $ 31,402,025
                               =============  =============  =============  =============  =============
                                                                                              (CONTINUED)
</TABLE>

<TABLE>
<CAPTION>
                                Accumulated       Deferred     Comprehensive
                                  Deficit         Expense          Loss             Total
                               -------------   -------------   -------------   -------------

<S>                            <C>             <C>             <C>             <C>
Balances
September 30, 2001             $(30,564,905)   $ (1,108,101)   $    (48,000)   $ (2,777,802)

  Stock issued for cash:                 --              --              --         245,220

  Stock issued for:
    Compensation                         --         379,688              --         650,868
    Consulting services                  --         103,233              --         841,859
    Professional services                --              --              --           7,500

  Settlement Agreement                   --              --              --          51,675

  Converted debentures                   --              --              --         230,739

  Convertible debt financing
    Costs                                --              --              --         893,452

  Issuance of common
    stock option for
    consultants                          --              --              --          46,841

  Unrealized loss on
   investment                            --              --         (59,291)        (59,291)

  Net (loss)                     (4,431,380)             --              --      (4,431,380)
                               -------------   -------------   -------------   -------------

BALANCES JUNE 30, 2002         $(34,996,285)   $   (625,180)   $   (107,291)   $ (4,300,319)
                               =============   =============   =============   =============

                    See accompanying notes to condensed consolidated financial statements.

                                                     F-7
</TABLE>





<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 financial statements for the year ended
         September 30, 2001 included in 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 nine
         months ended June 30, 2002 are not necessarily indicative of the
         results to be expected for the full year ending September 30, 2002, or
         any other period.

         (B) BUSINESS ORGANIZATION AND ACTIVITY
         --------------------------------------

         Kanakaris Wireless, which on June 2, 2000 changed its name from
         Kanakaris Communications, Inc. (formerly Big Tex Enterprises, Inc.)
         (the "Company"), was incorporated in the State of Nevada on November 1,
         1991. 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. In addition, 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.

         (C) BUSINESS COMBINATIONS
         -------------------------

         On October 10, 1997 (the "Acquisition Date"), Kanakaris Internetworks,
         Inc. ("KIW") consummated a Stock Purchase Agreement with the
         shareholder (the "Seller") of Desience Corporation ("Desience") to
         purchase 10,000 common shares representing 100% of its issued and
         outstanding common stock in exchange for a 4% royalty on the gross
         sales (after collection) of Desience subsequent to the Acquisition
         Date, to be paid monthly for as long as Desience remains in business or
         its products are sold. Pursuant to APB 16, since the Seller had no
         continuing affiliation with KIW, the 4% royalty is accounted for as an
         increase to goodwill at the date the amount is determinable. In
         addition, the Seller shall receive 5% of funds which are to be
         allocated to Desience arising from KIW's next securities offering as a
         non-refundable advance on the royalty. As of June 30, 2002, no
         advances have been given. KIW will hold harmless the Seller from any
         claims, causes of action, costs, expenses, liabilities, and prior

                                      F-8





<PAGE>

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

         shareholder advances. Immediately following the exchange, Desience
         became a wholly-owned subsidiary of KIW. The fair value of the assets
         and liabilities acquired pursuant to the acquisition of Desience was
         $148,776 and $468,120, respectively, which resulted in goodwill of
         $319,344 at the Acquisition Date since no trademarks, copyrights,
         existing or identified long term requirement contracts or other
         intangibles existed at that date. Additions to goodwill resulting from
         the royalty for the nine months ended June 30, 2002 and 2001 were
         $8,488 and $12,144, respectively. As of June 30, 2002, all goodwill
         had been written-off.

         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 is being
         treated as a discontinued operation and is presented in the statements
         of operations separately from continuing operations. (See note 12).

         On November 25, 1997, KIW and its stockholders (the "Stockholders")
         consummated an acquisition agreement with Big Tex Enterprises, Inc.
         ("Big Tex"), an inactive public shell with no recent operations at that
         time, whereby the shareholders sold all of their preferred and common
         stock, which represented 100% of KIW's issued and outstanding capital
         stock, to Big Tex in exchange for 1,300,000 shares (300,000 common,
         1,000,000 preferred) of Big Tex's restricted stock, representing 66.67%
         of the issued and outstanding common stock and 100% of the issued and
         outstanding preferred stock of Big Tex, aggregating 75% of the total
         voting rights (the "Exchange"). Big Tex was founded in 1991 for the
         purpose of lawful business or enterprise, but had been inactive since
         1991. Immediately following the exchange, Big Tex changed its name to
         Kanakaris Communications, Inc., which was subsequently changed to
         Kanakaris Wireless.

         Generally accepted accounting principles require that a company whose
         stockholders retain the majority interest in a combined business be
         treated as the acquiror for accounting purposes. Accordingly, the Big
         Tex acquisition was accounted for as an acquisition of Big Tex by KIW
         and a recapitalization of KIW.

         On March 15, 2002, the Company formed a new corporation called FFM
         Acquisition Corp. On April 8, 2002, this corporation acquired, for a
         cost of up to $516,000, the assets and certain liabilities of a
         distributor of video products for both major motion picture studios and
         independent producers. In April 2002, FFM Acquisition Corp. amended its
         articles of incorporation to change its name to Fast Forward Marketing,
         Inc.

                                      F-9





<PAGE>

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

         (D) PRINCIPLES OF CONSOLIDATION
         -------------------------------

         The accompanying condensed consolidated financial statements include
         the accounts of the Company, and its wholly owned subsidiaries
         Kanakaris Internetworks Inc., Desience Corporation, and Fast Forward
         Marketing, Inc. (formerly known as FFM Acquisition, Corp.). All
         significant intercompany balances and transactions have been eliminated
         in consolidation. Desience has been classified as a discontinued
         operation, and the prior year's information has been restated to
         account for this classification.

         (E) EARNINGS PER SHARE
         ----------------------

         Earnings (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.

