<PAGE>

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

                                    FORM 10-Q

                                   (MARK ONE)

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


                  For the quarterly period ended March 31, 2002

                                       OR

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

                  For the transition period from _____ to _____


                        Commission file number: 000-22839

                             GLOBECOMM SYSTEMS INC.
             (Exact name of Registrant as specified in its charter)


                  DELAWARE                               11-3225567
       (STATE OR OTHER JURISDICTION OF                (I.R.S. EMPLOYER
       INCORPORATION OR ORGANIZATION)                IDENTIFICATION NO.)

               45 OSER AVENUE,                              11788
                HAUPPAUGE, NY                            (ZIP CODE)
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (631) 231-9800

         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 [ ]

As of May 13, 2002, there were 12,556,443 shares outstanding of the Registrant's
common stock, par value $.001.

                                        1
<PAGE>

                             GLOBECOMM SYSTEMS INC.

                      Index to the March 31, 2002 Form 10-Q

                                                                            Page

                         Part I -- Financial Information

Item 1.  Consolidated Financial Statements ....................................3

         Consolidated Balance Sheets-- As of March 31, 2002 (unaudited)
           and June 30, 2001...................................................3

         Consolidated Statements of Operations (unaudited)-- For the three
           and nine months ended March 31, 2002 and 2001.......................4

         Consolidated Statement of Changes in Stockholders' Equity
           (unaudited)-- For the nine months ended March 31, 2002..............5

         Consolidated Statements of Cash Flows (unaudited)-- For the
           nine months ended March 31, 2002 and 2001...........................6

         Notes to Consolidated Financial Statements (unaudited)................7

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations......................12

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...........24

                          Part II -- Other Information

Item 1.  Legal Proceedings....................................................25

Item 2.  Changes in Securities and Use of Proceeds............................25

Item 3.  Defaults Upon Senior Securities......................................25

Item 4.  Submission of Matters to a Vote of Security Holders..................25

Item 5.  Other Information....................................................25

Item 6.  Exhibits and Reports on Form 8-K.....................................25

         Signatures...........................................................28

                                        2
<PAGE>

                         PART I -- FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

                             GLOBECOMM SYSTEMS INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                 MARCH 31,           JUNE 30,
                                                                                   2002                2001
                                                                                -----------         -----------
                                                                                 (UNAUDITED)
<S>                                                                             <C>                 <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                     $    40,846         $    45,038
  Restricted cash                                                                       588                 588
  Accounts receivable, net                                                           21,708              25,337
  Inventories                                                                         9,690              15,285
  Prepaid expenses and other current assets                                           1,124                 803
                                                                                -------------------------------
Total current assets                                                                 73,956              87,051

Fixed assets, net                                                                    28,343              30,456
Goodwill and other assets, net                                                        7,445               7,492
                                                                                -------------------------------
Total assets                                                                    $   109,744         $   124,999
                                                                                ===============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                              $    10,857         $    15,317
  Deferred revenue                                                                    5,536               5,825
  Accrued payroll and related fringe benefits                                         1,286                 931
  Other accrued expenses                                                              2,616               3,609
  Deferred liability                                                                    600                 300
  Capital lease obligations                                                             461                 430
                                                                                -------------------------------
Total current liabilities                                                            21,356              26,412

Deferred liability, less current portion                                              2,891               3,341
Capital lease obligations, less current portion                                       9,756              10,105

Commitments and contingencies

Stockholders' equity:
  Series A Junior Participating, shares authorized, issued and outstanding:
   none at March 31, 2002 and June 30, 2001                                               -                   -
  Common stock, $.001 par value, 22,000,000 shares authorized, shares issued:
   12,903,013 at March 31, 2002 and 12,865,591 at June 30, 2001                          13                  13
  Additional paid-in capital                                                        123,511             123,276
  Accumulated deficit                                                               (46,641)            (36,997)
  Accumulated other comprehensive loss                                                  (40)                (57)
  Treasury stock, at cost, 149,745 shares at March 31, 2002 and 147,745 at
     June 30, 2001                                                                   (1,102)             (1,094)
                                                                                -------------------------------
Total stockholders' equity                                                           75,741              85,141
                                                                                -------------------------------
Total liabilities and stockholders' equity                                      $   109,744         $   124,999
                                                                                ===============================
</TABLE>

                             See accompanying notes.

                                        3
<PAGE>

                             GLOBECOMM SYSTEMS INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED          NINE MONTHS ENDED
                                                       ----------------------      ----------------------
                                                       MARCH 31,     MARCH 31,     MARCH 31,     MARCH 31,
                                                         2002          2001          2002          2001
                                                       ----------------------      ----------------------
<S>                                                    <C>           <C>           <C>           <C>
Revenues                                               $ 20,292      $ 24,249      $ 67,159      $ 77,517
Costs of revenues                                        18,114        19,019        59,370        61,013
                                                       ----------------------      ----------------------
Gross profit                                              2,178         5,230         7,789        16,504
                                                       ----------------------      ----------------------
Operating expenses:
      Network operations                                  1,338         1,821         4,098         3,958
      Selling and marketing                               1,581         1,680         4,802         5,720
      Research and development                              366           258           786           625
      General and administrative                          2,591         3,408         7,893        12,439
                                                       ----------------------      ----------------------
Total operating expenses                                  5,876         7,167        17,579        22,742
                                                       ----------------------      ----------------------
Loss from operations                                     (3,698)       (1,937)       (9,790)       (6,238)
Other income (expense):
      Interest income                                       190           775           867         2,621
      Interest expense                                     (237)       (2,306)         (721)       (6,334)
      Gain on sale of investment                             --            --            --           304
                                                       ----------------------      ----------------------
Loss before income taxes and minority interests
    in operations of consolidated subsidiary             (3,745)       (3,468)       (9,644)       (9,647)
Provision for income taxes                                   --          (118)           --        (1,113)
                                                       ----------------------      ----------------------
Loss before minority interests in operations of
   consolidated subsidiary                               (3,745)       (3,586)       (9,644)      (10,760)
Minority interests in operations of consolidated
   subsidiary                                                --          (132)           --          (650)
                                                       ----------------------      ----------------------
Net loss                                               $ (3,745)     $ (3,718)     $ (9,644)     $(11,410)
                                                       ======================      ======================

Basic and diluted net loss per common share            $  (0.29)     $  (0.31)     $  (0.76)     $  (0.96)
                                                       ======================      ======================
Weighted-average shares used in the calculation of
   basic and diluted net loss per common share           12,753        11,962        12,730        11,910
                                                       ======================      ======================
</TABLE>

                             See accompanying notes.

                                        4
<PAGE>

                             GLOBECOMM SYSTEMS INC.
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                    FOR THE NINE MONTHS ENDED MARCH 31, 2002
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   ACCUMULATED
                                      COMMON STOCK        ADDITIONAL                  OTHER           TREASURY STOCK       TOTAL
                                 ------------------------  PAID-IN    ACCUMULATED COMPREHENSIVE     ------------------ STOCKHOLDERS'
                                   SHARES      AMOUNT      CAPITAL      DEFICIT   (LOSS) INCOME     SHARES      AMOUNT    EQUITY
                                 --------------------------------------------------------------------------------------------------
<S>                              <C>         <C>           <C>        <C>          <C>                <C>    <C>          <C>
Balance at June 30, 2001            12,866   $      13   $ 123,276    $ (36,997)   $     (57)         148    $  (1,094)   $  85,141
Proceeds from exercise of
  stock options                          7          --          26           --           --           --           --           26
Issuance of common stock in
  connection with employee
  stock purchase plan                   30          --         154           --           --           --           --          154
Stock options granted for
  services                              --          --          55           --           --           --           --           55
Purchase of treasury stock              --          --          --           --           --            2           (8)          (8)
Comprehensive loss:
  Net loss                              --          --          --       (9,644)          --           --           --       (9,644)
  Unrealized gain from foreign
    currency translation                --          --          --           --           47           --           --           47
  Unrealized loss on
    available-for-sale
    securities                          --          --          --           --          (30)          --           --          (30)
Total comprehensive loss                --          --          --           --           --           --           --       (9,627)
                                 --------------------------------------------------------------------------------------------------
Balance at March 31, 2002           12,903   $      13   $ 123,511    $ (46,641)   $     (40)         150    $  (1,102)   $  75,741
                                 ==================================================================================================
</TABLE>

                             See accompanying notes.

                                        5
<PAGE>

                             GLOBECOMM SYSTEMS INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS ENDED
                                                                              ------------------------
                                                                              MARCH 31,       MARCH 31,
                                                                                2002            2001
                                                                              ------------------------
<S>                                                                           <C>             <C>
OPERATING ACTIVITIES:
Net loss                                                                      $ (9,644)       $(11,410)
Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                2,764           6,286
    Provision for doubtful accounts                                                170             400
    Change in deferred liability                                                  (150)             --
    Stock compensation expense                                                      55              56
    Deferred income taxes                                                           --           1,113
    Gain on sale of investment                                                      --            (304)
    Minority interests in operations of consolidated subsidiary                     --             650
    Changes in operating assets and liabilities:
       Accounts receivable                                                       3,510          (9,968)
       Inventories                                                               5,595          (1,627)
       Prepaid expenses and other current assets                                  (352)           (503)
       Other assets                                                                 47            (481)
       Accounts payable                                                         (4,468)         (1,290)
       Deferred revenue                                                           (293)          2,541
       Accrued payroll and related fringe benefits                                 355             604
       Other accrued expenses                                                     (982)          1,574
                                                                              ------------------------
Net cash used in operating activities                                           (3,393)        (12,359)
                                                                              ------------------------
INVESTING ACTIVITIES:
Purchases of fixed assets, net of non-cash capital lease expenditures             (650)         (5,925)
Restricted cash                                                                     --            (186)
Proceeds from sale of investment                                                    --             204
                                                                              ------------------------
Net cash used in investing activities                                             (650)         (5,907)
                                                                              ------------------------
FINANCING ACTIVITIES:
Proceeds from exercise of stock options                                             26             308
Proceeds from sale of common stock in connection with employee
   stock purchase plan                                                             154             194
Payments under capital leases                                                     (318)         (1,031)
Purchase of treasury stock                                                          (8)             --
                                                                              ------------------------
Net cash used in financing activities                                             (146)           (529)
                                                                              ------------------------
Effect of foreign currency translation on cash                                      (3)            (32)
Net decrease in cash and cash equivalents                                       (4,192)        (18,827)
Cash and cash equivalents at beginning of period                                45,038          65,289
                                                                              ------------------------
Cash and cash equivalents at end of period                                    $ 40,846        $ 46,462
                                                                              ========================
</TABLE>

                             See accompanying notes.

