<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended June 30, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the transition period from _____ to _____

                        Commission file number 000-30701

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

                                     OZ.COM
             (Exact name of registrant as specified in its charter)


          California                                             95-4560875
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                                 Snorrabraut 54
                            IS-105 Reykjavik, Iceland
          (Address of principal executive offices, including zip code)

                               011 (354) 535-0000
              (Registrant's telephone number, including area code)


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

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                  Yes  [X]     No [ ]

     As of June 30, 2001, there were 90,339,596 shares of the registrant's
Common Stock outstanding.


<PAGE>   2

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I. FINANCIAL INFORMATION

     ITEM 1. FINANCIAL STATEMENTS

             Consolidated Balance Sheets at December 31, 2000 and
             June 30, 2001 (unaudited)                                        3

             Consolidated Statements of Operations (unaudited) for the
             three and six months ended June 30, 2000 and 2001                4

             Consolidated Statements of Cash Flows (unaudited) for the
             three and six months ended June 30, 2000 and 2001                5

             Consolidated Statements of Comprehensive Income (unaudited)
             for the three and six months ended June 30, 2000 and 2001        6

             Notes to Consolidated Financial Statements (unaudited)           7

     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
             AND RESULTS OF OPERATIONS                                        9

PART II. OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS                                               16

     ITEM 2. CHANGES IN SECURITIES                                           17

     ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                 17

     ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             17

     ITEM 5. OTHER INFORMATION                                               17

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                17

SIGNATURES                                                                   18


                                       2

<PAGE>   3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                             OZ.COM AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                      December 31,      June 30,
                                                         2000             2001
                                                     ------------     ------------
                                                                      (unaudited)
<S>                                                  <C>              <C>
Assets

Current assets:
     Cash and cash equivalents                       $  3,559,559     $  1,207,634
     Trade accounts receivable                             98,235          138,512
     Accounts receivable from shareholder               3,413,433        3,036,127
     Prepaid expenses and other current assets            530,777          441,620
                                                     ------------     ------------
         Total current assets                           7,602,004        4,823,893
Property and equipment, net                             3,879,161        4,362,401
License, net of accumulated amortization of
  $36,684 and $162,015                                    852,205          726,874
Goodwill, net of accumulated amortization of
  $448,505 and $2,001,023                              15,076,668       13,524,150
Other assets                                                   --          157,780
                                                     ------------     ------------
         Total assets                                $ 27,410,038     $ 23,595,098
                                                     ============     ============

Liabilities and Shareholders' Equity

Current liabilities:
     Trade accounts payable                          $    558,483     $    843,178
     Accrued liabilities                                1,111,304        1,272,697
     Current portion of deferred revenue                1,767,107        4,668,846
     Current portion of notes payable                      21,476           18,378
                                                     ------------     ------------
         Total current liabilities                      3,458,370        6,803,099

Notes payable                                             429,521          886,119
Deferred revenue                                        1,011,957          823,190
                                                     ------------     ------------
         Total liabilities                              4,899,848        8,512,408
                                                     ------------     ------------

Minority interest                                           8,489            3,488
Commitments and contingencies                                  --               --
Redeemable common stock, $0.01 par value                4,500,000        4,500,000

Shareholder's equity:
   Convertible preferred stock, $0.01 par value:
     25,000,000 shares authorized:
     14,680,964 and 14,270,964 shares issued
     and outstanding, respectively (liquidation
     value $14,270,964)                                17,079,446       16,546,446

   Common stock, $0.01 par value:
     275,000,000 shares authorized:
     89,479,596 and 90,339,596 shares issued and
     outstanding, respectively                            894,796          903,396
   Additional paid-in capital                          30,834,321       31,362,721
   Notes receivable from shareholders                    (353,900)        (353,900)
   Deferred stock-based compensation                   (4,032,567)      (3,163,974)
   Accumulated deficit including accumulated
     other comprehensive income of $667,810 and
     $1,111,061, respectively                         (26,420,395)     (34,715,487)
                                                     ------------     ------------
Total shareholders' equity                             18,001,701       10,579,202
                                                     ------------     ------------
Total liabilities and shareholders' equity           $ 27,410,038     $ 23,595,098
                                                     ============     ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                       3

<PAGE>   4

                             OZ.COM AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                        FOR THE THREE MONTHS            FOR THE SIX MONTHS
                                            ENDED JUNE 30,                 ENDED JUNE 30,
                                     ---------------------------     ---------------------------
                                         2000            2001           2000             2001
                                     -----------     -----------     -----------     -----------
<S>                                    <C>             <C>             <C>             <C>
REVENUES
     Development services              1,517,951       2,273,723       3,220,873       4,309,389
     Client services                          --          52,240              --          54,426
     License fees                         59,143          59,143         118,286         118,286
                                     -----------     -----------     -----------     -----------
         Total Revenues                1,577,094       2,385,106       3,339,159       4,482,101

COST OF REVENUES                       1,329,173       1,856,847       2,302,540       3,491,294
                                     -----------     -----------     -----------     -----------
GROSS PROFIT                             247,921         528,259       1,036,619         990,807

OPERATING EXPENSES
     Sales and marketing               1,400,800         644,353       2,046,957       1,743,457
     General and administrative
       (including stock-based
       compensation of $550,775,
       $432,984, $581,071 and
       $868,593                        1,845,302       3,235,538       3,042,845       6,363,336
     Research and development            547,129         586,430         778,988       1,428,425
                                     -----------     -----------     -----------     -----------
         Total operating expenses      3,793,231       4,466,321       5,868,790       9,535,218
                                     -----------     -----------     -----------     -----------
         Operating loss               (3,545,310)     (3,938,062)     (4,832,171)     (8,544,411)
                                     -----------     -----------     -----------     -----------
Interest income                          102,292          11,049         216,147          53,164
Interest expense                         (30,081)        (42,616)        (46,122)        (63,168)
Other income (expense) net              (512,213)        140,319        (601,263)       (205,873)
                                     -----------     -----------     -----------     -----------
     Loss before provision for
       income taxes and minority
       interest                       (3,985,312)     (3,829,310)     (5,263,409)     (8,760,288)
Income taxes                                  --                              --
Minority interest                             --          14,382              --          21,945
                                     -----------     -----------     -----------     -----------
     Net loss                        $(3,985,312)    $(3,814,928)    $(5,263,409)    $(8,738,343)
                                     ===========     ===========     ===========     ===========