2.       NOTES RECEIVABLE
         ----------------

         At June 30, 2002, notes receivable consisted of the following:

                 Russ Bassett Corp                                    $ 125,000
                 Hackman                                                158,000
                 Greenwood & Hall                                       300,000
                                                                      ----------
                                                                        583,000
                 Less allowance for doubtful accounts                  (458,000)
                                                                      ----------

                                                                      $ 125,000
                                                                      ==========

         The note receivable from Russ Bassett Corp. is receivable in monthly
         installments of $25,000, and $75,000 was received in the three months
         ended June 30, 2002. No payments were received in the quarter from
         Hackman or Greenwood & Hall (interest bearing at 10%). Interest income
         of approximately $18,000 has been accrued in the nine months ended June
         30, 2002.

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

         (A) LEGAL ACTIONS
         -----------------

         Dataview Consoles, Inc., dba Swanson Engineering & Manufacturing
         Company, entered into a settlement agreement with the Company in 2001
         under which the Company and Desience agreed to pay twelve monthly
         installments of $3,500. As of June 30, 2002, all required payments had
         been made under this agreement.

                                      F-10





<PAGE>

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

         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 June 30, 2002, no further action had been taken by
         either Loudeye or the Company.

         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 June 30, 2002, $41,000 was charged
         to operations under this agreement.

4.       REVOLVING LINE OF CREDIT
         ------------------------

         On February 25, 1999, the Company entered into a Revolving Line of
         Credit Agreement ("the Agreement") with Alliance Equities, Inc.
         ("Alliance"), a Florida-based venture capital firm. Under the terms of
         the Agreement, as amended to date, Alliance will make available through
         December 30, 2003, a $7,000,000 revolving line of credit with interest
         on the unpaid principal at 10% per annum. Under the terms of the
         Agreement, the Company may draw up to $500,000 per month on the total
         line of credit upon written request by the Company to Alliance.
         Additionally, the parties have agreed that any portion of the
         indebtedness may be paid back by the Company either in cash or by the
         issuance of common stock. Furthermore, in a separate Memorandum of
         Agreement the two parties agreed that Alliance will provide ongoing
         consulting services to the Company including, but not limited to,
         strategic growth advice and introductions, marketing advice, and
         business ideas. Alliance will be compensated for these services at the
         option of the Company either in cash, or through the issuance of common
         stock or credit towards the purchase of common stock. As of June 30,
         2002, no amounts were outstanding under this line of credit, and the
         Company had issued to Alliance 80,000 shares of common stock valued at
         approximately $554,000 for these services since 1999.

                                      F-11





<PAGE>

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

5.       DEBENTURE INVESTORS
         -------------------

         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.

         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.

         Also, in order to provide working capital and financing for the
         Company's expansion, 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 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.

         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 $1.00 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%.

                                      F-12





<PAGE>

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

         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 1,350,000 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.

         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.

         On May 6, 2002, the Company increased the indebtedness on 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.

         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
         trading days immediately preceding conversion.

         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 $1.00 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.

         As of June 29, 2001, 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, 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.

                                      F-13





<PAGE>

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

         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.

         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 $1.00 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.

         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.

                                      F-14





<PAGE>

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

         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.

         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.

         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
         $736,400 for the nine months ended June 30, 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.

         The Company recorded financing costs of approximately $157,100 for the
         nine months ended June 30, 2002 in connection with the repricing of
         existing debentures and warrants that occurred as a result of the
         January 2002 debenture offering.

         During the nine months ended June 30, 2002, the Company issued an
         aggregate of 2,644,438 shares of common stock to five accredited
         investors in connection with regular interest payments and upon
         conversion of an aggregate of $168,000 of principal plus accrued
         interest of approximately $63,000 on the Company's convertible
         debentures.

         As of June 30, 2002, the Company was indebted for an aggregate of
         $3,413,100 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.

                                      F-15





<PAGE>

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

         On January 5, 2002, approximately $185,000 of convertible debentures
         matured. On March 9, 2002 and on May 1, 2002, approximately $440,000
         and $1,480,000, respectively, of convertible debentures matured.
         Further, on June 29, 2002, approximately $625,000 of convertible
         debentures matured. The Company is in the process of registering a
         portion of the shares of common stock underlying certain of these
         debentures to satisfy these obligations upon conversion by the
         debenture holders of these 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 repayment of the debentures identified above
         and in the making of quarterly interest payments for the last three
         quarters, and for part of the quarter ended September 30, 2001, on the
         Company's outstanding convertible debentures.

6.       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 June 30, 2002, the full
         amount of these promissory notes remained outstanding.

7.       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
         Forwarding Marketing subsidiary which was issued to Bristol Capital 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 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 June 30, 2002, all
         900 shares of the Company's Series B Convertible Preferred Stock
         remained outstanding.

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

         A. DEBENTURE INVESTORS
         ----------------------

         During the nine months ended June 30, 2002, the Company issued an
         aggregate of 2,644,438 shares of common stock having a fair value of
         approximately $231,000 to various debenture investors representing the
         conversion of principal and interest.

         B. LEGAL AND CONSULTING
         -----------------------

         (i)      On April 2, 2002, the Company issued 300,000 shares of common
                  stock for consulting services having a fair value of $25,500.

         (ii)     On June 7, 2002, the Company issued 1,380,000 shares of common
                  stock for consulting services having a fair value of $41,400.

                                      F-16





<PAGE>

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

         C. SETTLEMENT AGREEMENT
         -----------------------

         On December 3, 2001, the Company entered into a settlement agreement
         with a former officer in satisfaction of certain claims, and issued
         125,000 shares of common stock having a fair market value of $46,875,
         62,500 of which shares are covered by registration rights. During the
         three months ended June 30, 2002, an additional 160,000 shares of
         common stock were issued to that former officer having a fair market
         value of $4,800.

9.       ADJUSTMENTS TO OUTSTANDING SECURITIES
         -------------------------------------

         In January 2002, the Company 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 Company's
         April 2000 offering was amended to be the lesser of $0.055 and 50% of
         the average of the lowest three intraday trading prices during the
         twenty 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 average of
         the lowest three intraday trading prices during the twenty 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.

