##### 



SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

|                           |  |                        
|-------------------------- |  | -----------------------
|For Quarterly Period Ended |  | Commission File Number:
|June 30, 2002              |  | 0-31295                

O2WIRELESS SOLUTIONS, INC.

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2467466                          
|                                                              
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|2355 Industrial Park Blvd, Cumming, Georgia                    |  | 30041                               
|                                                              
|(Address of principal executive offices)                       |  | (Zip Code)                          

678-513-1501

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(Registrants telephone number, including area code)


440 Interstate North Parkway, Atlanta, Georgia 30339

---

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [  ]

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date:

|                                         |  |                               
|---------------------------------------- |  | ------------------------------
|Common Stock, $.0001 par value per share |  | 27,937,737 shares             
|                                         |  |                               
|Class                                    |  | Outstanding at August 19, 2002

- 1 -



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O2WIRELESS SOLUTIONS, INC.
FORM 10-Q
JUNE 30, 2002
TABLE OF CONTENTS

|                               |  |                                                                                       |    |                                                                                                                       |    |      |   | 
|------------------------------ |  | ------------------------------------------------------------------------------------- | -- | --------------------------------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                               |  |                                                                                       |    |                                                                                                                       |    | Page
|                               |  |                                                                                       |    |                                                                                                                       |    |     
|PART I  FINANCIAL INFORMATION |  |                                                                                       |    |                                                                                                                      
|Item 1.                        |  | Financial Statements                                                                  |    |                                                                                                                       |    |     
|                               |  |                                                                                       |    | Condensed Consolidated Balance Sheets (unaudited) as of December 31, 2001
and June 30, 2002                           |    |      | 3 | 
|                               |  |                                                                                       |    | Condensed Consolidated Statements of Operations (unaudited) for the Three and Six
Months Ended June 30, 2001 and 2002 |    |      | 4 | 
|                               |  |                                                                                       |    | Condensed Consolidated Statements of Cash Flows (unaudited) for the Six
Months Ended June 30, 2001 and 2002           |    |      | 5 | 
|                               |  |                                                                                       |    | Notes to Condensed Consolidated Financial Statements (unaudited)                                                      |    |      | 6 | 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition
and Results of Operations |    |                                                                                                                       | 17 |     
|Item 3.                        |  | Quantitative and Qualitative Disclosure about Market Risk                             |    |                                                                                                                       | 31 |     
|PART II   OTHER INFORMATION   |  |                                                                                       |    |                                                                                                                      
|Item 1.                        |  | Legal Proceedings                                                                     |    |                                                                                                                       | 32 |     
|Item 2.                        |  | Changes in Securities and Use of Proceeds                                             |    |                                                                                                                       | 32 |     
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                   |    |                                                                                                                       | 32 |     
|Item 5.                        |  | Other Events                                                                          |    |                                                                                                                       | 33 |     
|Item 6.                        |  | Exhibits and Reports on Form 8-K                                                      |    |                                                                                                                       | 33 |     
|SIGNATURES                     |  |                                                                                       | 34 |                                                                                                                      

- 2 -



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##### 



PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

o2wireless Solutions, Inc. and
Subsidiaries


Condensed Consolidated Balance Sheets


(In thousands, except share and per share data)
(Unaudited)


|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |        | 
|--------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | ------ | ------------ | ------ | -------- | ------ | -------- | ------ | 
|                                                                                                                                  |                                                                                                                                                              |                            |        | December 31, |        | June 30,
|                                                                                                                                  |                                                                                                                                                              |                            |        | 2001         |        | 2002    
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |         
|ASSETS                                                                                                                            |                                                                                                                                                              |                            |        |              |        |          |        |         
|Current assets:                                                                                                                   |                                                                                                                                                              |                            |        |              |        |          |        |         
|                                                                                                                                  | Cash
and cash equivalents of continuing operations                                                                                                           |                            | $      | 4,528        |        |          | $      | 4,753    |       
|                                                                                                                                  | Cash
and cash equivalents of discontinued operations                                                                                                         |                            |        | 71           |        |          |        | 121      |       
|                                                                                                                                  | Contract revenue receivable, net of allowance for doubtful accounts of
$3,343 and $4,426 at December 31, 2001 and June 30, 2002, respectively                |                            |        | 23,444       |        |          |        | 12,527   |       
|                                                                                                                                  | Costs and estimated earnings in excess of billings on uncompleted contracts                                                                                  |                            |        | 15,456       |        |          |        | 7,324    |       
|                                                                                                                                  | Inventories,
net of obsolescence reserve of $446 and $130 at
December 31, 2001 and June 30, 2002, respectively                                               |                            |        | 539          |        |          |        | 134      |       
|                                                                                                                                  | Other current assets                                                                                                                                         |                            |        | 2,297        |        |          |        | 1,889    |       
|                                                                                                                                  | Other
assets of discontinued operations                                                                                                                      |                            |        | 4,890        |        |          |        | 4,505    |       
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  | Total current assets                                                                                                                                         |                            |        | 51,225       |        |          |        | 31,253   |       
|Property
and equipment, net of accumulated depreciation of $3,807 and $4,119 at
December 31, 2001 and June 30, 2002, respectively |                                                                                                                                                              |                            | 3,498  |              |        |          | 2,431  |         
|Goodwill, net                                                                                                                     |                                                                                                                                                              |                            | 28,775 |              |        |          |       |         
|Other intangible assets, net                                                                                                      |                                                                                                                                                              |                            | 112    |              |        |          |       |         
|Other assets                                                                                                                      |                                                                                                                                                              |                            | 167    |              |        |          | 124    |         
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  |                                                                                                                                                              | $                          | 83,777 |              |        | $        | 33,808 |         
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS EQUITY                                                                 
|Current liabilities:                                                                                                              |                                                                                                                                                              |                            |        |              |        |          |        |         
|                                                                                                                                  | Affiliate notes payable, current portion                                                                                                                     |                            | $      | 1,279        |        |          | $      | 617      |       
|                                                                                                                                  | Current portion of other indebtedness                                                                                                                        |                            |        | 442          |        |          |        | 106      |       
|                                                                                                                                  | Accrued earn-out                                                                                                                                             |                            |        | 1,650        |        |          |        | 1,650    |       
|                                                                                                                                  | Accounts payable                                                                                                                                             |                            |        | 9,144        |        |          |        | 2,676    |       
|                                                                                                                                  | Accrued expenses                                                                                                                                             |                            |        | 9,240        |        |          |        | 10,013   |       
|                                                                                                                                  | Line of credit                                                                                                                                               |                            |        |             |        |          |        | 7,655    |       
|                                                                                                                                  | Working
capital loan agreement                                                                                                                               |                            |        |             |        |          |        | 4,930    |       
|                                                                                                                                  | Billing in excess of costs and estimated earnings on uncompleted contracts                                                                                   |                            |        | 1,137        |        |          |        | 158      |       
|                                                                                                                                  | Other current liabilities                                                                                                                                    |                            |        | 358          |        |          |        | 572      |       
|                                                                                                                                  | Liabilities of discontinued operations                                                                                                                       |                            |        | 631          |        |          |        | 3,735    |       
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  |                                                                                                                                                              | Total current liabilities  |        |              | 23,881 |          |        |          | 32,112 | 
|                                                                                                                                  | Affiliate notes payable, less current portion                                                                                                                |                            |        | 23           |        |          |        |         |       
|                                                                                                                                  | Other long-term indebtedness, less current portion                                                                                                           |                            |        | 7,502        |        |          |        | 429      |       
|                                                                                                                                  | Other long-term liabilities                                                                                                                                  |                            |        | 674          |        |          |        |         |       
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  |                                                                                                                                                              | Total liabilities          |        |              | 32,080 |          |        |          | 32,541 | 
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|Redeemable preferred stock:                                                                                                       |                                                                                                                                                              |                            |        |              |        |          |        |         
|                                                                                                                                  | Class A redeemable convertible preferred stock, $.01 par value; 100,000 shares
authorized; no shares issued or outstanding                                   |                            |        |             |        |          |        |         |       
|                                                                                                                                  | Series C redeemable convertible preferred stock, no par value; 75,000 shares
authorized; no shares issued or outstanding                                     |                            |        |             |        |          |        |         |       
|                                                                                                                                  | Series D senior redeemable preferred stock, no par value; 100,000 shares
authorized; no shares issued or outstanding                                         |                            |        |             |        |          |        |         |       
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |         
|                                                                                                                                  |                                                                                                                                                              |                            |       |              |        |          |       |         
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |         
|Stockholders equity:                                                                                                             |                                                                                                                                                              |                            |        |              |        |          |        |         
|                                                                                                                                  | Serial preferred stock, no par value, 10,000,000 shares authorized; no shares issued
or outstanding                                                          |                            |        |             |        |          |        |         |       
|                                                                                                                                  | Common stock, $.0001 par value; 100,000,000 shares authorized; 27,937,737 shares
issued and outstanding at December 31, 2001 and June 30, 2002, respectively |                            |        | 3            |        |          |        | 3        |       
|                                                                                                                                  | Additional paid-in capital                                                                                                                                   |                            |        | 101,823      |        |          |        | 101,630  |       
|                                                                                                                                  | Deferred stock compensation                                                                                                                                  |                            |        | (368         | )      |          |        | (21      | )     
|                                                                                                                                  | Accumulated other comprehensive loss                                                                                                                         |                            |        | (114         | )      |          |        | (57      | )     
|                                                                                                                                  | Accumulated deficit                                                                                                                                          |                            |        | (49,647      | )      |          |        | (100,288 | )     
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  |                                                                                                                                                              | Total stockholders equity |        |              | 51,697 |          |        |          | 1,267  | 
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       
|                                                                                                                                  |                                                                                                                                                              | $                          | 83,777 |              |        | $        | 33,808 |         
|                                                                                                                                  |                                                                                                                                                              |                            |        |              |        |          |        |          |       

See accompanying notes to unaudited consolidated financial statements

- 3 -



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##### 



o2wireless Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations


(In thousands, except share and per share data)
(Unaudited)


|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |         |            |  
|--------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------- | ------------------ | ------ | --------------------------- | ---------- | ------------------------- | ------ | ------- | ---------- | ------- | ------ | ------- | ---------- | ------- | ------ | ------- | ---------- | -
|                                                    |                                                                                    |                                             |                    |        | Three months ended June 30, |            | Six months ended June 30,
|                                                    |                                                                                    |                                             |                    |        |                             |            |                          
|                                                    |                                                                                    |                                             |                    |        | 2001                        |            | 2002                      |        | 2001    |            | 2002   
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |        
|Revenues                                            |                                                                                    | $                                           | 25,006             |        |                             | $          | 10,794                    |        |         | $          | 52,754  |        |         | $          | 33,371  |       
|Operating expenses:                                 |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    | Cost of revenues                                                                   |                                             |                    | 20,272 |                             |            |                           | 14,332 |         |            |         | 42,728 |         |            |         | 33,769 |        
|                                                    | Selling, general, and administrative expenses                                      |                                             |                    | 6,780  |                             |            |                           | 6,124  |         |            |         | 15,623 |         |            |         | 11,862 |        
|                                                    | Management fees                                                                    |                                             |                    |       |                             |            |                           | 400    |         |            |         |       |         |            |         | 400    |        
|                                                    | Merger-related expenses                                                            |                                             |                    |       |                             |            |                           | 1,124  |         |            |         |       |         |            |         | 1,124  |        
|                                                    | Restructuring charge                                                               |                                             |                    |       |                             |            |                           | 3,004  |         |            |         | 1,100  |         |            |         | 3,427  |        
|                                                    | Restructuring credit                                                               |                                             |                    |       |                             |            |                           |       |         |            |         |       |         |            |         | (314   | )      
|                                                    | Depreciation                                                                       |                                             |                    | 322    |                             |            |                           | 413    |         |            |         | 633    |         |            |         | 760    |        
|                                                    | Intangible amortization                                                            |                                             |                    | 38     |                             |            |                           | 155    |         |            |         | 75     |         |            |         | 201    |        
|                                                    | Goodwill amortization                                                              |                                             |                    | 1,580  |                             |            |                           |       |         |            |         | 3,148  |         |            |         |       |        
|                                                    | Goodwill impairment                                                                |                                             |                    |       |                             |            |                           |       |         |            |         |       |         |            |         | 28,753 |        
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    |                                                                                    | Operating loss                              |                    |        | (3,986                      | )          |                           |        | (14,758 | )          |         |        | (10,553 | )          |         |        | (46,611 | )         
|Other income (expense):                             |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    | Interest income                                                                    |                                             |                    | 207    |                             |            |                           | 6      |         |            |         | 442    |         |            |         | 10     |        
|                                                    | Interest expense                                                                   |                                             |                    | (430   | )                           |            |                           | (448   | )       |            |         | (851   | )       |            |         | (676   | )      
|                                                    | Other                                                                              |                                             |                    | 143    |                             |            |                           | 5      |         |            |         | 157    |         |            |         | 15     |        
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|Loss from continuing operations before income taxes |                                                                                    |                                             | (4,066             | )      |                             |            | (15,195                   | )      |         |            | (10,805 | )      |         |            | (47,262 | )     
|Discontinued operations:                            |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    | Loss
from discontinued operations net of tax  Specialty Drilling,
Inc.            |                                             |                    | 0      |                             |            |                           | 0      |         |            |         | (196   | )       |            |         | 0      |        
|                                                    | Income
(loss) from discontinued operations net of tax  o2wireless
Lighting, Inc.  |                                             |                    | 164    |                             |            |                           | (95    | )       |            |         | 266    |         |            |         | (263   | )      
|                                                    | Gain
on disposal of discontinued operations net of tax  Specialty
Drilling, Inc.  |                                             |                    | 0      |                             |            |                           | 0      |         |            |         | 0      |         |            |         | 284    |        
|                                                    | Gain
on disposal of discontinued operations net of tax  o2wireless
Lighting, Inc. |                                             |                    | 0      |                             |            |                           | (3,400 | )       |            |         | (588   | )       |            |         | (3,400 | )      
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    |                                                                                    | Total discontinued operations               |                    |        |                            |            |                           |        | (3,495  | )          |         |        | (518    | )          |         |        | (3,379  | )         
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|Net loss                                            |                                                                                    | $                                           | (3,902             | )      |                             | $          | (18,690                   | )      |         | $          | (11,323 | )      |         | $          | (50,641 | )     
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|Earnings per share data:                            |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    | Net
loss per common share:                                                         |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |        
|                                                    |                                                                                    | Continuing operations:                      |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |         |           
|                                                    |                                                                                    |                                             | Basic and diluted: |        | $                           | (0.15      | )                         |        | $       | (0.54      | )       |        | $       | (0.39      | )       |        | $       | (1.69      | )
|                                                    |                                                                                    | Discontinued operations:                    |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |         |           
|                                                    |                                                                                    |                                             | Basic and diluted  |        | $                           | 0.01       |                           |        | $       | (0.13      | )       |        | $       | (0.02      | )       |        | $       | (0.12      | )
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    |                                                                                    | Net loss per common share:                  |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |         |           
|                                                    |                                                                                    |                                             | Basic and diluted  |        | $                           | (0.14      | )                         |        | $       | (0.67      | )       |        | $       | (0.41      | )       |        | $       | (1.81      | )
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       
|                                                    |                                                                                    | Weighted-average common shares outstanding: |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |        |         |           
|                                                    |                                                                                    |                                             | Basic and diluted  |        |                             | 27,937,737 |                           |        |         | 27,937,737 |         |        |         | 27,842,840 |         |        |         | 27,937,737 |  
|                                                    |                                                                                    |                                             |                    |        |                             |            |                           |        |         |            |         |        |         |            |         |       