NET LOSS PER SHARE:
     Basic                           $     (0.06)    $     (0.04)    $     (0.08)    $     (0.10)
                                     ===========     ===========     ===========     ===========
     Diluted                         $     (0.06)    $     (0.04)    $     (0.08)    $     (0.10)
                                     ===========     ===========     ===========     ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


                                       4

<PAGE>   5

                             OZ.COM AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                         FOR THE THREE MONTHS              FOR THE SIX MONTHS
                                                            ENDED JUNE 30,                   ENDED JUNE 30,
                                                     ----------------------------     ----------------------------
                                                         2000            2001             2000             2001
                                                     ------------     -----------     ------------     -----------
<S>                                                  <C>              <C>             <C>              <C>
Cash flows from operating activities:
  Net loss                                           $ (3,985,312)    $(3,814,928)    $ (5,263,409)    $(8,738,343)
  Adjustments to reconcile net loss to net
    cash provided by (used in) operating
    activities:
    Depreciation and amortization                         126,295       1,121,498          253,998       2,251,323
    Amortization of deferred stock-based
      compensation                                        550,775         432,984          581,071         868,593
    Minority interest                                          --         (14,382)              --         (21,945)
    (Increase) decrease in accounts receivable            204,063        (692,953)         (87,384)        337,029
    (Increase) decrease in prepaid expenses and
      other assets                                        (14,818)         15,965           28,692         (68,623)
    Increase (decrease) in trade accounts payable         (35,152)        521,849          262,553         284,695
    Increase (decrease) in accrued liabilities            391,402         (22,071)         757,036         161,393
    Increase (decrease) in deferred revenue               (59,143)      1,471,301         (118,286)      2,712,972
                                                     ------------     -----------     ------------     -----------
      Net cash used in operating activities            (2,821,890)       (980,737)      (3,585,729)     (2,212,906)
                                                     ------------     -----------     ------------     -----------

Cash flows from investing activities:
  Purchases of property and equipment                    (840,100)       (629,678)      (1,241,426)     (1,055,390)
                                                     ------------     -----------     ------------     -----------
      Net cash used in investing activities              (840,100)       (629,678)      (1,241,426)     (1,055,390)
                                                     ------------     -----------     ------------     -----------

Cash flows from financing activities:
  Exercise of employee stock options                       65,200           4,000          226,900           4,000
  Issuance of notes payable                                    --              --               --         500,000
  Repayments of notes payable                             (12,041)         (3,946)         (16,801)        (10,738)
  Payment of capital lease obligation                          --              --           (3,384)             --
                                                     ------------     -----------     ------------     -----------
      Net cash provided by financing activities            53,159              54          206,715         493,262
                                                     ------------     -----------     ------------     -----------
Effect of currency exchange rates on cash                 108,464        (117,356)         139,386         423,109
                                                     ------------     -----------     ------------     -----------
      Net decrease in cash                             (3,500,367)     (1,727,717)      (4,481,054)     (2,351,925)

Cash and cash equivalents at beginning of period       12,622,905       2,935,351       13,603,592       3,559,559
                                                     ------------     -----------     ------------     -----------
Cash and cash equivalents at end of period           $  9,122,538     $ 1,207,634     $  9,122,538     $ 1,207,634
                                                     ============     ===========     ============     ===========

Supplemental cash flow information:
     Interest paid                                   $      6,904     $    13,469     $     13,067     $    20,211
                                                     ============     ===========     ============     ===========
Supplemental disclosures of non-cash investing
  and financing activities:
    Conversion of preferred stock to common stock    $     62,790     $   338,000     $    275,191     $   533,000
                                                     ============     ===========     ============     ===========
    Common stock issued for notes                    $         --     $        --     $    188,000     $        --
                                                     ============     ===========     ============     ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                       5

<PAGE>   6

                             OZ.COM AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                FOR THE THREE MONTHS             FOR THE SIX MONTHS
                                                    ENDED JUNE 30,                  ENDED JUNE 30,
                                             ---------------------------     ---------------------------
                                                2000             2001            2000            2001
                                             -----------     -----------     -----------     -----------
<S>                                          <C>             <C>             <C>             <C>
Net loss                                     $(3,985,312)    $(3,814,928)    $(5,263,409)    $(8,738,343)

Other comprehensive income (loss):
  Foreign currency translation adjustment        108,465         (97,754)        139,387         443,251
                                             -----------     -----------     -----------     -----------
Comprehensive loss                           $(3,876,847)    $(3,912,682)    $(5,124,022)    $(8,295,092)
                                             ===========     ===========     ===========     ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                       6


<PAGE>   7

                             OZ.COM AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001

1.   INTERIM FINANCIAL STATEMENTS

     The accompanying financial statements of OZ.COM and subsidiaries (the
Company) are unaudited and have been prepared pursuant to the rules and
regulations of the U.S. Securities and Exchange Commission. Certain information
and note disclosures normally included in annual financial statements prepared
in accordance with generally accepted accounting principles have been condensed
or omitted pursuant to those rules and regulations. Accordingly, these interim
financial statements and notes should be read in connection with the Company's
2000 Annual Report on Form 10-KSB. The results of operations for the interim
periods shown in this report are not necessarily indicative of results to be
expected for other interim periods or for the full fiscal year. In the opinion
of management, the information contained herein reflects all adjustments
necessary for a fair statement of the interim results of operations.

     The year-end balance sheet data were derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles.

     The accompanying consolidated financial statements include accounts of the
Company and its subsidiaries.