                                        6
<PAGE>

                             GLOBECOMM SYSTEMS INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2002
                                   (UNAUDITED)

1.  BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. In the opinion of management, all material adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation of
the results for such periods have been included. The consolidated balance sheet
at June 30, 2001 has been derived from the audited consolidated financial
statements at that date but does not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. The results of operations for the
three and nine months ended March 31, 2002 are not necessarily indicative of the
results that may be expected for the full fiscal year ending June 30, 2002, or
for any future period.

         The accompanying consolidated financial statements should be read in
conjunction with the audited consolidated financial statements of the Company
for the fiscal year ended June 30, 2001 and the accompanying notes thereto
contained in the Company's Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on September 28, 2001.

Principles of Consolidation

         The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, NetSat Express, Inc. ("NetSat") and
Globecomm Systems Europe Limited. All significant intercompany balances and
transactions have been eliminated in consolidation.

Accounting Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

Revenue Recognition

         The Company recognizes revenue in accordance with Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements, for its
short-term (less than twelve months in term) production-type contracts that are
sold separately as stand-alone ground segment systems. Such contracts typically
require less engineering, drafting and design efforts than other longer-term
production-type projects and usually require customer acceptance upon completion
of installation of the equipment at the customers' site. Accordingly, the
Company typically recognizes 80 to 90% of the contract value upon shipment, with
the balance recognized upon receipt of the customers' final acceptance.
Installation is not deemed to be essential to the functionality of the equipment
since installation is mechanical in nature and does not require significant
change to the features or capability of the equipment, or require complex
software integration and interfacing. In addition, the customer or other vendors
can install the equipment; and generally the cost of installation is
approximately 10 to 20% of the sales value of the related equipment. Payments
received in advance by customers are deferred until shipment and are presented
as deferred revenue in the accompanying consolidated balance sheets.

         The Company uses the percentage-of-completion method of accounting to
recognize revenue for its long-term (in excess of twelve months in term), more
complex production-type contracts that are generally integrated into complete
ground segment networks, upon the achievement of certain contractual milestones,
in accordance with Statement of Position 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts. Contract costs
generally include purchased material, direct labor, overhead and other indirect
costs. Anticipated contracted losses are recognized as they become known.

                                       7
<PAGE>

         NetSat's revenues are derived primarily from Internet access service
fees and sales of hardware and equipment. Service revenues from Internet access
are recognized ratably over the period in which services are provided. Sales of
hardware and equipment are recognized upon shipment. Payments received in
advance of providing Internet access services are deferred until the period such
services are provided and are presented as deferred revenue in the accompanying
consolidated balance sheets.

Cost of Revenues

         In addition to contract costs, cost of revenues relating to Internet
access service fees consist primarily of satellite space segment charges and
Internet connectivity fees. Satellite space segment charges consist of the costs
associated with obtaining satellite bandwidth (the measure of capacity) used in
the transmission of services to and from the satellite leased from operators.
Cost of revenues associated with hardware and equipment sales consist primarily
of the purchase of the related products.

Comprehensive loss

         Comprehensive loss for the three and nine months ended March 31, 2002
of approximately $3,788,000 and $9,627,000 includes a foreign currency
translation (loss) gain of approximately ($13,000) and $47,000 and an unrealized
loss on available-for-sale equity securities of approximately $30,000 for the
three and nine months ended March 31, 2002, respectively. The Company's
comprehensive loss for the three and nine months ended March 31, 2001 of
approximately $3,720,000 and $11,468,000, respectively, includes a foreign
currency translation loss of approximately $5,000 and $32,000 and an unrealized
gain (loss) on available-for-sale equity securities of approximately $3,000 and
($26,000) for the three and nine months ended March 31, 2001, respectively.

Sale of Stock by Subsidiary

         We recognize changes in our ownership percentage of our subsidiary
caused by issuances of the subsidiary's stock as an adjustment to contributed
capital in the consolidated statement of changes in stockholders' equity.

Income Taxes

         In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will be realized. The ultimate realization of the deferred
tax assets is dependent upon the generation of future taxable income. For the
three and nine months ended March 31, 2002 and the year ended June 30, 2001, the
Company incurred a net loss, and accordingly, management provided a full
valuation allowance for the net deferred tax assets. For the three and nine
months ended March 31 2001, the Company realized approximately $118,000 and
$1,113,000, respectively, of deferred tax assets based on projected fiscal 2001
taxable income.

2. GOODWILL AND OTHER ASSETS

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141, Business Combinations
("SFAS No. 141"), and No. 142, Goodwill and Other Intangible Assets ("SFAS No.
142"), effective for fiscal years beginning after December 15, 2001. SFAS No.
141 requires the use of the purchase method of accounting and prohibits the use
of the pooling-of-interests method of accounting for business combinations
completed on or after July 1, 2001. SFAS No. 141 also requires that the Company
recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain specified criteria. Under SFAS No. 142, goodwill
and intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests. SFAS No. 142 also
requires that the Company identify reporting units for the purpose of assessing
potential future impairments of goodwill, reassess the useful lives of other
existing recognized intangible assets and cease amortization of intangible
assets with an indefinite useful life.

         On July 1, 2001, the Company adopted the new rules on business
combinations and accounting for goodwill and other intangible assets. The
Company's previous business combinations were accounted for using the purchase
method of accounting. Goodwill has a net carrying amount of approximately
$7,441,000 at March 31, 2002. Application of the nonamortization provisions of
SFAS No. 142 is expected to result in a decrease in net loss of approximately
$860,000, or $.07 per diluted share, for all of fiscal 2002. The Company has
completed its

                                       8
<PAGE>

assessment of the assets impacted by the adoption of SFAS No. 142, and based
upon such review, no impact to the carrying value of goodwill was identified.

         Had the Company been accounting for its goodwill under SFAS No. 142 for
all periods presented, the Company's net loss and net loss per basic and diluted
share would have been as follows:

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED          NINE MONTHS ENDED
                                                  ----------------------      ----------------------
                                                  MARCH 31,     MARCH 31,     MARCH 31,     MARCH 31,
                                                    2002          2001          2002          2001
                                                  ----------------------      ----------------------
                                                                      (UNAUDITED)
                                                        (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                               <C>           <C>           <C>           <C>
Reported net loss                                 $ (3,745)     $ (3,718)     $ (9,644)     $(11,410)
Add back goodwill amortization                          --            39            --           117
                                                  ----------------------      ----------------------
Adjusted net loss                                 $ (3,745)     $ (3,679)     $ (9,644)     $(11,293)
                                                  ======================      ======================

Basic and diluted net loss per common share:

       As reported                                $  (0.29)     $  (0.31)     $  (0.76)     $  (0.96)
       Goodwill amortization                            --            --            --          0.01
                                                  ----------------------      ----------------------
       Adjusted basic and diluted net loss per
           common share                           $  (0.29)     $  (0.31)     $  (0.76)     $  (0.95)
                                                  ======================      ======================
</TABLE>

3. RESTRUCTURING CHARGE

         In connection with management's plan to reduce costs and improve
NetSat's operating efficiencies, the Company recorded a restructuring charge of
approximately $1,950,000 during the fourth quarter of fiscal year ended June 30,
2001. The restructuring charge is primarily associated with the discontinuance
of certain NetSat product lines to enhance the Company's strategic redeployment
of its consolidated operating activities, enabling the Company to offer its
customers end-to-end satellite communications solutions while combining
operations and reducing costs. As a result of this restructuring, the Company
terminated 31 employees including executive management, marketing,
administration and operations support personnel. The major components of the
restructuring charge included severance payments to terminated NetSat employees
of approximately $850,000, fees incurred in connection with the termination of
certain satellite lease transponders of approximately $540,000 (charged to cost
of sales), the write-off of certain capitalized costs in the amount of
approximately $620,000 associated with NetSat's terminated financing activities
and the write-off of the estimated book value of equipment in the amount of
approximately $480,000 in connection with NetSat's discontinuance of certain
product lines. The restructuring was completed during the third quarter of
fiscal 2002. At March 31, 2002 and June 30, 2001, approximately $0 and $500,000
of the restructuring charge was accrued and included in other accrued expenses
in the accompanying consolidated balance sheets, respectively. Approximately
$250,000 was charged against the restructuring accrual in the quarter ended
September 30, 2001. For the quarter ended March 31, 2002, approximately $250,000
of the restructuring charge was reversed into income due to resolution of
liabilities for less than originally estimated.

4. BASIC AND DILUTED NET LOSS PER COMMON SHARE

         The Company computes net loss per share in accordance with the
provisions of Statement of Financial Accounting Standards No. 128, "Earnings Per
Share." Basic and diluted net loss per common share is computed by dividing the
net loss for the period by the weighted-average number of common and dilutive
equivalent shares outstanding for the period. Common equivalent shares consist
of the incremental common shares issuable upon the conversion of preferred stock
(using an if-converted method) and incremental shares issuable upon the exercise
of stock options and warrants (using the treasury stock method). Incremental
common equivalent shares are excluded from the calculation of diluted net loss
per share if their effect is anti-dilutive. Diluted net loss per share for the
three and nine months ended March 31, 2002, excludes the effect of approximately
302,000 and 163,000 stock options, respectively, as their effect would have been
anti-dilutive. Diluted net loss per share for the three and nine months ended
March 31, 2001, excludes the effect of approximately 497,000 and 458,000 stock
options and approximately 11,000 and 13,000 warrants, respectively, as their
effect would have been anti-dilutive.