See accompanying notes to unaudited consolidated financial statements

- 4 -



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##### 



o2wireless Solutions, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows


(In thousands, except share and per share data)
(Unaudited)


|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |        |        |  
|------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | --------------------------------------------------------------------------- | ------- | ------------------------- | ------- | ----- | ------- | ------ | ------ | -
|                                                  |                                                                                                                                 |                                                   |                                                                             |         | Six Months ended June 30,
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                          
|                                                  |                                                                                                                                 |                                                   |                                                                             |         | 2001                      |         | 2002 
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |      
|Cash flows from operating activities:             |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Net loss from continuing operations                                                                                             |                                                   |                                                                             | (10,805 | )                         |         |       | (47,262 | )     
|                                                  | Adjustments to reconcile net loss from continuing operations to net cash provided
by (used in) continuing operating activities: |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 | Depreciation and amortization                     |                                                                             |         | 3,856                     |         |       |         | 962    |       
|                                                  |                                                                                                                                 | Goodwill impairment                               |                                                                             |         |                          |         |       |         | 28,753 |       
|                                                  |                                                                                                                                 | Amortization of deferred stock-based compensation |                                                                             |         | 389                       |         |       |         | 71     |       
|                                                  |                                                                                                                                 | (Gain)
loss on disposal of assets                 |                                                                             |         | (30                       | )       |       |         | 421    |       
|                                                  |                                                                                                                                 | Changes in operating assets and liabilities:      |                                                                             |         |                           |         |       |         |        |       
|                                                  |                                                                                                                                 |                                                   | Contract revenues receivable                                                |         |                           | 21,177  |       |         |        | 10,917 |  
|                                                  |                                                                                                                                 |                                                   | Costs and estimated earnings in excess of billings on uncompleted contracts |         |                           | 2,014   |       |         |        | 8,132  |  
|                                                  |                                                                                                                                 |                                                   | Inventories                                                                 |         |                           | 15      |       |         |        | 404    |  
|                                                  |                                                                                                                                 |                                                   | Other current assets                                                        |         |                           | (1,239  | )     |         |        | 407    |  
|                                                  |                                                                                                                                 |                                                   | Other assets                                                                |         |                           | 85      |       |         |        | 43     |  
|                                                  |                                                                                                                                 |                                                   | Accounts payable                                                            |         |                           | (6,886  | )     |         |        | (6,469 | )
|                                                  |                                                                                                                                 |                                                   | Accrued expenses                                                            |         |                           | (473    | )     |         |        | 787    |  
|                                                  |                                                                                                                                 |                                                   | Billings in excess of cost and estimated earnings on uncompleted contracts  |         |                           | (2,543  | )     |         |        | (979   | )
|                                                  |                                                                                                                                 |                                                   | Other liabilities                                                           |         |                           | (1,443  | )     |         |        | (706   | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash provided by (used in) continuing operating activities              |         |                           | 4,117   |       |         |        | (4,519 | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Discontinued operations:                          |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Gain (loss) from discontinued operations                                                                                        |                                                   |                                                                             | 70      |                           |         |       | (263    | )     
|                                                  | (Loss) on disposal of discontinued operations                                                                                   |                                                   |                                                                             | (588    | )                         |         |       | (3,116  | )     
|                                                  | Adjustment to reconcile loss from discontinued operations to net cash used in
discontinued operating activities                 |                                                   |                                                                             | (154    | )                         |         |       | 3,728   |       
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash (used in) provided by discontinued operating activities            |         |                           | (672    | )     |         |        | 349    |  
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash provided by (used in) operating activities                         |         |                           | 3,445   |       |         |        | (4,170 | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Cash flows used in investing activities:          |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Purchase of property and equipment                                                                                              |                                                   |                                                                             | (564    | )                         |         |       | (114    | )     
|                                                  | Cash paid for acquisitions, net                                                                                                 |                                                   |                                                                             | (11,036 | )                         |         |       |        |       
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash used in continuing investing activities                            |         |                           | (11,600 | )     |         |        | (114   | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Discontinued operations:                          |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Purchase of property and equipment, net                                                                                         |                                                   |                                                                             | (56     | )                         |         |       | (10     | )     
|                                                  | Proceeds from disposal of discontinued operations                                                                               |                                                   |                                                                             | 640     |                           |         |       |        |       
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash provided by discontinued investing activities                      |         |                           | 584     |       |         |        | (10    | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash used in investing activities                                       |         |                           | (11,016 | )     |         |        | (124   | )
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Cash flows from financing activities:             |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Exercise of stock options and warrants                                                                                          |                                                   |                                                                             | 14      |                           |         |       |        |       
|                                                  | Repayment of various notes payable                                                                                              |                                                   |                                                                             | (1,093  | )                         |         |       | (666    | )     
|                                                  | Repayment of borrowing under credit facility                                                                                    |                                                   |                                                                             |        |                           |         |       | (1,765  | )     
|                                                  | Proceeds from borrowing under credit facility                                                                                   |                                                   |                                                                             | 11,664  |                           |         |       | 7,000   |       
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|                                                  |                                                                                                                                 |                                                   | Net cash provided by continuing financing activities                        |         |                           | 10,585  |       |         |        | 4,569  |  
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Net
increase in cash and cash equivalents         |                                                                                                                                 |                                                   | 3,014                                                                       |         |                           |         | 275   |        
|Cash and cash equivalents at beginning of period  |                                                                                                                                 |                                                   | 12,168                                                                      |         |                           |         | 4,599 |        
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Cash and cash equivalents at end of period        |                                                                                                                                 | $                                                 | 15,182                                                                      |         |                           | $       | 4,874 |        
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       
|Supplemental disclosure of cash flow information: |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |        
|                                                  | Cash paid during the period for interest                                                                                        |                                                   | $                                                                           | 826     |                           |         | $     | 587     |       
|                                                  |                                                                                                                                 |                                                   |                                                                             |         |                           |         |       |         |       

See accompanying notes to unaudited consolidated financial statements

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o2wireless Solutions Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements


(Unaudited)


1) Summary of Significant Accounting Policies and Procedures

a) Organization, Basis of Presentation and Liquidity

o2wireless Solutions, Inc. and subsidiaries (formerly Clear Holdings, Inc.
and subsidiaries)  (the Company) is headquartered in Cumming, Georgia. The
Company provides comprehensive integrated network solutions to all sectors of
the wireless telecommunications industry. This comprehensive end-to-end
solution enables the Company to address the current and emerging network
infrastructure requirements of its customers. These solutions enable its
customers to plan, design, deploy and maintain their wireless networks. The
Company also offers business planning and consulting services to wireless
telecommunications industry participants.

The accompanying consolidated financial statements as of June 30, 2002,
and for the three and six months ended June 30, 2001 and 2002 are unaudited and
have been prepared by management. In the opinion of management, these unaudited
consolidated financial statements include all adjustments, consisting of normal
recurring adjustments and reclassifications, necessary for a fair presentation of the financial
condition and results of operations for the interim periods presented. The
consolidated balance sheet data for December 31, 2001 was derived from audited
consolidated financial statements, but does not include all disclosures
required by accounting principles generally accepted in the United States of
America. Interim operating results are not necessarily indicative of operating
results for the entire year. The financial information presented herein should
be read in conjunction with the Companys Annual Report on Form 10-K for the
year ended December 31, 2001 which includes information and disclosures not
included herein. All significant inter-company accounts or balances have been
eliminated upon consolidation.

The telecommunications market is characterized by significant risks as a
result of changes in economic conditions, changes in technology, outsourcing of
telecommunications networks, consolidation of equipment vendors and other
significant factors. The Companys ability to effectively manage its
operations, personnel levels and third-party subcontractors is critical to
achieving profitability. Changes in technology, adverse economic or industry
conditions or the loss of one or more of the Companys key customers, among
other factors, could have a material adverse effect on the Companys financial
position and results of operations.

The Company currently funds its operations with available cash, cash
equivalents, and its working capital loan agreement with Baran Group Ltd.
(Baran) (see Note 7 Baran Group Ltd. Merger for further discussion). Due
to significant cost reduction steps taken in 2001 and early 2002, continuing efforts to further reduce expenses to reflect diminished revenue
opportunity, and proceeds presently expected to be received (see
paragraph below) in connection with the Baran working capital loan agreement,
the Company presently believes that it will have sufficient cash and cash
equivalents to fund its operations pending the closing of the merger with
Baran.

Management presently expects that the proposed merger with Baran (as described
in Note 7 Baran Group Ltd. Merger) will close during the fourth quarter of
the fiscal year ended December 31, 2002. However, Baran has notified the
Company that, based upon the results of operations of the Company for the
second quarter ended June 30, 2002, the ability of Baran to
complete the merger transaction with the Company will be subject to Barans
further review and evaluation of the Companys current financial condition and
third quarter operations. This review is expected to be completed within 30
days and if Baran determines to proceed with the merger, it is likely
that the exchange ratio will be reduced.
Management expects to receive additional advances in connection with
the working capital loan

- 6 -



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##### 



agreement at the completion of Barans review and
evaluation of the Companys current financial condition, assuming Baran proceeds with the merger. If the
proposed merger does not close, the Company will not have sufficient liquidity
to maintain operations through the early part of the fourth quarter of fiscal
year ended December 31, 2002. As such, management would consider re-financing
of the existing credit facility, negotiating the sale of the Company to another
acquirer, or pursuing other options available to the Company. However,
management expresses no assurances that these alternatives would be available
to the Company if the proposed merger with Baran is not completed and, as such,
could be required to liquidate.

The Companys bank credit facility requires that it maintain specified
levels of earnings (loss) before income taxes, depreciation, and amortization
(EBITDA) and its borrowing base is dependent upon the amount of eligible
receivables, as defined in the credit agreement. As of June 30, 2002, the
Company was not in compliance with its EBITDA covenant under the terms of the
fifth amendment to its credit agreement dated June 5, 2002 and was therefore in
default. Under the terms of the fifth amendment, if the EBITDA
requirements are not met, suspension of the EBITDA requirements under the
facility would have been permitted if Baran made cash available to the
Company to fund the EBITDA shortfall either in the form of an equity
contribution or one or more subsequent disbursements under the working capital
loan agreement with Baran. As of the date of filing of this Report,
Baran had
not provided the Company with additional funding; however, the Company expects to
receive additional funding after Baran has completed its review and
evaluation of the Company (approximately 30 days), assuming Baran proceeds
with the merger. On August 15, 2002, the Company obtained a waiver of the default at June
30, 2002 subject to (1) remitting $1 million to the Bank as a permanent
reduction in the Companys credit line and (2) an agreement to pay no further
monies to Baran.
If the Company fails to achieve its budgeted revenues and
margins and/or experiences any significant write-offs, the Company could be in
violation of the covenants of its credit facility in the future. Based on the
Companys current cash and cash equivalents, it does not have sufficient
resources to repay its indebtedness under the credit facility if called by the
lenders.

On June 30,
2002, the Company had cash and cash equivalents of $4.8
million, which included approximately $1.5 million in checks that had not
cleared the bank at June 30, 2002. As of June 30,
2002, the Company had outstanding balances of $5.0 million under the Baran
Working Capital Loan Agreement (see Note 7 Baran Group Ltd. Merger for
further discussion) and $7.7 million under the
credit facility with no additional availability under the credit
facility. As a result of principal reduction payments made subsequent
to June 30, 2002, the outstanding balance under the credit
facility was $5.6 million as of the date of filing this report.

b) Derivative Financial Instruments

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (SFAS No. 133). This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. Effective January 1, 2001, the Company adopted SFAS No. 133
which requires that all derivatives be recognized on the balance sheet at their
fair value.

The Company engages in activities that expose it to various market risks,
including the effects of a change in interest rates. This financial exposure is
managed as an integral part of the Companys risk management program, which
seeks to reduce the potentially adverse effect that the volatility in interest
rates may have on operating results. The Company currently maintains an
interest rate swap, to minimize significant, unanticipated earnings
fluctuations caused by volatility in interest rates. The Company assesses, both
at inception and on an ongoing basis, whether the interest rate swap is
effective in offsetting changes in cash flows of the hedged items.

- 7 -



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##### 



The Company has entered into an interest rate swap agreement with its
senior lender in accordance with its loan agreement, which has been classified
as a cash flow hedge. The interest rate swap agreement allows the Company to
swap interest rate payments from a floating rate of LIBOR to a fixed interest
payment of 7.25% on a notional principal of $12.5 million and will be in effect
until January 2003. Changes in the fair value of the interest rate swap
agreement are recognized in other comprehensive income or loss until such point
that the interest rate swap no longer qualifies for hedge accounting, at which
point, the gain (loss) reported is reported as a component of interest expense.
During 2001, the Company recognized a comprehensive loss of $200,000 on the
interest rate swap agreement. During the three month period ended September 30,
2001, the Company repaid $5 million on its line of credit with the result that
its line of credit fell below the notional principal of $12.5 million. Thus the
interest rate swap agreement no longer qualifies for hedge accounting and
therefore for the quarter ended June 30, 2002 the Company recorded to interest
expense a $94,000 decrease in the fair value of the swap agreement. The fair
value of the interest rate swap liability was approximately $674,000 and
$396,000 at December 31, 2001 and June 30, 2002, respectively.

c) Comprehensive Income (Loss)

On January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income(SFAS No. 130). SFAS No.
130 establishes standards for reporting and presentation of comprehensive
income or loss and its components in a full set of financial statements.
Comprehensive income or loss consists of net income or loss and all other gains
and losses that are excluded from net income by current accounting standards.
SFAS No. 130 requires only additional disclosures in the financial statements
and does not affect the Companys position or results of operations. As
discussed above in Note 1 (b), during 2001 the Company recognized a
comprehensive loss on its interest rate swap agreement of $200,000. The Company
had no other comprehensive income or loss for the three and six month periods
ended June 30, 2001 or June 30, 2002.

d) Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141, Business Combinations
(SFAS 141), which is effective for all business combinations initiated after
June 30, 2001. SFAS 141 requires companies to account for all business
combinations using the purchase method of accounting, recognize intangible
assets if certain criteria are met, as well as provide additional disclosures
regarding business combinations and allocation of purchase price. The Company
adopted SFAS 141 as of July 1, 2001. The adoption of SFAS 141 did not have a
material effect on the financial position or results of the operations of the
Company.