     The Company's consolidated financial statements have been prepared assuming
the Company will continue as a going concern. The Company has devoted
substantial efforts to the development of new products and has incurred losses
and negative cash flows from operations since inception. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The Company is seeking to raise additional capital through the offering of
equity or debt securities. However, there can be no assurance that the Company's
efforts to achieve profitable operations or raise additional capital will be
successful. These consolidated financial statements do not include any
adjustment that might result from the outcome of this uncertainty.

2.   NET LOSS PER SHARE

     Basic net loss per share is computed using the weighted average number of
common shares outstanding for the period. Diluted net loss per share is computed
using the weighted average number of common shares outstanding and any
potentially dilutive securities. Potentially dilutive securities are not
included in the diluted earnings per share calculations as their inclusion would
be anti-dilutive to the basic net loss per share calculations. Potentially
dilutive securities not included in the diluted net loss per share calculation
and outstanding during the three and six months ended June 30, 2000 and 2001,
included convertible preferred shares, stock options and warrants.

     The components of basic and diluted net loss per share are as follows:

<TABLE>
<CAPTION>
                                                SIX MONTHS ENDED
                                                    JUNE 30,
                                          ---------------------------
                                              2000           2001
                                          -----------     -----------
<S>                                       <C>              <C>
Net loss                                  $(5,263,409)    $(8,738,343)
                                          ===========     ===========

Weighted average outstanding shares of
   common stock                            69,694,564      89,852,524

Net loss per share:
     Basic                                $     (0.08)    $     (0.10)
                                          ===========     ===========
     Diluted                              $     (0.08)    $     (0.10)
                                          ===========     ===========
</TABLE>


                                       7

<PAGE>   8

<TABLE>
<CAPTION>
                                               THREE MONTHS ENDED
                                                    JUNE 30,
                                          ---------------------------
                                              2000           2001
                                          -----------     -----------
<S>                                       <C>              <C>
Net loss                                  $(3,985,312)    $(3,814,928)
                                          ===========     ===========

Weighted average outstanding shares of
   common stock                            70,527,170      90,082,893

Net Loss per share:
     Basic                                $     (0.06)    $     (0.04)
                                          ===========     ===========
     Diluted                              $     (0.06)    $     (0.04)
                                          ===========     ===========
</TABLE>

3.   CONVERSION OF SERIES A PREFERRED STOCK INTO COMMON STOCK

     During the six months ended June 30, 2001, holders of 260,000 shares of
preferred stock elected to convert their shares into shares of common stock. In
accordance with the terms of conversion, the shares of preferred stock were
converted into 520,000 shares of common stock.

4.   NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133, as amended by SFAS No. 137,
establishing accounting and reporting standards for derivative financial
instruments and hedging activities related to those instruments, as well as
other hedging activities. The Company adopted SFAS 133 during the three months
ended March 31, 2001. The adoption of SFAS No. 133, as amended, did not have a
material impact on the Company's consolidated financial position, results of
operations, or cash flows.

         In June 2001, the Financial Accounting Standards Board approved SFAS
No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible
Assets." SFAS No. 141 requires business combinations initiated after June 30,
2001 to be accounted for using the purchase method of accounting, and broadens
the criteria for recording intangible assets separate from goodwill. Recorded
goodwill and intangibles are required to be evaluated against these new criteria
and may result in an intangible asset being reclassified as goodwill, or
alternatively, amounts initially recorded as goodwill may be separately
identified and recognized apart from goodwill. SFAS No. 142 requires the use of
a nonamortization approach to account for purchased goodwill and certain
intangibles. Under a nonamortization approach, goodwill and certain intangibles
are not amortized into results of operations, but instead are reviewed for
impairment and written down and charged to results of operations only in the
periods in which the recorded value of goodwill and certain intangibles is more
than its fair value. The provisions of each statement that apply to goodwill and
intangible assets acquired prior to June 30, 2001 will be adopted by the Company
on January 1, 2002. The Company believes that upon adoption of these statements
it will likely need to rename the strategic "customer relationship" that it
acquired in its acquisition of MCE Holding Corporation in November 2000 that is
currently recorded as "goodwill" in its financial statements. The Company would
then continue to amortize the intangible asset. As a result, the Company does
not believe that the adoption of SFAS No. 141 and 142 will have a material
impact on its consolidated financial position or results of operations.

5.   GEOGRAPHIC, SEGMENT, AND SIGNIFICANT CUSTOMER INFORMATION

     The Company's chief operating decision maker is considered to be the
Company's Chief Executive Officer (CEO). The CEO reviews financial information
presented on a consolidated basis accompanied by disaggregated information about
revenues by geographic region and by product for purposes of making operating
decisions and assessing financial performance. The Company operates in three
operating segments: 1) development of software that enables the delivery of
Internet-based services to mass-market wireless telephones, 2) the delivery of
Internet-based services to wireless network operators


                                       8

<PAGE>   9

and Internet businesses, and related consulting services and 3) the licensing of
the Company's core technologies to Ericsson and the licensing of the Company's
products to network operators and Internet businesses. The disaggregated
information reviewed on a product basis by the CEO is as follows:

<TABLE>
<CAPTION>
                          THREE MONTHS ENDED           SIX MONTHS ENDED
                               JUNE 30,                    JUNE 30,
                       ------------------------    ------------------------
                          2000          2001          2000          2001
                       ----------    ----------    ----------    ----------
<S>                    <C>           <C>           <C>           <C>
Revenues:
  Development          $1,517,951    $2,273,723    $3,220,873    $4,309,389
  Client services              --        52,240            --        54,426
  License                  59,143        59,143       118,286       118,286
                       ----------    ----------    ----------    ----------
     Total revenues    $1,577,094    $2,385,106    $3,339,159    $4,482,101
                       ==========    ==========    ==========    ==========
</TABLE>

     Revenues attributable to geographic regions are based upon the origination
of the sales. The Company currently has sales operations in San Diego to address
the United States and Canadian markets. All development services related to the
revenues reported below were performed in Europe (Iceland and Sweden).
Information regarding the Company's revenues in different geographic regions is
as follows:

<TABLE>
<CAPTION>
                            THREE MONTHS ENDED           SIX MONTHS ENDED
                                 JUNE 30,                    JUNE 30,
                         ------------------------    ------------------------
                            2000          2001          2000          2001
                         ----------    ----------    ----------    ----------
<S>                      <C>           <C>           <C>           <C>
Revenues:
  North America          $1,447,774    $1,053,363    $3,109,035    $3,097,376
  Europe (principally
     Iceland)               129,320     1,331,743       230,124     1,384,725
                         ----------    ----------    ----------    ----------
     Total revenues      $1,577,094    $2,385,106    $3,339,159    $4,482,101
                         ==========    ==========    ==========    ==========
</TABLE>

     Ericsson was the Company's only significant source of revenues during the
three and six months ended June 30, 2001. Revenues attributable to Ericsson
comprised 95.5% and 97.3% of the total revenues for the three and six months
ended June 30, 2001, respectively.

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

     This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this Form 10-QSB contain
forward-looking statements that involve risks and uncertainties. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "will," "should," "could," "potential," "continues," "predicts" and
similar expressions and the negatives of such expressions identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to numerous assumptions, risks and uncertainties and
a number of factors that could cause actual results to differ materially from
those expressed, forecasted or implied in such forward looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in our Registration Statement on Form 10-SB/A and those
appearing elsewhere in this Form 10-QSB. You are cautioned not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. We assume no obligation to update these
forward-looking statements to reflect actual results or changes in factors or
assumptions affecting such forward-looking statements unless required under the
federal securities laws.

Overview

     Since we were incorporated in December 1995, we have devoted substantially
all of our resources to developing our multi-user communications platform, first
in the context of three-dimensional ("3D") online environments, and since 1997,
primarily in the context of wireless telecommunications networks. In 1998, we
began working with Ericsson Telecom AB and/or its affiliates ("Ericsson") to
develop a wireless Internet communications platform now called "iPulse(TM)"
based on


                                       9

<PAGE>   10

this technology. We first recognized development revenues in November 1998, and
generated development revenues of approximately $4.5 million and $7.7 million in
the years ended December 31, 1999 and 2000, respectively and $4.3 million for
the six months ended June 30, 2001. We first recognized license revenues in
September 1999, and generated license revenues of approximately $0.08 million
and $0.2 million in the years ended December 31, 1999 and 2000, respectively,
and $0.1 million for the six months ended June 30, 2001. In addition, we first
recognized client services revenues of approximately $0.3 million in the year
ended December 31, 2000. Client services revenue for the six months ended June
30, 2001 were $0.05 million.

     We incurred net losses of approximately $8.7 million for the six months
ended June 30, 2001 and $1.8 million, $2.9 million and $14.0 million for the
years ended December 31, 1998, 1999 and 2000, respectively. As of June 30, 2001,
we had an accumulated deficit, including accumulated other comprehensive income,
of approximately $35.8 million. We are currently operating at a deficit and
expect to continue operating at a deficit over at least the next three months as
we achieve reductions in our cost structure, while maintaining a sufficient
resource base to support anticipated growth in sales. We believe that our
historical operating results are not indicative of future performance for the
reasons discussed below.

     We generate revenues from development work, commissions and referral fees,
license fees and client services. We receive development revenues under
contracts with each of Ericsson and Microcell Labs, Inc. as discussed further
below. Until recently, we received license revenues primarily from a license of
our core technologies to Ericsson. However, in November 2000, we amended and
entered into new agreements with Ericsson. We also entered into agreements with
Microcell Telecommunications, Inc. and/or its affiliates ("Microcell") in
connection with our acquisition of MCE Holding Corporation and its subsidiary
3044016 Nova Scotia Company, which is now called OZ.COM Canada Company ("OZ.COM
Canada"). However, as a result of the levels of ownership interest of Microcell
and Ericsson at the inception of the contracts, certain payments received from
Ericsson Canada Inc., an affiliate of Ericsson Telecom AB ("Ericsson Canada"),
and Microcell have not been recognized as revenue, and future payments from
Ericsson Canada and Microcell may not be immediately recognizable as revenue
according to U.S. generally accepted accounting principles. In the quarter ended
June 30, 2001, we received payments of $750,000 for development work rendered to
Microcell, and $750,000 from Ericsson Canada under the specific co-operation and
development agreements with Ericsson Canada and Microcell that were not
recognized as revenue. The expenses associated with our performance of the
Microcell development work have been recognized as research and development
expenses and the payments from Microcell for the work performed have been
recorded as deferred revenue on our balance sheet. We have not incurred any cost
in connection with the payment received from Ericsson Canada because, as of June
30, 2001, we had not yet commenced the performance of services for Ericsson
Canada. We expect to begin performing services under specific development
agreements for Ericsson Canada in the quarter ending September 30, 2001. We will
recognize all of the deferred revenues as current revenue at the termination of
the contract under which we performed the work.

     On November 1, 2000, we entered into a general co-operation and development
agreement with Ericsson. The general co-operation and development agreement
superseded the earlier document of the same name that we entered into in
February 1999. Pursuant to this agreement, Ericsson and the Company agreed to
cooperate in the area of Internet-based technologies, applications and services,
including, but not limited to, development, testing integration, marketing,
sales, distribution, support and maintenance of solutions based on the
technologies and services of each company. Pursuant to the February 1999
agreement and as restated in the new agreement, Ericsson also acquired a license
to substantially all of our technology as it existed in February 1999 because
this technology was considered incidental to the development work as it was
expected to be integrated to some extent into most, if not all, applications
developed under the general co-operation and development agreement. Our
cooperation pursuant to this agreement is nonexclusive and each party's
participation is based on its individual evaluation of the commercial viability
and expected benefits of the relationship.

