<PAGE>


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




                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

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

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001

                        Commission file number 001-15837
                        --------------------------------


                       WORLD WIRELESS COMMUNICATIONS, INC.
             ------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



               Nevada                                    87-0549700
   -------------------------------                   -------------------
   (State of other jurisdiction of                    (I.R.S. employer
    incorporation or organization)                   identification No.)


5670 Greenwood Plaza Boulevard, Penthouse    Greenwood Village, Colorado   80111
--------------------------------------------------------------------------------
 (Address of principal executive offices)                 (Zip Code)


                  Registrant's telephone number (303) 221-1944
                                                --------------





   Indicate by check mark whether registrant (1) filed all reports required to
   be filed by Section 13 or 15 (d) of the Exchange Act 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 October 31, 2001 there were 31,387,087 shares of the Registrant's
   Common Stock, par value $0.001, issued and outstanding.

                                Explanatory Note:

   This amendment on Form 10-Q/A amends the registrant's quarterly report on
Form 10-Q for the three months ended September 30, 2001 as filed by the
registrant on November 19, 2001, and is being filed to reflect the restatement
of the registrant's unaudited condensed consolidated financial statements. See
Note 8 to the unaudited condensed consolidated financial statements.


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<S>             <C>                                                                                        <C>
PART I.  Financial Information

Item 1.  Financial Statements:

               Statement Regarding Forward-Looking Disclosure..............................................1

               Unaudited Condensed Consolidated Balance Sheets - as of
               September 30, 2001 and December 31, 2000....................................................2

               Unaudited Condensed Consolidated Statements of Operations -
               for the Three Months Ended September 30, 2001 and September 30, 2000
               And for the Nine Months Ended September 30, 2001 and September 30, 2000.....................4

               Unaudited Condensed Consolidated Statements of Cash Flows -
               for the Nine Months Ended September 30, 2001 and September 30, 2000.........................5

               Notes to Unaudited Condensed Consolidated Financial Statements .............................7

Item 2.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations..................................................................16

PART II. Other Information

Item 1.        Legal Proceedings..........................................................................23

Item 2.        Changes in Securities and Use of Proceeds..................................................23

Item 6.        Exhibits and Reports on Form 8-K...........................................................28


               Signatures.................................................................................29
</TABLE>



<PAGE>


PART I - FINANCIAL INFORMATION

STATEMENT REGARDING FORWARD-LOOKING DISCLOSURE

This report includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 (the "Act" or the "Securities Act"), as
amended, and Section 21E of the Securities Exchange Act of 1934 (the "Exchange
Act"), as amended, which represent the expectations or beliefs of World Wireless
Communications, Inc. and our subsidiaries (collectively the "Company", "we" or
"us") concerning future events that involve risks and uncertainties, including
and without limitation, (i) those associated with the ability of the Company to
obtain financing for our current and future operations, to manufacture (or
arrange for the manufacturing of) our products, to market and sell our products,
and our ability to establish and maintain our sales of X-traWebTM products, (ii)
general economic conditions and (iii) technological developments by us, our
competitors and others. All statements other than statements of historical facts
included in this Report including, without limitation, the statements under
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and elsewhere herein, are forward-looking statements. Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we cannot assure you that such expectations will prove to have been
correct. Important factors that could cause actual results to differ materially
from our expectations ("Cautionary Statements") are disclosed in this Report,
including, without limitation, in connection with the forward-looking statements
included in this report. All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf are expressly
qualified in their entirety by the Cautionary Statements.







                                      -1-
<PAGE>


ITEM 1.         FINANCIAL STATEMENTS

                       WORLD WIRELESS COMMUNICATIONS, INC.
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                     ASSETS

<TABLE>
<CAPTION>
                                                                                              SEPTEMBER 30,      DECEMBER 31,
                                                                                                  2001              2000
                                                                                              -------------      ------------
                                                                                        (As Restated, see Note 8)
<S>                                                                                            <C>               <C>
CURRENT ASSETS
     Cash and cash equivalents                                                                 $   83,456        $3,097,624
     Investment in securities available-for-sale                                                    1,063            19,109
     Trade receivables, net of allowance for doubtful
       accounts                                                                                   112,960           347,218
     Other receivables                                                                            116,459            57,345
     Inventory                                                                                    565,011           558,076
     Prepaid expenses                                                                             260,245            71,891
                                                                                               ----------        ----------
                 TOTAL CURRENT ASSETS                                                           1,139,194         4,151,263
                                                                                               ----------        ----------

EQUIPMENT, NET OF ACCUMULATED DEPRECIATION AND
     IMPAIRMENTS                                                                                  543,860           575,475
                                                                                               ----------        ----------

GOODWILL, NET OF ACCUMULATED AMORTIZATION                                                          85,712           214,286
                                                                                               ----------        ----------

OTHER ASSETS, NET OF ACCUMULATED AMORTIZATION                                                      23,864            28,863
                                                                                               ----------        ----------



TOTAL ASSETS                                                                                   $1,792,630        $4,969,887
                                                                                               ==========        ==========
</TABLE>





                                   (CONTINUED)




    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                      -2-
<PAGE>


                       WORLD WIRELESS COMMUNICATIONS, INC.
           UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


<TABLE>
<CAPTION>
                                                                     SEPTEMBER 30,         DECEMBER 31,
                                                                         2001                  2000
                                                                     -------------         ------------
                                                               (As Restated, see Note 8)
<S>                                                                  <C>                   <C>
CURRENT LIABILITIES
     Trade accounts payable                                          $    927,402          $    540,899
     Accrued liabilities                                                  231,675               371,149
     Accrued interest                                                      72,477                  --
     Other liabilities                                                     90,901                13,077
     Note payable                                                          15,057                  --
     Note payable, net of discount - related party                      1,664,843                  --
     Deferred revenue                                                      30,000                  --
     Obligation under capital leases - current portion                      6,453                19,374
                                                                     ------------          ------------
     TOTAL CURRENT LIABILITIES                                          3,038,808               944,499
                                                                     ------------          ------------


LONG-TERM OBLIGATION UNDER CAPITAL LEASES                                   7,509                 9,633
                                                                     ------------          ------------

STOCKHOLDERS' EQUITY (DEFICIT)
     Preferred stock - 1,000 shares of 8% cumulative
       Convertible senior series authorized; 0 issued and
       outstanding Common stock - $0.001 par value;
       50,000,000 shares authorized, issued and outstanding:
       31,387,087 shares at September 30, 2001 and
       31,208,847 shares at December 31, 2000                              31,386                31,209
     Additional paid-in capital                                        46,880,965            46,500,157
     Accumulated other comprehensive loss                                 (40,010)              (56,764)
     Accumulated deficit                                              (48,126,027)          (42,458,847)
                                                                     ------------          ------------

              TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                     (1,253,686)            4,015,755
                                                                     ------------          ------------



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 $  1,792,630          $  4,969,887
                                                                     ============          ============
</TABLE>




    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                      -3-
<PAGE>


                       WORLD WIRELESS COMMUNICATIONS, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                            FOR THE THREE MONTHS              FOR THE NINE MONTHS
                                             ENDED SEPTEMBER 30,              ENDED SEPTEMBER 30,
                                         ----------------------------    ----------------------------
                                             2001           2000             2001            2000
                                         ------------    ------------    ------------    ------------
                                          (As Restated, see Note 8)       (As Restated, see Note 8)
<S>                                      <C>             <C>             <C>             <C>
REVENUES:
  Services                               $     23,275    $    134,258    $    104,493    $    232,807
  Royalties                                     1,099          45,172          17,540         459,986
  Product sales                               238,081         197,455         741,282         650,331
                                         ------------    ------------    ------------    ------------
TOTAL SALES                                   262,455         376,885         863,315       1,343,124

COST OF SALES:
  Services                                     74,601          88,855         132,505         446,837
  Products                                    316,520         170,255         551,844         515,189
                                         ------------    ------------    ------------    ------------
TOTAL COST OF SALES                           391,121         259,110         684,349         962,026

GROSS PROFIT (LOSS)                          (128,666)        117,775         178,966         381,098
                                         ------------    ------------    ------------    ------------

EXPENSES
  Research and development                    131,978         455,456         406,155       1,060,762
  Selling, general and administrative       1,440,622       1,362,350       4,966,192       4,190,564
  Manufacturing activity exit costs              --              --              --        (1,677,668)
  Amortization of goodwill                     42,858          42,858         128,574         128,574
                                         ------------    ------------    ------------    ------------
TOTAL EXPENSES                              1,615,458       1,860,664       5,500,921       3,702,232
                                         ------------    ------------    ------------    ------------
LOSS FROM OPERATIONS                       (1,744,124)     (1,742,889)     (5,321,955)     (3,321,134)

OTHER INCOME/(EXPENSE):
  Interest expense                           (255,786)         (4,388)       (375,340)       (117,119)
  Interest and other income                       437          91,378          30,115         364,910
                                         ------------    ------------    ------------    ------------
NET LOSS                                 $ (1,999,473)   $ (1,655,899)   $ (5,667,180)   $ (3,073,343)
                                         ============    ============    ============    ============

Basic and Diluted Loss Per
Common Share                             $      (0.06)   $      (0.05)   $      (0.18)   $      (0.11)
                                         ============    ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES USED IN PER SHARE
CALCULATION                                31,383,635      31,208,847      31,273,990      28,856,083
                                         ============    ============    ============    ============
</TABLE>





    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                      -4-
<PAGE>


