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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549








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FORM 10-Q/A


AMENDMENT NO. 2





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





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WORLD WIRELESS COMMUNICATIONS, INC.


(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER)





Nevada

87-0549700(State of other jurisdiction of

(I.R.S. employerincorporation or organization)

identification No.)5670 Greenwood Plaza Boulevard, Penthouse Greenwood Village, Colorado

80111 (Zip
Code)(Address of principal executive offices)





Registrants telephone number (303) 221-1944





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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 31,447,087 shares of the
Registrants common stock, par value $0.001, issued and outstanding.





Explanatory Note:





This amendment No. 2 on Form 10-Q/A amends the registrants quarterly report on Form 10-Q/A for the three and nine months ended September 30, 2001 as filed
by the registrant on January 14, 2002, and is being filed to reflect the restatement of the registrants unaudited condensed consolidated financial statements. See Note 9 to the unaudited condensed consolidated financial statements.





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TABLE OF CONTENTS





PagePART I.

Financial InformationItem 1.

Financial Statements:Statement Regarding Forward-Looking Disclosure

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

3Unaudited 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

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

6Notes to Unaudited Condensed Consolidated Financial Statements

8Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

14PART II.

Other InformationItem 1.

Legal Proceedings

18Item 2.

Changes in Securities and Use of Proceeds

18Item 6.

Exhibits and Reports on Form 8-K

22Signatures

23








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.




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ITEM 1.Financial Statements





WORLD WIRELESS COMMUNICATIONS, INC.


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


ASSETS





SEPTEMBER 30,

DECEMBER 31,2001

2000(As Restated, see Note 9)

(As Restated, see Note 9)CURRENT ASSETSCash and cash equivalents

$
83,456

$
3,097,624Investment in securities available-for-sale


1,063


19,109Trade receivables, net of allowance for doubtful accounts


112,960


347,218Other receivables


116,459


57,345Inventory, net


565,011


558,076Prepaid expenses


260,245


71,891TOTAL CURRENT ASSETS


1,139,194


4,151,263EQUIPMENT, NET OF ACCUMULATED DEPRECIATION AND IMPAIRMENTS


543,860


575,475GOODWILL, NET OF ACCUMULATED AMORTIZATION


85,712


214,286OTHER ASSETS, NET OF ACCUMULATED AMORTIZATION


23,864


28,863TOTAL ASSETS

$
1,792,630

$
4,969,887











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




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LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)





SEPTEMBER 30,


DECEMBER 31,2001


2000(As Restated, see Note 9)


(As Restated, see Note 9)CURRENT LIABILITIESTrade accounts payable

$
927,402


$
540,899Accrued liabilities


231,675



371,149Accrued interest


72,477



Other liabilities


90,901



13,077Note 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



19,374TOTAL CURRENT LIABILITIES


3,038,808



944,499LONG-TERM OBLIGATION UNDER CAPITAL LEASES


7,509



9,633COMMITMENTS AND CONTINGENCIES






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:31,447,087 shares at September 30, 2001 and 31,268,847 shares at December 31, 2000


31,447



31,269Additional paid-in capital


47,076,205



46,695,397Accumulated other comprehensive loss


(40,012
)


(56,764
)Accumulated deficit


(48,321,327
)


(42,654,147
)TOTAL STOCKHOLDERS EQUITY (DEFICIT)


(1,253,687
)


4,015,755TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

$
1,792,630


$
4,969,887











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




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WORLD WIRELESS COMMUNICATIONS, INC.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS





FOR THE THREE MONTHS ENDED SEPTEMBER 30,


FOR THE NINE MONTHS ENDED SEPTEMBER 30,2001


2000


2001


2000(As Restated, see Note 9)REVENUES:Services

$
23,275


$
134,258


$
104,493


$
232,807Royalties


1,099



45,172



17,540



459,986Product sales


238,081



197,455



741,282



650,331TOTAL SALES


262,455



376,885



863,315



1,343,124COST OF SALES:Services


74,601



88,855



132,505



446,837Products


316,520



170,255



551,844



515,189TOTAL COST OF SALES


391,121



259,110



684,349



962,026GROSS PROFIT (LOSS)


(128,666
)