     OZ.COM Canada entered into a specific co-operation and development
agreement with Ericsson Canada on November 8, 2000 pursuant to which OZ.COM
Canada will provide consulting and development services in the areas of mobile
Internet applications for third generation ("3G") mobile telephony platforms.
The specific co-operation and development agreement is an agreement under the
Ericsson general co-operation and development agreement. Under the terms of the
specific


                                       10

<PAGE>   11

co-operation and development agreement, Ericsson Canada will advance to OZ.COM
Canada a total of $6 million in quarterly installments of $750,000 over the
agreement's two-year term, which installments will be applied by Ericsson Canada
against amounts due for development work performed under the agreement. OZ.COM
Canada will have access to Ericsson Canada's 3G laboratories and will receive up
to 6,000 hours of assistance from qualified 3G experts for testing of the 3G
development work. As further described below, we acquired OZ.COM Canada on
November 8, 2000 in connection with our acquisition of MCE Holding Corporation
("Acquisition").

     OZ.COM Canada entered into a general co-operation and development agreement
with Microcell dated as of November 8, 2000 pursuant to which Microcell agreed
to use OZ.COM Canada as its preferred development resource for development work
and consulting services in the field of wireless Internet applications. Under
the terms of the agreement, Microcell has committed to purchase $9 million in
consulting and development services and technology licenses in quarterly
installments of $750,000 during the three-year term of the agreement. OZ.COM
Canada will have full ownership of the products developed under the agreement
and their related intellectual property rights. However, if the products are
unrelated to OZ.COM Canada's product offerings or if the products are completed
by Microcell as a result of OZ.COM Canada's breach of the agreement, Microcell
will own the product and its related intellectual property rights, with OZ.COM
Canada retaining the right to use, sell, and distribute the product outside of
Canada for three years. Microcell will have a license to use, sell and
distribute for commercial use all products developed under the agreement. The
license will be royalty free, except that Microcell will pay to OZ.COM Canada
10% of its net revenues attributable to the sale or license of the products
during the three-year term after the commercial launch of the products. OZ.COM
Canada will pay to Microcell 10% of all of its net revenues attributable to the
sale or license of products developed under the agreement during the three-year
term commencing with the commercial launch of the products.

     OZ.COM Canada also concluded a specific development and consulting
agreement with Microcell dated as of November 8, 2000, pursuant to which OZ.COM
Canada granted to Microcell a non-exclusive, non-transferable, non-revocable
license to use iPulse(TM) 1.5 on certain terms and conditions. Except for the
revenue sharing payments under the general co-operation and development
agreement with Microcell dated November 8, 2000 the license is royalty free.
Ericsson had granted to MCE Holding Corporation, a strategic alliance between
Ericsson Canada and Microcell, the right to grant a license to iPulse(TM) 1.5
and agreed to the assignment of this right to OZ.COM Canada.

     In March 2001, OZ.COM Canada and Microcell entered into a second specific
development agreement under the general co-operation and development agreement
between the two parties dated as of November 8, 2000. Under the second specific
development agreement, OZ.COM Canada provided to Microcell consulting services
related to the development of wireless Internet applications. The payments
received under the second specific development agreement will be recognized at
the completion of the products for which the consulting services were provided.

     Our business strategy relies to a significant extent on the widespread
propagation of the iPulse(TM) application through our relationships with network
operators and Ericsson, one of the leading wireless telephone manufacturers.
iPulse(TM) is available to network operators directly from Ericsson although we
have entered into an agency agreement with Ericsson pursuant to which Ericsson
is obligated to pay a commission based upon the net amount of payments (after
deduction of taxes, insurance and other similar costs) actually received by
Ericsson under licensing contracts for iPulse(TM) concluded through Ericsson's
acceptance of orders that we procure. We will set the commission rate and the
method of calculation and payment with Ericsson from time to time. At the same
time, we have the opportunity to offer our Internet-based services to these
customers. In the event that Ericsson licenses iPulse(TM) to one of its
customers, we are entitled under a specific co-operation and development
agreement dated February 1999 to a license fee equal to 15% of the net amount of
payments (after deduction of taxes, insurance and other similar costs) actually
received by Ericsson.

     In February 2000, we introduced mPresence(TM), a growing suite of mobile
Internet applications. We continue to expect to incur significant additional
expenses in developing and commercializing the mPresence(TM) service, including
costs relating to operating our network cluster and network operating center in
North America, as well as sales and marketing and research and development
expenses. Although we have taken action to control these costs, we expect to
incur substantial costs and expenses in advance of generating revenues from this
service and cannot be certain that our business model for mPresence(TM) will
result in significant revenues or profitability.

     We derive client services revenues from services provided directly to
network operator customers. These customer services include consulting, system
integration, hosting and other value-added services. We expect in the future to
generate service revenues from hosting iPulse(TM) and mPresence(TM) applications
primarily on behalf of network operators, as well as from product installation,
maintenance and engineering support services.


                                       11

<PAGE>   12

     Consequently, we expect that our future revenues will be derived from the
following:

     o    Payments from development work for Ericsson and Microcell;

     o    Commissions and referral fees paid by Ericsson with respect to sales
          and licenses of iPulse(TM);

     o    Licensing fees (i.e., revenue sharing payments) paid by Ericsson with
          respect to sales and licenses of iPulse(TM);

     o    Licensing fees and/or revenue sharing payments paid by customers with
          respect to sales and licenses of mPresence(TM) services and
          applications; and

     o    Fees from client services that we provide to our network operator
          customers.

     Our future success depends on our ability to increase revenues from the
sources identified above. If the market for client services via wireless
telephones fails to develop or develops more slowly than expected, then our
business would be materially and adversely affected. In addition, because there
are a relatively small number of network operators worldwide, any failure to
sell our products to network operator customers successfully could result in a
shortfall in revenues that could not be readily offset by other revenue sources.

     On November 1, 2000, Ericsson entered into an agency agreement with us with
respect to mPresence(TM) and our valued-added services. Ericsson's commission is
based upon the net amount of payments (after deduction of taxes, hosting
expenses, third-party licensing costs, insurance and similar costs) actually
received by us under a licensing contract for mPresence(TM) concluded through
our acceptance of orders procured by Ericsson. We will set the commission rate
and the method of calculation and payment with Ericsson from time to time. In
the absence of a contrary agreement, the rate will be 15% of the net amount of
payment. If Ericsson does not participate in the sale but introduces the
customer to us, Ericsson is entitled to a finder's fee equal to 5% of the net
amount of payment. The agency agreement has a two-year term and will be
automatically renewed for an indefinite period unless earlier terminated in
accordance with its provisions.