                                       9
<PAGE>

5. INVENTORIES

         Inventories, which consist primarily of work-in-progress from costs
incurred in connection with specific customer contracts, are stated at the lower
of cost (using the first-in, first-out method of accounting) or market value.

Inventories consist of the following:

<TABLE>
<CAPTION>
                                               MARCH 31,       JUNE 30,
                                                 2002            2001
                                            ------------------------------
                                              (UNAUDITED)
                                                     (IN THOUSANDS)
<S>                                         <C>              <C>
  Raw materials and component parts         $         783    $         608
  Work-in-progress                                  8,907           14,677
                                            ------------------------------
                                            $       9,690    $      15,285
                                            ==============================
</TABLE>

6. SEGMENT INFORMATION

         The Company operates through two business segments. Its ground segment
systems, networks and enterprise solutions segment, through Globecomm Systems
Inc., is engaged in the design, assembly and installation of ground segment
systems, networks and enterprise solutions for the complex and changing
communications requirements of its customers. Its data communications services
segment, through its wholly owned subsidiary NetSat Express, Inc., is engaged in
providing high-speed, satellite-delivered data communications to developing
markets worldwide. NetSat Express is currently providing Internet access to
customers who have limited or no access to terrestrial network infrastructure
capable of supporting the economical delivery of such services.

         The Company's reportable segments are business units that offer
different products and services. The reportable segments are each managed
separately because they provide distinct products and services.

         The following is the Company's business segment information for the
three and nine months ended March 31, 2002 and 2001 and as of March 31, 2002 and
June 30, 2001:

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED             NINE MONTHS ENDED
                                                  MARCH 31,      MARCH 31,      MARCH 31,      MARCH 31,
                                                    2002           2001           2002           2001
                                                  -----------------------       -----------------------
                                                                      (UNAUDITED)
                                                                     (IN THOUSANDS)
<S>                                               <C>            <C>            <C>            <C>
Revenues:
   Ground segment systems, networks and
     enterprise solutions                         $ 15,953       $ 18,999       $ 52,516       $ 62,534
   Data communications services                      5,265          6,812         17,337         20,669
   Intercompany eliminations                          (926)        (1,562)        (2,694)        (5,686)
                                                  -----------------------       -----------------------
Total revenues                                    $ 20,292       $ 24,249       $ 67,159       $ 77,517
                                                  =======================       =======================

Loss from operations:
   Ground segment systems, networks and
     enterprise solutions                         $ (1,446)      $   (590)      $ (4,069)      $   (781)
   Data communications services                     (2,224)        (1,350)        (5,696)        (5,441)
   Intercompany eliminations                           (28)             3            (25)           (16)
                                                  -----------------------       -----------------------
Loss from operations                                (3,698)        (1,937)        (9,790)        (6,238)
Interest income                                        190            775            867          2,621
Interest expense                                      (237)        (2,306)          (721)        (6,334)
Gain on sale of investment                              --             --             --            304
                                                  -----------------------       -----------------------
Loss before income taxes and minority
   interests in operations of consolidated
   subsidiary                                       (3,745)        (3,468)        (9,644)        (9,647)
Provision for income taxes                              --           (118)            --         (1,113)
                                                  -----------------------       -----------------------
Loss before minority interests in operations
   of consolidated subsidiary                       (3,745)        (3,586)        (9,644)       (10,760)
                                                  -----------------------       -----------------------
Minority interests in operations of
  consolidated subsidiary                               --           (132)            --           (650)
                                                  -----------------------       -----------------------
Net loss                                          $ (3,745)      $ (3,718)      $ (9,644)      $(11,410)
                                                  =======================       =======================

Depreciation and amortization:
   Ground segment systems, networks and
     enterprise solutions                         $    351       $    427       $  1,243       $  1,279
   Data communications services                        461          1,022          1,530          5,013
   Intercompany eliminations                            (3)            (3)            (9)            (6)
                                                  -----------------------       -----------------------
Total depreciation and amortization               $    809       $  1,446       $  2,764       $  6,286
                                                  =======================       =======================

Expenditures for long-lived assets:
   Ground segment systems, networks and
     enterprise solutions                         $     51       $    331       $    349       $  1,756
   Data communications services                        186           (328)           301          3,751
   Intercompany eliminations                            --             (6)            --           (132)
                                                  -----------------------       -----------------------
Total expenditures for long-lived assets          $    237       $     (3)      $    650       $  5,375
                                                  =======================       =======================
</TABLE>

<TABLE>
<CAPTION>
                                                                                 MARCH 31,     JUNE 30,
                                                                                   2002          2001
                                                                                (UNAUDITED)
                                                                                -----------------------
                                                                                    (IN THOUSANDS)
<S>                                                                             <C>            <C>
Assets:
   Ground segment systems, networks and
     enterprise solutions                                                       $127,919       $136,103
   Data communications services                                                   21,704         21,985
   Intercompany eliminations                                                     (39,879)       (33,089)
                                                                                -----------------------
Total assets                                                                    $109,744       $124,999
                                                                                =======================
</TABLE>

                                       11
<PAGE>

7. RECENT ACCOUNTING PRONOUNCEMENTS

         In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets ("SFAS No. 144"), which supersedes FASB Statement No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
("SFAS No. 121"). The basis for recognition and measurement model under SFAS No.
121 for assets held for use and held for sale has been retained. SFAS No. 144
removes goodwill from its scope, thus eliminating SFAS No. 121's requirement to
allocate goodwill to long-lived assets to be tested for impairment. The
accounting for goodwill now is subject to the provisions of SFAS No. 141 and 142
on business combinations and other intangible assets. SFAS No. 144 provides
guidance on differentiating between assets held and used, held for sale, and
held for disposal other than by sale. SFAS No. 144 continues to require a
three-step approach for recognizing and measuring the impairment of assets to be
held and used. This new statement is effective for financial statements issued
for fiscal years beginning after December 31, 2001 and is to be applied
prospectively. The Company does not expect the adoption of this statement to
have a material impact on the Company's consolidated financial position, result
of operations or liquidity.

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

         This Quarterly Report on Form 10-Q contains certain forward-looking
statements that involve risks and uncertainties. Our actual results could differ
significantly from the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include those
discussed below as well as those discussed in our other filings with the
Securities and Exchange Commission, including our Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q.

OVERVIEW

         Since our inception, a majority of our revenues have been generated by
our ground segment systems, networks and enterprise solutions business.
Contracts for these ground segment systems and networks and communications
services have been fixed-price contracts in virtually all cases. Profitability
of such contracts is subject to inherent uncertainties as to the cost of
performance. In addition to possible errors or omissions in making initial
estimates, cost overruns may be incurred as a result of unforeseen obstacles
including both physical conditions and unexpected problems encountered in
engineering design and testing. Since our business may at times be concentrated
in a limited number of large contracts, a significant cost overrun on any
contract could have a material adverse effect on our business, financial
condition and results of operations. The period from contract award through
installation of ground segment systems and networks and communications services
supplied by us generally is from three to twelve months.

         We recognize revenue in accordance with Staff Accounting Bulletin No.
101, Revenue Recognition in Financial Statements, for our short-term (less than
twelve months in term) production-type contracts that are sold separately as
stand-alone ground segment systems. Such contracts typically require less
engineering, drafting and design efforts than other longer-term production-type
projects and usually require customer acceptance upon completion of installation
of the equipment at the customers' site. Accordingly, we typically recognize 80
to 90% of the contract value upon shipment, with the balance recognized upon
receipt of the customers' final acceptance. Installation is not deemed to be
essential to the functionality of the equipment since installation is mechanical
in nature and does not require significant change to the features or capability
of the equipment, or require complex software integration and interfacing. In
addition, the customer or other vendors can install the equipment; and generally
the cost of installation is approximately 10 to 20% of the sales value of the
related equipment. Payments received in advance by customers are deferred until
shipment and are presented as deferred revenue.

         We use the percentage-of-completion method of accounting to recognize
revenue for our long-term (in excess of twelve months in term), more complex
production-type contracts that are generally integrated into complete ground
segment networks, upon the achievement of certain contractual milestones, in
accordance with Statement of Position 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts.

         NetSat Express' revenues are derived primarily from Internet access
service fees and sales of hardware and equipment. Service revenues from Internet
access are recognized ratably over the period in which services are provided.
Sales of hardware and equipment are recognized upon shipment. Payments received
in advance of

                                       12
<PAGE>

providing Internet access services are deferred until the period such services
are provided and are presented as deferred revenue.

         Contract costs generally include purchased material, direct labor,
overhead and other indirect costs. Anticipated contracted losses are recognized
as they become known. Costs of revenues consist primarily of the costs of
purchased materials, direct labor and related overhead expenses, project-related
travel, living costs and subcontractor salaries. In addition, cost of revenues
relating to Internet access service fees consists primarily of satellite space
segment charges and Internet connectivity fees. Network operations expenses
consist primarily of costs associated with the operation of the network
operations center on a twenty-four hour a day, seven day a week basis including
personnel and related costs. Selling and marketing expenses consist primarily of
salaries, travel and living costs for sales and marketing personnel. Research
and development expenses consist primarily of salaries and related overhead
expenses paid to engineers. General and administrative expenses consist of
expenses associated with our management, finance, contract and administrative
functions.