10.      SEGMENT INFORMATION
         -------------------

         For the nine months ended June 30:
<TABLE>
<CAPTION>

                                            Internet       Film
                    2001                    Commerce    Distribution     Total
         -------------------------------   ----------   ------------  -----------
         <S>                              <C>           <C>           <C>
         Revenues                         $ 1,147,847   $     --      $ 1,147,847
         Segment profit (loss)             (7,135,603)        --       (7,135,603)
         Total assets                       1,459,891         --        1,459,891
         Additions to long-lived assets        17,824         --           17,824
         Depreciation and amortization        109,440         --          109,440

                                            Internet       Film
                    2002                    Commerce    Distribution     Total
         -------------------------------   ----------   ------------  -----------

         Revenues                         $    45,341   $   303,355   $   348,696
         Segment profit (loss)             (4,207,485)     (141,206)   (4,348,691)
         Total assets                         775,086       852,756     1,627,842
         Additions to long-lived assets         --          735,358       735,358
         Depreciation and amortization         89,425         9,396        98,821

                                      F-17





<PAGE>

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

         For the three months ended June 30:

                                            Internet       Film
                    2001                    Commerce    Distribution     Total
         -------------------------------   ----------   ------------  -----------

         Revenues                         $   369,383   $     --      $   369,383
         Segment profit (loss)             (2,904,216)        --       (2,904,216)
         Total assets                       1,459,891         --        1,459,891
         Additions to long-lived assets         4,070         --            4,070
         Depreciation and amortization         37,090         --           37,090

                                            Internet       Film
                    2002                    Commerce    Distribution     Total
         -------------------------------   ----------   ------------  -----------

         Revenues                         $    13,753   $   303,355   $   348,696
         Segment profit (loss)             (1,116,424)     (141,206)   (1,257,630)
         Total assets                         775,086       852,756     1,627,842
         Additions to long-lived assets         --          735,358       735,358
         Depreciation and amortization         29,390         9,396        38,786

</TABLE>

11.      RELATED PARTY TRANSACTIONS
         --------------------------

         During the nine months ended June 30, 2002, the Company issued
         5,130,000 shares of its common stock to officers, directors and related
         party consultants, having an aggregate fair market value of $631,600.
         During this period, the Company also loaned $36,000 at an annual
         interest rate of 5% to an officer and director. The loan and all
         accrued and unpaid interest was payable five years following the date
         of the loan. As of June 30, 2002, the full amount of this loan was
         offset against deferred compensation owed that officer.

12.      DISCONTINUED OPERATIONS
         -----------------------

         On March 4, 2002, the Company sold substantially all of the assets and
         business of its Desience division. The purchase price was $250,000,
         with $50,000 paid at closing and $25,000 per month to be paid over a
         period of eight months following the closing. In addition, if a certain
         pending sales transaction closes in 2002, the Company may receive up to
         an additional $100,000. Included in the loss from discontinued
         operations at June 30, 2002, is the write-off of goodwill associated
         with our Desience division of approximately $337,000.

         The following is included in the loss from discontinued operations for
         the nine months ended June 30, 2002:

                Sales                                                 $ 216,139
                Cost of sales                                           139,304
                                                                      ----------

                Gross profit                                             76,835

                Operating expenses                                      (92,501)
                Other income                                             22,728
                                                                      ----------

                Income before discontinued operations                     7,062
                Gain on sale of business assets                         247,301
                Write-off of remaining goodwill                        (337,052)
                                                                      ----------

                Loss from discontinued operations                     $ (82,689)
                                                                      ==========

                                      F-18





<PAGE>

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

13.      ACQUISITION OF FAST FORWARD MARKETING
         -------------------------------------

         On March 15, 2002, the Company formed a new corporation called FFM
         Acquisition Corp. On April 8, 2002, this corporation acquired, for a
         cost of up to $516,000, certain assets and liabilities of a distributor
         of video products for both major motion picture studios and independent
         producers. In April 2002, FFM Acquisition Corp. amended its articles of
         incorporation to change its name to Fast Forward Marketing, Inc.

         The purchase price allocation recorded for the acquisitions of certain
         assets and liabilities of Fast Forward Marketing, Inc., approximates
         the following:

                 Accounts receivable                                  $ 610,000
                 Inventory                                               29,000
                 Fixed assets                                            72,000
                 Other current assets                                     1,000
                                                                      ----------
                          Total assets                                  712,000
                 Liabilities assumed:
                      Accounts payable and accrued expenses             854,000
                                                                      ----------

                 Excess of liabilities assumed over assets acquired     142,000
                 Purchase price                                         516,000
                                                                      ----------

                 Goodwill                                             $ 658,000
                                                                      ==========

         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
         Forwarding Marketing subsidiary which was issued to Bristol Capital 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 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.

14.      DEBENTURE MATURITIES
         --------------------

         On January 5, 2002, approximately $185,000 of convertible debentures
         matured. On March 9, 2002 and on May 1, 2002, approximately $440,000
         and $1,480,000, respectively, of convertible debentures matured.
         Further, on June 29, 2002, approximately $625,000 of convertible
         debentures matured. The Company is in the process of registering a
         portion of the shares of common stock underlying certain of these
         debentures to satisfy these obligations upon conversion by the
         debenture holders of these 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 repayment of the debentures identified above
         and in the making of quarterly interest payments for the last three
         quarters, and for part of the quarter ended September 30, 2001, on the
         Company's outstanding convertible debentures.

15.      SUBSEQUENT EVENTS
         -----------------

         On July 11, 2002, we entered into a private placement transaction with
         one accredited investor in which we committed to issue 2,500,000
         shares of common stock in exchange for $27,500 in cash.