     We also entered into a value-added distribution license agreement with
Ericsson on November 1, 2000, which superseded the value-added reseller
agreement entered into with Ericsson in February 2000. The agreement gives us
unrestricted perpetual rights to offer iPulse(TM) as a hosted service to our
mPresence(TM) customers in exchange for certain license fees. Either party to
the agreement may terminate the agreement if the other party commits a material
breach of its obligations under the agreement or if any of the representations
of such other party are materially untrue, and such default is not cured within
thirty days of notice of such breach. Notwithstanding the termination of the
agreement, OZ will retain the right to provide hosting services based on the
then current version of iPulse(TM). After November 2003, and provided all
royalties due Ericsson under the agreement have been paid, Ericsson will no
longer be able to terminate the agreement.

     We expect that our gross profit on revenues derived from sales of our
products and services through Ericsson and future channel partners will be less
than the gross profit on revenues from direct sales. Our success, in particular
in international markets, depends in part on our ability to increase sales of
our products and services through value-added resellers and to expand our
indirect distribution channels.

     We expect sales in Canada and, to a lesser extent, Europe, to account for a
significant portion of our revenues in the foreseeable future. Risks inherent in
our international business activities include:

     o    failure by us and/or third parties to develop localized content and
          applications that are used with our products;

     o    costs of localizing our products for foreign markets;

     o    difficulties in staffing and managing foreign operations;

     o    longer accounts receivable collection time;

     o    political and economic instability;

     o    fluctuations in foreign currency exchange rates;

     o    reduced protection of intellectual property rights in some foreign
          countries;


                                       12

<PAGE>   13

     o    contractual provisions governed by foreign laws;

     o    export restrictions on encryption and other technologies;

     o    potentially adverse tax consequences; and

     o    the burden of complying with complex and changing regulatory
          requirements.

     Since early 2000, we have invested substantially in research and
development, marketing, domestic and international sales channels, professional
services and our general and administrative infrastructure. These investments
have significantly increased our operating expenses, contributing to net losses
in each fiscal quarter since our inception. We have recently taken action to
reduce these expenses by closing our Stockholm office, which will result in the
reduction or elimination of our sales efforts in Europe as well as the costs
associated with supporting the European sales force, and by adopting other cost
saving measures. Our limited operating history makes it difficult to forecast
future operating results. Although we believe that our revenues will grow in the
next several quarters, our revenues may not increase at a rate sufficient to
achieve and maintain profitability, if at all. We anticipate that our operating
expenses will remain approximately at their current levels as we focus on
performing existing contracts and supporting Ericsson's iPulse(TM) sales effort.
Even if we were to achieve profitability in any period, we may not sustain or
increase profitability on a quarterly or annual basis.

RESULTS OF OPERATIONS

Development Services Revenues

     Development services revenues increased from $1.5 million for the three
months ended June 30, 2000 to $2.3 million for the three months ended June 30,
2001 and increased from $3.2 million for the six months ended June 30, 2000 to
$4.3 million for the six months ended June 30, 2001. The increase in development
services revenues was attributable primarily to a temporary acceleration of
iPulse(TM) development work in response to customer demand in early 2001.

Client Services Revenues

     The quarter ended September 30, 2000 was the first period in which we
recognized client services revenue. These revenues were mainly derived from
contracts with oCen Communications, which engaged us to perform services
relating to their commercial launch of our technology, and from Ericsson, which
sponsored our Leif Ericsson project. Since then, we have focused our sales
efforts on selling iPulse(TM) jointly with Ericsson and have only secured $0.05
million additional customer services revenue for the three and six months ended
June 30, 2001. We believe that this will change assuming more customers purchase
iPulse(TM) licenses and prepare to commercialize their own version of the
product.

Licensing Revenues

     Licensing revenues were a constant $0.06 million for the three months ended
June 30, 2000 and 2001 and $0.12 million for the six months ended June 30, 2000
and 2001. These revenues were related to the license of our core technology to
Ericsson in 1999. We began recognizing these revenues upon delivery and
acceptance by Ericsson of the software license and we are amortizing the initial
payments over the remaining life of the general co-operation and development
agreement under which it was granted. As described above, we are entitled under
our arrangements with Ericsson to receive revenue sharing fees from Ericsson's
license or sale of iPulse(TM) to network operators. We also expect to receive
revenues from licensing our mPresence(TM) suite of applications to network
operators and Internet businesses. We expect our mPresence(TM) licensing
revenues to be based on a revenue-sharing model whenever possible. When revenue
sharing is not possible or, in our opinion, advisable, we will consider
alternative pricing models, including upfront or incremental royalties per
application per unit of time. We cannot be certain, however, that revenues will
be generated from mPresence(TM) licensing.

Cost of Revenues - Development Services

     Cost of revenues - development services consists of compensation and
independent consultant costs for personnel engaged in our developing services
operations and related overhead. Cost of development services revenues increased
from $1.0 million for the three months ended June 30, 2000 to $1.5 million for
the three months ended June 30, 2001, and from $1.9 million for the six months
ended


                                       13

<PAGE>   14

June 30, 2000 to $3.0 million for the six months ended June 30, 2001. As a
percentage of development services revenues, cost of revenues - development
services for the three months ended June 30, 2000 and 2001 was 63.6% and 65.3%,
respectively. As a percentage of development services revenues, cost of revenues
- development services for the six months ended June 30, 2000 and 2001 was 60.2%
and 68.9%, respectively. The mix of company personnel and independent
consultants assigned to projects impacts gross profit on development services
revenues. The gross profit we achieve is also impacted by the contractual terms
of the development assignments we undertake, and the gross profit on fixed price
contracts typically is more susceptible to fluctuation than contracts performed
on a time-and-materials basis. We anticipate that the cost of development
services revenues will increase slightly in absolute dollars but decrease as a
percentage of sales as we continue to invest in the growth of our consulting
services and licensing operations.