RESULTS OF OPERATIONS

Three and Nine Months Ended March 31, 2002 and 2001

         Revenues. Revenues decreased by $4.0 million, or 16.3%, to $20.3
million for the three months ended March 31, 2002 and decreased by $10.4
million, or 13.4% to $67.2 million for the nine months ended March 31, 2002,
compared to $24.2 million and $77.5 million for the three and nine months ended
March 31, 2001. The decrease reflects the uncertainty surrounding the global
economic slowdown in the telecommunications industry, resulting in customers and
prospects continuing to delay projects.

         Gross Profit. Gross profit decreased by $3.1 million, or 58.4%, to $2.2
million for the three months ended March 31, 2002 and decreased by $8.7 million,
or 52.8%, to $7.8 million for the nine months ended March 31, 2002 from $5.2
million and $16.5 million for the three and nine months ended March 31, 2001.
Gross profit as a percentage of revenues for the three months ended March 31,
2002 decreased to 10.7%, compared to 21.6% for the three months ended March 31,
2001, and for the nine months ended March 31, 2002 decreased to 11.6%, compared
to 21.3% for the nine months ended March 31, 2001. This decrease is attributable
to a lower revenue base resulting from the delay of projects coupled with the
effect of the renegotiation of certain long-term transponder leases and certain
unutilized satellite transponder capacity. We expect our gross margins to
decline in the future due to the under-utilization of satellite transponder
space and the global economic slowdown in the telecommunications industry.

         Network Operations. Network operations expenses decreased by $0.5
million, or 26.5%, to $1.3 million for the three months ended March 31, 2002 and
increased by $0.1 million, or 3.5%, to $4.1 million, for the nine months ended
March 31, 2002, compared to $1.8 million and $4.0 million for the comparable
three and nine months ended March 31, 2001. The decrease for the three-month
period is primarily attributable to a reduction in the expansion of our network
operations center due to current business levels. The increase for the
nine-month period is due to the expansion of our network operations center and
related expenses to support the service base.

         Selling and Marketing. Selling and marketing expenses decreased by $0.1
million, or 5.9%, to $1.6 million for the three months ended March 31, 2002 and
decreased by $0.9 million, or 16.0%, to $4.8 million, for the nine months ended
March 31, 2002, compared to $1.7 million and $5.7 million for the comparable
three and nine months ended March 31, 2001. This decrease is attributable to a
cost reduction program, which included a reduction in work force partially
offset by additional selling and marketing efforts, which included the addition
of a Corporate Vice President of Sales and Marketing.

         Research and Development. Research and development expenses increased
by $0.1 million, or 41.9%, to $0.4 million for the three months ended March 31,
2002 and increased by $0.2 million, or 25.8%, to $0.8 million for the nine
months ended March 31, 2002, compared to $0.3 million and $0.6 million for the
comparable three and nine months ended March 31, 2001. The increase is
attributable to internal development of new monitoring and control technologies
as well as the initial development of various subsystems for solutions we are
providing to a new customer.

         General and Administrative. General and administrative expenses
decreased by $0.8 million, or 24.0%, to $2.6 million for the three months ended
March 31, 2002 and decreased by $4.5 million, or 36.5%, to $7.9 million, for the
nine months ended March 31, 2002, compared to $3.4 million and $12.4 million for
the comparable three and

                                       13
<PAGE>

nine months ended March 31, 2001. General and administrative expenses as a
percentage of revenues for the three months ended March 31, 2002 decreased to
12.8%, compared to 14.1% for the three months ended March 31, 2001, and
decreased for the nine months ended March 31, 2002 to 11.8%, compared to 16.0%
for the nine months ended March 31, 2001. The decrease in general and
administrative expenses is primarily due to reduced depreciation expense related
to the renegotiation of certain long-term capitalized transponder leases to
operating leases in the fourth quarter of fiscal 2001.

         Interest Income. Interest income decreased by $0.6 million, or 75.5%,
to $0.2 million for the three months ended March 31, 2002, compared to $0.8
million for the three months ended March 31, 2001, and decreased by $1.8
million, or 66.9%, to $0.9 million for the nine months ended March 31, 2002,
compared to $2.6 million for the nine months ended March 31, 2001. The decrease
is primarily the result of a decline in interest rates and reduced cash balances
due to cash used in operations during the nine months ended March 31, 2002 and
the fiscal year ended June 30, 2001.

         Interest Expense. Interest expense decreased by $2.1 million, or 89.7%,
to $0.2 million for the three months ended March 31, 2002, compared to $2.3
million for the three months ended March 31, 2001, and decreased by $5.6
million, or 88.6%, to $0.7 million for the nine months ended March 31, 2002,
compared to $6.3 million for the nine months ended March 31, 2001. The decrease
primarily relates to the renegotiation of certain long-term capitalized
transponder leases into operating leases in the fourth quarter of fiscal 2001.

         Gain on Sale of Investment. The gain on sale of investment of $0.3
million for the nine months ended March 31, 2001 relates to the sale of our
interest in a cost method investment.

         Provision for Income Taxes. Provision for income taxes decreased by
$0.1 million, or 100.0%, for the three months ended March 31, 2002 and decreased
$1.1 million, or 100.0%, for the nine months ended March 31, 2002, compared to
the three and nine months ended March 31, 2001. As we incurred a net loss for
the three and nine months ended March 31, 2002 and provided a full valuation
allowance for our net deferred tax assets, accordingly, no provision for income
taxes was recorded during fiscal 2002.

LIQUIDITY AND CAPITAL RESOURCES

     At March 31, 2002, we had working capital of $52.6 million, including cash
and cash equivalents of $40.8 million, restricted cash of $0.6 million, net
accounts receivable of $21.7 million, inventories of $9.7 million and prepaid
expenses and other current assets of $1.1 million, offset by $10.9 million in
accounts payable, $5.5 million in deferred revenue and $4.9 million in accrued
expenses and other current liabilities.

     Net cash used in operating activities during the nine months ended March
31, 2002 was $3.4 million, which primarily relates to the current period net
loss of $9.6 million and an decrease in accounts payable of $4.5 million
relating to the timing of vendor payments offset by a decrease in inventories of
$5.6 million due to the completion of certain jobs and a decrease in accounts
receivable of $3.5 million due to collections on certain contract billings.

     Net cash used in investing activities during the nine months ended March
31, 2002 was $0.7 million, which relates to the purchase of fixed assets
primarily related to our network operations center in order to support our
service base.

     Effective April 11, 2002, we amended our bank agreement and established a
$5.0 million working capital line of credit. The modified credit facility bears
interest at the prime rate (4.75% at March 31, 2002) and is collateralized by a
first security interest on most of our assets. The credit facility, which
expires on April 10, 2003, contains certain financial covenants, with which we
were in compliance at March 31, 2002. As of March 31, 2002, no amounts were
outstanding under this credit facility.

     We also lease satellite space segment services and other equipment under
various operating lease agreements, which expire in various years through 2007.
Future minimum lease payments due on these leases through March 31, 2003 are
approximately $19.1 million.

     On November 7, 2001, the Board of Directors authorized a stock repurchase
program of up to $2.0 million of our outstanding stock, representing
approximately 3.7% of the total shares outstanding on that date. On November 15,
2001, we repurchased 2,000 shares at a price of $4.45 per share. The timing,
price, quantity and manner of future purchases will be at the

                                       14
<PAGE>

discretion of management, depending on market conditions and other factors,
subject to compliance with the applicable securities laws.

     We expect that our cash and working capital requirements for operating
activities will increase as we continue to implement our business strategy.
Management anticipates that we will experience negative cash flows due to
continued operating losses as a result of a decrease in orders and continued
under-utilization of satellite transponder space.

     Our future capital requirements will depend upon many factors, including
the success of our marketing efforts in the ground segment systems, networks,
and communications services business, the nature and timing of customer orders,
the extent to which we are able to locate additional strategic suppliers in
whose technology we wish to invest, the extent to which we must conduct research
and development efforts internally and potential acquisitions of complementary
businesses, products or technologies. Based on current plans, we believe that
our existing capital resources will be sufficient to meet working capital
requirements through March 31, 2003. However, we cannot assure you that there
will be no change that would consume available resources significantly before
that time. For example, terrorist attacks on the United States in 2001, as well
as future events occurring in response to or in connection with them, including,
without limitation, future terrorist attacks against the United States or its
allies or military or trade or travel disruptions impacting our ability to sell
and market our products and services in the United States and internationally
may impact our results of operations. Additional funds may not be available when
needed and even if available, additional funds may be raised through financing
arrangements and/or the issuance of preferred or common stock or convertible
securities on terms and prices significantly more favorable than those of the
currently outstanding common stock, which could have the effect of diluting or
adversely affecting the holdings or rights of our existing stockholders. If
adequate funds are unavailable, we may be required to delay, scale back or
eliminate some of our operating activities, including without limitation, the
timing and extent of our marketing programs, the extent and timing of hiring
additional personnel and our research and development activities. We cannot
assure you that additional financing will be available to us on acceptable
terms, or at all.

CERTAIN BUSINESS CONSIDERATIONS

RISK FACTORS

WE HAVE A HISTORY OF OPERATING LOSSES AND NEGATIVE CASH FLOW AND EXPECT OUR
LOSSES TO CONTINUE.

         We have incurred significant net losses since we began operating in
August 1994. We incurred net losses of $9.6 million for the nine months ended
March 31, 2002, $18.7 million during the fiscal year ended June 30, 2001 and
$3.6 million during the fiscal year ended June 30, 2000. As of March 31, 2002,
our accumulated deficit was approximately $46.6 million. We anticipate that we
will continue to incur net losses. Our ability to achieve and maintain
profitability will depend upon our ability to generate significant revenues
through new customer contracts and the expansion of our existing products and
services, including our communications services. We cannot assure you that we
will be able to obtain new customer contracts or generate significant additional
revenues from those contracts or any new products or services that we introduce.
Even if we become profitable, we may not sustain or increase our profits on a
quarterly or annual basis in the future.