                                      F-19





<PAGE>

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

         The following discussion and analysis should be read with our condensed
consolidated financial statements and notes to condensed consolidated financial
statements included elsewhere in this document. This document and our condensed
consolidated financial statements and notes to condensed consolidated financial
statements contain forward-looking statements, which generally include the plans
and objectives of our management for future operations, including plans and
objectives relating to our future economic performance and our current beliefs
regarding revenues we might earn if we are successful in implementing our
business strategies. The forward-looking statements and associated risks may
include, relate to or be qualified by other important factors, including,
without limitation:

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

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

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

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

         We do not undertake to update, revise or correct any forward-looking
statements.

         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," "Use of Proceeds," "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.

         The information contained in this document is not a complete
description of our business or the risks associated with an investment in our
common stock. Before deciding to buy or maintain a position in our common stock,
you should carefully review and consider the various disclosures we made in this
report and in our other materials filed with the Securities and Exchange
Commission that discuss our business in greater detail and that disclose various
risks, uncertainties and other factors that may affect our business, results of
operations or financial condition.

         Any of the factors described above or in the "Risk Factors" section
below could cause our financial results, including our net income (loss) or
growth in net income (loss) to differ materially from prior results, which in
turn could, among other things, cause the price of our common stock to fluctuate
significantly.

                                       3





<PAGE>

OVERVIEW

         We provide online delivery of 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 also operate a video distribution business in which we distribute films and
features in VHS and DVD formats to retailers through our Fast Forward Marketing,
Inc. 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 video distribution
business. We expect to continue to place significant emphasis upon the
further development and expansion of our content 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.kanakaris.com online movie and book website. This
website includes CinemaPop, which offers online and on-demand 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
$513,136 (30%) of our revenues for the year ended September 30, 2001 and
contributed $591,244 (96%) 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. The Desience
Division would have contributed $216,139 to our revenues for the nine months
ended June 30, 2002 had it not been sold and reported in our financial
statements for the quarterly period ended June 30, 2002 as a discontinued
operation. The Desience Division also would have generated $76,835 in gross
profit for the nine months ended June 30, 2002 had it not been sold and reported
in our financial statements for the quarterly period ended June 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 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 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., a
California corporation. We intend to further expand into the video distribution
market and integrate this new aspect of our business with our existing products
and services.

                                       4





<PAGE>


         We believe that the acquisition of FFM will enable us to significantly
increase our revenues and provide funds to develop and grow our content delivery
and e-commerce activities. In addition, we believe that FFM is a viable
strategic fit for our existing business activities and plan to integrate FFM
with our existing business activities to the extent practicable. We currently
offer for purchase directly over the internet to visitors to our various
websites videos that FFM distributes. In addition, we believe that FFM's
connections within the movie industry may ultimately allow us important access
to major motion picture and independent producers who may be ideal suppliers of
additional content for our online content delivery activities.

         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 the financial statements and notes to financial statements for the
quarterly period and nine months ended June 30, 2002 included elsewhere in this
document, the annualized net sales and gross profit of our Fast Forward
Marketing 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 Fast Forward Marketing 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 Fast
Forward Marketing video distribution largely resulting from our lack of
available financial resources.

         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, specifically over the
next nine 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 June 30,
2002, FFM had approximately $823,000 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 negative impact on our video distribution
business.

         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 operate our FFM business and conduct our other business activities.

RESULTS OF OPERATIONS

     COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
     JUNE 30, 2002 AND 2001

         NET SALES. Net sales decreased $52,275 (14%) from $369,383 for the
quarter ended June 30, 2001 to $317,108 for the quarter ended June 30, 2002.
This decrease was primarily due to a decrease in advertising revenue generated
from our web sites and from the discontinuance of the operations of our Desience
Division. Our advertising revenue decreased by $250,000 (100%) and the
discontinuance of the operations of our Desience Division due to its sale
resulted in a net sales decrease of $46,135 from the prior period. The decline
in our advertising revenue was the result of our single source of advertising
revenues not placing any additional advertisements on our websites. We expect
that the decline in advertising revenues will continue for at least the next
twelve months given our present focus on generating revenues through our
Internet commerce activities, our video distribution business and subscription
and pay-per-view fees in connection with our content delivery websites. The
decline in our advertising revenues did not result in any significant reduction
in available resources because the advertising revenues we generated were paid
for through the issuance of restricted capital stock of our advertising client,
which stock we were unable to liquidate. Any revenue we may have received from
this advertising client likely also would have been paid for through the
issuance of the client's restricted capital stock.

         GROSS PROFIT. Gross profit decreased $176,703 (68%) from a gross profit
of $260,174 for the quarter ended June 30, 2001 to a gross profit of $83,471 for
the quarter ended June 30, 2002. This decrease in gross profit was due primarily
to the decrease in net sales noted above and excludes any gross profit otherwise
reportable as a result of our data control console business, which business is
treated as a discontinued operation for the quarter ended June 30, 2002.

                                       5





<PAGE>

         OPERATING EXPENSES. Total operating expenses decreased $194,612 (14%)
from $1,384,051 for the quarter ended June 30, 2001 to $1,189,439 for the
quarter ended June 30, 2002. This decrease in total operating expenses was due
primarily to a decrease in executive compensation, consulting services and
marketing, advertising and investor relations costs and expenses, with executive
compensation expenses decreasing by $124,653 (27%), consulting services expenses
decreasing by $39,610 (11%), and marketing, advertising and investor relations
costs decreasing by $53,764 (78%) over the prior period.

         Marketing, advertising and investor relations costs decreased $53,764
(78%) from $68,646 for the quarter ended June 30, 2001 to $14,882 for the
quarter ended June 30, 2002, primarily due to our decreased investor relations
costs. This decrease had no noticeable effects on our business. Some of the
marketing, advertising and investor relations costs were reduced as a result of
the increase in the duties and responsibilities of management and other
employees.

         Executive compensation decreased $124,653 (27%) from $460,535 for the
quarter ended June 30, 2001 to $335,882 for the quarter ended June 30, 2002,
primarily due to the decrease in the issuance of common stock to executives as
cash compensation. Salaries increased $17,694 (19%) from $95,116 for the quarter
ended June 30, 2001 to $112,810 for the quarter ended June 30, 2002 due to
increases in staff, with staff increasing by five persons. The operation of our
newly acquired FFM video distribution business necessitated the increase in
staff.