                       WORLD WIRELESS COMMUNICATIONS, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                  FOR THE NINE MONTHS
                                                                                  ENDED SEPTEMBER 30,
                                                                  ---------------------------------------------------
                                                                             2001                    2000
                                                                  (As Restated, see Note 8) (As Restated, see Note 8)
                                                                  ------------------------- -------------------------
<S>                                                                    <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES
    Net Loss                                                              $(5,667,180)            $(3,073,343)
    Adjustments to reconcile net loss
      to net cash used by operating activities:
           Amortization of goodwill                                           128,574                 128,574
Depreciation                                                                   97,220                 101,794
           Amortization of debt discount                                      264,269                    --
           Consulting services paid with stock                                 12,000                    --
           Change in compensation from stock options                          (37,170)                334,289
           Loss on sale of securities                                          26,762                    --
           Valuation allowance on inventory                                   172,741                 (72,624)
           Provision for doubtful accounts receivable                          11,545                  93,304
           Changes in operating assets and liabilities:
                Accounts receivable                                           163,599                  79,738
                Inventory                                                    (179,677)                (15,077)
                Prepaid expenses/other assets                                (183,355)                 38,986
                Deferred revenue                                               30,000                    --
                Accounts payable                                              386,503                (419,280)
                Accrued interest                                               72,477                    --
                Accrued liabilities                                           (61,649)             (1,639,243)
                                                                          -----------             -----------

    NET CASH AND CASH EQUIVALENTS USED BY OPERATING
       ACTIVITIES                                                          (4,763,341)             (4,442,882)
                                                                          -----------             -----------

CASH FLOW FROM INVESTING ACTIVITIES
           Payments for the purchase of property and equipment                (65,605)               (235,218)
           Proceeds from sale of property and equipment                          --                    18,913
           Proceeds from sale of securities                                    31,083                    --

NET CASH AND CASH EQUIVALENTS
              USED BY INVESTING ACTIVITIES                                    (34,522)               (216,305)
                                                                          -----------             -----------
</TABLE>



                                   (CONTINUED)



    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                      -5-
<PAGE>


                       WORLD WIRELESS COMMUNICATIONS, INC.
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


<TABLE>
<CAPTION>
                                                                             FOR THE NINE MONTHS
                                                                             ENDED SEPTEMBER 30,
                                                                    -------------------------------------
                                                                        2001                     2000
                                                                    ------------             ------------
<S>                                                                 <C>                      <C>
CASH FLOW FROM FINANCING ACTIVITIES
    Net proceeds from issuance of common stock                      $       --               $ 12,133,217
    Proceeds from exercise of options                                     17,467                     --
    Proceeds from exercise of warrants                                    39,261                  401,220
    Redemption of preferred stock                                           --                   (950,000)
    Proceeds from borrowings and issuance of warrants                  1,815,600                     --
    Principal payments on notes payable                                  (50,543)              (2,415,208)
    Principal payments on obligation under capital lease                 (15,045)                 (67,196)
    Payment of preferred dividends                                          --                    (57,378)
                                                                    ------------             ------------

NET CASH AND CASH EQUIVALENTS PROVIDED BY
      FINANCING ACTIVITIES                                             1,806,740                9,044,655
                                                                    ------------             ------------

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS                     (23,045)                    --
                                                                    ------------             ------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                  (3,014,168)               4,385,468
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                        3,097,624                  893,849
                                                                    ------------             ------------


CASH AND CASH EQUIVALENTS - END OF PERIOD                           $     83,456             $  5,279,317
                                                                    ============             ============
</TABLE>

SUPPLEMENTAL CASH FLOW INFORMATION -

Cash paid for interest was $7,318 and $193,719 in 2001 and 2000 respectively.

NON-CASH INVESTING AND FINANCING ACTIVITIES - NOTES  3 AND  5

    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                      -6-
<PAGE>
                       WORLD WIRELESS COMMUNICATIONS, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - The accompanying condensed
consolidated financial statements are unaudited. In the opinion of management,
all necessary adjustments (which include only normal recurring adjustments) have
been made to present fairly the financial position, results of operations and
cash flows for the periods presented. Certain information and note disclosure
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the December 31,
2000 annual report on Form 10-K/A. The results of operations for the nine month
period ended September 30, 2001 are not necessarily indicative of the operating
results to be expected for the full year.

GOING CONCERN - The accompanying financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
sustained recurring losses from operations, and has a working capital
deficiency, a stockholders' deficit and does not have the necessary funds to
repay its debt, which is all due February 28, 2002. As operations have not
generated sufficient amounts of cash, the Company has relied upon financing to
fund its current period operations. The financing has been with debt holders who
are affiliates of the Company's largest shareholder and have extended the due
dates of the notes several times during 2001. There is no guarantee that the due
dates of the notes will continue to be extended. The Company's attainment of
profitable operations and sufficient additional financing, cannot be determined
at this time. These uncertainties among others raise substantial doubt about the
Company's ability to continue as a going concern. See also Note 5 and 9.

The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern. The Company's continuation as a going
concern is dependent upon its ability to generate sufficient cash flow to meet
its obligations on a timely basis, to comply with the terms and covenants of its
financing agreements, to obtain additional financing or refinancing as may be
required, and ultimately to attain successful operations. Management is
continuing its efforts to obtain additional funds so that the Company can meet
its obligations and sustain operations from sources that are described below.

MANAGEMENT'S PLANS - Based on the Company's current cash position and its plans
for 2001 and early 2002, management believes that additional capital will be
required by the end of February 2002. The Company's financing agreement with
Lancer Offshore, Inc. and Lancer Partners L.P. allows for such loan to be
increased to a total of $5,000,000 from its current outstanding principal amount
of $3,210,000 (see Note 5 and Note 9), provided that both parties agree to do
so, although such mutual agreement cannot be assured. The Company is currently
seeking funding from other sources, however there can be no assurances that the
Company will be successful.

MAJOR CUSTOMERS - Sales to major customers are defined as sales to any one
customer which exceeded 10% of total sales in any of the two reporting periods.

Sales to the major customers during each of the nine months ended September 30,
2001 and 2000 are as follows: Customer "B" represented 12.6% and 25.8% of sales
respectively; Customer "C" represented 0.0% and 12.5% respectively and Customer
"D" represented 13.2% and 0.07% respectively.

Sales to the major customers during each of the three months ended September 30,
2001 and 2000 are as follows: Customer "A" represented 0% and 33.3%; Customer
"B" represented 15.7% and 0.09%; and Customer "D" represented 9.0% and 0.03%
respectively.


INVENTORY - Inventory is stated at the lower of cost or market. Cost is
determined using the first-in, first-out method. Reserves for inventory
valuation are reviewed periodically, and adjusted accordingly. During the third
quarter, the inventory valuation reserve was increased by $198,000 to reflect
the obsolescence of various component parts. As of September 30, 2001 and
December 31, 2000 inventory consisted of the following:

<TABLE>
<CAPTION>
                             September 30,    December 31,
                                 2001            2000
                             -------------    ------------
        <S>                    <C>             <C>
        Materials              $404,697        $297,147

        Work in process          56,683            --

        Finished goods          103,631         260,929
                               --------        --------

        Total                  $565,011        $558,076
                               ========        ========
</TABLE>


                                      -7-
<PAGE>


DEFERRED REVENUE - deferred revenue represents amounts invoiced and paid by
customers for which products have not yet been shipped.


LOSS PER SHARE - Basic loss per common share is computed by dividing net loss by
the weighted-average number of common shares outstanding during the period.
Diluted loss per share reflects potential dilution which could occur if all
potentially issuable common shares from stock purchase warrants and options or
convertible notes payable and preferred stock resulted in the issuance of common
stock. In the present position, diluted loss per share is the same as basic loss
per share because the inclusion of potentially issuable common shares at
September 30, 2001 and 2000, respectively, would have decreased the loss per
share.


COMPREHENSIVE LOSS - Comprehensive income/(loss) provides a measure of overall
Company performance that includes all changes in equity resulting from
transactions and events other than capital transactions. The Company's
comprehensive income and loss for the reporting periods ended September 30, 2001
and 2000 are as follows:

<TABLE>
<CAPTION>
                                                   For the Three Months                     For the Nine Months
                                                    Ended September 30,                     Ended September 30,
                                              -------------------------------         -------------------------------
                                                 2001                2000                 2001               2000
                                              -----------         -----------         -----------         -----------
<S>                                           <C>                 <C>                 <C>                 <C>
Net Loss                                      $(1,999,473)        $(1,655,899)        $(5,667,180)        $(3,073,334)
Unrealized Gain (loss)
on Marketable Equity Securities                     7,671             (29,722)             13,037             (36,312)

Effect of foreign currency translation              5,439                --               (23,045)               --

Comprehensive Loss
for the Period                                $(1,986,363)        $(1,685,621)        $(5,677,188)        $(3,109,646)
                                              ===========         ===========         ===========         ===========
</TABLE>


NOTE 2 -- EXIT FROM MANUFACTURING ACTIVITIES

During the fourth quarter of 1999, the Company executed a plan to focus its
efforts primarily on enhancing and marketing its X-traWebTM products whereby all
contract manufacturing was discontinued, all in-house production was outsourced
and the Company moved its executive offices to the Denver, Colorado area. The
plan also involved liquidating the Company's raw materials and work in process
inventory and selling all equipment used in production and contract
manufacturing. The Company was able to effect the inventory liquidation under
terms more favorable than previously estimated, resulting in a recovery of
$72,624 of inventory impairment previously charged to cost of sales. The
recovery was recognized as other income during the first quarter of 2000.

The Company recognized as exit costs the related non-cancelable obligation under
a lease agreement for the office and manufacturing facilities in Salt Lake City,
Utah through 2005. Future minimum lease payments of $1,756,924 under the lease
were charged to operations during the year ended December 31, 1999.


                                      -8-
<PAGE>


The Company completed its relocation to the Denver, Colorado area in the first
quarter of 2000. Pursuant to a Lease Termination Agreement dated May 1, 2000,
the Company paid a $75,000 settlement payment and transferred its security
deposit in the amount of $27,742 to the benefit of a new tenant in the Salt Lake
City Utah office and manufacturing facilities, and the lease was terminated as
of that date.