SINCE SALES OF SATELLITE COMMUNICATIONS EQUIPMENT ARE DEPENDENT ON THE GROWTH OF
COMMUNICATIONS NETWORKS, AS MARKET DEMAND FOR THESE NETWORKS DECLINES, OUR
REVENUE AND PROFITABILITY ARE LIKELY TO DECLINE.

         We derive, and expect to continue to derive, a significant amount of
revenue from the sale of satellite ground segment systems and networks. If the
long-term growth in demand for communications networks does not occur as we
expect, the demand for our satellite ground segment systems and networks may
decline or grow more slowly than we expect. As a result, we may not be able to
grow our business, our revenue may decline from current levels and our results
of operations may be harmed. The demand for communications networks and the
products used in these networks is affected by various factors, many of which
are beyond our control. For example, general economic conditions have recently
deteriorated and affected the overall rate of capital spending by our customers.
Also, many companies are finding it increasingly difficult to raise capital to
finish building their communications networks and therefore are placing fewer
orders with our customers. The current economic slowdown has resulted in a
softening of demand from our customers. We believe that this slowdown is
generally the result of slower than forecasted growth in a number of key
segments, including communications infrastructure equipment, resulting from a
reduction in the capital spending of service providers. We cannot predict the
extent to which this softening of demand will continue. Further, increased
competition among satellite ground segment systems and networks manufacturers
may lead to overcapacity and falling prices.

                                       15
<PAGE>

RISKS ASSOCIATED WITH OPERATING IN INTERNATIONAL MARKETS COULD RESTRICT OUR
ABILITY TO EXPAND GLOBALLY AND HARM OUR BUSINESS AND PROSPECTS.

         We market and sell our products and services in the United States and
internationally. We anticipate that international sales will continue to account
for a significant portion of our total revenues for the foreseeable future. We
presently conduct our international sales in the following geographic areas:
Africa, the Asia-Pacific Region, Australia, Central and South America, Eastern
and Central Europe and the Middle East. There are some risks inherent in
conducting our business internationally, including:

o    general political and economic instability in international markets, as
     well as a result of the terrorist attacks in the United States on September
     11, 2001 and the related outbreak of hostilities, could impede our ability
     to deliver our products and services to customers and harm our results of
     operations;

o    changes in regulatory requirements could restrict our ability to deliver
     services to our international customers;

o    export restrictions, tariffs, licenses and other trade barriers could
     prevent us from adequately equipping our network facilities;

o    differing technology standards across countries may impede our ability to
     integrate our products and services across international borders;

o    protectionist laws and business practices favoring local competition may
     give unequal bargaining leverage to key vendors in countries where
     competition is scarce, significantly increasing our operating costs;

o    increased expenses associated with marketing services in foreign countries;

o    decreases in value of foreign currency relative to the U.S. dollar;

o    relying on local subcontractors for installation of our products and
     services;

o    difficulties in staffing and managing foreign operations;

o    potentially adverse taxes;

o    complex foreign laws and treaties; and

o    difficulties in collecting accounts receivable.

         These and other risks could impede our ability to manage our
international operations effectively, limit the future growth of our business,
increase our costs and require significant management attention.

IF WE ARE NOT SUCCESSFUL IN SELLING OUR COMMUNICATIONS SERVICES TO OUR CUSTOMERS
FOR WHOM WE HAVE HISTORICALLY PROVIDED SATELLITE GROUND SEGMENT SYSTEMS AND
NETWORKS, OUR RESULTS OF OPERATIONS WILL BE HARMED.

         We have historically provided our customers with satellite ground
segment systems and networks as a product on a project basis. We intend on
marketing to our customers our communications services. These services not only
provide the implementation of the satellite ground segment systems and networks
but also provides the ongoing operation and maintenance of these systems and
networks. If we are not successful in selling these communications services to
our existing customers it will harm our results of operations.

                                       16
<PAGE>

IF NETSAT EXPRESS DOES NOT EXECUTE ITS BUSINESS STRATEGY OR IF THE MARKET FOR
ITS SERVICES FAILS TO DEVELOP OR DEVELOPS MORE SLOWLY THAN IT EXPECTS, OUR
RESULTS OF OPERATIONS WILL BE HARMED AND OUR STOCK PRICE MAY BE ADVERSELY
AFFECTED.

         NetSat Express' future revenues and results of operations are dependent
on its execution of its business strategy and the development of the market for
its current and future services. In particular, the current level and manner of
utilization of NetSat Express' transponder space as well as a decrease in orders
currently being experienced continues to harm our results of operation, and our
gross profit margins in particular. If NetSat does not efficiently and
substantially utilize its transponder space capacity or increase its level of
orders, our results of operations, and our gross profit margins in particular,
will be harmed. We cannot assure you that the transponder space will be
efficiently and substantially utilized or that an increase in orders will be
realized.

CURRENCY DEVALUATIONS IN THE FOREIGN MARKETS IN WHICH WE OPERATE COULD DECREASE
DEMAND FOR OUR PRODUCTS AND SERVICES.

         We denominate our foreign sales in U.S. dollars. Consequently,
decreases in the value of local currencies relative to the U.S. dollar in the
markets in which we operate could adversely affect the demand for our products
and services by increasing the price of our products and services in the
currencies of the countries in which they are sold. The difficult economic
conditions in international markets and the resulting foreign currency
devaluations have led to a decrease in demand for our products and services, and
the decrease in bookings received by us from these foreign regions has adversely
affected our results of operations for the nine months ended March 31, 2002 and
the fiscal year ended June 30, 2001. We expect that these negative trends will
continue to adversely impact our results of operations.

YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION OF OUR
FUTURE RESULTS BECAUSE THEY ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS, AND IF WE
FAIL TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS OR INVESTORS, OUR STOCK
PRICE COULD DECLINE SIGNIFICANTLY.

         Our future revenues and results of operations may significantly
fluctuate due to a combination of factors, including:

o    delays and/or a decrease in the booking of new contracts;

o    general political and economic conditions in the United States and abroad
     as a result of the terrorist attacks on September 11, 2001 and the related
     outbreak of hostilities;

o    the length of time needed to initiate and complete customer contracts;

o    the demand for and acceptance of our existing products and services;

o    the cost of providing our products and services;

o    the introduction of new and improved products and services by us or our
     competitors;

o    market acceptance of new products and services;

o    the mix of revenue between our standard products, custom-built products and
     our communications services;

o    the timing of significant marketing programs;

o    our ability to hire and retain additional personnel;

o    the competition in our markets; and

o    difficult global economic conditions and the currency devaluations in
     international markets which have, and may continue to, adversely impact our
     quarterly results.

         Accordingly, you should not rely on quarter-to-quarter comparisons of
our results of operations as an

                                       17
<PAGE>

indication of our future performance. It is possible that in future periods our
results of operations may be below the expectations of public market analysts
and investors, which could cause the trading price of our common stock to
decline.

OUR MARKETS ARE HIGHLY COMPETITIVE AND WE HAVE MANY ESTABLISHED COMPETITORS, AND
WE MAY LOSE MARKET SHARE AS A RESULT.

         The markets in which we operate are highly competitive and this
competition could harm our ability to sell our products and services on prices
and terms favorable to us. Our primary competitors in the satellite ground
segment and networks market include vertically integrated satellite systems
providers like Nippon Electric Corporation, systems integrators like IDB
Systems, a division of MCI WorldCom Inc. and equipment manufacturers who also
provide integrated systems like Andrew Corporation and Vertex-RSI.

         In the communications services and Internet access services markets, we
compete with other satellite communication companies who provide similar
services, like Loral CyberStar, Inc. and PanAmSat Corporation and Verestar, as
well as other Internet services providers. In addition, we may compete with
other communications service providers like Teleglobe, Inc. and MCI WorldCom
Inc. We anticipate that our competitors may develop or acquire services that
provide functionality that is similar to that provided by our services and that
those services may be offered at significantly lower prices or bundled with
other services. In addition, we anticipate that continuing deregulation
worldwide is expected to result in the formation of a significant number of new
competitive service providers over the next two to three years. These
competitors have the financial resources to withstand substantial price
competition and may be in a better position to endure difficult economic
conditions in international markets, and may be able to respond more quickly
than we can to new or emerging technologies and changes in customer
requirements. Moreover, many of our competitors have more extensive customer
bases, broader customer relationships and broader industry alliances than we do
that they could use to their advantage in competitive situations.

         The markets in which we operate have limited barriers to entry and we
expect that we will face additional competition from existing competitors and
new market entrants in the future. Moreover, our current and potential
competitors have established or may establish strategic relationships among
themselves or with third parties to increase the ability of their products and
services to address the needs of our current and prospective customers. Existing
and new competitors with their potential strategic relationships may rapidly
acquire significant market share, which would harm our business and financial
condition.

IF THE SATELLITE COMMUNICATIONS INDUSTRY FAILS TO CONTINUE TO DEVELOP OR NEW
TECHNOLOGY MAKES IT OBSOLETE OUR BUSINESS AND FINANCIAL CONDITION WILL BE
HARMED.

         Our business is dependent on the continued success and development of
satellite communications technology, which competes with terrestrial
communications transport technologies like terrestrial microwave, coaxial cable
and fiber optic communications systems. If the satellite communications industry
fails to continue to develop, or any technological development significantly
improves the cost or efficiency of competing terrestrial systems relative to
satellite systems, then our business and financial condition would be materially
harmed.

WE MAY BE UNABLE TO RAISE ADDITIONAL FUNDS TO MEET OUR CAPITAL REQUIREMENTS IN
THE FUTURE.