         Consulting services expenses decreased $39,610 (11%) from $348,745 for
the quarter ended June 30, 2001 to $309,135 for the quarter ended June 30, 2002.
The decrease in consulting services expenses resulted from the decline in our
engagement of the services of outside consultants relating to acquisitions and
business strategies not already rendered by company employees. Other than a
decrease in expenses, there were no noticeable effects resulting from the fewer
consulting services. For the quarter ended June 30, 2002, some of the services
previously handled by outside consultants were rendered by management and other
employees as a result of the increase in their regular duties and
responsibilities.

         An aggregate of $556,356 of the total operating expenses for the
quarter ended June 30, 2002, as compared to $520,746 of the total operating
expenses for the quarter ended June 30, 2001, were paid through the issuance of
shares of our common stock to the service provider. For each of the issuances of
our common stock for 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.

         INTEREST AND OTHER EXPENSE. Interest and other expense decreased
$1,628,677 (91%) from $1,780,339 for the quarter ended June 30, 2001 to $151,662
for the quarter ended June 30, 2002. This decrease in interest and other expense
was due to the decrease 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 $1,698,884 (57%) from $2,962,339 for the
quarter ended June 30, 2001 to $1,263,455 for the quarter ended June 30, 2002.
This decrease in net loss was primarily due to the decrease in interest and
other expense, as discussed above.

     COMPARISON OF RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
     JUNE 30, 2002 AND 2001

         NET SALES. Net sales decreased $799,151 (70%) from $1,147,847 for the
nine months ended June 30, 2001 to $348,696 for the nine months ended June 30,
2002. This decrease was primarily due to a decrease in advertising revenue
generated from our web sites and from the discontinuance of the operations of
our Desience Division. Our advertising revenue decreased by $1,000,000 (100%)
and the discontinuance of the operations of our Desience Division due to its
sale resulted in a net sales decrease of $216,139 from the prior period. The
decline in our advertising revenue was the result of our single source of
advertising revenues not placing any additional advertisements on our websites.
We expect that the decline in advertising revenues will continue for at least
the next twelve months given our present focus on generating revenues through
our Internet commerce activities, our video distribution business and
subscription and pay-per-view fees in connection with our content delivery
websites. The decline in our advertising revenues did not result in any
significant reduction in available resources because the advertising revenues we
generated were paid for through the issuance of restricted capital stock of our
advertising client, which stock we were unable to liquidate. Any revenue we may
have received from this advertising client likely also would have been paid for
through the issuance of the client's restricted capital stock.

                                       6

<PAGE>

         GROSS PROFIT. Gross profit decreased $811,134 (90%) from a gross profit
of $900,706 for the nine months ended June 30, 2001 to a gross profit of $89,572
for the nine months ended June 30, 2002. This decrease in gross profit was due
primarily to the decrease in net sales noted above and excludes any gross profit
otherwise reportable as a result of our data control console business, which
business is treated as a discontinued operation for the nine months ended June
30, 2002.

         OPERATING EXPENSES. Total operating expenses decreased $1,902,292 (38%)
from $5,023,848 for the nine months ended June 30, 2001 to $3,121,556 for the
nine months ended June 30, 2002. This decrease in total operating expenses was
due primarily to a decrease in executive compensation, consulting services, and
marketing, advertising and investor relations costs, with executive compensation
expenses decreasing by $374,756 (31%), consulting services expenses decreasing
by $596,909 (37%), and marketing, advertising and investor relations costs
decreasing by $549,382 (89%) over the prior period.

         Marketing, advertising and investor relations costs decreased $549,382
(89%) from $616,903 for the nine months ended June 30, 2001 to $67,521 for the
nine months ended June 30, 2002, primarily due to our decreased investor
relations costs. This decrease had no noticeable effect on our business. Some of
the marketing, advertising and investor relations costs were reduced as a result
of the increase in the duties and responsibilities of management and other
employees.

         Executive compensation decreased $374,756 (31%) from $1,223,585 for the
nine months ended June 30, 2001 to $848,829 for the nine months ended June 30,
2002, primarily due to the decrease in the issuance of common stock to
executives as cash compensation. Salaries decreased $146,745 (52%) from $281,764
for the nine months ended June 30, 2001 to $135,019 for the nine months ended
June 30, 2002. Staff decreased as a result of the sale of our Desience division
but increased as a result of the acquisition of our FFM video distribution
business.

         Consulting services expenses decreased $596,909 (37%) from $1,602,934
for the nine months ended June 30, 2001 to $1,006,025 for the nine months ended
June 30, 2002. The decrease in consulting services expenses resulted from a
decline in the engagement of the services of outside consultants relating to
acquisitions and business strategies not already rendered by company employees.
Other than a decrease in expenses, there were no noticeable effects resulting
from the decline in consulting services. For the nine months ended June 30,
2002, some of the services previously handled by outside consultants were
rendered by management and other employees as a result of the increase in their
regular duties and responsibilities.

         An aggregate of $1,551,902 of the total operating expenses for the nine
months ended June 30, 2002, as compared to $2,329,740 of the total operating
expenses for the nine months ended June 30, 2001, were paid through the issuance
of shares of our common stock to the service provider. For each of the issuances
of our common stock for 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.

         INTEREST AND OTHER EXPENSE. Interest and other expense decreased
$1,684,105 (56%) from $3,000,812 for the nine months ended June 30, 2001 to
$1,316,707 for the nine months ended June 30, 2002. This decrease in interest
and other expense was due to the decrease 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 $2,704,223 (38%) from $7,135,603 for the
nine months ended June 30, 2001 to $4,431,380 for the nine months ended June 30,
2002. This decrease in net loss was primarily due to decreased operating
expenses and interest and other expense, as discussed above.