Incident to the lease termination, the settlement funds described above were
charged to the outstanding lease liability on the Company's balance sheet
resulting in a remaining liability balance of $1,598,342, which was recorded to
manufacturing exit recoveries income during the second quarter of 2000.


NOTE 3 - STOCKHOLDERS' EQUITY

During the first quarter of 2000, the Company issued 4,548,557 common shares for
gross cash proceeds of $13,646,000 received from 45 accredited investors in a
private placement offering, at $3.00 per share. These securities are exempt from
registration under the Act. In connection with the offering, a total of
$1,512,782 was incurred as placement costs.

During March 2000, the Company issued a total 5,393,690 common shares related to
the exercise of warrants to purchase common stock at $.25 per share. The Company
received $401,220 in cash and recorded $947,203 related to the cashless exercise
of warrants as a deemed payment of the principal of the 1999 Notes, as described
in Note 5 - Notes Payable.

Pursuant to the authority vested in the Board of Directors, the Board on June 8,
2001 resolved to issue up to 1,000 shares of a series of 8% cumulative,
convertible senior preferred stock. The shares, if and when issued, will be
convertible into shares of common stock at a rate of 16,667 shares of common
stock for each share of preferred stock. The Company has not issued any of such
shares as of the date hereof.

NOTE 4 - MANDATORILY REDEEMABLE PREFERRED STOCK

On May 14, 1999 the Company authorized 950 shares of senior liquidating
mandatorily redeemable 10% preferred stock with a liquidation preference of
$1,000 per share and detachable five-year warrants to purchase 4,750,000 common
shares at $0.25 per share, and issued such 950 shares of preferred stock and the
related warrants between May 15, 1999 and October 5, 1999. By their terms, the
preferred shares had to be redeemed within one year at their par value plus
accrued dividends. The preferred stock cash dividend requirement was $95,000
annually. The preferred stock was issued for proceeds of $950,000 consisting of
$700,000 cash and the deemed payment of $250,000 principal amount of 1998 bridge
loan notes.

On February 25, 2000, the Company redeemed the mandatorily redeemable preferred
stock for cash of $950,000 for the principal balance and $57,378 for the
preferred dividends accrued to date.




                                      -9-
<PAGE>


NOTE 5 - NOTES PAYABLE

On May 14, 1999 the Company issued $2,600,000 of senior secured 16% notes
payable ("the 1999 Notes") which were to mature in one year and bore interest at
the rate of 16% annually and payable quarterly. The notes were issued for
$2,600,000 consisting of $1,600,000 in cash and the deemed payment of $1,000,000
principal amount of the 1998 bridge loan notes. The 1999 Notes were secured by
substantially all the Company's assets.

In March 2000, the Company repaid the 1999 Notes outstanding with cash in the
amount of $2,377,623 and with the deemed proceeds from the exercise of warrants
to purchase 3,788,813 common shares at $.25 per share. The portion of the 1999
Notes repaid by the exercise of warrants was $947,203. The warrants exercised
are included in the total warrants issued during the three months ended March
31, 2000 as discussed in Note 3

On May 17, 2001 the Company issued $1,125,000 of 15% senior secured convertible
notes payable to an affiliate of the Company's largest shareholder, Lancer
Offshore, Inc. (the "2001 Notes"). The 2001 Notes are mandatorily convertible
into shares of Common Stock of the Company at the rate of $0.50 of debt for each
share upon (i) approval by the Company's shareholders to such conversion at a
meeting and (ii) the Company's receipt of $2,000,000 in equity on or before
December 31, 2001 from sources other than Michael Lauer and his affiliates. The
Company also issued detachable five-year warrants to purchase 562,500 shares of
the Company's common stock at $.50 per share. Such financing agreement also
allows for such loan to be increased to a total of $5,000,000 provided that both
parties agree to do so. The 2001 Notes are secured by a first security interest
in substantially all the assets of the Company.

$258,949 of the net proceeds from the 2001 Notes was deemed to result from the
issuance of the detachable warrant. This amount was recorded as discount on the
2001 Notes, and is being amortized over the term of the loan.

On May 17, 2001 the closing price of a share of our Common Stock was $0.65,
which was higher than the conversion rate of one share for each $0.50 of debt
and the exercise price of each warrant of $0.50 per share. The resulting
beneficial conversion feature of $596,449 will be recognized when the related
contingencies are resolved.

Any event of default under the 2001 Notes will require the issuance of 1,000,000
shares of our Common Stock commencing with the month in which such default first
occurs and thereafter in each such month in which such default is not cured, up
to a maximum amount of 10,000,000 shares.

On August 7, 2001 the 2001 Notes were amended to provide for an additional
$875,000 in debt financing over a three month period by Lancer Partners L.P., an
affiliate of our largest stockholder. Pursuant thereto the Company received
$350,000 on August 7, 2001, with $275,000 and $250,000 to be provided on or
about September 15, 2001 and October 15, 2001, respectively, with the September
and October payments conditioned upon the receipt of $2,000,000 in additional
equity financing to be provided by sources other than Michael Lauer and his
affiliates on or before September 15, 2001. The Company also issued detachable
five-year warrants to purchase 225,000 shares of our Common Stock at $0.30 per
share as the result of the $350,000 August 7 loan. The Company recorded the
August 7, 2001 debt net of a discount equal to $64,136, attributable to the
related warrants.



                                      -10-
<PAGE>


On August 7, 2001, the average of the high and low price per share of the
Company's Common Stock was $0.38, which was higher than the conversion rate of
one share for each $0.20 of debt and the exercise price of each warrant at $0.30
per share. The resulting beneficial conversion feature of $379,136 will be
recognized when the related contingencies are resolved.

While the Company did not meet the requirements for the conditional funding of
$275,000 originally to have been provided on or about September 15, 2001,
$100,000 of the $275,000 was provided on September 6, 2001 and the balance of
$175,000 was provided on September 18, 2001 without the issuance of any
additional special consideration for the making of such modification. Detachable
warrants to purchase 87,500 shares of stock at $0.30 per share were issued in
connection with the September loans. The Company recorded the debt net of a
discount equal to $17,767, attributable to the related warrants.

On September 8, 2001 and September 16, 2001, the average of the high and low
price per share of the Company's Common Stock was $0.255 and $0.235,
respectively, which was higher than the conversion rate of one share for each
$0.20 of debt, but lower than the exercise price of each warrant at $0.30 per
share. The resulting beneficial conversion features of $32,813 and $61,517
respectively will be recognized when the related contingencies are resolved

As a condition of this additional financing, among other changes, the $1,125,000
principal amount of the 2001 Notes funded on May 17, 2001 then became
convertible into shares of the Company's Common Stock at the rate of $0.20 of
debt per share, and the exercise price of the 562,500 warrants issued on May 17,
2001 was reduced to $0.30 per share. The maximum amount of shares of common
stock issuable in the event of continuing monthly defaults was increased to
12,500,000 from 10,000,000.

By an agreement dated September 14, 2001 the 2001 Notes were amended (a) to
extend the maturity dates of the first two tranches of the 2001 Notes totaling
$1,475,000 in principal amount from September 15, 2001 until October 15, 2001
and (b) to extend the time for the Company to raise $2,000,000 until October 15,
2001 as a condition to the issuance of the $250,000 loan on or about October 15,
2001.

Although the first two tranches of the 2001 Notes totaling $1,475,000 in
principal amount were due on October 15, 2001, Lancer Offshore, Inc. and Lancer
Partners L.P. agreed to extend the maturity date thereof until February 28,
2002. Although the third and fourth tranches of the 2001 Notes totaling $275,000
in principal amount were originally to be due on December 15, 2001, Lancer
Offshore, Inc. and Lancer Partners L.P. agreed to extend the maturity date
thereof until February 28, 2002. The Company does not currently have the ability
to pay those portions of the 2001 Notes and may default on this debt on February
28, 2002. See Note 9.

NOTE 6 - BUSINESS SEGMENT INFORMATION

As of September 30, 2001 the Company's operations are classified into two
reportable business segments: X-traWeb products and radio products. Corporate
includes income, expenses, and assets that are not allocable to a specific
business segment, or relate to activities no longer being pursued. The revenues,
expenses, and assets associated with our former manufacturing activities



                                      -11-
<PAGE>


have been reclassified to Corporate to provide a better comparison of our
ongoing business model.

Segment operating income is total segment revenue reduced by operating expenses
identifiable with or allocable to that business segment. The Company evaluates
performance of its segments based on revenues and operating income.

The Company's Italian subsidiary, X-traWeb Europe, S.p.A., held assets of under
$50,000 as of September 30, 2001, and contributed only $700 in revenue for the
three and nine month periods ended September 30, 2001. These amounts have been
included in the X-traWeb segment.