In June 2001, FASB issued Statement of Financial Accounting Standards No.
142, Goodwill and Other Intangible Assets (SFAS 142), which requires
non-amortization of goodwill and intangible assets that have indefinite useful
lives and annual tests of impairment of those assets. SFAS 142 also provides
specific guidance about how to determine and measure goodwill and intangible
asset impairment, and requires additional disclosure of information about
goodwill and other intangible assets. The provisions of this statement are
required to be applied starting with fiscal years beginning after December 15,
2001 and applied to all goodwill and other intangible assets recognized in its
financial statements at that date. Goodwill and intangible assets acquired
after June 30, 2001 will be subject to the non-amortization provisions of the
statement. The Company adopted SFAS 142 beginning January 1, 2002 upon which
time the Company ceased amortizing goodwill in accordance with the guidelines
set forth in the standard.

During the first quarter of 2002, as a result of recent economic
triggering events, the Company performed an impairment analysis of its goodwill
and recorded a $28.8 million pre-tax charge for the impairment of goodwill. The
charge reflected changes in the Companys business plan,
continued declines in the telecommunications sector, along with
the current depressed market price for the Companys common
stock. The impairment charge is
reflected as an operating expense in the accompanying consolidated financial
statements as the impairment analysis was performed as a result of current
period events, and was not attributable to the transition provisions of SFAS 142.

- 8 -



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In August 2001, FASB issued Statement of Financial Accounting Standards
No. 143, Accounting for Asset Retirement Obligations (SFAS 143). SFAS 143
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. When the liability
is initially recorded, the entity capitalizes a cost by increasing the carrying
amount of the related long-lived asset. Over time, the liability is accreted to
its present value each period, and the capitalized cost is depreciated over the
useful life of the related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. Companies are required to adopt SFAS 143 in the first fiscal
year beginning after June 15, 2002. Adoption of SFAS 143 is not currently
expected to have a material impact on the Companys results of operations.

In October 2001, FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets which supersedes SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
and the accounting and reporting provisions of Accounting Principles Board
(APB) Opinion No. 30, Reporting the Results of Operations  Reporting the
Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions for the disposal of a segment of
a business. SFAS 144 retains many of the fundamental provisions of SFAS 121,
but resolves certain implementation issues associated with that Statement. SFAS
144 became effective for the Company beginning January 1, 2002. Adoption of
SFAS 144 has not had any material effect on the Companys financial statements.

In May 2002, the FASB issued SFAS No. 145, Revision of FAS Nos. 4, 44 and
64, Amendment of SFAS13 and Technical Corrections as of April 2002. SFAS No.
145 is effective for fiscal periods beginning after May 15, 2002. The Company
does not believe that the adoption of SFAS No. 145 will have any material
effect on its financial statements.

In July 2002, FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS No. 146 provides new guidance on the
recognition of costs associated with exit or disposal activities. The standard
requires companies to recognize costs associated with exit or disposal
activities when they are incurred rather than at the date of commitment to an
exit or disposal plan. SFAS No. 146 supercedes previous accounting guidance
provided by the Emerging Issues Task Force (EITF) EITF 94-3 Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
and Activity (including Certain Costs Incurred in a Restructuring). EITF 94-3
required recognition of costs at the date of commitment to an exit or disposal
plan. SFAS No. 146 is to be applied prospectively to exit or disposal
activities initiated after December 31, 2002. Adoption of SFAS 146 is not
currently expected to have a material impact on the Companys results of
operations.

2) Goodwill and Intangibles

During the past few years, the Company acquired certain strategically positioned
companies in order to create an integrated telecommunications services company
with depth and expertise in wireless and wireline technologies and a broad
geographical presence. All of the Companys acquisitions have been accounted for under
the purchase method of accounting. Aggregate goodwill for all of the Companys acquisitions from 1997 to 2001 was approximately $44.2 million which, prior to
December 31, 2001, was generally being amortized on a straight-line basis over
5 to 10 years, the expected period of benefit. Effective January 1, 2002, with
the adoption of SFAS 142, the Company is no longer amortizing goodwill on these
acquisitions but evaluating the carrying value of the goodwill on an annual
basis or as required if an event occurs or circumstances change that would more
likely than not reduce the fair value of the Company below its carrying value.

- 9 -



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##### 



During the first quarter of 2002, as a result of recent economic
triggering events, the Company performed an impairment review of its goodwill
and recorded a $28.8 million pre-tax charge for the impairment of goodwill.
The charge reflected declines in the telecommunications sector along with the
current depressed market price for the Companys common stock and was reflected
as an operating expense in the first quarter of 2002 financial statements.

The following is a pro forma presentation of reported net loss and
earnings per share, adjusted for the exclusion of goodwill and
intangible amortization net of
related income tax effect (amounts in thousands of dollars except per share
data):

|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|------------------------------------------- |  | --------------------------- | ---------- | ------------------------- |  | ---- | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                            |  | Three months ended June 30, |            | Six months ended June 30,
|                                            |  |                             |            |                          
|                                            |  | 2001                        |            | 2002                      |  | 2001 |            | 2002
|                                            |  |                             |            |                           |  |      |            |     
|Net loss  as reported                      |  | $                           | (3,902     | )                         |  | $    | (18,690    | )    |  | $ | (11,323    | ) |  | $ | (50,641    | )
|Goodwill amortization, net of taxes         |  |                             | 1,580      |                           |  |      |           |      |  |   | 3,148      |   |  |   |           |  
|Intangibles amortization                    |  |                             | 38         |                           |  |      | 155        |      |  |   | 75         |   |  |   | 193        |  
|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|Net loss   as adjusted                     |  | $                           | (2,284     | )                         |  | $    | (18,535    | )    |  | $ | (8,100     | ) |  | $ | (50,448    | )
|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|Basic and diluted earnings per share:       |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|As reported                                 |  | $                           | (0.14      | )                         |  | $    | (0.67      | )    |  | $ | (0.41      | ) |  | $ | (1.81      | )
|Goodwill amortization, net of taxes         |  |                             | 0.06       |                           |  |      |           |      |  |   | 0.11       |   |  |   |           |  
|Intangibles amortization                    |  |                             |           |                           |  |      | 0.01       |      |  |   |           |   |  |   | 0.01       |  
|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|As adjusted                                 |  | $                           | (0.08      | )                         |  | $    | (0.66      | )    |  | $ | (0.30      | ) |  | $ | (1.80      | )
|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|Weighted-average common shares outstanding: |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  
|Basic and diluted                           |  |                             | 27,937,737 |                           |  |      | 27,937,737 |      |  |   | 27,842,840 |   |  |   | 27,937,737 |  
|                                            |  |                             |            |                           |  |      |            |      |  |   |            |   |  |   |            |  

3) Restructuring

During the first quarter of 2002, the Company implemented a restructuring
plan to further streamline operations and cost structure to reflect the
slowdown in the telecommunications sector and the decline in revenues it has
experienced. As part of the restructuring plan, which consists
primarily of severances for workforce reduction, write-off of fixed assets, closure of certain offices and
the consolidation of certain facilities, the Company recorded a restructuring
charge of approximately $3.4 million over the first two quarters of 2002.
During the three months ended March 31, 2002, the Company recorded a charge of
approximately $423,000 of which $283,000 was incurred during that period. During
the three months ended June 30, 2002, the Company recorded an additional charge
of approximately $3.0 million of which $1.05 million was
incurred during that
period. The Company anticipates recording an additional restructuring charge
of approximately $1.5  2 million during the three months ended September 30,
2002.

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##### 



Workforce reduction has been the main focus of the restructuring. Employee
headcount has been reduced from 573 employees at December 31, 2001 to 352
employees at June 30, 2002, representing a reduction of 221 employees or
approximately 39% of the Companys workforce. The reductions took place in all
sectors of operations and at all levels of staff, including management. The
Company recorded approximately $1.9 million for severance and other termination
benefits related to the workforce reduction during the six month period ended
June 30, 2002.

Additionally, as part of the restructuring, the Company is closing certain
regional offices. Costs related to remaining office and equipment leases for
these offices were included in the Companys restructuring reserve. The
Companys fiscal year 2002 restructuring plan utilization was as follows (in
thousands of dollars):

|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 
|------------------------------------- |  | -------------------------- | --- | -------- |  | ---------- | ---- | ------- |  | -------- | --- | ---------- |  | - | ----- |  |  | - | ------ | - |  | - | ----- | 
|                                      |  | FY 2002 Restructuring Plan
|                                      |  |                           
|                                      |  | 1st Qtr                    |     | 1st Qtr  |  | Balance at |      | 2nd Qtr |  | 2nd Qtr  |     | Balance at
|                                      |  | Charges                    |     | Incurred |  | 3/31/2002  |      | Charges |  | Incurred |     | 6/30/2002 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |           
|Employee Severance                    |  | $                          | 223 |          |  | $          | (223 | )       |  | $        |    |            |  | $ | 1,367 |  |  | $ | (446   | ) |  | $ | 921   | 
|Severance Benefits                    |  |                            | 140 |          |  |            |     |         |  |          | 140 |            |  |   | 140   |  |  |   | (80    | ) |  |   | 60    | 
|Office Closings                       |  |                            | 60  |          |  |            | (60  | )       |  |          |    |            |  |   | 951   |  |  |   | (453   | ) |  |   | 498   | 
|Fixed Asset Write-off                 |  |                            |    |          |  |            |     |         |  |          |    |            |  |   | 448   |  |  |   | (448   | ) |  |   |      | 
|Office and Equipment Leases Write-off |  |                            |    |          |  |            |     |         |  |          |    |            |  |   | 98    |  |  |   | (9     | ) |  |   | 89    | 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 
|Total                                 |  | $                          | 423 |          |  | $          | (283 | )       |  | $        | 140 |            |  | $ | 3,004 |  |  | $ | (1,436 | ) |  | $ | 1,568 | 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 

During the first quarter of 2001, the Company also implemented a
restructuring plan at which time it took a restructuring charge totaling
approximately $1.1 million. As of March 31, 2002 approximately $786,000 in
costs were paid relating to this restructuring. The Company now believes it has
incurred and paid all costs associated with that restructuring. Therefore, during
the three months ended March 31, 2002, the Company recorded a restructuring
credit for the remaining unused liability of approximately $314,000 related to
that initial charge.

- 11 -



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##### 



4) Discontinued Operations

Specialty Drilling, Inc. Sale

On April 12, 2001 the Company sold substantially all of the assets of
Specialty Drilling, Inc. During the quarter ended March 31, 2001 the Company
provided for approximately $784,000 in losses from discontinued operations and
losses on disposal of discontinued operations. As of March 31, 2002,
approximately $500,000 in losses had been incurred and paid. The Company does
not believe there are any additional losses to be paid and hence reversed the
remaining $284,000 of the provision during the quarter ended March 31, 2002.

o2wireless Lighting, Inc. Sale

On June 4, 2002, the Companys Board of Directors formally approved a
Recovery Plan issued in connection with the signing of the merger agreement
with Baran Group, Ltd. (See Note 7 Baran Group Ltd. Merger for further
discussion). This Plan included certain revenue and other operating
performance targets, relocation of the corporate offices, an incentive bonus
program for key staff and management, and the sale of o2wireless Lighting, Inc.
(the Lighting Division). The Lighting Division installs lighting systems on
towers and sells aftermarket lighting systems. Historically, the Company has
not accounted for the division as a segment.

In August 2001, FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The definition of a segment under SFAS 144
broadens the definition and scope of a segment. Further the term segment was
replaced by the term component of an entity. The Lighting Division has
clearly distinguishable operations and cash flows from other aspects of the
turn-key operation. Furthermore, the Lighting Divisions operations and cash
flows will be eliminated from the ongoing operations of the entity, and the
Company will have no further involvement in the operations of the Lighting
Division as it is expected to be sold to an independent third party. The
Company is presently in negotiations with a third party regarding the sale of
the Lighting Division.

Accordingly, the Company has
classified the
Lighting Division as held for sale and reflected it as a discontinued operation
for all periods presented.
The Company expects the sale of the Lighting Division to be completed by the
fourth quarter of fiscal year 2002. The condensed consolidated financial
statements have been reclassified to segregate the net assets and operating
results of these discontinued operations for all periods presented.

Summary operating results of the discontinued operations (in thousands of
dollars) are as follows:

|                                         |  |                             |       |                           |  |      |        |      |  |   |       |   |  |   |        |  
|---------------------------------------- |  | --------------------------- | ----- | ------------------------- |  | ---- | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                         |  | Three months ended June 30, |       | Six months ended June 30,
|                                         |  |                             |       |                          
|                                         |  | 2001                        |       | 2002                      |  | 2001 |        | 2002
|                                         |  |                             |       |                           |  |      |        |     
|Revenue                                  |  | $                           | 2,822 |                           |  | $    | 1,535  |      |  | $ | 5,412 |   |  | $ | 3,017  |  
|Gross profit                             |  |                             | 873   |                           |  |      | 514    |      |  |   | 1,678 |   |  |   | 1,014  |  
|Operating
income (loss)                  |  |                             | 164   |                           |  |      | (95    | )    |  |   | 267   |   |  |   | (262   | )
|Interest expense                         |  |                             |      |                           |  |      |       |      |  |   | (1    | ) |  |   | (1     | )
|Loss on disposal of assets               |  |                             |      |                           |  |      | (3,400 | )    |  |   |      |   |  |   | (3,400 | )
|Income tax expense                       |  |                             |      |                           |  |      |       |      |  |   |      |   |  |   |       |  
|Gain
(loss) from discontinued operations |  |                             | 164   |                           |  |      | (3,495 | )    |  |   | 266   |   |  |   | (3,663 | )

The operating loss for the three months ended June 30, 2001 includes
depreciation of $20,000. The operating loss for the three months ended June 30, 2002 includes
depreciation of $16,000 and restructuring costs of $19,000.