LIQUIDITY AND CAPITAL RESOURCES

         We currently finance our operations primarily through private
placements of securities and revenue generated from our operations. We also have
available to us a $7,000,000 revolving line of credit from Alliance Equities
that can be drawn upon by us for up to $500,000 per month, with interest to
accrue at the rate of 10% per annum. However, during the fiscal year ended
September 30, 2001 and through August 13, 2002, no amounts were outstanding
under the line of credit.

                                       7

<PAGE>

         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 June 30, 2002, an aggregate of
$261,000 of principal plus related interest was outstanding under these
debentures, including $70,000 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 June 30, 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
195,000 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 June 30, 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 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 June 30, 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
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 w ere 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.

                                       8





<PAGE>

         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 the registration
statement of which this prospectus is a part. However, the investor is not
committed to purchase the additional debentures. None of the shares underlying
any of the convertible debentures or warrants that the investor has the option
to purchase are registered for resale under the registration statement of which
this prospectus is a part. As of June 30, 2002, an aggregate of $200,000 of
principal plus related interest was outstanding under these debentures.

         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 June 30, 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 Fast Forward Marketing subsidiary which was issued to
Bristol Capital in consideration for providing the opportunity to acquire the
Fast Forward Marketing business. Each share of our Series B Convertible
Preferred Stock has a stated value of $1,000 and is 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 May 4, 2002, we entered into a private placement transaction with
one accredited investor in which we committed to issue 714,285 shares of common
stock in exchange for $30,000 in cash.

         On July 11, 2002, we entered into a private placement transaction with
one accredited investor in which we committed to issue 2,500,000 shares of
common stock in exchange for $27,500 in cash.

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

         As of June 30, 2002, we had a working capital deficiency of $5,369,527
and an accumulated deficit of $34,996,285 As of that date, we had approximately
$23,000 in cash, $243,000 in accounts receivable, $49,000 of interest
receivable, and $161,000 in notes receivable. We had accounts payable and
accrued expenses of approximately $2,029,000 and outstanding convertible
debentures and convertible promissory notes of approximately $3,786,000
including convertible debentures and notes issued prior to the beginning of
fiscal year 2002. 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 $363,275 for the nine
months ended June 30, 2002 as compared to $2,050,645 for the nine months ended
June 30, 2001. Cash provided by our investing activities totaled $535,828 for
the nine months ended June 30, 2002 as compared to cash provided by our
investing activities of $232,308 for the nine months ended June 30, 2001.

                                       9





<PAGE>

         Cash provided by our financing activities totaled $870,720 for the nine
months ended June 30, 2002 as compared to $1,204,900 for the nine months ended
June 30, 2001. We raised $625,500 of the cash provided by our financing
activities during the nine months ended June 30, 2002 and $1,109,900 of the cash
provided by our financing activities during the nine months ended June 30, 2001
from the issuance of convertible debentures.

         For the quarter ended June 30, 2002, we had net sales of approximately
$317,000 and a net loss of approximately $1,263,000 of which loss $556,356 (44%)
consisted of non-cash expenses. These non-cash expenses included $503,681 of
compensation, marketing and professional services expenses incurred in exchange
for common stock.

         At January 5, 2002, we were in default in the repayment of principal of
approximately $185,000 plus related interest on 12% Convertible Debentures due
January 5, 2002. At March 9, 2002, we were in default in the repayment of
principal of approximately $439,000 plus related interest on 12% Convertible
Debentures due March 9, 2002. At May 1, 2002, we were in default in the
repayment of principal of approximately $1,480,000 plus related interest on 10%
Convertible Debentures due May 1, 2002. At June 29, 2002 we were in default in
the repayment of principal of approximately $625,000 plus related interest on
12% Convertible Debentures due June 29, 2002. As of August 13, 2002, each of
these defaults was continuing. As of August 13, 2002, we were in default under
convertible debentures in the aggregate principal amount of $2,692,625 plus
related interest on those debentures. At August 13, 2002, we also were in
default under our obligations to register for resale shares of our common stock
underlying all of our outstanding convertible debentures. In addition, at August
13, 2002, 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 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.

         As of August 13, 2002, we had a total of 18,385,517 shares of common
stock outstanding, the closing sale price of a share of our common stock on the
OTC Bulletin Board(R) was $0.03, and the debentures, notes, warrants and shares
of preferred stock with variable conversion or exercise prices were convertible
or exercisable into approximately 500,000,000 shares of common stock. The
applicable conversion price of our debentures issued to certain of the selling
security holders identified in this prospectus 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 August 13, 2002, the
principal portions of our convertible debentures were convertible into an
aggregate of approximately 377,000,000 shares of common stock. 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 503,000,000 shares of common stock. 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 754,000,000 shares of common
stock. 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 1,508,000,000 shares of
common stock. Our current authorized capital authorizes us to issue a maximum of
250,000,000 shares of common stock.

         As a result of conversions of the principal or interest portion of our
convertible debentures and related sales of our common stock, 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. Existing stockholders could, therefore,
experience substantial dilution of their investment as a result of the
conversion of the principal or interest portions of our convertible debentures.

                                       10





<PAGE>

         Our successful operation of our video distribution business,
specifically over the next nine 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 June 30, 2002, FFM had approximately $823,000
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 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 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
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 $1,000,000 to pursue and implement our planned business
operations.

         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.

                                       11

<PAGE>

         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 are also
working on the launch of an interactive personal meeting place within our
websites that will allow users to send and receive video messages and to use
on-line 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 and e-commerce business activities.

                                       12
<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
     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 June 30, 2002, we had
an accumulated deficit of approximately $35,000,000 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.

     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 June 30, 2002, our current assets amounted to approximately
$559,000 and our current liabilities amounted to approximately $5,928,000 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 the
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.

         Our successful operation of our Fast Forward Marketing video
distribution business, or FFM, especially over the next nine 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 June 30, 2002, FFM had approximately $823,000
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 negative impact on our business, prospects,
financial condition and results of operations.