<TABLE>
<CAPTION>
                              For the Three Months Ended               For the Nine Months Ended
                                    September 30                             September 30
                            -------------------------------         -------------------------------
                               2001                2000                 2001               2000
                            -----------         -----------         -----------         -----------
<S>                         <C>                 <C>                 <C>                 <C>
Revenues:
X-traWebTM                  $    41,074         $   114,578         $   233,012         $   272,946
Radio products                  220,281             177,111             612,763             496,619
Corporate                         1,100              85,196              17,540             573,559
                            -----------         -----------         -----------         -----------
Total sales                 $   262,455         $   376,885         $   863,315         $ 1,343,124
                            ===========         ===========         ===========         ===========

Operating loss:
X-traWebTM                  $  (860,336)        $  (869,488)        $(2,908,724)        $(2,324,647)
Radio products                 (884,888)           (819,265)         (2,484,052)         (2,300,683)
Corporate                         1,100             (54,136)             70,821           1,304,196
                            -----------         -----------         -----------         -----------
Total operating loss        $(1,744,124)        $(1,742,889)        $(5,321,955)        $(3,321,134)
                            ===========         ===========         ===========         ===========
</TABLE>

<TABLE>
<CAPTION>
                                  As of
                     -------------------------------
                     September 30,      December 31,
                         2001              2000
                     -------------      ------------
<S>                   <C>               <C>
Assets:
X-traWebTM            $1,050,866        $1,324,821
Radio products           114,563           642,595
Corporate                627,201         3,002,471
                      ----------        ----------
Total assets          $1,792,630        $4,969,887
                      ==========        ==========
</TABLE>


NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations."
SFAS 141 requires the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the pooling-of-interests method.
The Company does not believe that the adoption of SFAS 141 has a significant
impact on its financial statements.


                                      -12-
<PAGE>


Effective January 2002, the Company is required to adopt Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. Under
the provisions of SFAS No. 142, goodwill is no longer subject to amortization
over its estimated useful life. Instead, goodwill is assessed for impairment on
an annual basis (or more frequently if circumstances indicate a possible
impairment) by means of a fair-value-based test. As of September 30, 2001, the
Company had approximately $85,712 of unamortized goodwill. The Company believes
the implementation of SFAS No. 142 will not have a material adverse effect on
its future results of operations.

The Company will adopt SFAS No. 143, Accounting for Asset Obligations, no later
than January 1, 2003. Under SFAS No. 143, the fair value of a liability for an
asset retirement obligation covered under the scope of SFAS No. 143 would be
recognized in the period in which the liability is incurred, with an offsetting
increase in the carrying amount of the related long-lived asset. Over time, the
liability would be accreted to its present value, and the capitalized cost would
be depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity would either settle the obligation for its recorded amount
or incur a gain or loss upon settlement. The Company is still studying this
newly-issued standard to determine, among other things, whether it has any asset
retirement obligations which are covered under the scope of SFAS No. 143. The
effect to the Company of adopting this standard, if any, has not yet been
determined.

In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 provides new guidance on the
recognition of impairment losses on long-lived assets to be held and used or to
be disposed of and also broadens the definition of what constitutes a
discontinued operation and how the results of a discontinued operation are to be
measured and presented. SFAS No. 144 is effective for the Company's fiscal year
beginning in 2002, but is not expected to have a material impact on the
Company's financial statements.


NOTE 8 - RESTATEMENT OF FINANCIAL STATEMENTS

Subsequent to the issuance of the Company's financial statements for the three
and nine months ended September 30, 2001 the Company concluded that the
calculations for compensation expense related to options accounted for as
variable plan options were not current, and the unaudited consolidated financial
statements for the three and nine months ended September 30, 2001 and 2000
should be restated. In addition, the Company has made certain reclassifications
to the statement of operations for the nine months ended September 30, 2000.
These reclassifications did not affect net loss per share for any of the periods
presented.

The balance sheet as of September 30, 2001 and the statement of operations for
the three month periods ended September 30, 2001 and 2000 and for the nine
months ended September 30, 2001 and 2000 presented herein reflects the
restatement as follows:

<TABLE>
<CAPTION>
                                                              As Previously
                                                                 Reported               As restated
                                                              -------------             ------------
<S>                                                           <C>                       <C>
Balance sheet as of September 30, 2001:

Additional paid-in capital                                     $ 48,086,323             $ 46,880,965

Accumulated deficit                                             (49,331,386)             (48,126,027)
</TABLE>




                                      -13-
<PAGE>


<TABLE>
<CAPTION>
                                                              As Previously
                                                                 Reported               As restated
                                                              -------------             ------------
<S>                                                           <C>                       <C>
Statements of operations:

       Three months ended September 30, 2001
       -------------------------------------

       Selling, general and administrative expenses            $  1,440,582             $  1,440,622

       Net loss                                                  (1,999,433)              (1,999,473)

       Net loss per share                                             (0.06)                   (0.06)



       Three months ended September 30, 2000
       -------------------------------------

       Selling, general and administrative expenses            $  1,354,295             $  1,362,350

       Net loss                                                  (1,647,844)              (1,655,899)

       Net loss per share                                             (0.05)                   (0.05)



       Nine months ended September 30, 2001
       ------------------------------------

       Selling, general and administrative expenses            $  4,949,948             $  4,966,192

       Net loss                                                  (5,651,110)              (5,667,180)

       Net loss per share                                             (0.18)                   (0.18)



       Nine months ended September 30, 2000
       ------------------------------------

       Selling, general and administrative expenses            $  4,147,612             $  4,190,564

       Net loss                                                  (3,030,384)              (3,073,343)

       Net loss per share                                             (0.11)                   (0.11)
</TABLE>


NOTE 9 - SUBSEQUENT EVENTS

Although the Company did not meet the requirements for additional funding by
October 15, 2001, Lancer Partners L.P. loaned an additional $25,000 on October
3, 2001 and Lancer Offshore Inc. loaned an additional $85,000 on October 3,
2001, $175,000 on October 9, 2001 and $175,000 on October 29, 2001 without the
issuance of any additional special consideration for the making of such
modification.

On November 14, 2001, Lancer Offshore Inc. loaned the Company an additional
$1,000,000 and among other things, the Company and such creditors agreed to
change the conversion rate of each note comprising the 2001 Notes to one share
for each $0.05 of debt and to extend the date of the entire $3,210,000 principal
amount of the loans to February 28, 2002. The Company also issued detachable
five-year warrants to purchase 1,042,500 shares of its Common Stock at $0.30 per
share as a result of these additional loans, of which total warrants to purchase
312,500 shares of the Company's Common Stock were issued with respect to the
quarter ended September 30, 2001


                                      -14-
<PAGE>


The finders fee payable on the transaction was increased by requiring us to
issue a five-year warrant to Capital Research Ltd. to purchase 2,000,000 shares
of our Common Stock at an exercise price of $0.05 per share, which expires on
November 13, 2006.




                                      -15-
<PAGE>

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

Subsequent to the issuance of the Company's financial statements for the three
and nine months ended September 30, 2001 the Company concluded that the
calculations for compensation expense related to options accounted for as
variable plan options were not current, and the unaudited consolidated financial
statements for the three and nine months ended September 30, 2001 and 2000
should be restated. In addition, the Company has made certain reclassifications
to the statement of operations for the nine months ended September 30, 2000.
These reclassifications did not affect net loss per share for any of the periods
presented.

When used in this discussion, the words "expect(s)", "feel(s)", "believe(s)",
"will", "may", "anticipate(s)" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, and are urged to carefully review and consider the
various disclosures elsewhere in this Report which discuss factors which affect
our business.

The following discussion should be read in conjunction with our Unaudited
Condensed Consolidated Financial Statements and respective notes thereto.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2001 AND THREE MONTHS ENDED SEPTEMBER 30, 2000

We incurred a net loss of $1,999,473 for the three-month period ended September
30, 2001, or a $0.06 loss per share, compared to net loss of $1,655,899 or a
$0.05 loss per share, for the three months ended September 30, 2000. Our loss
from operations for the third quarter of 2001 increased by $1,235 over the loss
from operations for the third quarter of 2000. Such increased loss was
attributable to the $114,430 reduction in revenue in the third quarter of 2001,
and a $198,000 write-down of inventory to its fair value, offset by a reduction
of approximately $240,000 in compensation expense related to reductions in the
workforce, reduced travel expenses, and lower equipment leasing


                                      -16-
<PAGE>


expenses resulting from the expiration of the lease period on a number of
operating leases. The inventory write-down results from the obsolescence of
various component items held in stock.

Sales for the three-month period ended September 30, 2001 totaled $262,455
compared to $376,885 during the three months ended September 30, 2000, or a
decrease of $114,430 or 30.4%. During the comparative third quarters of 2001 and
2000, we derived our revenue as follows:

<TABLE>
<CAPTION>
                                         For the Three Months Ended
                                               September 30,
                                        ----------------------------
Summary of Revenue by Activity            2001                2000
                                        --------            --------
<S>                                     <C>                 <C>
            X-traWeb (TM)               $ 41,074            $114,578
            Radio products               220,281             177,111
            Corporate                      1,100              85,196
                                        --------            --------
            Total Revenue               $262,455            $376,885
                                        ========            ========
</TABLE>


During the third quarter of 2001, we continued to implement our strategic plan
to focus our efforts on the X-traWebTM product line. Of the $41,074 in revenue
derived from the X-traWebTM product line, $23,275 resulted from engineering
design services related to proof-of-concept and similar development activities
contracted by customers interested in custom applications of our internet
communications products and services.

Our business strategy continues to include revenue from the production of radio
products, which totaled $220,281 for the three-month period ended September 30,
2001, compared to $177,111 for the three months ended September 30, 2000, an
increase of $43,170 or 24.4%. Finally, royalties contributed $1,100 in corporate
revenues during the three-month period ended September 30, 2001, compared to
$45,172 for the three months ended September 30, 2000, a decrease of $44,072 or
97.6%. Since the license agreement with our primary customer expired by its
terms in September 2000, we received greatly reduced royalty income during the
third quarter of 2001.

In addition, we derived only $700 in revenues from our Italian subsidiary,
X-traWeb Europe, S.p.A. and received no revenues from our subsidiaries, X-traWeb
Europe S.p.A. We formed two additional operating subsidiaries, X-traWeb Services
Corp. and X-traWeb Financial Corp., which are designed to offer various services
of X-traWeb products and to provide financing capability of sales of X-traWeb
products or services, respectively, but which generated no revenues.