117,775



178,966



381,098EXPENSES:Research and development


131,978



455,456



406,155



1,060,762Selling, general and administrative


1,440,622



1,362,350



4,966,192



4,385,864Manufacturing activity exit costs














(1,677,668
)Amortization of goodwill


42,858



42,858



128,574



128,574TOTAL EXPENSES


1,615,458



1,860,664



5,500,921



3,897,532LOSS FROM OPERATIONS


(1,744,124
)


(1,742,889
)


(5,321,955
)


(3,516,434
)OTHER INCOME (EXPENSE):Interest expense


(255,786
)


(4,388
)


(375,340
)


(117,119
)Interest and other income


437



91,378



30,115



364,910NET LOSS

$
(1,999,473
)

$
(1,655,899
)

$
(5,667,180
)

$
(3,268,643
)Basic and Diluted Loss PerCommon Share

$
(0.06
)

$
(0.05
)

$
(0.18
)

$
(0.11
)WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN PER SHARE CALCULATION


31,443,635
*


31,268,847
*


31,333,990
*


28,915,424
*


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|* |  | As restated, see Note 9.
|- |  | ------------------------







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




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WORLD WIRELESS COMMUNICATIONS, INC.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS





FOR THE NINE MONTHS ENDED
SEPTEMBER 30,2001


2000(As Restated, see Note 9)CASH FLOW FROM OPERATING ACTIVITIESNet Loss

$
(5,667,180
)

$
(3,268,643
)Adjustments to reconcile net loss to net cash used by operating activities:Amortization of goodwill


128,574



128,574Depreciation


97,220



101,794Amortization of debt discount


264,269



Consulting services paid with stock


12,000



195,300Change in compensation from stock options


(37,170
)


334,289Loss on sale of securities


26,762



Valuation allowance on inventory


172,741



(72,624
)Provision for doubtful accounts receivable


11,545



93,304Changes in operating assets and liabilities:Accounts receivable


163,599



79,738Inventory


(179,677
)


(15,077
)Prepaid expenses/other assets


(183,355
)


38,986Deferred 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 ACTIVITIESPayments for the purchase of property and equipment


(65,605
)


(235,218
)Proceeds from sale of property and equipment






18,913Proceeds from sale of securities


31,083



NET CASH AND CASH EQUIVALENTS USED BY INVESTING ACTIVITIES


(34,522
)


(216,305
)











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




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|
|

FOR THE NINE MONTHSENDED SEPTEMBER 30,2001


2000(As restated, see Note 9)CASH FLOW FROM FINANCING ACTIVITIESNet proceeds from issuance of common stock

$



$
12,133,217Proceeds from exercise of options


17,467



Proceeds from exercise of warrants


39,261



401,220Redemption 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



9,044,655EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS


(23,045
)


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


(3,014,168
)


4,385,468CASH AND CASH EQUIVALENTSBEGINNING OF PERIOD


3,097,624



893,849CASH AND CASH EQUIVALENTSEND OF PERIOD

$
83,456


$
5,279,317





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SEE NOTES 3 AND 5











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




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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 The results of operations for the three and nine month periods 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 Notes 5 and 10.





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 Notes 5 and 10), 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% respectively; Customer B represented 15.7% and 0.09% respectively; 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:




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September 30, 2001

December 31, 2000Materials

$
404,697

$
297,147Work in process


56,683


Finished goods


103,631


260,929Total

$
565,011

$
558,076





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 resulted in the issuance of common stock. 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. For the quarters ended September 30, 2001 and 2000 11,569,494 and 2,382,545 potentially dilutive securities from common stock options, warrants and convertible debt have been excluded from the
weighted average number of common shares outstanding for the diluted net loss per share computations as they are antidilutive.





COMPREHENSIVE LOSSComprehensive 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
loss for the reporting periods ended September 30, 2001 and 2000 are as follows:





For the Three Months Ended
September 30,


For the Nine Months Ended
September 30,2001


2000


2001


2000Net Loss

$
(1,999,473
)

$
(1,655,899
)

$
(5,667,180
)

$
(3,268,643
)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
)

$
(3,304,955
)





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-traWeb TM 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.





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.




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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 Securities Act of 1933. In connection with the offering, a total of $1,512,782 was incurred as placement costs. The Company also issued 60,000 share of
common stock valued at $195,300 for consulting fees during the quarter ended March 31, 2000.





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.





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.





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 accrued 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.