         Historically, we have relied upon cash from financing activities and
revenues generated from operations to fund all of the cash requirements of our
activities. However, we have never generated revenues substantial enough to
allow us to fully finance our growth or our business. 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 also may cause us to be unable
to raise 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. Our failure to secure additional
funding may have a material adverse effect on our business, prospects, financial
condition and results of operations.

                                       13

<PAGE>

     WE NEED AND MAY BE UNABLE TO OBTAIN ADDITIONAL FUNDING ON SATISFACTORY
     TERMS, WHICH COULD DILUTE OUR STOCKHOLDERS OR IMPOSE BURDENSOME FINANCIAL
     RESTRICTIONS ON OUR BUSINESS.

         Historically, we have relied upon cash from financing activities and
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 six months of operations with currently available capital resources. In
addition, over the next twelve months, we believe that we will require at least
$1,000,000 to pursue and implement our planned business operations.

         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
Kanakaris Wireless. Future financing may not be available on a timely basis, in
sufficient amounts or on terms acceptable to us. Any financing we are able to
obtain may also significantly dilute existing stockholders' equity. Any debt
financing or other financing of securities senior to common stock 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
and results of operations because we could lose any existing sources of funding
and impair our ability to secure new sources of funding.

     WE RELY HEAVILY ON OUR KEY EMPLOYEES, AND THE LOSS OF THEIR SERVICES COULD
     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 could 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
Electronic Commerce(TM) technology, could benefit from patent protection.
Accordingly, we intend to 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.

                                       14

<PAGE>

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

                                       15

<PAGE>

     OUR FAILURE TO MANAGE GROWTH EFFECTIVELY COULD IMPAIR OUR BUSINESS.

         Our business strategy, including our strategy concerning our recently
acquired video distribution business, envisions a period of rapid growth that
may put a strain on our administrative and operational resources. With our new
video distribution business and our new focus on subscription and pay-per-view
services to our websites, we are planning for rapid growth. Our upper management
does not have significant experience with video distribution or in operating
wholly subscription- or pay-per-view-based websites. Because of this lack of
significant experience, we may be unable to effectively manage our growth. Our
ability to effectively manage growth will require us to continue to expand the
capabilities of our operational and management systems and to attract, train,
manage and retain qualified managers, engineers, technicians, salespersons and
other personnel. There can be no assurance that we will be able to do so,
particularly if our losses continue and we are unable to obtain sufficient
financing , because we will not be able to attract, train, manage and retain
satisfactory personnel due to our lack of available resources.

         Our video distribution business in particular 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, 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 further
growing or maintaining growth. If we are unable to successfully manage our
growth, 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 un certain 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.

                                       16





<PAGE>

     COMPETITION AMONG VIDEO DISTRIBUTORS IS INTENSE, AND MANY OF OUR
     COMPETITORS ENJOY A COMPETITIVE 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 conduct 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
     MARKET 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
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.

                                       17





<PAGE>


     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 NASD's 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 August 13, 2002, we
had a total of 18,385,517 shares of common stock outstanding, the closing sale
price of a share of our common stock on the OTC Bulletin Board(R) was $0.03, and
the debentures, notes, warrants and shares of preferred stock with variable
conversion or exercise prices were convertible or exercisable into approximately
500,000,000 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.

                                       18





<PAGE>

         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. The following table sets forth the number of
shares issuable upon conversion of the principal portion of the debentures
issued to certain security holders and outstanding as of August 13, 2002, based
upon the indicated hypothetical trading prices:

                                          Number of        Percentage of
          Hypothetical     Conversion       Shares          Company's
         Trading Price     Price (1)     Issuable (2)    Common Stock (3)
         -------------     ----------    ------------    ----------------

            $0.020          $.0100        339,262,500         94.86%

            $0.015          $.0075        452,350,000         96.09%

            $0.010          $.0050        678,525,000         97.36%

            $0.005          $.0025        1,357,050,000       98.66%

      _______________
         (1) 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 $0.035, depending on the
particular debenture. As of August 13, 2002, the applicable conversion price was
$0.009.

         (2) Our current authorized capital allows us to issue a maximum of
250,000,000 shares of common stock.

         (3) Amounts are based on 18,385,517 shares of our common stock
outstanding as of August 13, 2002 plus the corresponding number of shares
issuable. 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 August 13, 2002 and based on the conversion price of approximately $0.009
per share, 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 965,600
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 2,040,500 shares of our common stock as a result of the 9.99%
limitation.

         The security holders who hold our convertible debentures may elect to
receive payment for accrued and unpaid interest on certain of our convertible
debentures in shares of our common stock based on the conversion price and on
the same terms described above with respect to conversions of the principal
portion of these debentures. 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.

                                       19





<PAGE>

     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
eng age 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 quarter
ended June 30, 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 $0.115 and $0.02, respectively. The trading
prices of our common stock could experience wide fluctuations in the future in
response to:

         o        quarter-to-quarter variations in our operating results;
         o        material announcements of technological innovations;
         o        establishment of strategic partnerships by us or our
                  competitors or providers of alternative products and
                  services;
         o        general conditions in the Internet and e-commerce
                  industries; or
         o        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
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.

                                       20





<PAGE>

     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>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         Dataview Consoles, Inc., a California corporation dba Swanson
Engineering & Manufacturing Company, commenced an action against Kanakaris
Wireless and our subsidiary, Desience Corporation, in the Los Angeles Superior
Court (Case No. BC245203) on February 14, 2001. The complaint alleged that
Kanakaris and Desience owed Dataview $104,601 under several invoices for
equipment manufactured for Desience by Dataview in 1997. Concurrently with the
filing of the complaint, Dataview filed an application for a right to attach
order against Kanakaris and Desience to secure repayment of the debt alleged in
the complaint. Effective as of April 3, 2001, the parties to the dispute entered
into a settlement agreement under which Kanakaris and Desience paid Dataview
$63,584 and agreed to pay Dataview an additional $42,000 in twelve monthly
installments of $3,500 beginning May 1, 2001. The agreement provides that we
will be entitled to file a request for dismissal after we have made all of the
installment payments in accordance with the agreement. The agreement also
provides that Kanakaris and Desience, on the one hand, and Dataview and Nels
Swanson, on the other hand, shall all retain the unrestricted right to market,
sell, distribute and manufacture or have manufactured under their own respective
names all of the data control console products that Dataview had been
manufacturing for Desience. As of June 30, 2002, all payments had been made
under our settlement agreement with Dataview Consoles, Inc.