Our cost of sales for the three-month period ended September 30, 2001 increased
to $391,121 from a total of $259,110 for the three months ended September 30,
2000, or an increase of $132,011 or 50.9%. The resulting gross margin was a loss
of $128,666, or 49.0% of sales, for the three-month period ended September 30,
2001 compared to a profit of $117,775, or 31.2%, for the three months ended
September 30, 2000. The gross profit for the three months ended September 30,
2001 was $69,334, or 26.4% of sales before the write-down of inventory items to
their fair value.

Our research and development expenses decreased to $131,978 from $455,456, or by
a decrease of $323,478, or 71.0%, for the comparable three month periods ended
September 30, 2001 versus



                                      -17-
<PAGE>


September 30, 2000. This decrease reflects the increasing maturity of our
X-traWeb product line, and the shift in resources from research and development
to applications engineering. These costs continue to relate to the ongoing
development of the X-traWebTM proprietary technology in 2001.

Our total selling, general, and administrative expenses amounted to $1,440,622
for the three-month period ended September 30, 2001 compared to $1,362,350 for
the three months ended September 30, 2000, representing an increase of $78,272,
or 5.7%. Selling and marketing expenses decreased by $144,552 or 35.5%, during
the three-month period ended September 30, 2001 over the three months ended
September 30, 2000, which primarily represents an decrease in staffing levels
for our full-time permanent sales force and a reduced investment in media
consulting. Total general and administrative expenses for the comparable
September 30, 2001 and September 30, 2000 period increased by $222,824, or
23.3%, and resulted primarily from (1) an increase in expenses of $136,000 for
the general operating requirements of the X-traWeb Europe offices, and (2)
expenses related to applications engineering that had previously been allocated
to research and development.

Our interest income for the three-month period ended September 30, 2001 was $437
compared to $91,378 for the three months ended September 30, 2000, with the
decrease of $90,941 directly attributable to decreased available funds in
overnight interest bearing accounts initially provided by the $13.6 million
private placement of shares of our Common Stock we sold in the first quarter of
2000. Interest expense increased to $255,786 during the three-month period ended
September 30, 2001 compared to $4,388 for the three months ended September 30,
2000, and represents an increase of $251,398. This expense increase is directly
related to our issuance of units of secured notes and warrants during the second
and third quarters of 2001, and represents the amortization of discount and
accrued interest thereon.

NINE MONTHS ENDED SEPTEMBER 30, 2001 AND NINE MONTHS ENDED SEPTEMBER 30, 2000

We incurred a net loss of $5,667,180 for the nine months ended September 30,
2001, or $0.18 loss per share, compared to a net loss of $3,073,343, or $0.11
loss per share, for the nine months ended September 30, 2000. This represents an
increase in 2001 of $2,593,837, or 84.4%, over the 2000 year-to- date financial
results. However, the increase of the loss in 2001 would be $916,165 if the
non-recurring reversal of manufacturing exit costs of approximately $1,677,668
were excluded from the 2000 result.

Sales for the nine month period ended September 30, 2001 totaled $863,315
compared to $1,343,124 during the nine month period ended September 30, 2000, a
decrease of $479,809 or 35.7%. During the comparative three quarters of 2001 and
2000, the Company derived its revenue as follows:

<TABLE>
<CAPTION>
                                           For the Nine Months Ended
                                                 September 30,
                                        --------------------------------
Summary of Revenue by Product              2001                  2000
                                        ----------            ----------
<S>                                     <C>                   <C>
            X-traWebTM                  $  233,012            $  272,946
            Radio Products                 612,763               496,619
            Corporate                       17,540               573,559
                                        ----------            ----------
            Total Revenue               $  863,315            $1,343,124
                                        ==========            ==========
</TABLE>

                                      -18-
<PAGE>


During the first three quarters of 2001, we continued to implement our strategic
plan to focus our efforts on the X-traWebTM product line and proprietary radio
products. Our sales of branded products, including radio and antenna sales,
increased by $116,144, or 23.4%, during the first three quarters of 2001. We
recognized total revenues from the X-traWebTM product line of $233,012 during
the first nine months of 2001, of which $104,493 was attributable to engineering
design services contracted by customers for the custom development of such
products.

Finally, royalties contributed $17,540 in revenue during the nine months ended
September 30, 2001 compared to $459,986 during the nine months ended September
30, 2000, a decrease of $442,446, or 96.2%.

We realized only marginal revenues, about $700, from our operating subsidiary,
X-traWeb Europe S.p.A., based in Milan, Italy, which is in charge of our
marketing efforts in Europe.

Cost of sales for the nine months ended September 30, 2001 declined to $ 684,349
from a total of $962,026 in 2000, or a reduction of $277,677 or 28.9%. The
resulting gross profit was $178,966 or 20.7% of sales, for the nine months ended
September 30, 2001 compared to $381,098, or 28.4%, for the nine months ended
September 30, 2000. During the third quarter of 2001, we marked a portion of our
inventory down to reflect its fair value. As a result we recognized $198,000 in
expense as cost of sales during the third quarter of 2001. Excluding the
adjustment to the value of our inventory, we realized a gross profit of
$376,966, or 43.7% of sales.

Research and development expenses declined from $1,060,762 to $406,155 or a
decrease of $654,607 or 61.7% for the comparable nine month periods ended
September 30, 2001 versus September 30, 2000. This decrease is consistent with
the increasing maturity of our X-traWebTM product line, and the shift in
resources from research and development to applications engineering. These costs
continue to relate to the ongoing development of the X-traWebTM proprietary
technology in 2001.

Total selling, general, and administrative expenses amounted to $4,966,192 for
the nine months ended September 30, 2001 compared to $4,190,564 for the nine
months ended September 30, 2000, representing an increase of $775,628, or 18.5%.
Selling and marketing expenses decreased by $312,107, or 26.9%, during the nine
months ended September 30, 2001 over 2000 and represents a reduction in staffing
levels for our full-time permanent sales force and a reduced investment in media
consulting. Total general and administrative expenses for the comparable nine
month periods ended September 30, 2001 and 2000 increased by $1,087,735, or
35.9%, and resulted from (1) an increase in operating expenses for the X-traWeb
Europe offices of $417,000 for promotion of X- traWebTM products, and other
international business opportunities, and (2) an increase in expenses related to
applications engineering representing the allocation of resources away from
research and development.

Interest and other income for the nine months ended September 30, 2001 was
$30,115 compared to $364,910 for the nine months ended September 30, 2000, with
the decrease directly attributable to


                                      -19-
<PAGE>


decreased available funds in overnight interest bearing accounts provided by the
$13.6 million private placement securities issued in the first quarter of 2000.
Interest expense increased to $375,340 during the nine months ended September
30, 2001 compared to $117,119 for the nine months ended September 30, 2000, and
represents a $258,221 increase, or 220.5% increase. This increase is directly
related to our issuance of the 2001 Notes and warrants, and represents the
amortization of discount and accrued interest.

RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations."
SFAS 141 requires the purchase method of accounting for business combinations
initiated after June 30, 2001 and eliminates the pooling-of-interests method.
The Company does not believe that the adoption of SFAS 141 has a significant
impact on its financial statements.

Effective January 2002, we are required to adopt Statement of Financial
Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets. Under
the provisions of SFAS No. 142, goodwill is no longer subject to amortization
over its estimated useful life. Instead, goodwill is assessed for impairment on
an annual basis (or more frequently if circumstances indicate a possible
impairment) by means of a fair-value-based test. As of September 30, 2001, we
had approximately $85,712 of unamortized goodwill. We believe the implementation
of SFAS No. 142 will not have a material adverse effect on our future results of
operations.

The Company will adopt SFAS No. 143, Accounting for Asset Obligations, no later
than January 1, 2003. Under SFAS No. 143, the fair value of a liability for an
asset retirement obligation covered under the scope of SFAS No. 143 would be
recognized in the period in which the liabilityis incurred, with an offsetting
increase in the carrying amount of the related long-lived asset. Over time, the
liability would be accreted to its present value, and the capitalized cost would
be depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity would either settle the obligation for its recorded amount
or incur a gain or loss upon settlement. The Company is still studying this
newly-issued standard to determine, among other things, whether it has any asset
retirement obligations which are covered under the scope of SFAS No. 143. The
effect to the Company of adopting this standard, if any, has not yet been
determined.

In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 provides new guidance on the
recognition of impairment losses on long-lived assets to be held and used or to
be disposed of and also broadens the definition of what constitutes a
discontinued operation and how the results of a discontinued operation are to be
measured and presented. SFAS No. 144 is effective for the Company's fiscal year
beginning in 2002, but is not expected to have a material impact on the
Company's financial statements.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity at September 30, 2001 consisting of cash and cash equivalents was
$83,456, which represents a decrease of $3,014,168 over our cash and cash
equivalents of $3,097,624 as of


                                      -20-
<PAGE>


December 31, 2000. Our current assets were $1,139,194 as of September 30, 2001,
a decrease of $3,012,069 from our current assets of $4,151,263 as of December
31, 2000. As of September 30, 2001, our total liabilities were $3,046,317, which
was an increase of $2,092,185 from our total liabilities of $954,132 as of
December 31, 2000.

Our liquidity decreased significantly due to our net loss and due to changes in
operating assets and liabilities during the nine-month period ended September
30, 2001. For the period ended September 30, 2001, the net change in operating
assets and liabilities generated a increase of net cash flow of $227,898
compared to a net decrease of cash for the nine months ended September 30, 2000
of $277,208, exclusive of the change in accrued manufacturing exit costs.

On May 17, 2001, we issued $1,125,000 of our 15% Senior Secured Convertible
Notes to an affiliate of our largest stockholder, which mature as amended on
February 28, 2002 (unless mandatorily converted into shares of our Common Stock
before such date) (the "2001 Notes"). The 2001 Notes are convertible at $0.50
per share and are secured by a first security interest in substantially all of
our assets. For a further description of this financing, see "Senior Secured
Indebtedness Financing" in Item 2 of Part II of this Report. We also issued
warrants to purchase 562,500 shares of our Common Stock at $0.50 per share.