- 12 -



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##### 



The operating loss for the six months ended June 30, 2001 includes
depreciation of $39,000. The operating loss for the six months ended June 30, 2002 includes
depreciation of $33,000 and restructuring costs of $19,000.

The restructuring costs consist of the following (in thousands of
dollars):

|                   |  |                             |   |                           |  |      |    |      |  |   |   |  |  |   |    | 
|------------------ |  | --------------------------- | - | ------------------------- |  | ---- | -- | ---- |  | - | - |  |  | - | -- | 
|                   |  | Three months ended June 30, |   | Six months ended June 30,
|                   |  |                             |   |                          
|                   |  | 2001                        |   | 2002                      |  | 2001 |    | 2002
|                   |  |                             |   |                           |  |      |    |     
|Employee
Severance |  | $                           |  |                           |  | $    | 13 |      |  | $ |  |  |  | $ | 13 | 
|Severance Benefits |  |                             |  |                           |  |      | 6  |      |  |   |  |  |  |   | 6  | 
|Total              |  | $                           |  |                           |  | $    | 19 |      |  | $ |  |  |  | $ | 19 | 
|                   |  |                             |   |                           |  |      |    |      |  |   |   |  |  |   |    | 

Assets and liabilities of discontinued operations (in thousands of
dollars) are as follows:

|                                                                                                                                       |                                        |   |              |     |          |   |       |       | 
|-------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | - | ------------ | --- | -------- | - | ----- | ----- | 
|                                                                                                                                       |                                        |   | December 31, |     | June 30,
|                                                                                                                                       |                                        |   | 2001         |     | 2002    
|                                                                                                                                       |                                        |   |              |     |         
|Cash and cash equivalents                                                                                                              |                                        | $ | 71           |     |          | $ | 121   |      
|Contract revenue receivable, net of allowance for doubtful accounts of $13
and $5 at December 31, 2001 and June 30, 2002, respectively |                                        |   | 1,389        |     |          |   | 1,116 |      
|Inventories                                                                                                                            |                                        |   | 2,895        |     |          |   | 2,867 |      
|Other current assets                                                                                                                   |                                        |   | 116          |     |          |   | 50    |      
|Property and equipment, net of accumulated depreciation of $154 and $187
at December 31, 2001 and June 30, 2002, respectively          |                                        |   | 479          |     |          |   | 455   |      
|Other assets                                                                                                                           |                                        |   | 11           |     |          |   | 17    |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|Assets of discontinued operations                                                                                                      |                                        | $ | 4,961        |     |          | $ | 4,626 |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|Current
portion of other indebtedness                                                                                                  |                                        |   | 9            |     |          |   | 10    |      
|Accounts payable                                                                                                                       |                                        |   | 436          |     |          |   | 198   |      
|Accrued expenses                                                                                                                       |                                        |   | 169          |     |          |   | 116   |      
|Other current liabilities                                                                                                              |                                        |   | 6            |     |          |   | 5     |      
|Other
long-term indebtedness, less current portion                                                                                     |                                        |   | 11           |     |          |   | 6     |      
|Reserve for loss on sale and operating losses                                                                                          |                                        |   |             |     |          |   | 3,400 |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|                                                                                                                                       | Liabilities of discontinued operations |   | $            | 631 |          |   | $     | 3,735 | 
|                                                                                                                                       |                                        |   |              |     |          |   |       |      

5) Segment and Customer Information

The Company operates and manages its business as a single segment. The
Company provides comprehensive integrated network solutions to service
providers in the wireless telecommunications industry. The following is a
summary of revenues by geographic area (in thousands of dollars):

|             |  |                             |        |                           |  |      |        |      |  |   |        |  |  |   |        | 
|------------ |  | --------------------------- | ------ | ------------------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|             |  | Three months ended June 30, |        | Six months ended June 30,
|             |  |                             |        |                          
|             |  | 2001                        |        | 2002                      |  | 2001 |        | 2002
|             |  |                             |        |                           |  |      |        |     
|U.S.         |  | $                           | 23,645 |                           |  | $    | 10,529 |      |  | $ | 49,648 |  |  | $ | 32,390 | 
|Foreign      |  |                             | 1,361  |                           |  |      | 265    |      |  |   | 3,106  |  |  |   | 981    | 
|             |  |                             |        |                           |  |      |        |      |  |   |        |  |  |   |        | 
|Consolidated |  | $                           | 25,006 |                           |  | $    | 10,794 |      |  | $ | 52,754 |  |  | $ | 33,371 | 
|             |  |                             |        |                           |  |      |        |      |  |   |        |  |  |   |        | 

- 13 -



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6) Legal Matters

In the normal course of business, the Company is subject to certain
administrative proceedings and litigation. The following is a summary of three
proceedings currently pending:

On November 7, 2000, a suit was filed against the Company and two officers
of the Company, (as well as a third individual not affiliated with the
Company), asserting that the defendants engaged in a conspiracy to pursue
frivolous litigation against the plaintiff, to threaten further litigation and
to interfere with the business relations of the plaintiff and that agents of
the Company acting to benefit the Company committed acts of fraud against, and
violated fiduciary duties to the plaintiff. The Complaint was later amended to
reflect that the plaintiff had lost by jury verdict in related litigation in
Georgia concerning a sale of a 30 MHz PCS license for Honolulu. An additional
amendment to the Complaint, filed in August 2001, abandoned plaintiffs claim
for interference with business relations and added a subsidiary of the Company
as a defendant. The Company vigorously defended all claims against it. An
agreement has been reached between the parties that all claims against the
Company will be dismissed with prejudice in connection with the resolution of
related disputes between parties to two other lawsuits to which the Company is
not a party. In managements opinion, the outcome of the foregoing proceeding
will not materially affect the financial condition and results of the Company.

On July 12, 2002, an action was filed against o2wireless in the United
States District Court for the Northern District of Georgia, McKenzie
Telecommunications Group, Inc. v. Clear Holdings, Inc. and o2wireless, Inc.
f/k/a Clear Communications Group, Inc.In
the Complaint, the Plaintiff alleges that o2wireless breached its obligations
under an asset purchase agreement, dated November 1, 1999, in connection with
the sale of McKenzie Telecommunications Group, Inc. (MTG) to o2wireless. The
Complaint further alleges that the Plaintiff is entitled to receive an earn-out
payment under the terms of the asset purchase agreement. The Plaintiff seeks
compensatory damages in excess of $3 million. Management believes that the
lawsuit is completely without merit and that o2wireless has meritorious
defenses against all of the claims alleged in the Complaint. o2wireless
intends to deny all of the allegations contained in the Complaint and to
vigorously defend the action. Management believes that the outcome of this
litigation will not have a material adverse effect on the Companys results of
operations and financial condition; however, the lawsuit is in an early
procedural stage and therefore it is not possible to determine with certainty
what the effect may be on the Companys results of operations and financial
condition.

On August 6, 2002, an action was filed against o2wireless in the United
States District Court for the Southern District of Texas, George A. Jackson and
TWR Family of Companies, L.L.C. v. o2wireless, Inc.,In the Complaint, the Plaintiff alleges that Plaintiff is entitled
to receive an earnout payment of $3.3 million pursuant to the terms of a stock
purchase agreement entered into between the parties. The Plaintiff seeks
damages in the amount of $3.3 million. Management believes that o2wireless has
meritorious defenses against all of the claims alleged in the Complaint.
o2wireless intends to deny all of the allegations contained in the Complaint
and to vigorously defend the action. Management believes that the outcome of
this litigation will not have a material adverse effect on the Companys
results of operations and financial condition; however, the lawsuit is in an
early procedural stage and therefore it is not possible to determine with
certainty what the effect may be on the Companys results of operations and
financial condition.

7) Baran Group Ltd. Merger

On June 6, 2002, the Company announced the execution of a merger agreement
with Baran. If the merger is completed, the Company will merge with and into a
wholly owned subsidiary of Baran. Each holder of the Companys common stock
will be entitled to receive 0.032135 ordinary shares of Baran in exchange for
their shares of the Companys common stock. The closing of the
merger is subject to the approval of the Company's shareholders and
certain other conditions. If, while the merger agreement is in effect,
the Company breaches certain exclusivity obligations or accepts
another acquisition proposal, Baran will be entitled to receive a
termination fee of $1.2 million.

- 14 -



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##### 



Baran has notified the Company that, based upon the results of operations
of the Company for the second quarter ended June 30, 2002 the ability of Baran to complete the merger transaction with the Company will
be subject to Barans further review and evaluation of the Companys current
financial condition and third quarter operations. This review is expected to
be completed within 30 days and if Baran determines to proceed with the merger, it is likely that the exchange ratio will be reduced. The terms of the merger agreement remain in effect
and Baran will continue to provide management consulting services to the
Company pursuant to the management consulting agreement entered into between
the parties in connection with the execution of the merger agreement.

Management Consulting Agreement

As part of the merger transaction, Baran and the Company have entered into
an agreement under which Baran has begun providing financial and management
consulting services to the Company, on business and financial matters as are
reasonably requested from time to time by the Companys board of directors,
including corporate strategy, budgeting of future corporate investments,
acquisition and divestiture decisions, operational matters and debt and equity
financing. In consideration for the services rendered by Baran under the
agreement, the Company will pay Baran a monthly fee of $400,000 for the
remainder of June 2002, and commencing in July 2002 and continuing each month
thereafter that the agreement is in effect, an amount equal to six percent (6%)
of the Companys consolidated monthly revenues. While the agreement is in
effect, $40,000 of the monthly fee will be paid by the fifteenth day of the
succeeding month. Any remaining fees due and payable under the agreement to
Baran shall be paid by the later of the end of the calendar month succeeding
the month in which the agreement terminates, or the date on which the Companys
obligations to Wachovia Bank, N.A., as described below are paid in full. As a condition to the waiver received from Wachovia with respect to the default at June 30, 2002, the Company is prohibited
from paying additional monies to Baran.

In addition, the Company will promptly reimburse Barans reasonable travel
accommodation and transportation expenses and other out-of-pocket costs as may
be incurred by Baran or its personnel, in connection with services rendered
under the agreement. The agreement will terminate on the earlier of:



| |  |  | the effective time of the merger,                                                                                                                          
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | 90 days following a notice of termination sent by the Company to Baran,                                                                                    
| |  |  | six months from the date of the agreement,                                                                                                                 
| |  |  | 10 days after the Company notifies Baran of termination for cause,
as defined below, which Baran fails to cure,                                            
| |  |  | 10 days after Baran gives notice to the Company of breach of the
agreement, which the Company fails to cure, and                                           
| |  |  | the date of termination of the merger agreement due to the Company
accepting an acquisition that is more favorable to the Company than the
proposed merger.

For purposes of this agreement, cause is defined as the filing of a
bankruptcy petition by Baran, Baran becoming insolvent or making an assignment
for the benefit of creditors, or Barans failing to render services to the
Company for a continuous 30 day period, without having provided the Company
with advance written notice of the reasons for the failure.

Working Capital Loan Agreement: Working Capital Note and Warrant

On June 5, 2002, as part of the merger transaction, Baran Acquisition Sub,
Inc. (Baran Sub), a wholly owned subsidiary of Baran, entered into a working
capital loan agreement with the Company. In the loan agreement, Baran Sub
agreed to provide working capital advances to the Company, subject to
conditions and covenants imposed on the Company, and provided that the
representations and warranties of the Company given in the loan agreement
remain true and correct on the date of each advance to the Company by Baran
Sub.

Baran Sub extended the first advance on June 6, 2002, immediately
following the execution of the loan agreement and the merger agreement, in the
amount of $5,000,000, which was evidenced by a working capital note. In
addition, and provided that no event of default has occurred, Baran Sub has
agreed to advance to the Company the following:

- 15 -



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| |  |  | No later than the date the Company files its Form 10-Q for the
quarter ended June 30, 2002 or August 15, 2002, the lesser of (x)
$3,000,000 or (y) the amount of the Companys loss (as defined below)
for the quarter ended June 30, 2002; and                 
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | If the loan agreement is in effect as of the later of the date the
Company files its Form 10-Q for the quarter ended September 30, 2002 or
November 15, 2002, at its discretion, an amount equal to the Companys
loss for the quarter ended September 30, 2002.

Loss is defined in the loan agreement as the Companys consolidated earnings
before interest, taxes, depreciation, amortization, non-cash restructuring
expenses and any accrued and unpaid management fees due to Baran Sub.

As of the date of filing this report, Baran has not made any additional
advances. Management expects to receive additional advances
after Baran has completed its review and evaluation of the Company
(approximately 30 days), assuming
Baran proceeds with the merger.

In consideration of Baran Subs execution of the loan agreement and the
extension of the initial working capital advance to the Company, the Company
has issued to Baran Sub a warrant to purchase 5,559,610 shares of the Companys
common stock, at a purchase price equal to $0.45 per share, which warrant may
be exercised only in the event that the merger agreement is terminated due to
acceptance of an acquisition proposal more favorable to the Company than the
proposed merger with Baran. The loan has been discounted to reflect the
fair value of the warrants issued, totaling approximately $80,000, using
the Black-Scholes option pricing method based on the following weighted-average
assumptions: expected volatility  159%; expected life  three years; risk-free
interest rate  3.9%; expected dividend yield  0%,
discounted to reflect a 5%
probability of occurrence.

Subordination Agreement

Also on June 5, 2002, Baran Sub entered into a subordination agreement
with Wachovia Bank, N.A. Under the subordination agreement, all rights and
remedies of Baran Sub under the loan agreement are and shall continue to be
junior in right of payments to the rights of Wachovia Bank under the Companys
credit agreement. Under the subordination agreement, Baran Sub agreed that it
shall not receive or accept any payment on its advances unless and until all of
the Companys obligations under the credit agreement are paid in full.
However, Baran Sub shall be entitled to receive, unless there is an event of
default under the credit agreement between Wachovia Bank and the Company, up to
$40,000 per month and reimbursement of its out-of-pocket expenses in partial
payment of the amounts due under the management consulting agreement described
above. As a condition to the waiver received from Wachovia with
respect to the default at June 30, 2002, the Company is
prohibited from paying additional monies to Baran. In addition, Baran Sub has agreed not to accelerate the maturity of its
loan to the Company or commence any action against the Company to recover any
part of its loans or join with any creditor, unless Wachovia Bank shall also
have joined in bringing against the Company any proceeding under any
bankruptcy, insolvency or similar law.