         We have incurred negative cash flows from operations in each year since
our inception. We believe that our available cash resources will be sufficient
to meet our working capital and capital expenditure requirements through March
31, 2003. However, our future liquidity and capital requirements are difficult
to predict, as they depend on numerous factors, including the success of our
existing product and service offerings, as well as competing technological and
market developments. We may need to raise additional funds in order to meet
additional working capital requirements and to support additional capital
expenditures. Should this need arise, additional funds may not be available when
needed and, even if additional funds are available, we may not find the terms
favorable or commercially reasonable. If adequate funds are unavailable, we may
be required to delay, reduce or eliminate some of our operating activities,
including marketing programs, hiring of additional personnel and research and
development programs. If we raise additional funds by issuing equity securities,
our existing stockholders will own a smaller percentage of our capital stock and
new investors may pay less on average for their securities than, and could have
rights superior to, existing stockholders.

                                       18
<PAGE>

WE RELY ON OUR RELATIONSHIPS WITH RESELLERS IN DEVELOPING COUNTRIES WITH
EMERGING MARKETS FOR SALES OF OUR PRODUCTS AND SERVICES AND THE LOSS OR FAILURE
OF ANY OF THESE RELATIONSHIPS MAY HARM OUR ABILITY TO MARKET AND SELL OUR
PRODUCTS AND SERVICES.

         We intend to provide our products and services and NetSat Express'
services almost entirely in developing countries where we have little or no
market experience. We intend to rely on resellers in those markets to provide
their expertise and knowledge of the local regulatory environment in order to
make access to customers in emerging markets easier. If we are unable to
maintain these relationships, or develop new ones in other emerging markets, our
ability to enter into and compete successfully in developing countries would be
adversely affected.

A LIMITED NUMBER OF CUSTOMERS ACCOUNT FOR A HIGH PERCENTAGE OF OUR REVENUE, AND
THE LOSS OF A KEY CUSTOMER WOULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS,
BUSINESS AND FINANCIAL CONDITION.

         We rely on a small number of customers for a large portion of our
revenues and expect that a significant portion of our revenues will continue to
be derived from a limited number of customers. We anticipate that our operating
results in any given period will continue to depend to a significant extent upon
revenues from large contracts with a small number of customers. As a result of
this concentration of our customer base, a loss of or decrease in business from
one or more of these customers would materially adversely affect our results of
operations and financial condition.

OUR INABILITY TO EFFECTIVELY MANAGE OUR GROWTH AND EXPANSION COULD SERIOUSLY
HARM OUR ABILITY TO EFFECTIVELY RUN OUR BUSINESS.

         Since our inception, we have continued to increase the scope of our
operations. This growth has placed, and our anticipated growth will continue to
place, a significant strain on our personnel, management, financial and other
resources. Any failure to manage our growth effectively could seriously harm our
ability to respond to customers, monitor the quality of our products and
services and maintain the overall efficiency of our operations. In order to
continue to pursue the opportunities presented by our satellite-based
communications services, we plan to continue to hire key officers and other
employees and to increase our operating expenses by broadening our customer
support capabilities, expanding our sales and marketing operations and improving
our operating and financial systems. If we fail to manage any future growth in
an efficient manner, and at a pace consistent with our business, our results of
operations, financial condition and business will be harmed.

WE ANTICIPATE SIGNIFICANT REVENUES FROM THREE CONTRACTS AND A MODIFICATION OR
TERMINATION OF ALL OR ANY OF THESE CONTRACTS WOULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

         We have agreements with three customers to provide equipment and
services, which we expect to generate substantial revenues. If any of these
customers are unable to implement their business plans, the market for their
services declines, or all or any of the customers modifies or terminates its
agreement with us, our results of operations and financial condition would be
harmed.

WE ARE PAID A FIXED PRICE IN MOST OF OUR CUSTOMER CONTRACTS, AND ANY VARIATION
BETWEEN THE FIXED PRICE AND THE ACTUAL COST OF PERFORMANCE MAY HARM OUR
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

         A majority of our customer contracts are on a fixed-price basis. The
profitability of these contracts is subject to inherent uncertainties in the
cost of performance, including costs related to unforeseen obstacles and
unexpected problems encountered in engineering, design and testing of our
products and services. Because a significant portion of our revenues is
dependent upon a small number of customers, if the fixed price is significantly
less than the actual cost of performance on any one contract, our results of
operations and financial condition could be adversely affected.

IF OUR PRODUCTS AND SERVICES ARE NOT ACCEPTED IN DEVELOPING COUNTRIES WITH
EMERGING MARKETS, OUR REVENUES WILL BE IMPAIRED.

         We anticipate that a substantial portion of the growth in the demand
for our products and services will come from customers in developing countries
due to a lack of basic communications infrastructure in these countries.
However, we cannot guarantee an increase in the demand for our products and
services in developing countries or that customers in these countries will
accept our products and services at all. Our ability to penetrate emerging
markets in developing countries is dependent upon various factors including:

                                       19
<PAGE>

o    the speed at which communications infrastructure, including terrestrial
     microwave, coaxial cable and fiber optic communications systems, which
     compete with satellite-based services, is built;

o    the effectiveness of our local value-added resellers and sales
     representatives in marketing and selling our products and services; and

o    the acceptance of our products and services by customers.

         If our products and services are not accepted, or the market potential
we anticipate does not develop, our revenues will be impaired.

WE DEPEND UPON CERTAIN KEY PERSONNEL AND MAY NOT BE ABLE TO RETAIN THESE
EMPLOYEES OR RECRUIT ADDITIONAL QUALIFIED PERSONNEL, WHICH WOULD HARM OUR
BUSINESS.

         Our future performance depends on the continued service of our key
technical, managerial and marketing personnel; in particular, David Hershberg,
Kenneth Miller, Patrick Flemming, Stephen Yablonski and Donald Woodring. The
employment of any of our key personnel could cease at any time subject to prior
notice.

         Our future success depends upon our ability to attract, retain and
motivate highly skilled employees. Because the competition for qualified
employees among companies in the satellite communications industry and the
networking industry is intense, we may not be successful in recruiting or
retaining qualified personnel, which would harm our business.

UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY DAMAGE OUR
BUSINESS.

         We regard our trademarks, trade secrets and other intellectual property
as beneficial to our success. Unauthorized use of our intellectual property by
third parties may damage our business. We rely on trademark, trade secret and
patent protection and contracts including confidentiality and license agreements
with our employees, customers, strategic collaborators, consultants and others
to protect our intellectual property rights. Despite our precautions, it may be
possible for third parties to obtain and use our intellectual property without
our authorization.

         We currently have been granted two patents in the United States, one
for remote access to the Internet using satellites, and the other for satellite
communication with automatic frequency control, and have two patent applications
pending in the United States. We also intend to seek further patents on our
technology, if appropriate. We cannot assure you that patents will be issued for
any of our pending or future patents or that any claims allowed from such
applications will be of sufficient scope, or be issued in all countries where
our products and services can be sold, to provide meaningful protection or any
commercial advantage to us. Also, our competitors may be able to design around
our patents. The laws of some foreign countries in which our products and
services are or may be developed, manufactured or sold may not protect our
products and services or intellectual property rights to the same extent as do
the laws of the United States and thus make the possibility of piracy of our
technology and products and services more likely.

         We have filed applications for trademark registration of Globecomm
Systems Inc., Globecomm, and GSI in the United States and various other
countries, and have been granted registrations for some of these terms in Europe
and Russia. We have received trademark registrations for NetSat Express in the
United States, the European Community, Russia, and Brazil. We have various other
trademarks registered or pending for registration in the United States and in
other countries and may intend to seek registration of other trademarks and
service marks in the future. We cannot assure you that registrations will be
granted from any of our pending or future applications, or that any
registrations that are granted will prevent others from using similar trademarks
in connection with related goods and services.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE TIME
CONSUMING AND EXPENSIVE, AND IF WE ARE NOT SUCCESSFUL, COULD CAUSE SUBSTANTIAL
EXPENSES AND DISRUPT OUR BUSINESS.

         We cannot be sure that our products, services, technologies, and
advertising we employ in our business do not or will not infringe valid patents,
trademarks, copyrights or other intellectual property rights held by third
parties. We may be subject to legal proceedings and claims from time to time
relating to the intellectual property of others in the ordinary course of our
business. Prosecuting infringers and defending against intellectual property
infringement claims could be time consuming and expensive, and regardless of
whether we are or are not successful, could cause substantial

                                       20
<PAGE>

expenses and disrupt our business. We may incur substantial expenses in
defending against these third party claims, regardless of their merit.
Successful infringement claims against us may result in substantial monetary
liability and/or may materially disrupt the conduct of, or necessitate the
cessation of, our business.

THROUGH THEIR OWNERSHIP, OUR OFFICERS AND DIRECTORS AND THEIR AFFILIATES MAY BE
ABLE TO EXERT SUBSTANTIAL INFLUENCE OVER OUR MANAGEMENT.

         As of May 13, 2002, our officers and directors, and their affiliates
beneficially own approximately 1.6 million shares, constituting approximately
12.3% of our outstanding common stock. These stockholders, acting together, may
be able to exert significant influence over the election of directors and other
corporate actions requiring stockholder approval.

WE MAY NOT BE ABLE TO KEEP PACE WITH TECHNOLOGICAL CHANGES, WHICH WOULD MAKE OUR
PRODUCTS AND SERVICES BECOME NON-COMPETITIVE AND OBSOLETE.

         The telecommunications industry, including satellite-based
communications services, is characterized by rapidly changing technologies,
frequent new product and service introductions and evolving industry standards.
If we are unable, for technological or other reasons, to develop and introduce
new products and services or enhancements to existing products and services in a
timely manner or in response to changing market conditions or customer
requirements, our products and services would become non-competitive and
obsolete, which would harm our business, results of operations and financial
condition.