During the quarter ended September 30, 2001, we received an additional $625,000
in loans from Lancer Partners L.P., an affiliate of our largest stockholder,
comprising part of the 2001 Notes. In October, 2001, we received an additional
$25,000 as a loan from Lancer Partners L.P. and an additional $435,000 as loans
from Lancer Offshore, Inc. comprising part of the 2001 Notes. On November 14,
2001, Lancer Offshore Inc. loaned us an additional $1,000,000 comprising part of
the 2001 Notes. The due date on all of the 2001 Notes was set at February 28,
2002 and all notes bear interest at 15%. We also issued detachable five-year
warrants to purchase 1,042,500 shares of our Common Stock at $0.30 per share as
a result of these additional loans, of which total warrants to purchase 312,500
shares of our Common Stock were issued with respect to the quarter ended
September 30, 2001. For a further description of this financing, see "Senior
Secured Indebtedness Financing" in Item 2 of Part II of this Report. Also, the
parties made certain amendments to the terms of the May 17, 2001 financing, as
further described in "Senior Secured Indebtedness Financing" in Item 2 of Part
II hereof.

Based on our current cash position and our plans for 2001 and early 2002, we
believe that additional capital will be required by the end of February, 2002.
Our agreement with Lancer Offshore, Inc. and Lancer Partners L.P. also allows
for such loan to be increased to a total of $5,000,000 from its current
outstanding principal amount of $3,210,000, provided that both parties agree to
do so, although we cannot assure you of such mutual agreement. See "Senior
Secured Indebtedness Financing" in Item 2 of Part II of this Report, including,
without limitation, Item 2(b)2 thereof. We previously obtained a financing
commitment letter totaling $4,000,000 from a third party, to be provided as
private equity placements on or before May 31, 2001, which management believed
was adequate to fund our operations in 2001. The funding party did not provide
the financing within the terms of the commitment, and to date, no funds have
been received thereunder. Upon the lapse of the commitment deadline, management
believed our best interests would be served by accommodating the funding party's
interest in seeking to arrange substitute financing with other accredited
investors on a best efforts basis, and waiving the funder's prior unconditional
commitment therefor. We and the funding party have verbally agreed to allow the
funding party to seek substitute financing through November 30, 2001. As the
result of the foregoing events and since



                                      -21-
<PAGE>


the $3,210,000 loan from the Lancer entities matures on February 28, 2002, we
are currently seeking funding from other sources.

GOING CONCERN - The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company has
sustained recurring losses from operations, and has a working capital
deficiency, a stockholders' deficit and does not have the necessary funds to
repay its debt, which is all due February 28, 2002. As operations have not
generated sufficient amounts of cash, the Company has relied upon financing from
outside investors to fund the current period operations. Debt holders are
affiliates of the Company's largest shareholder and have extended the due dates
of the notes several times during 2001. There is no guarantee that debt holders
will continue to do so in the future. The Company's attainment of profitable
operations and sufficient additional financing, cannot be determined at this
time. These uncertainties raise substantial doubt about the Company's ability to
continue as a going concern.

SUMMARY

During 2000, we implemented our redirection efforts to focus on the growth of
our X-traWeb(TM) business segment and proprietary radio products. We raised
$13,646,000 in new equity capital, paid off substantially all outstanding debt,
redeemed all mandatorily redeemable preferred stock outstanding, relocated our
corporate headquarters to the Denver, Colorado area, and exited from all
in-house manufacturing activities, including termination of our lease obligation
for facilities in Utah. Also, we realized revenues from the sales of our
X-traWeb products for the first time during 2000 and signed various marketing
alliance agreements during the year.

During the first nine months of 2001, we continued to focus on our sales of
X-traWeb(TM) products and services. We continued to receive revenues from the
sale of our X-traWeb products, albeit at a slower pace than anticipated, and
also signed additional marketing alliance agreements during the year.

While we believe that (i) a number of our pending proposals for projects or
products will be accepted in whole or in part, (ii) we will develop additional
sources of sales in the United States, Italy and other foreign countries and
(iii) will derive additional revenues therefrom in 2002 and thereafter, we
cannot assure you that any such sales will be made or the amount thereof,
although we anticipate that X-traWeb(TM) product sales will constitute the bulk
of our revenues during the year 2002 and thereafter. We also believe that we
will derive a large portion revenues from the sale of our proprietary radio
products in the future, but we cannot assure you as to the amount of such sales
or when such sales will occur. We do not expect the sales of our antenna
products to contribute materially to our consolidated net sales or income in the
foreseeable future.

As a result of the slower receipt of revenues from the sale of our X-traWeb
products, we decided in July, 2001 to focus our activities principally on the
sale of such products in the automatic meter reading and facilities management
field (in part due to the current energy crisis experienced in parts of the
United States), although we will continue to market our products in the areas of
(i) vending machines, (ii) security systems and (iii) food services equipment.
We also decided to reduce the number of our employees, particularly in the
engineering and administrative areas, and also closed our office in Kansas City,
Kansas. Thus, as of October 31, 2001, we had a total of 33 employees, a
reduction of 15 from the total of 48 employees we had as of January 1, 2001.

In summary, we are fully aware that anticipated revenue increases from sales of
our X-traWeb(TM) products and our proprietary radios are by no means assured,
and that our requirements for capital are substantial. If significant revenues
with adequate margins are not generated and/or the additional financing is not
obtained, we would have to effect additional reductions in product development
and marketing costs, which could impact the timing and ultimate amount of future
revenues.



                                      -22-
<PAGE>


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On February 20, 2001 the Pinnacle Fund L.P., Barry M. Kitt and Tom and Denise
Hunse filed a lawsuit against us with respect to the purchase of a total of
230,000 shares of our common stock at $3.00 per share in a private placement
transaction in February 2000. The plaintiffs seek rescission of the transaction
and/or damages, including treble damages, which they allege arise out of our
failure to file a registration statement on or before December 31, 2000. The
lawsuit is currently pending in the United States District Court for the
District of Utah. The case is in the discovery stage, with each party having
exchanged documents and written responses to questions asked. We believe that we
have meritorious defenses to such action and intend to prosecute our defense of
the action vigorously, but there can be no assurance as to the outcome thereof.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

We made several sales of shares of our securities during the third quarter of
2001 each of which is exempt from registration under the Act, as set forth
below:

         (a) As of August 7, 2001, we issued (i) a Senior Secured Note in the
principal amount of $350,000 (described immediately below) and (ii) a warrant
expiring on August 6, 2006 to purchase 225,000 shares of our Common Stock at an
exercise price of $0.30 per share, to Lancer Partners L.P., an affiliate of our
largest stockholder. We believe that Lancer Partners L.P. is an accredited
investor within the meaning of Regulation D issued under the Act. We issued such
securities in reliance upon Section 4(2) of the Act.

         (b) As of September 6, 2001, we issued a Senior Secured Note in the
principal amount of $100,000 to Lancer Partners L.P., an affiliate of our
largest stockholder. We believe that Lancer Partners L.P. is an accredited
investor within the meaning of Regulation D issued under the Act. We issued such
securities in reliance upon Section 4(2) of the Act.

         (c) As of September 18, 2001, we issued (i) a Senior Secured Note in
the principal amount of $175,000 to Lancer Partners L.P. (described immediately
below) and (ii) a warrant to purchase 87,500 shares of our Common Stock at an
exercise price of $0.30 per share, expiring on September 17, 2006, to Lancer
Partners L.P., an affiliate of our largest stockholder. We believe that Lancer
Partners L.P. is an accredited investor within the meaning of Regulation D
issued under the Act. We issued such securities in reliance upon Section 4(2) of
the Act.

Senior Secured Indebtedness Financing

(a)      May 17, 2001 Financing

         On May 17, 2001, the Company entered into an investment arrangement
consisting of (a) $2,250,000 principal amount of its Senior Secured Convertible
Notes (the "2001 Notes") and (b) warrants to purchase 1,125,000 shares of Common
Stock of the Company to Lancer Offshore, Inc., an affiliate of the Company's
largest stockholder, in a private placement transaction exempt from registration
under the Act, subject to the following terms and conditions.


                                      -23-
<PAGE>


1.       The 2001 Notes bear simple interest at the rate of 15% per annum and
         mature on September 15, 2001, unless they are mandatorily converted
         into shares of our Common Stock prior to such date.

2.       Under the 2001 Notes, we received the principal amount of $1,125,000 on
         May 17, 2001, issued a Note for such amount. The holder agreed to loan
         the additional amount of $1,125,000 on or before July 15, 2001,
         provided that we raised a minimum of $2,000,000 in equity from persons
         other than Michael Lauer and his affiliates, including Lancer Offshore
         Inc., Lancer Partners L.P., and The Orbiter Fund Ltd.

3.       The 2001 Notes are secured by a first security interest of
         substantially all of our assets, including its machinery, equipment,
         automobiles, fixtures, furniture, accounts receivable and general
         intangibles, including patents, patent applications and any stock in
         any subsidiary.

4.       Under the 2001 Notes, we and Lancer Offshore, Inc. may jointly agree to
         increase the amount of the loan to a total of $5,000,000 with a pro
         rata increase in the amount of warrants issuable by the Company.

5.       The 2001 Notes are mandatorily convertible into shares of our Common
         Stock at the rate of $0.50 per share (i.e. one share for each $0.50 of
         debt) upon (i) our receipt of approval of our stockholders at a meeting
         of such conversion and (ii) our receipt of $2,000,000 in equity from
         persons other than Michael Lauer and his affiliates.