All liens, pledges, and security interest of any nature in any collateral
held by or in favor of Baran Sub under the loan agreement were made junior to
the liens, pledges and security interests in any collateral held by or in favor
of Wachovia Bank.

Baran Sub has agreed that, unless and until the subordination agreement is
terminated, it shall not proceed with any enforcement action against the
Company and shall have the sole right to administer and enforce all matters in
respect of the collateral.

If the merger fails to become effective as a result of the Companys
acceptance of a superior acquisition proposal, Wachovia Bank has agreed that,
as a condition to its consent to the transaction contemplated by the superior
proposal, it will require the payment in full of all of its senior debt upon
the closing of the transaction constituting the superior proposal and that in
no event will the senior debt be sold, assigned or transferred to the party
which proposed the superior proposal or to any other party on its behalf.

- 16 -



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

This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements regarding our expected financial position
and operating results, our business strategy and our financing plans are
forward-looking statements. These statements can sometimes be identified by our
use of forward-looking words such as believe, project, may, will,
anticipate, estimate, expect, or intend. Known and unknown risks,
uncertainties and other factors could cause our actual results to differ
materially from those contemplated by these statements. Such risks and
uncertainties include, but are not limited to:



| |  |  | general economic conditions,                                                                               
| | - |  | -----------------------------------------------------------------------------------------------------------
| |  |  | competition in the wireless services industry,                                                             
| |  |  | demand for outsourced wireless network services,                                                           
| |  |  | the Companys ability to manage its operations effectively,                                                
| |  |  | the Companys ability to maintain and increase revenues while controlling costs,                           
| |  |  | the Companys ability to retain its customers and attract new business,                                    
| |  |  | fluctuations in quarterly operating results, and                                                           
| |  |  | other uncertainties detailed from time to time in the
Companys Securities and Exchange Commission filings.

The section entitled Risk Factors in Item 1 of our Form 10-K for the year
ended December 31, 2001, discusses some additional important
factors that could cause the Companys actual results to differ materially from
those in such forward-looking statements.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are under no obligation to update any
of the forward-looking statements after the filing of this Form 10-Q to conform
such statements to actual results or to changes in our expectations.

The following discussion should be read in conjunction with our financial
statements and the related notes and other financial information appearing
elsewhere in this Form 10-Q and the information contained in our Annual Report
on Form 10-K for the year ended December 31, 2001.

Overview

We provide comprehensive integrated network solutions to all sectors of
the wireless telecommunications industry. This comprehensive end-to-end
solution enables us to address the current and emerging network infrastructure
requirements of our customers. These solutions enable our customers to plan,
design, deploy and maintain their wireless networks. We also offer business
planning and consulting services to wireless telecommunications industry
participants.

The Company currently funds its operations with available cash, cash
equivalents, and its working capital loan agreement with Baran (see Note 7
Baran Group Ltd. Merger for further discussion). Due to significant cost
reduction steps taken in 2001 and early 2002, continuing efforts to further
reduce expenses to reflect diminished revenue opportunity, and proceeds presently expected to be received (see paragraph below) in connection
with the Baran working capital loan agreement, the Company presently believes
that it will have sufficient cash and cash equivalents to fund its operations
pending the closing of the merger with Baran.

- 17 -



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Management presently expects that the proposed merger with Baran (as
described in Note 7 Baran Group Ltd. Merger) will close during the fourth
quarter of the fiscal year ended December 31, 2002. However, Baran has
notified the Company that, based upon the results of operations of the Company
for the second quarter ended June 30, 2002, the ability of
Baran to complete the merger transaction with the Company will be subject to
Barans further review and evaluation of the Companys current financial
condition and third quarter operations. This review is expected to be
completed within 30 days and if Baran determines to proceed with
the merger, it is likely that the exchange ratio will be reduced.
Management expects to receive additional advances
in connection with the working capital loan agreement at the completion of
Barans review and evaluation of the Companys current
financial condition, assuming Baran proceeds with the
merger. The terms of the merger agreement remain in effect and Baran will
continue to provide management consulting services to the Company pursuant to
the management consulting agreement entered into between the parties in
connection with the execution of the merger agreement. If the proposed merger
does not close, the Company will not have sufficient liquidity to maintain
operations through the early part of the fourth quarter of fiscal year ended
December 31, 2002. As such, management would consider re-financing the
existing credit facility, negotiating the sale of the Company to another
acquirer, or pursuing other options available to the Company. However,
management expresses no assurances that these alternatives would be available
to the Company if the proposed merger with Baran is not completed and as such
could be required to liquidate.

During the past few years, we acquired certain strategically positioned
companies in order to create an integrated telecommunications services company
with depth and expertise in wireless and wireline technologies and a broad
geographical presence. All of our acquisitions have been accounted for under
the purchase method of accounting. Aggregate goodwill for all of our
acquisitions from 1997 to 2001 is approximately $44.2 million which, prior to
December 31, 2001, was generally being amortized on a straight-line basis over
5 to 10 years, the expected period of benefit. Effective January 1, 2002, with
the adoption of FAS 142 the Company is no longer amortizing goodwill on these
acquisitions but evaluating the carrying value of the goodwill on an annual
basis or as required if an event occurs or circumstances change that would more
likely than not reduce the fair value of the Company below its carrying value.

During the first quarter of 2002, as a result of recent economic
triggering events, the Company performed an impairment analysis of its goodwill
and recorded a $28.8 million pre-tax charge for the impairment of goodwill. The
charge reflected changes in the Companys business plans, declines in the telecommunications sector along with the
current depressed market price for the Companys common stock and is reflected
as an operating expense in the accompanying financial statements.

We generally offer our network planning, design and deployment services on
either a fixed-price or a time-and-materials basis, with scheduled deadlines
for completion times, that is, on a time-certain basis. Revenue on time
and-materials contracts is recognized as services are rendered. We recognize
revenues for our fixed-price contracts using the percentage-of-completion
method of accounting. Under the percentage-of-completion method, in each
period we recognize expenses as they are incurred, and we recognize revenues
based on a comparison of the current costs incurred for the project to the then
estimated total costs of the project.

Accordingly, the revenues we recognize in a given quarter depend primarily
on the costs we have incurred for individual projects and our then current
estimate of the total remaining costs to complete individual projects. These
estimates are reviewed on a contract-by-contract basis, and are revised
periodically throughout the life of the contract such that adjustments to the
results of operations relating to these revisions are reflected in the period
of revision. Our estimated costs for a project are based on many factors.
Accordingly, the final projects cost may vary from the original estimate.
Certain project costs can vary significantly from original estimates, which may
lead to significant fluctuations in actual gross margin compared to projected
margins. If in any period we significantly increase our estimate of the total
costs to complete a project, we may recognize very little or no additional
revenue with respect to that project. As a result, gross margins in such period
and in future periods may be significantly reduced, and in some cases, a loss
may be required to be recognized. Provisions for estimated losses on
uncompleted contracts are made

- 18 -



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##### 



in the period in which such losses are
determined. For the three months ended June 30, 2002, revenues from our
fixed-price contracts accounted for approximately 75% of our total revenues.
Our contracts are typically structured with milestone events that dictate the
timing of payments to us from our customers. Accordingly, there may be a
significant delay between the date we record revenues and the date we receive
payment from our customers. During our planning process, we divide projects
into deliverables, which enables us to better understand the costs associated
with each of the components and minimize the risks of exceeding our initial
estimates.

Our customers include wireless carriers, equipment vendors, tower
companies and broadband carriers. We have derived, and believe that we will
continue to derive a significant portion of our revenues from a limited number
of customers. For the three months ended June 30, 2002, we derived 61% of our
revenues from our top five customers. Our business was obtained from multiple
departments within these organizations. The volume of work performed for
specific customers is likely to vary from period to period, and a major
customer in one period may not use our services in a subsequent period.

Due to the recent downturn in financial markets in general, and
specifically within the telecommunications industry, many of our customers are
having trouble obtaining necessary capital resources which are required to fund
the expansion of their businesses (e.g. telecom network deployments and
upgrades). The current volatility of the financial markets and economic
slowdown in the U.S. and internationally has also intensified the uncertainty
experienced by many of our customers, who are finding it increasingly difficult
to predict demand for their products and services. As a result, many of our
customers may continue to slow and postpone the deployment of new wireless
networks and the development of new technologies and products, which may
continue to reduce the demand for our services. Some of our customers have
recently cancelled or suspended their contracts with us and many of our
customers or potential customers have postponed entering into new contracts for
our services. Also due to the difficult financing and economic conditions, some
of our customers may not be able to pay us for services that we have already
performed. Based on the Companys assessment of the expected collectibility of
various receivables, we have increased our allowance for doubtful accounts by
$771,000 during the quarter ending June 30, 2002 to specifically reserve for
those customers for which collectibility is uncertain.

Our net contract revenue receivables have continued to decrease in
absolute dollars from $23.4 million at December 31, 2001 to
$12.5 million at
June 30, 2002. This reflects the slowdown in revenues for the period along with
slower payments from our customers. This has resulted in an increase of our
days sales outstanding (DSOs), from 79 days at
December 31, 2001 to 104 days at
June 30, 2002. Our costs and estimated earnings in excess of billings decreased
from $15.5 million at December 31, 2001 to $7.3 million at June 30, 2002. This
represented an increase from 45 days to 61 days. This increase represents a
delay in billing certain large projects as billing milestones had not been
achieved.

Our cost of revenues includes direct materials, compensation and benefits,
living and travel expenses, payments to third-party subcontractors and other
direct project-related expenses, in addition to allocation of indirect
overhead. Cost of revenues excludes down-time for direct compensation and
benefits and training not required for a specific job. As of June 30, 2002 we
had 281 employees working on contracted projects.

Selling, general and administrative expenses include compensation and
benefits, facilities expenses and other expenses not related directly to
projects. All unassigned employees and related costs are charged to selling,
general and administrative expenses along with training costs associated with
new hires.

Depreciation and amortization expenses include depreciation on our
furniture, fixtures and equipment and in prior years, amortization related to
our acquisitions through December 31, 2001.

Interest expense is primarily related to interest on notes payable to
related parties and our bank facility. It also includes adjustments to the
valuation of the interest rate swap agreement.

- 19 -



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##### 



Prior to our initial public offering in August 2000, we granted options to
certain of our employees at exercise prices below our initial public offering
price of $12.00 per share, which resulted in a total future compensation
expense of approximately $1.9 million to be recognized over the vesting period
of the options. A majority of the aggregate expense amount has been recognized
over the past two fiscal years. Of this aggregate amount, approximately $23,000
was expensed during the three months ended June 30, 2002 as a component of
selling general and administrative expenses and the remaining $21,000 will be
expensed through September 30, 2002.

Critical Accounting Policies and Significant Estimates

Factors that could affect the Company's
future operating results and cause actual results to vary materially from expectations
include, but are not limited to, lower than anticipated growth from existing customers,
an inability to attract new customers, an inability to successfully integrate acquisitions,
technology changes, or a decline in the financial stability of the Company's customers.

Negative developments in these or other risk factors
could have a material adverse effect on the Company's financial position and results of operations.

A summary of the Company's
critical accounting policies follows:

Revenue Recognition

The Company offers network planning, design
and deployment services on either a fixed price or a time and materials basis, with
scheduled deadlines for completion times. Revenue on time and materials contracts is
recognized as services are rendered. Revenue on fixed price contracts is recognized
using the percentage-of-completion method. Under the percentage-of-completion method, in each period
expenses are recognized as incurred and revenue is recognized based on a comparison of the current
costs incurred for the project to the then estimated total costs of the project.
Accordingly, the revenues recognized in a given quarter depend on the costs incurred
for individual projects and the estimate of the total remaining costs to complete individual
projects. These estimates are reviewed on a contract-by-contract basis, and are revised
periodically throughout the life of the contract such that adjustments to the results of
operations relating to these revisions are reflected in the period of revision.
Estimated costs to complete a project are based on many factors. Accordingly, the final project cost
may vary from the original estimate. Certain project costs can vary significantly from original estimates which may lead to
significant fluctuations in actual gross margin compared to projected margins. As a result,
gross margins in future periods may be significantly reduced, and in some cases, a loss may be required to be
recognized. Provisions for estimated losses on uncompleted contracts are made in the
period in which such losses are determined.

Contract Revenue Receivables

The Company is required to estimate the collectibility
of its contract revenue receivables. A considerable amount of judgment is required in assessing the ultimate realization of these
receivables including the current credit-worthiness of each customer. Significant changes in required reserves
have been recorded in recent periods and may occur in the future due to the current market environment
in the telecommunications industry.

Inventories

The Company is required to state its
inventories at the lower of cost or market. In assessing the ultimate realization of
inventories, the Company is required to make judgments as to future demand requirements
and compare that with the current or committed inventory levels. The Company has recorded
changes in required reserves in recent periods due to changes in strategic direction,
such as discontinuances of product lines as well as changes in market conditions due to
changes in demand requirements. It is possible that changes in required inventory reserves may
continue to occur in the future due to the current market conditions.

Restructurings

The Company initiated restructuring plans during the three
months ended March 31, 2001 and 2002, respectively, and the
three months ended June 30, 2002. See further discussion Note 3 Restructuring.
In conjunction with these restructuring plans, the Company established restructuring reserves
to account for the estimated costs related to the restructuring plan. These costs primarily
related to employee severance benefits, office and equipment
obligations, and the write-off of fixed assets.

The Company established reserves for individually negotiated
employee severance payments based upon length of service, accrued vacation, extended insurance coverages,
and expected federal and state payroll taxes.

For office closings, reserves were established for all remaining lease
payments due on buildings and office equipment that would no longer be utilized in continuing
operations. The Company assumed no sub-leases would be executed.

The impairment
charges for fixed assets related to field and office
equipment owned by the Company that would be abandoned and no longer utilized in continuing operations.
The Company assumed no salvage value on disposal of these fixed assets.

The Company is self-insured for medical claims
up to a stop loss of $70,000 per event and has established termination benefits reserves for the
expected period that former employees of the Company will be covered under COBRA benefits.

Legal

The Company is subject to proceedings, lawsuits and other claims
related to environmental, labor, product and other matters. The Company is required to assess the likelihood
of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses.
A determination of the amount of reserves required, if any, for these contingencies are made after
careful analysis of each individual issue. The required reserves may change in the future due to new
developments in each matter or changes in approach such as a change in settlement strategy in dealing
with these matters.