WE DEPEND ON OUR SUPPLIERS, SOME OF WHICH ARE OUR SOLE OR A LIMITED SOURCE OF
SUPPLY, AND THE LOSS OF THESE SUPPLIERS WOULD MATERIALLY ADVERSELY AFFECT OUR
BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

         We currently obtain most of our critical components and services from
single or limited sources and generally do not maintain significant inventories
or have long-term or exclusive supply contracts with our source vendors. We have
from time to time experienced delays in receiving products from vendors due to
lack of availability, quality control or manufacturing problems, shortages of
materials or components or product design difficulties. We may experience delays
in the future and replacement services or products may not be available when
needed, or at all, or at commercially reasonable rates or prices. If we were to
change some of our vendors, we would have to perform additional testing
procedures on the service or product supplied by the new vendors, which would
prevent or delay the availability of our products and services. Furthermore, our
costs could increase significantly if we need to change vendors. If we do not
get timely deliveries of quality products and services, or if there are
significant increases in the prices of these products or services, it could have
a material adverse effect on our business, results of operations and financial
condition.

WE MAY BE UNABLE TO LEASE TRANSPONDER SPACE ON SATELLITES, WHICH COULD LIMIT OUR
ABILITY TO PROVIDE OUR SERVICES TO OUR CUSTOMERS.

         We and NetSat Express lease transponder space on satellites in order to
provide communications and Internet services to our customers and the customers
of NetSat Express. The supply of transponder space serving a geographic region
on earth is limited by the number of satellites that are in orbit above that
geographic region. If companies that own and deploy satellites in orbit
underestimate the demand for transponder space in a given geographic area or
they are simply unable to build and launch enough satellites to keep up with
increasing demand, the price for leasing transponder space could rise,
increasing our cost of operations or we simply may not be able to lease enough
transponder space where needed to meet the demands of our customers. We
currently anticipate that the rapid growth in the demand for satellite-based
communications worldwide could lead to a short-term shortage of transponder
space.

WE RELY ON NETSAT EXPRESS, OUR WHOLLY-OWNED SUBSIDIARY, FOR OUR MAIN SUPPLY OF
SPACE SEGMENT ON SATELLITES. IF ITS BUSINESS FAILS OR WE ARE OTHERWISE UNABLE TO
CONTINUE TO RELY ON NETSAT EXPRESS FOR THIS SUPPLY, OUR BUSINESS MAY BE HARMED.

         We currently depend on NetSat Express for a majority of our transponder
space on satellites. We do not have a long-term agreement in place with NetSat
Express, as most of our needs are filled on a purchase order basis. If NetSat
Express is unable to develop its business or if we are unable to continue to
rely on its supply for space segment, then we will have to find alternative
suppliers. If we are unable to find another supplier of transponder space or if
we are unable to find one on terms favorable to us, then our business may be
harmed.

                                       21
<PAGE>

OUR NETWORK MAY EXPERIENCE SECURITY BREACHES, WHICH COULD DISRUPT OUR SERVICES.

         Our network infrastructure may be vulnerable to computer viruses,
break-ins, denial of service attacks and similar disruptive problems caused by
our customers or other Internet users. Computer viruses, break-ins, denial of
service attacks or other problems caused by third parties could lead to
interruptions, delays or cessation in service to our customers. There currently
is no existing technology that provides absolute security, and the cost of
minimizing these security breaches could be prohibitively expensive. We may face
liability to customers for such security breaches. Furthermore, these incidents
could deter potential customers and adversely affect existing customer
relationships.

SATELLITES UPON WHICH WE RELY MAY BE DAMAGED OR LOST, OR MALFUNCTION.

         The damage, loss or malfunction of any of the satellites used by us, or
a temporary or permanent malfunction of any of the satellites upon which we
rely, would likely result in the interruption of our satellite-based
communications services. This interruption would have a material adverse effect
on our business, results of operations and financial condition.

OUR STOCK PRICE IS HIGHLY VOLATILE.

         Our stock price has fluctuated substantially since our initial public
offering, which was completed in August 1997. The market price for our common
stock, like that of the securities of many telecommunications and high
technology industry companies, is likely to remain volatile based on many
factors, including the following:

o    quarterly variations in operating results;

o    announcements of new technology, products or services by us or any of our
     competitors;

o    acceptance of satellite-based communication services and Internet access
     services in developing countries with emerging markets;

o    changes in financial estimates or recommendations by security analysts; or

o    general market conditions, including, but not limited to, results of the
     terrorist attacks on September 11, 2001 and the related outbreak of
     hostilities.

         In the past, following periods of volatility in the market price of a
particular company's securities, securities class action litigation has often
been brought against that company. We may become involved in this type of
litigation in the future. Litigation of this type is often extremely expensive
and diverts management's attention and resources, which could significantly harm
our business.

A THIRD PARTY COULD BE PREVENTED FROM ACQUIRING OUR STOCKHOLDERS' SHARES OF
STOCK AT A PREMIUM TO THE MARKET PRICE BECAUSE OF OUR ANTI-TAKEOVER PROVISIONS.

         Various provisions with respect to votes in the election of directors,
special meetings of stockholders, and advance notice requirements for
stockholder proposals and director nominations of our amended and restated
certificate of incorporation, bylaws and Section 203 of the General Corporation
Laws of the State of Delaware could make it more difficult for a third party to
acquire us, even if doing so might be beneficial to our stockholders. In
addition, we have a poison pill in place that could make an acquisition of us by
a third party more difficult.

                                       22
<PAGE>

RISKS RELATED TO GOVERNMENT APPROVALS

WE ARE SUBJECT TO MANY GOVERNMENT REGULATIONS, AND FAILURE TO COMPLY WITH THEM
WILL HARM OUR BUSINESS.

OPERATIONS AND USE OF SATELLITES

         We are subject to various federal laws and regulations, which may have
negative effects on our business. We operate Federal Communications Commission,
or FCC, licensed earth stations in Hauppauge, New York, subject to the
Communications Act of 1934, as amended (the Act), and the rules and regulations
of FCC. Pursuant to the Act and rules, we have obtained and are required to
maintain radio transmission licenses from the FCC for both domestic and foreign
operations of our earth stations. These licenses should be renewed by the FCC in
the normal course as long as we remain in compliance with FCC rules and
regulations. However, we cannot guarantee that the FCC will grant additional
licenses when our existing licenses expire, nor are we assured that the FCC will
not adopt new or modified technical requirements that will require us to incur
expenditures to modify or upgrade our equipment as a condition of retaining our
licenses. We are also required to comply with FCC regulations regarding the
exposure of humans to radio frequency radiation from our earth stations. These
regulations, as well as local land use regulations, restrict our freedom to
choose where to locate our earth stations.

FOREIGN OWNERSHIP

         We may, in the future, be required to seek FCC approval for foreign
ownership if we operate as a common carrier and ownership of our stock exceeds
the specified criteria. Failure to comply with these policies may result in an
order to divest the offending foreign ownership, fines, denial of license
renewal, and/or license revocation proceedings against the licensee by the FCC.

FOREIGN REGULATIONS

         Regulatory schemes in countries in which we may seek to provide our
satellite-delivered data communications services may impose impediments on our
operations. Some countries in which we intend to operate have telecommunications
laws and regulations that do not currently contemplate technical advances in
telecommunications technology like Internet/intranet transmission by satellite.
We cannot assure you that the present regulatory environment in any of those
countries will not be changed in a manner, which may have a material adverse
impact on our business. Either we or our local partners typically must obtain
authorization for each country in which we provide our satellite-delivered data
communications services. The regulatory schemes in each country are different,
and thus there may be instances of noncompliance of which we are not aware. We
cannot assure you that our licenses and approvals are or will remain sufficient
in the view of foreign regulatory authorities, or that necessary licenses and
approvals will be granted on a timely basis in all jurisdictions in which we
wish to offer our products and services or that restrictions applicable thereto
will not be unduly burdensome.

REGULATION OF THE INTERNET

         Due to the increasing popularity and use of the Internet it is possible
that a number of laws and regulations may be adopted at the local, national or
international levels with respect to the Internet, covering issues including
user privacy and expression, pricing of products and services, taxation,
advertising, intellectual property rights, information security or the
convergence of traditional communication services with Internet communications.
It is anticipated that a substantial portion of our Internet operations will be
carried out in countries, which may impose greater regulation of the content of
information coming into the country than that which is generally applicable in
the United States; for example, privacy regulations in 35 countries in Europe
and content restrictions in countries including the Republic of China. To the
extent that we provide content as a part of our Internet services, it will be
subject to laws regulating content. Moreover, the adoption of laws or
regulations may decrease the growth of the Internet, which could in turn
decrease the demand for our Internet services or increase our cost of doing
business or in some other manner have a material adverse effect on our business,
operating results and financial condition. In addition, the applicability to the
Internet of existing laws governing issues including property ownership,
copyrights and other intellectual property issues, taxation, libel and personal
privacy is uncertain. The vast majority of these laws were adopted prior to the
advent of the Internet and related technologies and, as a result, do not
contemplate or

                                       23
<PAGE>

address the unique issues of the Internet and related technologies. Changes to
these laws intended to address these issues, including some recently proposed
changes, could create uncertainty in the marketplace which could reduce demand
for our products and services, could increase our cost of doing business as a
result of costs of litigation or increased product development costs, or could
in some other manner have a material adverse effect on our business, financial
condition and results of operations.

TELECOMMUNICATIONS TAXATION, SUPPORT REQUIREMENTS, AND ACCESS CHARGES

         All telecommunications carriers providing domestic services in the
United States are required to contribute a portion of their gross revenues for
the support of universal telecommunications services; and some
telecommunications services are subject to special taxation and to contribution
requirements to support services to special groups, like persons with
disabilities. Our services may be subject to new or increased taxes and
contribution requirements that could affect our profitability, particularly if
we are not able to pass them through to customers for either competitive or
regulatory reasons.