The Company allocated $258,949 of the net proceeds from the 2001 Notes to the detachable warrants. This amount was recorded as a 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 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 contingencies related to the
conversion feature of the 2001 Notes are resolved.





Any event of default under the 2001 Notes will require the
issuance of 1,000,000 shares of 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.




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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 the Companys 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 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. The discount was amortized over the term of the loan





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 contingencies to the conversion feature of the 2001 Notes 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 common 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. The discount was amortized over the term of the loan.





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 contingencies related to the conversion feature of the 2001 Notes 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 10.





NOTE 6COMMITMENTS AND CONTINGENCIES





On February 20, 2001 the Pinnacle Fund L.P.,
Barry M. Kitt and Tom and Denise Hunse filed a lawsuit against the Company with respect to the purchase of a total of 230,000 shares of 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 the Companys 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. The Company believes that it has meritorious defenses to such action and intends to
prosecute its defense of the action vigorously, but there can be no assurance as to the outcome thereof.




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NOTE 7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 the former manufacturing activities have been reclassified to
Corporate to provide a better comparison of the Companys 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.





For the Three MonthsEnded September 30,


For the Nine MonthsEnded September 30,2001


2000


2001


2000Revenues:X-traWebTM

$
41,074


$
114,578


$
233,012


$
272,946Radio products


220,281



177,111



612,763



496,619Corporate


1,100



85,196



17,540



573,559Total sales

$
262,455


$
376,885


$
863,315


$
1,343,124Operating loss:X-traWebTM

$
(860,336
)

$
(869,488
)

$
(2,908,724
)

$
(2,324,647
)Radio products


(884,888
)


(819,265
)


(2,484,052
)


(2,495,983
)Corporate


1,100



(54,136
)


70,821



1,304,196Total operating loss

$
(1,744,124
)

$
(1,742,889
)

$
(5,321,955
)

$
(3,516,434
)





As ofSeptember 30, 2001

December 31, 2000Assets:X-traWebTM

$
1,050,866

$
1,324,821Radio products


114,563


642,595Corporate


627,201


3,002,471Total assets

$
1,792,630

$
4,969,887





NOTE 8RECENT ACCOUNTING PRONOUNCEMENTS





In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 141
(SFAS No. 141), Business Combinations. SFAS No. 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 No. 141 will have a significant impact on its financial statements.





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.
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 Retirement 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 on the Company of
adopting this standard, if any, has not yet been determined.




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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, and is not expected to have a material impact on the Companys financial
statements.





NOTE 9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 determined that a transaction
involving the issuance of common stock for services that occurred in the quarter ended March 31, 2000 had not been accounted for in the Companys financial statements. The transaction involved the issuance of 60,000 shares of common stock
effective January 3, 2000 valued at $195,300.





As a result, the condensed consolidated balance sheets as of
December 31, 2000 and September 30, 2001 and the condensed consolidated statement of operations for the nine months ended September 30, 2000 presented herein have been restated from the amounts previously reported to give effect to the issuance of
the common stock. A summary of the significant effects of the restatement is as follows:





As of December 31, 2000:





As previously reported


As restatedCommon stock, $0.001 par value

$
31,209


$
31,269Additional paid-in capital


46,500,157



46,695,397Accumulated deficit


(42,458,847
)


(42,654,147
)





As of September 30, 2001:





As previously reported


As restatedCommon stock, $0.001 par value

$
31,386


$
31,447Additional paid-in capital


46,880,965



47,076,205Accumulated deficit


(48,126,027
)


(48,321,327
)





For the nine months ended September 30, 2000:





As previously reported


As restatedGeneral and administrative expenses

$
4,190,564


$
4,385,864Total operating expenses


3,702,232



3,897,532Loss from operations


(3,321,134
)


(3,516,434
)Net loss

$
(3,073,343
)

$
(3,268,643
)Weighted average common shares outstanding


28,856,083



28,915,424





The restatement for the nine months ended September 30, 2000 did
not have any effect on the loss per common share.





NOTE 10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




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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.





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





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 determined that a transaction involving the issuance of common stock for services that occurred
in the quarter ended March 31, 2000 had not been accounted for in the Companys financial statements. The transaction involved the issuance of 60,000 shares of common stock effective January 3, 2000 valued at $195,300. As a result, the
condensed consolidated balance sheet as of December 31, 2000 and September 30, 2001 and the condensed consolidated statement of operations for the nine months ended September 30, 2000 presented at Item 1 have been restated from the amounts
previously reported to give effect to the issuance of the common stock. These restatements did not affect net loss per share for any of the periods presented. The following Management Discussion and Analysis takes into account the effects of the
restatement.