Related Parties

The Company has related party transactions with members of its Board
of Directors, senior management, and employees. These transactions
may include issuances of debt and loans, execution of
operating leases to the Company, and potential earn-out payments. The Company believes that the
terms of the above transactions with related parties are comparable to similar transactions among
unrelated parties.

Discontinued Operations of the Lighting Division

The Company has recorded an estimated loss on the future sale for the
Lighting Division asset group of approximately $3.4 million,
representing the estimated fair value of the asset group.
Management established its estimated loss on future sale assuming transaction costs of $500,000 and
current negotiated offers available to the Company.

Baran Warrant

The Company has issued to Baran a warrant to purchase
5,559,610 shares of the Company's common stock, at a purchase price equal to $0.45 per share, which
warrant may be exercised only in the event that the merger agreement is terminated due to
acceptance of an acquisition proposal more favorable to the Company than the proposed merger with
Baran. The loan has been discounted to reflect the fair value of the warrants issued, totaling approximately
$80,000. Management valued the warrants using the Black-Scholes option pricing method based on the
following weighted-average assumptions: expected
volatility  159%; expected life  three years; risk-free interest
rate  3.9%; expected dividend
yield  0%, discounted to reflect a 5% probability of
occurrence. Management established its 5% probability of receiving a
more favorable offer based on required fees to be repaid to Baran,
increased dilution of its common stock upon execution of the warrant,
and alternative offers available to the Company.

- 20 -



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##### 



The Company is subject to proceedings, lawsuits and other claims
related to environmental, labor, product and other matters. The Company
is required to assess the likelihood of any adverse judgments or outcomes
to these matters as well as potential ranges of probable losses. A
determination of the amount of reserves required, if any, for these
contingencies are made after careful analysis of each individual issue.
The required reserves may change in the future due to new developments in
each matter or changes in approach such as a change in settlement strategy
in dealing with these matters.

The Company has related party transactions with members of its Board of
Directors, senior management, and employees. These transactions include
issuances of debt and loans, execution of operating leases to the Company, and
potential earn-out payments. The Company believes that the terms of the above
transactions with related parties are comparable to similar transactions among
unrelated parties.

Restructuring

During the first quarter of 2002 the Company implemented a restructuring
plan to further streamline operations and cost structure to reflect the
slowdown in the telecommunications sector and the decline in revenues it has
experienced. As part of the restructuring plan, which consists
primarily of severances for
workforce reduction, write-off of fixed assets, closure of certain offices and
the consolidation of certain facilities, the Company recorded a restructuring
charge of approximately $3.4 million over the first two quarters of 2002.
During the three months ended March 31, 2002, the Company recorded a charge of
approximately $423,000 of which $283,000 was paid during that period. During
the three months ended June 30, 2002, the Company recorded an additional charge
of approximately $3.0 million of which $1.8 million was paid during that
period. The Company anticipates recording an additional restructuring charge of
approximately $1.5-2 million during the three months ended September 30, 2002.

Workforce reduction has been the main focus of the restructuring. Employee
headcount has been reduced from 573 employees at December 31, 2001 to 352
employees at June 30, 2002, representing a reduction of 221 employees or
approximately 39% of the Companys workforce. The reductions took place in all
sectors of operations and at all levels of staff, including management. The
Company recorded approximately $1.9 million for severance and other termination
benefits related to the workforce reduction during the six month period ended
June 30, 2002.

Additionally, as part of the restructuring, the Company is closing certain
regional offices. Costs related to remaining office and equipment leases for
these offices were included in the Companys restructuring reserve. The
Companys fiscal year 2002 restructuring plan utilization was as follows (in
thousands of dollars):

|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 
|------------------------------------- |  | -------------------------- | --- | -------- |  | ---------- | ---- | ------- |  | -------- | --- | ---------- |  | - | ----- |  |  | - | ------ | - |  | - | ----- | 
|                                      |  | FY 2002 Restructuring Plan
|                                      |  |                           
|                                      |  | 1st Qtr                    |     | 1st Qtr  |  | Balance at |      | 2nd Qtr |  | 2nd Qtr  |     | Balance at
|                                      |  | Charges                    |     | Incurred |  | 3/31/2002  |      | Charges |  | Incurred |     | 6/30/2002 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |           
|Employee Severance                    |  | $                          | 223 |          |  | $          | (223 | )       |  | $        |    |            |  | $ | 1,367 |  |  | $ | (446   | ) |  | $ | 921   | 
|Severance Benefits                    |  |                            | 140 |          |  |            |     |         |  |          | 140 |            |  |   | 140   |  |  |   | (80    | ) |  |   | 60    | 
|Office Closings                       |  |                            | 60  |          |  |            | (60  | )       |  |          |    |            |  |   | 951   |  |  |   | (453   | ) |  |   | 498   | 
|Fixed Asset Write-off                 |  |                            |    |          |  |            |     |         |  |          |    |            |  |   | 448   |  |  |   | (448   | ) |  |   |      | 
|Office and Equipment Leases Write-off |  |                            |    |          |  |            |     |         |  |          |    |            |  |   | 98    |  |  |   | (9     | ) |  |   | 89    | 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 
|Total                                 |  | $                          | 423 |          |  | $          | (283 | )       |  | $        | 140 |            |  | $ | 3,004 |  |  | $ | (1,436 | ) |  | $ | 1,568 | 
|                                      |  |                            |     |          |  |            |      |         |  |          |     |            |  |   |       |  |  |   |        |   |  |   |       | 

- 21 -



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##### 



During the first quarter of 2001, the Company also implemented a
restructuring plan at which time it took a restructuring charge totaling
approximately $1.1 million. As of March 31, 2002 approximately $786,000 in
costs were paid relating to this restructuring. The Company now believes it has
incurred and paid all costs associated with that restructuring. Hence, during
the three months ended March 31, 2002, the Company recorded a restructuring
credit for the remaining unused liability of approximately $314,000 related to
that initial charge.

Discontinued Operations

Specialty Drilling, Inc. Sale

On April 12, 2001 the Company sold substantially all of the assets of
Specialty Drilling, Inc. During the quarter ended March 31, 2001 the Company
provided for approximately $784,000 in losses from discontinued operations and
losses on disposal of discontinued operations. As of March 31, 2002,
approximately $500,000 in losses had been incurred and paid. The Company does
not believe there are any additional losses to be paid and reversed the
remaining $284,000 of the provision during the quarter ended March 31, 2002.

Revenues from Specialty Drilling, Inc. were approximately $170,000 for the
six months ended June 30, 2001 while the net loss for the six months ended June
30, 2001 was $196,000. There were no discontinued operations for the six
months ended June 30, 2002 related to the sale of Specialty Drilling, Inc.

o2wireless Lighting, Inc. Sale

On June 4, 2002, the Companys Board of Directors formally approved a
Recovery Plan adopted in connection with the signing of the merger agreement
with Baran Group, Ltd. (See Note 7 Baran Group Ltd. Merger for further
discussion). This Plan included certain revenue and other operating
performance targets, relocation of the corporate offices, an incentive bonus
program for key staff and management, and the sale of o2wireless Lighting, Inc.
(the Lighting Division). The Lighting Division installs lighting systems on
towers and sells aftermarket systems.

In August 2001, FASB issued SFAS 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. As the Lighting Division has
clearly distinguishable operations and cash flows from the rest of
the Company, the assets and liabilities of the Lighting Division are
defined as an asset group under SFAS 144 and will be discontinued
from the ongoing operations of the Company. The Company plans to have
no further involvement in the operations of the Lighting Division and
expects to sell the asset group to an independent third party and is
in current negotiations regarding the sale of the Lighting Division.

Accordingly, the
Company has classified the Lighting
Division as held for sale and reflected it as a discontinued operation
for all periods presented. The
Company expects the sale of the Lighting Division to be completed by
the fourth quarter of fiscal year 2002. The condensed consolidated
financial statements have been reclassified to segregate the assets,
liabilities and operating results of the discontinued operations for
all periods presented.

- 22 -



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##### 



Accordingly, the Company has elected to report the pending sale of the
Lighting Division as a discontinued operation by early adoption of SFAS 144.
The Company expects the sale of the Lighting Division to be completed by the
fourth quarter of fiscal year 2002. The condensed consolidated financial
statements have been reclassified to segregate the net assets and operating
results of these discontinued operations for all periods presented.

Summary operating results of the discontinued operations (in thousands of
dollars) are as follows:

|                                         |  |                             |       |                           |  |      |        |      |  |   |       |   |  |   |        |  
|---------------------------------------- |  | --------------------------- | ----- | ------------------------- |  | ---- | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                         |  | Three months ended June 30, |       | Six months ended June 30,
|                                         |  |                             |       |                          
|                                         |  | 2001                        |       | 2002                      |  | 2001 |        | 2002
|                                         |  |                             |       |                           |  |      |        |     
|Revenue                                  |  | $                           | 2,822 |                           |  | $    | 1,535  |      |  | $ | 5,412 |   |  | $ | 3,017  |  
|Gross profit                             |  |                             | 873   |                           |  |      | 514    |      |  |   | 1,678 |   |  |   | 1,014  |  
|Operating
income (loss)                  |  |                             | 164   |                           |  |      | (95    | )    |  |   | 267   |   |  |   | (262   | )
|Interest expense                         |  |                             |      |                           |  |      |       |      |  |   | (1    | ) |  |   | (1     | )
|Loss on disposal of assets               |  |                             |      |                           |  |      | (3,400 | )    |  |   |      |   |  |   | (3,400 | )
|Income tax expense                       |  |                             |      |                           |  |      |       |      |  |   |      |   |  |   |       |  
|(Loss)
gain from discontinued operations |  |                             | 164   |                           |  |      | (3,495 | )    |  |   | 266   |   |  |   | (3,663 | )

The operating loss for the three months ended June 30, 2001 includes
depreciation of $20,000. The operating loss for the three months ended June 30, 2002 includes
depreciation of $16,000 and restructuring costs of $19,000.

The operating loss for the six months ended June 30, 2001 includes
depreciation of $39,000. The operating loss for the six months ended June 30, 2002 includes
depreciation of $33,000 and restructuring costs of $19,000.

The restructuring costs consist of the following (in thousands of
dollars):

|                   |  |                             |   |                           |  |      |    |      |  |   |   |  |  |   |    | 
|------------------ |  | --------------------------- | - | ------------------------- |  | ---- | -- | ---- |  | - | - |  |  | - | -- | 
|                   |  | Three months ended June 30, |   | Six months ended June 30,
|                   |  |                             |   |                          
|                   |  | 2001                        |   | 2002                      |  | 2001 |    | 2002
|                   |  |                             |   |                           |  |      |    |     
|Employee
Severance |  | $                           |  |                           |  | $    | 13 |      |  | $ |  |  |  | $ | 13 | 
|Severance Benefits |  |                             |  |                           |  |      | 6  |      |  |   |  |  |  |   | 6  | 
|Total              |  | $                           |  |                           |  | $    | 19 |      |  | $ |  |  |  | $ | 19 | 
|                   |  |                             |   |                           |  |      |    |      |  |   |   |  |  |   |    | 

- 23 -



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##### 



Assets and liabilities of discontinued operations (in thousands of
dollars) are as follows:

|                                                                                                                                       |                                        |   |              |     |          |   |       |       | 
|-------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | - | ------------ | --- | -------- | - | ----- | ----- | 
|                                                                                                                                       |                                        |   | December 31, |     | June 30,
|                                                                                                                                       |                                        |   | 2001         |     | 2002    
|                                                                                                                                       |                                        |   |              |     |         
|Cash and cash equivalents                                                                                                              |                                        | $ | 71           |     |          | $ | 121   |      
|Contract revenue receivable, net of allowance for doubtful accounts of $13
and $5 at December 31, 2001 and June 30, 2002, respectively |                                        |   | 1,389        |     |          |   | 1,116 |      
|Inventories                                                                                                                            |                                        |   | 2,895        |     |          |   | 2,867 |      
|Other current assets                                                                                                                   |                                        |   | 116          |     |          |   | 50    |      
|Property and equipment, net of accumulated depreciation of $154 and $187
at December 31, 2001 and June 30, 2002, respectively          |                                        |   | 479          |     |          |   | 455   |      
|Other assets                                                                                                                           |                                        |   | 11           |     |          |   | 17    |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|Assets of discontinued operations                                                                                                      |                                        | $ | 4,961        |     |          | $ | 4,626 |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|Current
portion of other indebtedness                                                                                                  |                                        |   | 9            |     |          |   | 10    |      
|Accounts payable                                                                                                                       |                                        |   | 436          |     |          |   | 198   |      
|Accrued expenses                                                                                                                       |                                        |   | 169          |     |          |   | 116   |      
|Other current liabilities                                                                                                              |                                        |   | 6            |     |          |   | 5     |      
|Other
long-term indebtedness, less current portion                                                                                     |                                        |   | 11           |     |          |   | 6     |      
|Reserve for loss on sale and operating losses                                                                                          |                                        |   |             |     |          |   | 3,400 |      
|                                                                                                                                       |                                        |   |              |     |          |   |       |      
|                                                                                                                                       | Liabilities of discontinued operations |   | $            | 631 |          |   | $     | 3,735 | 
|                                                                                                                                       |                                        |   |              |     |          |   |       |      

Results of Operations for the Three Months and Six Months Ended June 30, 2002

Revenues. Our
revenues decreased 57%, or $14.2 million, from $25.0 million
for the three months ended June 30, 2001 to $10.8 million for the three months
ended June 30, 2002. The decrease was primarily attributable to the overall
decline in network construction activity and the continued reduction or delay
of capital expenditures by some of our customers, particularly equipment
manufacturers. We do not anticipate any significant increase in revenues in the
near future until there is a sustained increase in capital
expenditures in the telecommunications sector.

Our revenues decreased 37% or $19.4 million from $52.7 million for the six
months ended June 30, 2001 to $33.4 million for the six months ended June 30,
2002. The decrease was primarily attributable to the overall decline in
network construction activity and the continued reduction or delay of capital
expenditures by some of our customers, particularly equipment manufacturers.

Cost of Revenues.Our cost of revenues decreased 29% from $20.3 million,
or 81% of revenues, for the three months ended June 30, 2001 to $14.3 million,
or 133% of revenues, for the three months ended June 30, 2002. Gross margin
decreased from 19% for the three months ended June 30, 2001 to (33%) for the
three months ended June 30, 2002. The decrease in 2002 reflected continued
pricing pressure in the telecommunications sector, causing revenue to decline
at a faster rate than cost-cutting initiatives along with costs of
approximately $1.7 million associated with the closure of certain
contracts in one of our divisions closed during the quarter.