         Internet services are currently exempt from charges that long distance
telephone companies pay for access to the networks of local telephone companies
in the U.S. Efforts have been made from time to time, and may be made again in
the future, to eliminate this exemption. If these access charges are imposed on
telephone lines used to reach Internet service providers, and/or if flat rate
telephone services for Internet access are eliminated or curtailed, the cost to
customers who access our satellite facilities using telephone company-provided
facilities could increase to an extent that could discourage the demand for our
services. Likewise, the demand for our services in other countries may be
affected by the availability and cost of local telephone or other
telecommunications facilities to reach our facilities.

EXPORT OF TELECOMMUNICATIONS EQUIPMENT

         The sale of our ground segment systems, networks, and communications
services outside the United States is subject to compliance with the regulations
of the United States Export Administration Regulations. The absence of
comparable restrictions on competitors in other countries may adversely affect
our competitive position. In addition, in order to ship our products into other
countries, the products must satisfy the technical requirements of that
particular country. If we were unable to comply with such requirements with
respect to a significant quantity of our products, our sales in those countries
could be restricted, which could have a material adverse effect on our business,
results of operations and financial condition.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are subject to a variety of risks, including foreign currency exchange
rate fluctuations relating to certain purchases from foreign vendors. In the
normal course of business, we assess these risks and have established policies
and procedures to manage our exposure to fluctuations in foreign currency
values.

     Our objective in managing our exposure to foreign currency exchange rate
fluctuations is to reduce the impact of adverse fluctuations in earnings and
cash flows associated with foreign currency exchange rates for certain purchases
from foreign vendors, if applicable. Accordingly, we utilize from time to time
foreign currency forward contracts to hedge our exposure on firm commitments
denominated in foreign currency. As of March 31, 2002, we had no such foreign
currency forward contracts.

     Our results of operations and cash flows are subject to fluctuations due to
changes in interest rates primarily from our investment of available cash
balances in money market funds with portfolios of investment grade corporate and
U.S. government securities, and secondly, our fixed long-term capital lease
agreement. Under our current positions, we do not use interest rate derivative
instruments to manage exposure to interest rate changes.

                                       24
<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits

Index to Exhibits:

Exhibit No.

3.1      Amended and Restated Certificate of Incorporation (incorporated by
         reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K
         for the fiscal year ended June 30, 1999).

3.2      Amended and Restated By-laws of the Company (incorporated by reference
         to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the
         fiscal year ended June 30, 1999).

4.2      See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
         Certificate of Incorporation and Amended and Restated By-laws of the
         Company defining rights of holders of Common Stock of the Company
         (incorporated by reference to Exhibit 4.2 of the Company's Registration
         Statement on Form S-1, File No. 333-22425 (the "Registration
         Statement")).

10.1     Form of Registration Rights Agreement, dated as of February 1997
         (incorporated by reference to Exhibit 10.1 of the Registration
         Statement).

10.2     Form of Registration Rights Agreement, dated May 30, 1996 (incorporated
         by reference to Exhibit 10.2 of the Registration Statement).

10.3     Form of Registration Rights Agreement, dated December 31, 1996, as
         amended (incorporated by reference to Exhibit 10.3 of the Registration
         Statement).

10.4     Letter Agreement for purchase and sale of 199,500 shares of Common
         Stock, dated November 9, 1995 between the Company and Thomson-CSF
         (incorporated by reference to Exhibit 10.4 of the Registration
         Statement).

10.5     Investment Agreement, dated February 12, 1996 by and between Shiron
         Satellite Communications (1996) Ltd. and the Company (incorporated by
         reference to Exhibit 10.5 of the Registration Statement).

10.6*    Stock Purchase Agreement, dated as of August 30, 1996 by and between
         C-Grams Unlimited Inc. and the Company (incorporated by reference to
         Exhibit 10.6 of the Registration Statement).

                                       25
<PAGE>

10.7     Memorandum of Understanding, dated December 18, 1996 by and between
         NetSat Express, Inc. and Applied Theory Communications, Inc.
         (incorporated by reference to Exhibit 10.7 of the Registration
         Statement).

10.8     Stock Purchase Agreement, dated as of August 23, 1996 by and between
         NetSat Express, Inc. and Hughes Network Systems, Inc. (incorporated by
         reference to Exhibit 10.8 of the Registration Statement).

10.9     Employment Agreement, dated as of October 9, 2001, by and between David
         E. Hershberg and the Company (incorporated by reference to Exhibit 10.9
         of the Company's Quarterly Report on Form 10-Q, for the quarter ended
         September 30, 2001).

10.10    Employment Agreement, dated as of October 9, 2001, by and between
         Kenneth A. Miller and the Company (incorporated by reference to Exhibit
         10.10 of the Company's Quarterly Report on Form 10-Q, for the quarter
         ended September 30, 2001).

10.11    Purchase and Sale Agreement, 45 Oser Avenue, Hauppauge, New York, dated
         December 12, 1996 by and between Eaton Corporation and the Company
         (incorporated by reference to Exhibit 10.13 of the Registration
         Statement).

10.12    Amended and Restated 1997 Stock Incentive Plan (incorporated by
         reference to Exhibit 4 of the Company's Registration Statement on Form
         S-8, File No. 333-54622, filed on January 30, 2001).

10.13    Investment Agreement, dated August 21, 1998 by and between McKibben
         Communications LLC and the Company (incorporated by reference to
         Exhibit 10.13 of the Company's Annual Report on Form 10-K for the year
         ended June 30, 1998).

10.14    1999 Employee Stock Purchase Plan (incorporated by reference to Exhibit
         99.8 of the Company's Registration Statement on Form S-8, File No.
         333-70527, filed on January 13, 1999).

10.15    Rights Agreement, dated as of December 3, 1998, between American Stock
         Transfer and Trust Company and the Company, which includes the form of
         Certificate of Designation for the Series A Junior Participating
         Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit
         B and the Summary of Rights to Purchase Series A Preferred Shares as
         Exhibit C (incorporated by reference to Exhibit 4 of Company's Current
         Report on Form 8-K dated December 3, 1998).

10.16    Common Stock Purchase Agreement, dated August 11, 1999 between NetSat
         Express, Inc. and Globix Corporation (incorporated by reference to
         Exhibit 10.16 of the Company's Annual Report on Form 10-K for the year
         ended June 30, 1999).

10.17    Series A Preferred Stock Purchase Agreement, dated August 11, 1999
         between NetSat Express, Inc. and George Soros (incorporated by
         reference to Exhibit 10.17 of the Company's Annual Report on Form 10-K
         for the year ended June 30, 1999).

10.18    Common Stock Purchase Agreement, dated October 28, 1999 between NetSat
         Express, Inc., Globecomm Systems, Inc. and Reuters Holdings Switzerland
         SA (incorporated by reference to Exhibit 10.18 of the Company's
         Quarterly Report on Form 10-Q, for the quarter ended September 30,
         1999).

10.19    Negotiable Promissory Note, dated April 1, 2001, by and between Donald
         G. Woodring and the Company (incorporated by reference to Exhibit 10.19
         of the Company's Annual Report on Form 10-K for the year ended June 30,
         2001).

10.20    Employment Agreement, dated as of October 9, 2001, by and between
         Stephen C. Yablonski and the Company (incorporated by reference to
         Exhibit 10.20 of the Company's Quarterly Report on Form 10-Q, for the
         quarter ended September 30, 2001).

10.21    Employment Agreement, dated as of October 9, 2001, by and between
         Andrew C. Melfi and the Company (incorporated by reference to Exhibit
         10.21 of the Company's Quarterly Report on Form 10-Q, for the quarter
         ended September 30, 2001).

10.22    Employment Agreement, dated as of October 9, 2001, by and between
         Donald G. Woodring and the Company (incorporated by reference to
         Exhibit 10.22 of the Company's Quarterly Report on Form 10-Q, for the
         quarter ended September 30, 2001).

                                       26
<PAGE>

10.23    Employment Agreement, dated as of October 9, 2001, by and between Paul
         J. Johnson and the Company (incorporated by reference to Exhibit 10.23
         of the Company's Quarterly Report on Form 10-Q, for the quarter ended
         September 30, 2001).

10.24    Employment Agreement, dated as of October 9, 2001, by and between Paul
         Eterno and the Company (incorporated by reference to Exhibit 10.24 of
         the Company's Quarterly Report on Form 10-Q, for the quarter ended
         September 30, 2001).

10.25    Promissory Note Secured By Stock Pledge Agreement, dated September 4,
         2001, by and between David E. Hershberg and the Company (incorporated
         by reference to Exhibit 10.25 of the Company's Quarterly Report on Form
         10-Q, for the quarter ended September 30, 2001).

10.26    Promissory Note Secured By Stock Pledge Agreement, dated September 4,
         2001, by and between Kenneth A. Miller and the Company (incorporated by
         reference to Exhibit 10.26 of the Company's Quarterly Report on Form
         10-Q, for the quarter ended September 30, 2001).

10.27    Employment Agreement, dated as of January 25, 2002, by and between G.
         Patrick Flemming and the Company (incorporated by reference to Exhibit
         10.27 of the Company's Quarterly Report on Form 10-Q, for the quarter
         ended December 31, 2001).

* Confidential treatment granted for portions of this agreement.

         (b)  Reports on Form 8-K

         None

                                       27
<PAGE>

                                   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.

                                            GLOBECOMM SYSTEMS INC.

Date: May 15, 2002                          /s/ David E. Hershberg
                                            ----------------------
                                            David E. Hershberg
                                            Chairman of the Board and
                                            Chief Executive Officer
                                            (Principal Executive Officer)

Date: May 15, 2002                          /s/ Andrew C. Melfi
                                            -------------------
                                            Andrew C. Melfi
                                            Vice President and Chief Financial
                                            Officer (Principal Financial and
                                            Accounting Officer)

                                       28