6.       We agreed to give Lancer Offshore, Inc. registration rights with
         respect to the shares issuable upon conversion of the 2001 Notes and
         upon exercise of the warrants granted to it.

7.       Any event of default under the 2001 Notes will require the issuance of
         1,000,000 shares of our Common Stock commencing with the month in which
         such default first occurs and thereafter in each such month in which
         such default is not cured, up to a maximum amount of 10,000,000 shares.

8.       The warrants issued and potentially issuable to Lancer Offshore Inc.
         have an exercise price at $0.50 per share, expire on the fifth
         anniversary date of the date of issuance and may be exercised in whole
         or in part, but the shares subject thereto are issuable only upon the
         approval of such issuance by our stockholders at a meeting. Based on
         the $1,125,000 loan made to us, we issued warrants to purchase 562,500
         shares of our Common Stock.

9.       We agreed to pay a finder's fee to Capital Research Ltd. and Sterling
         Technology Partners of a total of 10% of the gross proceeds received by
         it on the sale of the 2001 Notes payable on each closing of a tranche
         of the financing under the 2001 Notes.

         On May 17, 2001 the closing price of a share of our Common Stock was
$0.65, which was higher than the conversion rate of one share for each $0.50 of
debt and the exercise price of each warrant of $0.50 per share.


                                      -24-
<PAGE>


(b)      August 7, 2001 Financing

         We failed to meet the conditions described in item 2 above on the May
17, 2001 financing by July 15, 2001. As a result, on August 7, 2001, Lancer
Partners L.P., another affiliate of our largest stockholder, agreed to loan us
an additional $875,000 as part of the 2001 Notes on the following terms and
conditions:

1.       Lancer Partners L.P. agreed to loan us the additional amount of
         $350,000 on August 7, 2001 provided our Board approved the terms of the
         August 7, 2001 financing (which it did). We issued an additional 2001
         Note for the $350,000 loan.

2.       Lancer Partners L.P. agreed to loan us $275,000 on or about
         September 15, 2001 and $250,000 on or about October 15, 2001, provided
         that we raised a minimum of $1,500,000 in equity from persons other
         than Michael Lauer and his affiliates, including Lancer Offshore Inc.,
         Lancer Partners L.P. and The Orbiter Fund Ltd., on or before September
         15, 2001. Each of these additional loans would mature on December 15,
         2001 unless mandatorily converted into shares of our common stock.

3.       This tranche of $875,000 comprising the 2001 Notes is mandatorily
         convertible into shares of our Common Stock at the rate of $0.20 per
         share (i.e. one share for each $0.20 of debt) upon (a) the receipt of
         approval of our stockholders at a meeting of such conversion and (b)
         our receipt of $2,000,000 of equity from non-Lancer entities or
         affiliates by December 31, 2001.

4.       We agreed to issue additional warrants to purchase up to an additional
         562,500 shares of our Common Stock if the entire $875,000 is loaned by
         Lancer Partners, LP to us. As a result of the $350,000 loan made on
         August 7, 2001, we issued warrants to purchase an additional 225,000
         shares of our Common Stock at an exercise price of $0.30 per share.

5.       We agreed as a condition to the August 7, 2001 financing to reduce our
         operating budget to a monthly burn rate of less than $250,000 effective
         September 1, 2001 and to curtail all our discretionary spending of
         funds until additional equity is raised.

6.       We agreed to provide Lancer Partners L.P. with fully executed loan
         agreements, Uniform Commercial Code and other filings and warrant
         agreements by August 15, 2001.

7.       The terms set forth in the May 17, 2001 financing described in 1, 3, 4,
         6, 7 and 9 apply with the same force and effect to the August 7, 2001
         financing.

         In addition, under the August 7, 2001 financing, we agreed to amend the
May 17, 2001 financing as follows:

(i)      The $1,125,000 principal amount comprising a portion of the 2001 Notes
is now mandatorily convertible into shares of our Common Stock  at the rate of
$0.20 per share (i.e. one share for each $0.20 of debt);

(ii)     We agreed to give Lancer Offshore Inc. and Lancer Partners L.P. full
anti-dilution protection in the event we sold shares of our Common Stock at a
price of less than $0.20 per share during the one-year period commencing on
May 12, 2001;

(iii)    The exercise price of the warrant to purchase 562,200 shares of our
Common Stock was reduced to $0.30 per share; and


                                      -25-
<PAGE>


(iv)     The maximum amount of shares of our Common Stock issuable in the event
of continuing monthly defaults was increased to 12,500,000 from 10,000,000.

         On August 7, 2001, the average of the high and low price per share of
the Company's Common Stock was $0.38, which was higher than the conversion rate
of one share for each $0.20 of debt and the exercise price of each warrant at
$0.30 per share.

(c)      September, 2001 Financing

         We failed to meet the condition described in Item 2 above on the August
7, 2001 financing by September 15, 2001. Despite such failure, Lancer Partners
L.P. loaned the Company an additional $100,000 and $175,000 on September 6, 2001
and September 18, 2001, respectively, which loans originally had a maturity date
of December 15, 2001. As a result thereof, the Company issued a separate note
comprising part of the 2001 Notes to such party (which originally were
mandatorily convertible into 1,375,000 shares of our Common Stock at $0.20 per
share) and also issued a warrant to purchase an aggregate of 87,500 shares of
our Common Stock at $0.30 per share.

         In addition, the parties amended the August 7, 2001 financing as
follows:

         (i) The maturity date of the two tranches of the 2001 Notes totaling
$1,475,000 in principal amount was extended from September 15, 2001 until
October 15, 2001; and

         (ii) The creditors extended the time for the Company to raise
$1,500,000 until October 15, 2001 as a condition to the issuance of the $250,000
loan on or about October 15, 2001.

         On September 8, 2001 and September 16, 2001, the average of the high
and low price per share of the Company's Common Stock was $0.255 and $0.235,
respectively, which was higher than the conversion rate of one share for each
$0.20 of debt, but lower than the exercise price of each warrant at $0.30 per
share.

(d)      October and November, 2001 Financing

         We again failed to meet the condition to raise additional equity
financing of $1,500,000 on or before October 15, 2001. Despite such failure,
Lancer Partners L.P. loaned us an additional $25,000 (bringing its total loan to
us to $650,000 in principal amount) and Lancer Offshore, Inc. loaned us an
additional $85,000 on October 3, 2001, $175,000 on October 9, 2001, an $175,000
on October 29,2001 and $1,000,000 on November 14, 2001 (bringing its total loan
to us to $2,560,000 in principal amount), or a total loan from such parties of
$3,210,000. As a result, we issued separate notes comprising part of the 2001
Notes and issued additional warrants to such parties to purchase 730,000 shares
of our Common Stock at an exercise price of $0.30 per share, expiring in each
case on a date in 2006 five years after the date of their respective issuance.

         In addition, the parties agree on November 14, 2001 to amend the entire
2001 Note financing as follows:

         (i) The entire principal amount of $3,210,000 comprising the 2001 Notes
is now mandatorily convertible into shares of our Common Stock at the rate of
one share for $0.05 of debt;


                                      -26-
<PAGE>


         (ii) The maturity date of the entire principal amount of $3,210,000
comprising the 2001 Notes was extended until February 28, 2002 (unless
mandatorily converted into shares of our Common Stock prior to such date);

         (iii) The amount of shares issuable in the event of a default is now
increased to 1,605,000 for each month in which a default exists and continuing
until such default is cured;


         (iv) We agreed to give Lancer Offshore Inc. and Lancer Partners L.P.
full anti-dilution protection in the event we sold shares of our Common Stock at
a price less than $0.05 per share during the one-year period commencing on
November 14, 2001 (which was changed from May 12, 2001); and

         (v) The finders fee payable on the transaction was increased by
requiring us to issue a five-year warrant to Capital Research Ltd. to purchase
2,000,000 shares of our Common Stock at an exercise price of $0.05 per share,
which expires on November 13, 2006.

         On the date of the issuance of each of the additional Notes comprising
part of the 2001 Notes and the warrants to purchase shares of our Common Stock,
the average of the high and low price of a share of our Common Stock was higher
than conversion rate of the Note and the exercise price of each Warrant.

         We plan to amend our Articles of Incorporation to permit the potential
issuance of the shares of our Common Stock necessitated by the above-described
financing and to obtain shareholders approval of the same.

(e)      American Stock Exchange Rules

         Under applicable American Stock Exchange Rules, we are required to
obtain the approval of our stockholders if we propose to issue shares of our
Common Stock (i) to a controlling stockholder at a per share price less than the
market value thereof and (ii) such issuance involves an amount of shares that is
more than 5% of the number of the corporation's then issued and outstanding
shares of Common Stock in any one year. Such rule applies to our recent
financing transaction with Lancer Offshore, Inc. and Lancer Partners L.P..
Accordingly, the approval of our stockholders is required in order to permit the
mandatory conversion of the 2001 Notes owned by Lancer Offshore, Inc. and Lancer
Partners L.P. into shares of our Common Stock, and the issuance of the shares of
our Common Stock upon the exercise of the warrants granted to Lancer Offshore,
Inc. and Lancer Partners L.P. in connection with the above financing.


(f)      Risk of Default Under Our Senior Secured Indebtedness.

         While we use our best efforts to raise $3,200,000 in additional equity
as a further condition for the mandatory conversion of the 2001 Notes into our
shares of Common Stock, we cannot assure you of such result. Moreover, we cannot
assure you that we will not commit a default under the 2001 Notes in the future
when they mature on February 28, 2002. In the event that the holders of the 2001
Notes sell our assets securing the 2001 Notes following any future default by
us, a remedy available under the 2001 Notes, such sale would materially and
adversely affect our business and financial condition.