Our cost of revenues decreased 21% from $42.7 million for the six months
ended June 30, 2001 to $33.8 million for the six months ended June 30, 2002
due, primarily to deterioration of our revenue base.
Gross margin was (1)% for the six months ended June 30, 2002,
compared to 19% for
the six months ended June 30, 2001. Gross margin for the six months ended June
30, 2002 decreased from that of the prior year primarily due to
continued pricing pressure in the telecommunication sector causing
revenue to decline at a faster rate than cost-cutting initiatives. We expect margins to improve for the
remaining quarters of 2002 based on our continued cost reduction efforts and
streamlining of our operations.

Selling, General and Administrative Expenses. Selling, general, and
administrative expenses decreased 10% from $6.8 million, or 27% of revenues,
for the three months ended June 30, 2001 to $6.1 million,
or 57% of revenues,
for the three months ended June 30, 2002. The decrease in absolute dollars
reflects our continued efforts to reduce selling, general and administrative
expenses in line with the decline in revenues. Included in SG&A
expenses for the quarter is a $1.2 million bad debt expense recorded during the three months ended June 30, 2002.
Based on the Companys assessment of the expected collectibility of various
receivables, we have increased our allowance for doubtful accounts by
approximately $500,000 during the quarter ended June 30, 2002
to specifically reserve for those customers for which collectibility is
uncertain.

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Selling, general, and
administrative expenses decreased 24% from $15.6
million for the six months ended June 30, 2001 to $11.9 million for the six
months ended June 30, 2002. The decrease was attributable in large part to our
restructuring plan and reductions in costs to match our declining
revenue.

Depreciation and Amortization. Depreciation and amortization expenses
decreased 71% from $1.9 million for the three months ended June 30, 2001 to
$568,000 for the three months ended June 30, 2002. This significant decrease is
attributable to the adoption of FAS 142 on January 1, 2002, with the result
that the Company is no longer amortizing goodwill on acquisitions but
evaluating the carrying value of goodwill on an annual basis or as required if
an event occurs or circumstances change that would more likely than not reduce
the fair value of the Company below its carrying value. As described
previously, the Company recorded a $28.8 million charge for the impairment of
its goodwill balance during the first quarter of 2002. This is recorded as an
operating expense in the accompanying financial statements as the impairment
analysis was performed as a result of current period events, not attributable
to the transition provisions of SFAS 142.

Depreciation and amortization expenses decreased 75% from $3.9 million for
the six months ended June 30, 2001 to $961,000 for the six months ended June
30, 2002. This significant decrease reflects the adoption of
FAS 142 on January 1, 2002 as discussed in the previous
paragraph.

Interest Expense. Interest expense remained relatively constant from
$430,000 for the three months ended June 30, 2001 to $448,000 for the three
months ended June 30, 2002. The primary reason for the consistency in interest
expense is a reflection of similar levels of borrowing and similar interest
rates in both fiscal periods. Interest expense is expected to
increase in future quarters with
the addition of the Baran debt.

Interest expense decreased 21% from $851,000 for the six months ended June
30, 2001 to $676,000 for the six months ended June 30, 2002. The decrease in
interest expense is primarily attributable to a reduced usage of the credit
facility.

Other Income (Expense).For the three months ended June 30, 2001, other
income was approximately $143,000 as compared to other income of approximately
$5,000 for the three months ended June 30, 2002. Other income for the three
months ended June 30, 2001 consisted primarily of interest income from our note
receivable with South Carolina Phone LLC, which was fully paid during
2001.

For the six months
ended June 30, 2001, other income was $157,000 as
compared to other expense of approximately $15,000 for the six months ended
June 30, 2002. The income for the six months ended June 30, 2001 was primarily
attributable to interest income from our note receivable with South Carolina
Phone LLC.

Income Tax Expense. No income tax expense was recorded for the three
months or six months ended June 30, 2001 and 2002.

Net Loss. Net loss from continuing operations for the three months ended
June 30, 2001 was $4.1 million, as compared to net loss of $15.2 million for
the three months ended June 30, 2002. The increase in net loss was primarily
attributable to decreased margins, restructuring charges, merger related
expenses, the overall decline in network construction activity and the
continued reduction or delay of capital expenditures by some of our customers,
particularly equipment manufacturers.

Net loss from continuing operations for the six months ended June 30, 2002
was $47.3 million, as compared to a net loss of $10.8 million for the six
months ended June 30, 2001. The net loss for the six months ended June 30,
2002 is primarily attributable to further erosion within the marketplace and
the write-off of approximately $28.8 million in goodwill.

- 25 -



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##### 



Liquidity and Capital Resources

Net Cash Used in Operating Activities

As of June 30,
2002, we had a cash balance of approximately $4.8 million
which included approximately $1.5 million of outstanding checks that had not
cleared the bank at June 30, 2002. Net cash provided by and used in
operations is primarily derived from our contracts in process and changes in
working capital. Net cash used by continuing operations was approximately $4.5 million for
the six months ended June 30, 2002.

Net Cash Used in Investing Activities

Net cash used in
investing activities by continuing operation was approximately $124,000 for the
six months ended June 30, 2002, consisting primarily of capital expenditures to
support our operations.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June
30, 2002 was approximately $4.6 million. This consisted primarily of $7.0
million borrowed under our credit facility and working capital loan agreement with Baran, offset by
repayment of various notes payable of approximately $1.8 million.

Contractual Obligations and Commercial Commitments

The following summarizes our future contractual obligations and commercial
commitments for the period ended June 30, 2002 (in thousands of dollars):

|                                   |  |       |        |        |  |                        |        |           |  |         |       |  |  |   |     |       |  |   |   | 
|---------------------------------- |  | ----- | ------ | ------ |  | ---------------------- | ------ | --------- |  | ------- | ----- |  |  | - | --- | ----- |  | - | - | 
|                                   |  |       |        |        |  | Payments Due by Period
|                                   |  |       |        |        |  |                       
|                                   |  |       |        |        |  | Less than              |        |           |  |         |       |  |  |   |     | After
|                                   |  | Total |        | 1 year |  | 1-3 years              |        | 4-5 years |  | 5 years
|                                   |  |       |        |        |  |                        |        |           |  |        
|Line of credit and notes payable   |  | $     | 13,508 |        |  | $                      | 13,212 |           |  | $       | 296   |  |  | $ |    |       |  | $ |  | 
|Capital Lease Obligations          |  |       | 235    |        |  |                        | 96     |           |  |         | 139   |  |  |   |    |       |  |   |  | 
|Operating Leases                   |  |       | 4,304  |        |  |                        | 1,247  |           |  |         | 2,676 |  |  |   | 381 |       |  |   |  | 
|                                   |  |       |        |        |  |                        |        |           |  |         |       |  |  |   |     |       |  |   |   | 
|Total Contractual Cash Obligations |  | $     | 18,047 |        |  | $                      | 14,555 |           |  | $       | 3,111 |  |  | $ | 381 |       |  | $ |  | 
|                                   |  |       |        |        |  |                        |        |           |  |         |       |  |  |   |     |       |  |   |   | 

Our commercial commitments for the period ended June 30, 2002 represented
the proceeds received in connection with the Baran working capital loan
agreement and our credit facility which are included above in our line of
credit and notes payable balance. At June 30, 2002, we had no availability for
additional borrowings under the credit facility and at that date it had $7.7
million in outstanding borrowings. The credit facility is due November 15,
2002. For more information regarding the credit facility, please see -Credit
Facility below.

- 26 -



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##### 



On April 15, 2002, the Company entered into a Standby Letter of Credit
Agreement with Fleet Capital Corporation. This Letter of Credit is in the
amount of $337,652. The Letter of Credit is guaranteed by several of the
Companys shareholders including American Capital Strategies, Ltd., Stratford
Capital Partners, LP, DFW Capital Partners, LP, and DeMuth, Folger & Wetherill
II, LP. The Letter of Credit will expire on April 15, 2003 and shall not be
extended without the express written consent of each of the shareholders noted
above.

Cash Requirements

Our cash requirements through the end of fiscal year 2002 are primarily to
fund operations, capital expenditures, cash restructuring outlays and service
debt agreements.

Sources of Cash

We currently fund our operations with available cash, cash equivalents,
and the proceeds received in connection with the Baran working capital loan
agreement (see Note 7 Baran Group Ltd. Merger in the accompanying financial
statements for further discussion). Due to significant cost reduction steps
taken in 2001 and early 2002, continuing efforts to further reduce expenses
to reflect diminished revenue opportunity, and proceeds
presently expected to be received (see paragraph below) in connection with the Baran working capital
loan agreement, the Company presently believes that it will have sufficient
cash and cash equivalents to fund its operations pending the closing of the
merger with Baran.

Management presently expects that the proposed merger with Baran (as described
in Note 7 Baran Group Ltd. Merger) will close during the fourth quarter of
the fiscal year ended December 31, 2002. However, Baran has notified the
Company that, based upon the results of operations of the Company for the
second quarter ended June 30, 2002, the ability of Baran to
complete the merger transaction with the Company will be subject to Barans
further review and evaluation of the Companys current financial condition and
third quarter operations. This review is expected to be completed within 30
days and if Baran determines to proceed with the merger, it is likely that the exchange ratio will be reduced. Management expects to receive additional advances in connection with
the working capital loan agreement at the completion of Barans review and
evaluation of the Companys current financial condition, assuming Baran proceeds with the merger. If the
proposed merger does not close, the Company will not have sufficient liquidity
to maintain operations through the early part of the fourth quarter of fiscal
year ended December 31, 2002. As such, management would consider re-financing
of the existing credit facility, negotiating the sale of the Company to another
acquirer, or pursuing other options available to the Company. However,
management expresses no assurances that these alternatives would be available
to the Company if the proposed merger with Baran is not completed and, as such,
could be required to liquidate.

The Companys bank credit facility requires that it maintains specified
levels of earnings (loss) before income taxes, depreciation, and amortization
(EBITDA) and its borrowing base is dependent upon the amount of eligible
receivables, as defined in the credit agreement. As of June 30, 2002, the
Company was not in compliance with its EBITDA covenant under the terms of the
fifth amendment to its credit agreement dated June 5, 2002 and was therefore in
default. Under the terms of the fifth amendment, if the EBITDA
requirements are not met, suspension of the requirements under the facility
would have been permitted if Baran made cash available to the Company to
fund the EBITDA shortfall either in the form of an equity contribution or one
or more subsequent disbursements under the working capital loan agreement with
Baran. As of the date of filing this report, Baran had not provided the
Company with additional funding; however, the Company expects to receive additional funding after Baran has completed its review and evaluation of the Companys current financial condition
(approximately 30 days), assuming Baran proceeds with the merger. See further
detail in Credit Facility below. On August 15, 2002
the Company obtained a waiver of the default at
June 30, 2002 subject to (1) remitting $1.0 million to the Bank as a permanent
reduction in the Companys credit line and (2) an agreement to pay no further
monies to Baran. If the Company fails to achieve its
budgeted revenues and margins and/or experiences any significant write-offs,
the Company could be in violation of the covenants of its credit facility in
the future. Based on the Companys current cash and cash equivalents, it would
not have sufficient resources to repay its indebtedness under the credit
facility.

On June 30,
2002, the Company had cash and cash equivalents of $4.8
million, which included approximately $1.5 million in checks that had not
cleared the bank at June 30, 2002. As of June 30,
2002, the Company had outstanding balances of $5.0 million related to the Baran
Working Capital Loan (see Note 7 Baran Group Ltd. Merger in the accompanying
financial statements for further discussion) and $7.7 million under its credit facility with no additional availability under the
credit facility. As a result of principal reduction payments made
subsequent to June 30, 2002, the outstanding balance under the
credit facility was $5.6 million as of the date of filing this
report.

- 27 -



---



##### 



Credit Facility

Effective June 5, 2002, the Company amended its syndicated credit
agreement with Wachovia Bank, N.A., as agent. The amount available under the
credit facility is limited to the lesser of (a) $9.7 million or (b) a
predefined borrowing base determined by Eligible Receivables, as defined in the
credit agreement. The Eligible Receivables balance excludes certain accounts
receivable from EBITDA covenant calculations. After the amendment, no more
revolving loans or letters of credit will be made available to the Company.
The amendment provides for repayments aggregating $1.6 million over the period
ending November 15, 2002, the maturity date of the term loan. Accordingly, the
Companys ability to maintain its current level of borrowings under the
facility, without having to make additional repayments prior to maturity, is
contingent upon gross receivables, based on a pre-defined borrowing base.

The line of credit is secured by substantially all of the Companys
business assets, is guaranteed by its subsidiaries and Baran, and is senior to
approximately $5.6 million of subordinated indebtedness. The terms of the
credit agreement include several covenants and restrictions including but not
limited to those discussed in this filing. Under the terms of the agreement,
for the quarters ended June 30, 2002 and September 30, 2002, the Companys
EBITDA for each such fiscal quarter, adjusted for certain restructuring costs,
is required to be at least $1. However, in the event that EBITDA for a fiscal
quarter, as so adjusted, is less than $1, the suspension of the Companys
compliance is permitted if Baran makes available to the Company,
either in the form of an equity contribution or one or more subsequent
disbursements under the Baran Sub loan agreement, an amount equal to the amount
necessary to cover the difference between the EBITDA loss for the fiscal
quarter and $1. The amount of the disbursement under the Baran Sub loan
agreement is limited to $3 million for the quarter ended June 30, 2002. As of
the date of filing this report, Baran had not provided the Company with
additional funding; however, the Company expects to

- 28 -



---



##### 



receive additional funding after
Baran has completed its review and evaluation of the Company (approximately 30
days), assuming Baran proceeds with the merger. See Note 7 Baran Group Ltd.
Merger in the accompanying financial statements. As of June 30, 2002, the
Company was not in compliance with its EBITDA covenant under the terms of the
fifth amendment to its credit agreement dated June 5, 2002 and was therefore in
default. On August 15, 2002, the
Company obtained a waiver of the default at June 30, 2002 subject to (1)
remitting $1.0 million to the Bank as a permanent reduction in the Companys
credit line and (2) an agreement to pay no further monies to Baran.

In addition, the Company is required to provide the lenders with periodic
budgets, financial statements and periodic reports and filings. Additionally,
the Company is restricted in the amount of payments to holders of seller notes.
The covenants in the credit facility also limit the Companys ability to sell
its assets outside the ordinary course of business, merge with or acquire other
businesses. In addition, the Company is limited in capital expenditures that
can be incurred during a given period. If the Company continues to experience
significant losses, the Company could be in violation of the covenants in its
credit facility in the future.