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 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:





For the Three Months EndedSeptember 30,Summary of Revenue by Activity

2001

2000X-traWebTM

$
41,074

$
114,578Radio products


220,281


177,111Corporate


1,100


85,196Total Revenue

$
262,455

$
376,885





During the third quarter of 2001, we continued to implement our
strategic plan to focus our efforts on the X-traWeb TM product line. Of the $41,074 in revenue derived
from the X-traWeb TM 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,




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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 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-traWeb TM 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 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
$3,268,643, or $0.11 loss per share, for the nine months ended September 30, 2000. This represents an increase in 2001 of $2,398,537, or 73.4%, over the 2000 year-to-date financial results. However, the increase of the loss in 2001 would be $720,869
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:





For the Nine Months EndedSeptember 30,Summary of Revenue by Product

2001

2000X-traWebTM

$
233,012

$
272,946Radio Products


612,763


496,619Corporate


17,540


573,559Total Revenue

$
863,315

$
1,343,124





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




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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-traWeb TM 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-traWeb TM 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 $4,385,864 for the nine months ended September 30, 2000, representing an increase of $580,328, or 13.2%. 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 $892,435, or 27.7%, and resulted from (1) an increase in operating expenses for the X-traWeb Europe offices of $417,000 for promotion of X-traWeb TM 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 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 June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS No. 141), Business Combinations. SFAS No. 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 No. 141 has a significant effect 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. 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 effect on our future results of operations.





The Company will adopt SFAS No. 143, Accounting for Asset Retirement 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




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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 effect 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 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 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 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.




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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 of our 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.





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




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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.





|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.





(b)    August 7, 2001 Financing




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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 562,500 shares of our common stock was reduced to $0.30 per share; and





(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:




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(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 agreed 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;





(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.




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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.





(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, unaudited Condensed Consolidated Statements of
Operation, unaudited 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.





99.1    Certification of Chief Executive Officer.





99.2     Certification of Vice President of Finance and Chief Financial Officer.





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




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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: October 11, 2002





WORLD WIRELESS COMMUNICATIONS, INC.By:

/s/    DAVID D.
SINGERDavid D. Singer President,
Chief Executive Officer





By:

/s/    ROBERT W.
HATHAWAYRobert W. Hathaway Vice
President of Finance and Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer)




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CERTIFICATION





I, David D. Singer, the President of World Wireless Communications, Inc. (the Company), certify that:





1.    I have reviewed this quarterly report on Form 10-Q/A of the Company;





2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.    [Intentionally Omitted] 1





5.    [Intentionally Omitted] 1





6.    [Intentionally Omitted] 1





Date: October 11, 2002





/s/    DAVID D. SINGERDavid D. SingerPresident


---

|1 |  | Intentionally omitted pursuant to Section V (Transition Provisions) of SEC Release No. 34-46427.
|- |  | ------------------------------------------------------------------------------------------------



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CERTIFICATION





I, Robert W. Hathaway, the Vice President of Finance and Chief Financial Officer of World Wireless Communications, Inc. (the Company), certify that:





1.    I have reviewed this quarterly report on Form 10-Q/A of the Company;





2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;





3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly
report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;





4.    [Intentionally Omitted] 1





5.    [Intentionally Omitted] 1





6.    [Intentionally Omitted] 1





Date: October 11, 2002





/s/    ROBERT W. HATHAWAYRobert W. Hathaway Vice President
of Finance and Chief Financial Officer


---

|1 |  | Intentionally omitted pursuant to Section V (Transition Provisions) of SEC Release No. 34-46427.
|- |  | ------------------------------------------------------------------------------------------------



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EXHIBIT INDEX





No.

Description3.1

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*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*




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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*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.*




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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.*99.1

Certification of Chief Executive Officer.**99.2

Certification of Vice President of Finance and Chief Financial Officer.**


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|* |  | Filed previously
|- |  | ----------------

|** |  | Filed herewith
|-- |  | --------------

|+ |  | Management contract or compensatory plan or arrangement filed previously.
|- |  | -------------------------------------------------------------------------



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