                                      -27-
<PAGE>


(g)      Special Risk Factor - - One Principal Stockholder May Increase His
         Control of Us

         Michael Lauer and his affiliates currently own 7,295,853 shares of our
Common Stock. In addition, he and his affiliates potentially will increase their
ownership in us by 65,805,000 shares of our Common Stock (a) through the
mandatory conversion of the $3,210,000 in principal amount of the 2001 Notes if
(i) our stockholders approve the mandatory conversion thereof at a stockholders
meeting and (ii) we receive $3,210,000 in equity from sources other than Michael
Lauer, Lancer Offshore, Inc., Lancer Partners L.P., and the Orbiter Fund Ltd. on
or before February 28, 2002 and (b) if the warrants to purchase 1,605,000 shares
of our Common Stock granted to them are exercised after stockholder approval
thereof at a stockholders meeting. If such additional shares of our Common Stock
are issued, then Michael Lauer would control approximately 75% of our then
issued and outstanding shares of Common Stock (excluding the issuance by us of
any other shares prior to such time, including the shares issued for the equity
investment needed to convert the note) which represents an increase of 51.1
percentage points from the Lancer group's current ownership of 23.4%. However,
we cannot actually determine the Lancer group's actual percentage ownership of
the shares of our Common Stock without knowing the final terms of any new equity
infusion of $3,210,000. In any event as a result of the $3,210,000 in loans made
to us, Mr. Lauer will be able, in all likelihood, to determine effectively the
vote on any matter being voted on by our stockholders, including the election of
directors and any merger, sale of assets or other change in control of the
Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report: Financial
Statements of the Company, including Unaudited Condensed Consolidated Balance
Sheets, Condensed Consolidated Statements of Operation, Condensed Consolidated
Statements of Cash Flows and Notes to Unaudited Condensed Consolidated Financial
Statements as of December 31, 2000 and September 30,2001 and for the three
months and nine months ended September 30, 2001 and 2000, and the Exhibits which
are listed on the Exhibit Index reflected below.

         10.39       Amended and Restated Loan Agreement by and among the
Registrant, Lancer Offshore, Inc. and Lancer Partners L.P. dated as of August 7,
2001, together with the Note, Warrant, Amended and Restated Pledge/Security
Agreement, Subordination Agreement, Pledgee Representation Agreement and the
Amended and Restated Registration Rights Agreement.

         10.40       Amendment of Agreements by and among the Registrant, Lancer
Offshore, Inc. and Lancer Partners L.P. dated September 14, 2001.

(b)  The following reports on Form 8-K were filed by the Registrant during
     the quarter ended September 30, 2001: None


                                      -28-
<PAGE>


                                   SIGNATURES

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


DATE:     January 09, 2002

                                         WORLD WIRELESS COMMUNICATIONS, INC.

                                         By: /s/ David D. Singer
                                            ------------------------------------
                                            David D. Singer
                                            President, Chief Executive Officer


                                         By: /s/ Robert W. Hathaway
                                            ------------------------------------
                                            Robert W. Hathaway
                                            Vice President Finance and
                                            Chief Financial Officer
                                            (Principal Financial Officer and
                                            Principal Accounting Officer)




                                      -29-
<PAGE>


                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
         No.      Description
         ---      -----------
         <S>      <C>
         3.1      Articles of Incorporation of the Company and all amendments
                  thereto*

         3.2      Bylaws of the Company*

         4.1      Form of Common Stock Certificate*

         4.2      Form of Subscription Agreement used in private financing
                  providing for registration rights*

         5.       Opinion of Connolly Epstein Chicco Foxman Engelmyer & Ewing
                  regarding the legality of securities being registered*

         10.1     1997 Stock Option Plan*

         10.2     DRCC Omnibus Stock Option Plan*

         10.3     Development and License Agreement dated April 4, 1997, between
                  DRCC and Kyushu Matsushita Electric Co., Ltd.*

         10.4     Amended and restated Technical Development and Marketing
                  Alliance Agreement dated September 15, 1997, between the
                  Company and Williams Telemetry Services, Inc.*

         10.5     Lease Agreement dated May 17, 1995, between DRCC and Pracvest
                  Partnership relating to the Company's American Fork City
                  offices and facility*

         10.6     Lease Agreement dated February 12, 1996, between the Company
                  the Green/Praver, et al., relating to the Company's Salt Lake
                  City offices*

         10.7     Shareholders Agreement dated May 21, 1997 between the Company,
                  DRCC, Philip A. Bunker and William E. Chipman, Sr.*

         10.8     Asset Purchase Agreement dated October 31, 1997, between the
                  Company and Austin Antenna, Ltd.*

         10.9     Stock Exchange Agreement dated October 31, 1997, between the
                  Company, TWC, Ltd. and the shareholders of TWC, Ltd.*

         10.10    Settlement Agreement, Mutual Waiver and Release of All Claims
                  dated November 11, 1997 between Digital Radio Communications
                  Corp. and Digital Scientific, Inc.*

         10.11    Agreement (undated) between the Company, Xarc Corporation and
                  Donald J. Wallace relating to the Company's acquisition of
                  Xarc Corporation*

         10.12    Promissory Note dated December 4, 1997, by the Company,
                  payable to William E. Chipman, Sr. in the principal amount of
                  $125,000*
</TABLE>




<PAGE>


<TABLE>
<CAPTION>
         No.      Description
         ---      -----------
         <S>      <C>
         10.13    Promissory Note dated November 13, 1997, by the Company,
                  payable to T. Kent Rainey in the principal amount of $200,000*

         10.14    Investment Banking Services Agreement dated November 19, 1997,
                  between the Company and PaineWebber Incorporated*

         10.15    $400,000 Promissory Note dated December 24, 1997, payable to
                  Electronic Assembly Corporation*

         10.16    $400,000 Promissory Note dated January 8, 1998, payable to
                  Tiverton Holdings Ltd.*

         10.17    Loan Agreement by and among the Registrant and the Bridge
                  Noteholders * dated as of May 15, 1998*

         10.18    Amendment and Waiver Agreement by and among the Registrant and
                  the Bridge Noteholders dated August 7, 1998*

         10.19    Amendment and Waiver Agreement by and among the Registrant and
                  the Bridge Noteholders dated September 11, 1998*

         10.20    Loan Agreement by and among the Registrant and the Bridge
                  Noteholders dated as of May 15, 1998 (Previously filed),
                  together with the Notes, Pledge/Security Agreement,
                  Pledgee/Representative Agreement, Subordination, and
                  Registration Rights Agreement*

         10.21    Separation and Mutual Release Agreement between the Registrant
                  and William E. Chipman, Sr. dated as of May 26, 1998*

         10.22    Registration Rights Agreement by and among the Registrant and
                  the purchasers of common stock issued pursuant to the
                  Registrants Confidential Private Placement Memorandum dated
                  September 9, 1998, as amended*

         10.23    Employment Agreement between the Registrant and James
                  O'Callaghan dated May 20, 1998*

         10.24    Lease agreement between the Registrant and NP#2 dated as of
                  July 29, 1998 relating to the premises at 2441 South 3850
                  West, West Valley City, Utah 84120*

         10.25    Agreement between KME and the Registrant dated October 19,
                  1998 relating to the Registrant's providing of technical
                  assistance and development relating to the Gigarange
                  telephone*

         10.26    Agreement between KME and the Registrant dated as of March 1,
                  1998 relating to the Panasonic MicroCast System*

         10.27    General and Mutual Release Agreement between the Registrant
                  and Phil Acton dated November 2, 1998*

         10.28    Agreement and Waiver Agreement by and among the Registrant and
                  the Bridge Noteholders dated November 25, 1998*
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
         No.      Description
         ---      -----------
         <S>      <C>
         10.29    1998 Employee Incentive Stock Option Plan*

         10.30    1998 Non-qualified Stock Option Plan*

         10.31    Amendment of Agreement by and among the Registrant and the
                  Bridge Noteholders dated as of March 26, 1999*

         10.32    Loan Agreement by and among the Registrant and the Senior
                  Secured Noteholders dated as of May 14, 1999, together with
                  the Notes, Pledge/Security Agreement, Pledgee Representative
                  Agreement, Subordination and Registration Rights Agreement*

         10.33    Two separate Agreements by and among the Registrant and the
                  1999 Bridge Noteholders dated August 19, 1999*

         10.34    Waiver Agreement by and among the Registrant and the Bridge
                  Noteholders dated as of December 7, 1999*

         10.35    Registration Rights Agreement by and among the Registrant and
                  the purchasers of common stock issued pursuant to the
                  Registrant's Confidential Private Placement Memorandum dated
                  January 12, 2000 as amended*

         10.36    Settlement Agreement and Mutual Release between Internet
                  Telemetry Corp. and the Registrant, dated as of August 7,
                  2000.*

         10.37    Financing Commitment Letter between the Registrant and Insight
                  Capital LLC dated April 2, 2001.*

         10.38    Loan Agreement by and among the Registrant and Lancer \
                  Offshore, Inc. Noteholders dated as of May 17, 2001, together
                  with the Notes, Warrant, Pledge/Security Agreement,
                  Subordination Agreement, and Registration Rights Agreement.*

         10.39    Amended and Restated Loan Agreement by and among the
                  Registrant, Lancer Offshore, Inc. and Lancer Partners L.P.
                  dated as of August 7, 2001, together with the Note, Warrant,
                  Amended and Restated Pledge / Security Agreement,
                  Subordination Agreement, Pledgee Representation Agreement and
                  the Amended and Restated Registration Rights Agreement.*

         10.40    Amendment of Agreements by and among the Registrant and Lancer
                  Offshore, Inc. and Lancer Partners L.P. dated September 14,
                  2001.*
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*   Filed previously

+   Management contract or compensatory plan or arrangement filed previously.