         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 and, as of
August 13, 2002, neither us nor Loudeye had taken any further action.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         In April 2002, we issued 300,000 shares valued at $25,500 to one
consultant as compensation for services rendered.

         In April 2002, we issued an aggregate of 1,065,767 shares of common
stock to three accredited investors upon conversion of an aggregate of
approximately $40,500 in principal plus related interest on our convertible
debentures.

         In April 2002, we issued an aggregate of 1,250,000 shares of common
stock valued at $100,000 to two directors and officers as compensation for
services rendered.

         In April 2002, we issued an aggregate of 200,000 shares of common stock
valued at $16,000 to one consultant and ten employees as compensation for
services rendered.

         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 Fast Forward Marketing subsidiary which was issued to
Bristol Capital in consideration for providing the opportunity to acquire the
Fast Forward Marketing business. Each share of our Series B Convertible
Preferred Stock has a stated value of $1,000 and is 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 May 4, 2002, we entered into a private placement transaction with
one accredited investor in which we committed to issue 714,285 shares of common
stock in exchange for $30,000 in cash.

         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.

         In May 2002, we issued an aggregate of 680,680 shares of common
stock to three accredited investors upon conversion of an aggregate of
approximately $17,000 in principal plus related interest on our convertible
debentures.

                                       22





<PAGE>

         In June 2002, we issued an aggregate of 1,500,000 shares of common
stock valued at $45,000 to two directors and officers as compensation for
services rendered.

         In June 2002, we issued an aggregate of 1,630,000 shares of common
stock valued at $48,900 to eight consultants and one employee as compensation
for services rendered.

         In June 2002, we issued 160,000 shares of common stock valued at $4,800
to one individual in settlement of a dispute.

         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.

                                       23





<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         At January 5, 2002, we were in default in the repayment of principal of
approximately $185,000 plus related interest on 12% Convertible Debentures due
January 5, 2002. At March 9, 2002, we were in default in the repayment of
principal of approximately $439,000 plus related interest on 12% Convertible
Debentures due March 9, 2002. At May 1, 2002, we were in default in the
repayment of principal of approximately $1,480,000 plus related interest on 10%
Convertible Debentures due May 1, 2002. At June 29, 2002 we were in default in
the repayment of principal of approximately $625,000 plus related interest on
12% Convertible Debentures due June 29, 2002. As of August 13, 2002, each of
these defaults was continuing. As of August 12, 2002, we were in default under
convertible debentures in the aggregate principal amount of $2,692,625 plus
related interest on those debentures. At August 12, 2002, we also were in
default under our obligations to register for resale shares of our common stock
underlying all of our outstanding convertible debentures. In addition, at August
12, 2002, 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 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 AND REPORTS ON FORM 8-K.

         (a)      Exhibits
                  --------

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

2.1               Amendment to Asset Purchase Agreement dated as of April 8,
                  2002 by and between the Registrant, FFM Acquisition Corp.,
                  Fast Forward Marketing, Inc. and Intervisual Books, Inc. (1)

3.1               Certificate of Designations, Preferences and Rights of Series
                  B Convertible Preferred Stock of Kanakaris Wireless (1)

10.1              Restated 12% Convertible Debenture due June 29, 2002 made by
                  the Registrant in favor of Alliance Equities, Inc. (2)

10.2              Letter Agreement dated May 4, 2002 between the Registrant and
                  the Hopkins Family Trust (2)

10.3              Security Agreement dated as of April 1, 2002 by and among the
                  Registrant and each of the secured parties identified therein
                  (1)

10.4              Exchange Agreement dated as of April 10, 2002 by and between
                  the Registrant and Bristol Capital, LLC (1)

10.5              Registration Rights Agreement dated as of April 10, 2002 by
                  and between the Registrant and Bristol Capital, LLC (1)

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

---------------
(1)      Filed as an exhibit to the Registrant's Form 8-K filed with the
         Securities and Exchange Commission on April 22, 2002 (File No. 0-28213)
         and incorporated herein by reference.
(2)      Filed as an exhibit to the Registrant's Form SB-2 filed with the
         Securities and Exchange Commission on May 9, 2002 (Registration
         No. 333-87908) and incorporated herein by reference.

         (b)      Reports on Form 8-K
                  -------------------

                  We filed a report on Form 8-K on April 22, 2002 in connection
with the acquisition of the assets of Fast Forward Marketing, Inc. effective
April 8, 2002. A copy of our related press release was included in that report.
The Form 8-K included "Item 2. Acquisition or Disposition of Assets," "Item 5.
Other Events" and "Item 7. Financial Statements and Exhibits."

                  We filed an amended report on Form 8-K/A on June 24, 2002 in
connection with the acquisition of the assets of Fast Forward Marketing, Inc.
effective April 8, 2002, which amended report was filed to include audited
financial statements of Fast Forward Marketing, Inc. and unaudited pro forma
financial information of the Registrant giving effect to the acquisition of Fast
Forward Marketing, Inc. The Form 8-K/A included "Item 2. Acquisition or
Disposition of Assets," "Item 5. Other Events" and "Item 7. Financial Statements
and Exhibits."

                                       25





<PAGE>

                                   SIGNATURES

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

                                 KANAKARIS WIRELESS

Dated: August 19, 2002           By: /S/ ALEX F. KANAKARIS
                                 --------------------------------------------
                                 Alex F. Kanakaris
                                 Chairman of the Board, Chief Executive Officer
                                 (Principal Executive Officer) and President

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

                                       26





<PAGE>

                                    EXHIBITS

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

    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