Cost of Revenues - Client Services

     Cost of revenues - client services consists of compensation and independent
consultant costs for personnel engaged in our consulting services operations,
hosting center and network operating center in North America, and related
overhead. For the three and six months ended June 30, 2001, cost of revenues -
client services was $0.3 million and $0.4 million, respectively. These
expenditures were primarily in connection with the establishment of our hosting
center and network operating center in Montreal, Canada. Gross profit on client
services revenues will be impacted by the mix of company personnel and
independent consultants assigned to projects, the nature of the consulting
agreements (i.e., fixed price versus time-and-material) and hosting and
monitoring expenses. Hosting and monitoring expenses are, to a large extent,
fixed and will therefore be reduced on a per user basis as the number of users
is increased. There are also significant variable costs associated with hosting,
including the need for additional third-party software licenses, additional
servers and storage capacity, and additional bandwidth. Some of these variable
expenses are affected by the number of users, but most will be a function of
end-user behavior. The more our end-users take advantage of our services, the
greater the demand will be on our equipment infrastructure, processing power and
bandwidth. We cannot predict what actual user behavior will be and we are
therefore seeking to develop contract relationships with our customers that will
pass the risk of increases in hosting costs to our customers, but which will fix
our gross profit margin on hosting services to fairly modest levels. However, we
cannot be certain that we will be successful in entering into these types of
relationships. We expect that cost of revenues - client services will vary as a
percentage of client services revenues from period to period for the next
several quarters.

Cost of Revenues - Licensing

     We have had no significant cost of revenues - licensing associated with our
historical licensing revenues, which relate to a single license of our core
technology to Ericsson in 1999. When we begin realizing licensing revenues from
the sale of licenses related to our mPresence(TM) services, we expect to incur
cost of revenues - licensing, which will consist primarily of third-party
license and support fees. We expect that cost of revenues - licensing will vary
as a percentage of licensing revenues from period to period.

Sales and Marketing Expenses

     Sales and marketing expenses consist primarily of compensation and related
costs for sales and marketing personnel, sales commissions, marketing programs,
public relations, promotional materials, travel expenses and trade show exhibit
expenses. Sales and marketing expenses decreased 54.0% from $1.4 million, or
88.8% of revenues, for the three months ended June 30, 2000, to $0.6 million, or
27.0% of revenues, for the three months ended June 30, 2001. Sales and marketing
expenses decreased 14.8% from $2.0 million, or 61.3% of revenues, for the six
months ended June 30, 2000, to $1.7 million, or 38.9% of revenues, for the six
months ended June 30, 2001. These decreases resulted from the reduction of our
sales force and sales activities in Europe and our focus on sales and marketing
efforts on selling iPulse(TM) jointly with Ericsson, primarily in North America.


                                       14

<PAGE>   15

General and Administrative Expenses

     General and administrative expenses consist primarily of salaries and
related expenses, accounting, legal and administrative expenses, professional
service fees, stock-based compensation, depreciation and amortization and other
general corporate expenses. General and administrative expenses increased 75.3%
from $1.8 million or 117.0% of revenues, for the three months ended June 30,
2000, to $3.2 million, or 135.7% of revenues, for the three months ended June
30, 2001. General and administrative expenses increased 109.1% from $3.0 million
or 91.1% of revenues, for the six months ended June 30, 2000, to $6.4 million,
or 142.0% of revenues, for the six months ended June 30, 2001. These increases
were due primarily to the addition of personnel performing general and
administrative functions, the management of our international operations,
compliance with the reporting requirements under the U.S. Securities Exchange
Act of 1934, increased amortization of stock-based compensation and amortization
of intangible assets associated with the acquisition of MCE Holding Corporation
in November 2000. We expect general and administrative expenses to begin to
decline in the short-term as the effects of recent reductions in general and
administrative personnel begin to impact our expenses, although increases in
legal expenses in connection with the legal proceedings initiated by Mr. Garry
Hare will offset some or all of the recent reductions, and may even cause
general and administrative expenses to increase in the short-term. Our plan is
to maintain a lower level of general and administrative expenses relative to the
fourth quarter of 2000 and commit to additional expenses only if and when
required in response to the growth of our business or by factors beyond our
control.

Research and Development Expenses

     Research and development expenses consist primarily of compensation and
related costs for research and development personnel. Research and development
expenses increased 7.2% from $0.5 million, or 34.7% of revenues, for the three
months ended June 30, 2000, to $0.6 million, or 24.6% of revenues, for the three
months ended June 30, 2001. Research and development expenses increased 83.4%
from $0.8 million, or 23.3% of revenues, for the six months ended June 30, 2000,
to $1.4 million, or 31.9% of revenues, for the six months ended June 30, 2001.
The increase is primarily the result of certain work performed for Microcell
that is not presently recognizable as revenues under U.S. generally accepted
accounting principles. During the three months ended June 30, 2001, we
recognized in research and development expenses the cost of providing certain
development services to Microcell, for which we received a payment of $750,000,
which was not recognized as revenue under U.S. generally accepted accounting
principles.

Interest Income (Expense), Net

     Interest income, net decreased from a net gain of $72,211 for the three
months ended June 30, 2000 to a net expense of $31,567 for the three months
ended June 30, 2001. Interest income, net decreased from $170,025 for the six
months ended June 30, 2000 to a net expense of $10,004 for the six months ended
June 30, 2001. The decrease is due to the lower cash balances held by us in the
three and six months ended June 30, 2001.

Other Income (Expense), Net

     Other income (expense), net changed from a net loss of $512,213 for the
three months ended June 30, 2000 to a net gain of $140,319 for the three months
ended June 30, 2001. Other income (expense), net changed from a net loss of
$601,263 for the six months ended June 30, 2000 to a net loss of $205,873 for
the six months ended June 30, 2001. The change is primarily the result of
changes in the currency exchange rates of the U.S. dollar relative to the
Icelandic krona.