Baran Working Capital Loan Agreement

On June 5, 2002, as part of the merger transaction, Baran Acquisition Sub, Inc.
(Baran Sub), a wholly owned subsidiary of Baran, entered into a working
capital loan agreement with the Company. In the loan agreement, Baran Sub
agreed to provide working capital advances to the Company, subject to
conditions and covenants imposed on the Company, and provided that the
representations and warranties of the Company given in the loan agreement
remain true and correct on the date of each advance to the Company by Baran
Sub. Also on June 5, 2002, Baran Sub entered into a subordination agreement
with Wachovia Bank, N.A. Under the subordination agreement, all rights and
remedies of Baran Sub under the loan agreement are and shall continue to be
junior in right of payments to the rights of Wachovia Bank under the Companys
credit agreement.

Baran Sub extended the first advance on June 6, 2002, immediately
following the execution of the loan agreement and the merger agreement, in the
amount of $5,000,000, which was evidenced by a working capital note. In
addition, and provided that no event of default has occurred, Baran Sub has
agreed to advance to the Company the following:



| |  |  | No later than the date the Company files its Form 10-Q for the
quarter ended June 30, 2002 or August 15, 2002, the lesser of (x)
$3,000,000 or (y) the amount of the Companys loss (as defined below)
for the quarter ended June 30, 2002; and                 
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  | If the loan agreement is in effect as of the later of the date the
Company files its Form 10-Q for the quarter ended September 30, 2002 or
November 15, 2002, at its discretion, an amount equal to the Companys
loss for the quarter ended September 30, 2002.

Loss is defined in the loan agreement as the Companys consolidated earnings
before interest, taxes, depreciation, amortization, non-cash restructuring
expenses and any accrued and unpaid management fees due to Baran Sub.

As of the date of filing this report, Baran has not made any additional
advances. Management expects to receive additional advances at
the completion of Barans review and evaluation of the merger
agreement, assuming Baran proceeds with the merger.

- 29 -



---



##### 



Interest Rate Risk

We are exposed to market risk from changes in interest rates and equity
prices that could affect our results of operations and financial condition. We
manage our exposure to these market risks through our regular operating and
financing activities and, when deemed appropriate, hedge these risks through
the use of derivative financial instruments. We use the term hedge to mean a
strategy designed to manage risks of volatility in prices or rate movements on
certain assets, liabilities or anticipated transactions and by creating a
relationship in which gains or losses on derivative instruments are expected to
counterbalance the losses or gains on the assets, liabilities or anticipated
transactions exposed to such market risks. We use derivative financial
instruments as risk management tools and not for trading or speculative
purposes. We generally do not hedge our credit risk on customer receivables.

We use a combination of financial instruments, including variable-rate
debt instruments and, to a lesser extent, interest rate swaps to manage the
interest rate mix of our total debt portfolio and related cash flows. To manage
this mix in a cost-effective manner, we, from time to time, may enter into
interest rate swap agreements in which we agree to exchange various
combinations of fixed and/or variable interest rates based on agreed-upon
notional amounts.

The Company has entered into an interest rate swap agreement with its
senior lender in accordance with its loan agreement, which has been classified
as a cash flow hedge. The interest rate swap agreement allows us to swap
interest rate payments from a floating rate tied to LIBOR to a fixed interest
payment of 7.25% on a notional principal of $12.5 million and will be in effect
until January 2003. Changes in the fair value of the interest rate swap
agreement are recognized in other comprehensive income or loss until such point
that the interest rate swap no longer qualifies for hedge accounting, at which
point, the gain (loss) reported is reported as a component of interest expense.
In addition, a credit of $278,000 was recorded to interest expense for a
reduction in value of the interest rate hedge swap from $674,000 to $396,000.

Recent Developments

Baran has notified the Company that, based upon the results of operations of
the Company for the second quarter ended June 30, 2002, the ability of Baran to
complete the merger transaction with the Company will be subject to Barans
further review and evaluation of the Companys current financial condition and
third quarter operations. This review is expected to be completed within 30
days and if Baran determines to proceed with the merger, it is likely
that the exchange ratio will be reduced. The terms of the merger agreement remain in effect and Baran will
continue to provide management consulting services to the Company pursuant to
the management consulting agreement entered into between the parties in
connection with the execution of the merger agreement. Baran has made
no additional advances under its working capital loan agreement with
the Company.

- 30 -



---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company engages in activities that expose it to various market risks,
including the effects of a change in interest rates. This financial exposure is
managed as an integral part of the Companys risk management program, which
seeks to reduce the potentially adverse effect that the volatility for the
markets may have on operating results. The Company does not use derivative
financial instruments for trading purposes. The Company currently maintains an
interest rate swap, to minimize significant, unanticipated earnings
fluctuations caused by volatility in interest rates. The Company assesses, both
at inception and on an ongoing basis, whether the interest rate swap is highly
effective in offsetting changes in cash flows of the hedged items. For more
information regarding the Companys interest rate swap agreement, please see
Note 1(c) of Notes to Consolidated Financial Statements included in this
report.

At June 30, 2002, we had notes payable to affiliated parties (the Notes)
of approximately $627,000 with interest payable at a rate equal to 9.75% per
annum, which rate shall be adjusted on July 31 and December 31 of each year the
Notes remain outstanding to a rate equal to the most recently announced by
Citibank, N.A., in the Wall Street Journal as its prime rate of interest.

Our revolving credit facility bears interest at LIBOR plus a margin of up
to 3.75%. Accordingly, changes in LIBOR, which is affected by changes in
interest rates in general, will affect the interest rate on our revolving
credit facility.

We temporarily invest our excess cash in money market funds. Changes in
interest rates would not significantly affect the fair value of these cash
investments.

- 31 -



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##### 



PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, the Company is subject to certain
administrative proceedings and litigation. The following is a summary
of three
proceedings currently pending:

On November 7, 2000, a suit was filed against the Company and two officers
of the Company, (as well as a third individual not affiliated with the
Company), asserting that the defendants engaged in a conspiracy to pursue
frivolous litigation against the plaintiff, to threaten further litigation and
to interfere with the business relations of the plaintiff and that agents of
the Company acting to benefit the Company committed acts of fraud against, and
violated fiduciary duties to the plaintiff. The Complaint was later amended to
reflect that the plaintiff had lost by jury verdict in related litigation in
Georgia concerning a sale of a 30 MHz PCS license for Honolulu. An additional
amendment to the Complaint, filed in August 2001, abandoned plaintiffs claim
for interference with business relations and added a subsidiary of the Company
as a defendant. The Company vigorously defended all claims against it. An
agreement has been reached between the parties that all claims against the
Company will be dismissed with prejudice in connection with the resolution of
related disputes between parties to two other lawsuits to which the Company is
not a party. In managements opinion, the outcome of the foregoing proceeding
will not materially affect the financial condition and results of the Company.

On July 12, 2002, an action was filed against o2wireless in the United
States District Court for the Northern District of Georgia, McKenzie
Telecommunications Group, Inc. v. Clear Holdings, Inc. and o2wireless, Inc.
f/k/a Clear Communications Group, Inc.Civil Action File No. 1:02-CV-1955. In
the Complaint, the Plaintiff alleges that o2wireless breached its obligations
under an asset purchase agreement, dated November 1, 1999, in connection with
the sale of McKenzie Telecommunications Group, Inc. (MTG) to o2wireless. The
Complaint further alleges that the Plaintiff is entitled to receive an earn-out
payment under the terms of the asset purchase agreement. The Plaintiff seeks
compensatory damages in excess of $3 million. Management believes that the
lawsuit is completely without merit and that o2wireless has meritorious
defenses against all of the claims alleged in the Complaint. o2wireless
intends to deny all of the allegations contained in the Complaint and to
vigorously defend the action. Management believes that the outcome of this
litigation will not have a material adverse effect on the Companys results of
operations and financial condition; however, the lawsuit is in an early
procedural stage and therefore it is not possible to determine with certainty
what the effect may be on the Companys results of operations and financial
condition.

On August 6, 2002, an action was filed against o2wireless in the United
States District Court for the Southern District of Texas, George A. Jackson and
TWR Family of Companies, L.L.C. v. o2wireless, Inc.,Civil Action File No.
H-02-2974. In the Complaint, the Plaintiff alleges that Plaintiff is entitled
to receive an earnout payment of $3.3 million pursuant to the terms of a stock
purchase agreement entered into between the parties. The Plaintiff seeks
damages in the amount of $3.3 million. Management believes that o2wireless has
meritorious defenses against all of the claims alleged in the Complaint.
o2wireless intends to deny all of the allegations contained in the Complaint
and to vigorously defend the action. Management believes that the outcome of
this litigation will not have a material adverse effect on the Companys
results of operations and financial condition; however, the lawsuit is in an
early procedural stage and therefore it is not possible to determine with
certainty what the effect may be on the Companys results of operations and
financial condition.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In consideration of Baran Acquisition Sub Inc.s execution of the loan
agreement and the extension of the initial working capital advance of $5.0 million to the Company, the Company issued to Baran Sub a warrant to purchase
5,559,610 shares of the Companys common stock, at a purchase price equal to
$0.45 per share (the Warrant). The Warrant may be exercised only in the
event that the merger agreement is terminated due to acceptance of an
acquisition proposal more favorable to the Company than the proposed merger
with Baran.

The issuance of the Warrant described above was made in reliance on the
exemption from registration provided in Section 4(2) of the Securities Act of
1933, as amended, as a transaction by an issuer not involving a public
offering. The Warrant was acquired by Baran Sub for investment purposes with
no view toward the resale or distribution thereof. The purchaser has a
pre-existing relationship with the Company and the offers and sales were made
without any public solicitation. No underwriter was involved in the
transaction and no commissions were paid.

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

The 2002 Annual Meeting of Shareholders of the Company was held on May 21,
2002. At the meeting, the following matters were submitted for approval by the
shareholders:



| |  |  | Election of Directors. The following persons were elected as Class II
Directors to serve for a term of three years and until there successors are
elected and qualified: Donald F. DeMuth and Darin R. Winn.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 32 -



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##### 



The number of votes cast for and withheld for the election of each nominee
for director was as follows:

|                 |  |       |            |          |  |  |           | 
|---------------- |  | ----- | ---------- | -------- |  |  | --------- | 
|                 |  | Votes |            | Votes   
|                 |  | For   |            | Withheld
|                 |  |       |            |         
|Donald F. DeMuth |  |       | 17,797,865 |          |  |  | 7,013,784 | 
|Darin R. Winn    |  |       | 17,796,365 |          |  |  | 7,015,284 | 

No other matters were presented at the meeting.

ITEM 5. OTHER EVENTS

Nasdaq Delisting Notification

On July 17, 2002, the Company announced that it received a determination
from the Staff at the Nasdaq Stock Market on July 12, 2002 indicating that the
Company fails to comply with the minimum bid price requirement for continued
listing set forth in Nasdaq Marketplace Rule 4450(a)(5), and that its common
stock is, therefore, subject to delisting from the Nasdaq National Market. The
Company has requested an oral hearing before a Nasdaq Listing Qualifications
Panel which is scheduled for August 22, 2002. There can be no assurance that
the Panel will grant the Companys request for continued listing.

The Companys common stock will continue to be traded on the Nasdaq
National Market pending the final decision by the listing Qualification Panel.
If the Companys appeal is denied, the Company currently meets the listing
requirements to list on the Nasdaq Small Cap Market.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



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

|      |  |                                                                                                                                                                           
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3.3 |  | Fourth Amendment, dated May 20, 2002, to Amended and
Restated Credit Agreement among o2wireless Solutions, Inc., the
Company, certain subsidiaries and Wachovia Bank, N.A.
|      |  |                                                                                                                                                                           
|4.3.4 |  | Fifth Amendment, dated June 5, 2002, to Amended and Restated
Credit Agreement among o2wireless Solutions, Inc., the Company,
certain subsidiaries and Wachovia Bank, N.A. 
|      |  |                                                                                                                                                                           
|10.8  |  | Employment Agreement dated June 5, 2002 between o2wireless
Solutions, Inc. and Martin Dempsey                                                                             
|      |  |                                                                                                                                                                           
|99.1  |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.                                                                                                  



|(b) |  | Reports on Form 8-K                                                                                                                                                                                                                    
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Company filed a Current Report on Form 8-K on June 12, 2002 in
connection with the execution of the merger agreement with Baran Group
Ltd. In connection with the filing of the Form 8-K, the Company filed
the following exhibits:



| |  |  | The Agreement and Plan of Merger with Baran Group Ltd.,                 
| | - |  | ------------------------------------------------------------------------
| |  |  | The Working Capital Loan Agreement with Baran Acquisitions Sub, Inc. and
| |  |  | The Management Consulting Agreement with Baran Group Ltd.               

- 33 -



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##### 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                      |  |                                                                                           
|--------------------- |  | ------------------------------------------------------------------------------------------
|                      |  | O2WIRELESS SOLUTIONS, INC                                                                 
|                      |  |                                                                                           
|                      |  |                                                                                           
|                      |  | By: /s/ Andrew D. Roscoe                                                                  
|                     
|Date: August 19, 2002 |  | Andrew D. Roscoe
Chairman and Co-Chief Executive Officer
(principal executive officer)    
|                      |  |                                                                                           
|                      |  |                                                                                           
|                      |  | By: /s/ William J. Loughman                                                               
|                     
|Date: August 19, 2002 |  | William J. Loughman
President and Co-Chief Executive Officer
(principal executive officer)
|                      |  |                                                                                           
|                      |  |                                                                                           
|                      |  | By: /s/ Martin Dempsey                                                                    
|                     
|Date: August 19, 2002 |  | Martin Dempsey
Vice President of Finance
(principal financial and accounting officer)     

- 34 -



---



##### 



EXHIBIT INDEX

|      |  |                                                                                                                                                                           
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3.3 |  | Fourth Amendment, dated May 20, 2002, to Amended and
Restated Credit Agreement among o2wireless Solutions, Inc., the
Company, certain subsidiaries and Wachovia Bank, N.A.
|      |  |                                                                                                                                                                           
|4.3.4 |  | Fifth Amendment, dated June 5, 2002, to Amended and Restated
Credit Agreement among o2wireless Solutions, Inc., the Company,
certain subsidiaries and Wachovia Bank, N.A. 
|      |  |                                                                                                                                                                           
|10.8  |  | Employment Agreement dated June 5, 2002 between o2wireless
Solutions, Inc. and Martin Dempsey                                                                             
|      |  |                                                                                                                                                                           
|99.1  |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.