Income Taxes

     At December 31, 1999 and 2000 we had deferred tax assets of $4.7 million
and $9.7 million respectively. Due to the uncertain nature of the ultimate
realization, we have recorded a valuation allowance against deferred tax assets.
At December 31, 2000 we had net operating loss carryforwards of approximately
$23.9 million, $11.9 million and $4.0 million for federal, state and foreign
income tax purposes, respectively. These carryforwards will expire from year
2001 through 2020.

Liquidity and Capital Resources

     Our primary liquidity needs are for working capital and capital
expenditures, and, to a lesser extent, debt service. Our primary sources of
liquidity are cash flows from operations and issuances of stock.


                                       15

<PAGE>   16

     Net cash used in operating activities was $2.2 million for the six months
ended June 30, 2001. The net cash used by operating activities for the six
months ended June 30, 2001 was attributable primarily to the net loss of $8.7
million, which was offset primarily by amortization and depreciation of $3.1
million, a decrease of accounts receivable of $0.3 million, an increase in
accounts payable of $0.3 million and an increase in deferred revenue of $2.7
million.

     Net cash used in investing activities was $1.1 million for the six months
ended June 30, 2001, primarily reflecting net purchases of property and
equipment, to a large extent related to the set-up of hosting equipment and our
network operating center and further establishment of our Montreal operations.

     Net cash provided by financing activities was $0.5 million for the six
months ended June 30, 2001, primarily reflecting the issuance of convertible
promissory notes in SmartVR, Inc., our online learning subsidiary. The funds are
being used entirely to finance the operations of the subsidiary and the
promissory notes are convertible into shares of stock of SmartVR, Inc.

     As of June 30, 2001, our principal commitments consisted of obligations
outstanding under operating leases and capitalized lease obligations and the
convertible promissory notes issued by our SmartVR, Inc. subsidiary, which are
not guaranteed by us. Although we have no material commitments for capital
expenditures, we expect to increase capital expenditures and lease commitments
consistent with our anticipated growth in operations, infrastructure and
personnel. We also may increase our capital expenditures as we expand into
additional international markets.

     We are limiting discretionary expenses in all categories and plan to halt
our growth, except for some expansion in our Montreal office, which may be
offset from some attrition in other offices. We believe that our current cash,
cash equivalents and short-term investments, will be sufficient to meet our
anticipated cash needs for working capital and capital expenditures for at least
the next nine months. While we have significantly reduced our cost structure,
negotiated better payment terms from our customers and focused substantially all
of our sales efforts on opportunities that will generate additional cash in the
short-term, we are not confident that cash generated from operations will be
sufficient to satisfy our liquidity requirements, and we are seeking to sell
additional equity or debt securities. If additional funds are raised through the
issuance of debt or preferred stock securities, these securities could have
rights, preferences and privileges senior to holders of common stock, and the
terms of any debt could impose restrictions on our operations. The sale of
additional equity or convertible debt securities could result in additional
dilution to our shareholders, and additional financing may not be available in
amounts or on terms acceptable to us, if at all. We cannot be sure that any such
financing will be obtained or, if obtained, will be adequate to meet our needs.
If we are unable to obtain this additional financing, we may be required to
reduce the scope of our planned product development and marketing efforts, which
could harm our business, financial condition and operating results.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     On August 9, 2000, Garry Hare filed a complaint against us in the Superior
Court for the City and County of San Francisco, California. Mr. Hare is a former
director and officer whose employment was terminated in December 1998. We
subsequently entered into a termination agreement with Mr. Hare. The amended
complaint alleges fraud and breach of the employment and termination agreements.
The amended complaint seeks compensatory damages according to proof, punitive
damages according to proof, specific performance of the stock bonus portion of
the termination agreement or employment agreement, a declaration that the
termination agreement is void, and attorneys' fees and costs. We believe that
the allegations in the amended complaint are without merit and intend to defend
against the complaint vigorously. In addition, we filed a cross-complaint
against Mr. Hare on December 30, 2000, seeking attorneys' fees and damages for
breach of the termination agreement. The ultimate outcome of this matter is not
presently determinable. In July 2001 we received notice from our insurance
carrier of its position that neither the costs of defense nor any judgment
against us in this matter will be paid or reimbursed under our insurance policy.
Accordingly, the cost of defending this action, if not reimbursed by Mr. Hare as
the non-prevailing party under the terms of the termination agreement between
us, and the costs of any judgment or settlement in favor of Mr. Hare could have
a materially adverse impact on our business and financial position.


                                       16

<PAGE>   17

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - NOT APPLICABLE.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NOT APPLICABLE.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NOT APPLICABLE.

ITEM 5. OTHER INFORMATION - NOT APPLICABLE.

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

(a) EXHIBITS

    *10.1  Specific Co-Operation and Development Agreement (II) between
           Registrant and Microcell Labs Inc. dated as of March 9, 2001

(b) REPORTS ON FORM 8-K - NOT APPLICABLE.


* Certain portions of this exhibit have been omitted and filed separately with
  the Securities and Exchange Commission under an application for confidential
  treatment.


                                       17

<PAGE>   18

                                    SIGNATURE

     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.

                                             OZ.COM
                                             a California corporation


                                             By: /s/ JON L. ARNASON
                                                 -------------------------------
                                                     Jon L. Arnason
                                                     Vice President, Finance
                                                     (Principal Financial and
                                                     Accounting Officer)


Date: August 14, 2001



                                       18
<PAGE>   19
                                 EXHIBIT INDEX

   EXHIBIT
   NUMBER                         DESCRIPTION
   -------                        -----------

    *10.1  Specific Co-Operation and Development Agreement (II) between
           Registrant and Microcell Labs Inc. dated as of March 9, 2001.


------------
* Certain portions of this exhibit have been omitted and filed separately with
  the Securities and Exchange Commission under an application for confidential
  treatment.