<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                FORM 10-QSB-A/1

[Mark One}

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 for the quarterly period ended MARCH 31, 2001
                                                         --------------

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 for the transition period from _______ to ________

                        Commission file number: 0-25203
                                                -------

                            OMNICOMM SYSTEMS, INC.
                            ----------------------

                (Name of small business issuer in its charter)

                 Delaware                             11-3349762
                 --------                             ----------
        (State of incorporation)               (IRS employer Ident. No.)

    3250 Mary Street, #402, Miami, FL                   33133
    ---------------------------------                   -----
      (Address of principal office)                   (Zip Code)

                 Registrant's telephone number: (305) 448-4700

     Indicate by check mark whether the Registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes  X  NO ____
             ---

     The number of shares outstanding of each of the issuer's classes of equity
as of March 31, 2001: 7,876,003 common stock $.001 par value, 4,215,224
preferred stock no par value.

                                                                               1
<PAGE>

                            OMNICOMM SYSTEMS, INC.
                          CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                                March 31,      December 31,
                                                                ---------      ------------
                                                                  2001             2000
                                                                  ----             ----
                                                               (unaudited)
                                                               -----------
<S>                                                            <C>             <C>
                                        ASSETS
CURRENT ASSETS
      Cash                                                     $    10,985     $    90,958
      Accounts receivable                                           12,259           9,927
      Prepaid expenses                                               3,862              -0-
                                                               -----------     -----------
      Total current assets                                          27,106         100,885

PROPERTY AND EQUIPMENT, Net                                        452,915         486,481

OTHER ASSETS
      Intangible assets, net                                       150,408          53,071
      Goodwill, net                                                 39,639          79,277
      Other assets                                                 100,160          25,160
                                                               -----------     -----------
TOTAL ASSETS                                                   $   770,228     $   744,874
                                                               ===========     ===========

                    LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
      Accounts payable and accrued expenses                    $ 1,263,402     $ 1,079,506
      Notes payable - current                                      252,500         612,500
      Notes payable related parties - current                      210,000         660,000
      Deferred revenue                                              14,363          26,861
                                                               -----------     -----------
      Total current liabilities                                  1,740,265       2,378,867


CONVERTIBLE DEBT                                                 1,710,000         462,500
                                                               -----------     -----------
TOTAL LIABILITIES                                                3,450,265       2,841,367
                                                               -----------     -----------

COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
      5% Series A convertible preferred stock, 5,000,000         3,812,179       3,857,179
      shares authorized, 4,215,224 and 4,260,224 issued and
      outstanding, respectively, at par
      Common stock - 20,000,000 shares authorized,                   8,497           7,975
      8,496,954 and 7,974,578 issued, respectively, at $.001
      par value
      Additional paid in capital                                 3,641,375       3,260,500
      Less cost of treasury stock: Common - 620,951 and           (293,912)       (293,312)
      620,951 shares, respectively
      Retained deficit                                          (9,847,036)     (8,927,695)
      Subscriptions receivable                                      (1,140)         (1,140)
                                                               -----------     -----------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                            (2,680,037)     (2,096,493)
                                                               -----------     -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)           $   770,228     $   744,874
                                                               ===========     ===========
</TABLE>


    See accompanying summary of accounting policies and notes to financial
                                  statements.

                                                                               2
<PAGE>

                            OMNICOMM SYSTEMS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
               For the Period January 1, 2000 to March 31, 2001
                                  (unaudited)

<TABLE>
<CAPTION>
                                                          5% Series A Convert.                                            Total
                       Common Stock        Additional      Preferred Stock        Retained                             Shareholders'
                   Number of      $.001     Paid in       Number                  Earnings    Subscription   Treasury     Equity
                    Shares        Value     Capital     Of Shares   $ No Par     (Deficit)     Receivable     Stock      (Deficit)
                    ------        -----     -------     ---------   --------    -----------   ------------    -----      ---------
<S>                <C>           <C>       <C>          <C>        <C>          <C>           <C>           <C>        <C>
Balance at         3,344,066     $ 3,344   $  238,007   4,117,500  $ 3,872,843  $(2,652,644)  $  (850,952)  $      -0-  $ 610,598
January 1, 2000
Issuance of           40,000          40       89,960                                                                      90,000
common stock
for services

Issuance of          284,166         284                                                                                      284
common stock

Exercise of        1,025,895       1,026      297,024                                                                     298,050
stock options

Purchase of          (20,951)                                                                                (293,312)   (293,312)
treasury stock
in connection
with stock
appreciation
rights

Payment on                                                                                        850,000                 850,000
subscription
receivable

Acquisition of     1,200,000       1,200        4,433                                                                       5,633
WebIPA, Inc.

Common stock        (600,000)                                                                                    (600)       (600)
reacquired in
the acquisition
of WebIPA
</TABLE>


                                                                               3
<PAGE>

                            OMINICOMM SYSTEMS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
               For the Period January 1, 2000 to March 31, 2001
                                  (unaudited)

<TABLE>
<CAPTION>
                                                          5% Series A Convert.                                            Total
                       Common Stock        Additional      Preferred Stock       Retained                              Shareholders'
                   Number of      $.001     Paid in       Number                  Earnings    Subscription   Treasury     Equity
                    Shares        Value     Capital     Of Shares   $ No Par     (Deficit)     Receivable     Stock      (Deficit)
                    ------        -----     -------     ---------   --------    -----------   ------------    -----      ---------
<S>                <C>           <C>       <C>          <C>        <C>          <C>           <C>           <C>        <C>
Issuance of                                               146,000    146,000                                               146,000
preferred stock

Issuance costs                                                      (206,750)                                             (206,750)
on preferred
stock
Conversion of       320,000         320       366,393                                                                      366,713
conv. notes
payable, net of
issuance costs
of $33,287

Exercise of          20,000          20        15,980                                                                       16,000
stock options

Exercise of         481,834         482       963,186                                                                      963,668
stock warrants

Exercise of         187,954         188                                                               (188)                     -0-
stock warrants

Conversion of        66,667          67        99,933    (100,000)  (100,000)                                                   -0-
preferred stock
to common stock

Conversion of        91,608          92       206,026                                                                      206,118
notes payable
to common stock

Issuance of          70,990          71       188,784                                                                      188,855
</TABLE>

                                                                               4
<PAGE>

                            OMINICOMM SYSTEMS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
               For the Period January 1, 2000 to March 31, 2001
                                  (unaudited)

<TABLE>
<CAPTION>
                                                          5% Series A Convert.                                            Total
                       Common Stock        Additional      Preferred Stock       Retained                              Shareholders'
                   Number of      $.001     Paid in       Number                  Earnings    Subscription   Treasury     Equity
                    Shares        Value     Capital     Of Shares   $ No Par     (Deficit)     Receivable     Stock      (Deficit)
                    ------        -----     -------     ---------   --------    -----------   ------------    -----      ---------
<S>                <C>           <C>       <C>          <C>        <C>          <C>           <C>           <C>        <C>
common stock
for services

Issuance of          668,334        668       600,833                                                                       601,501
common stock,
net of issuance
costs of $66,833

Issuance of                                               126,781    190,172                                                190,172
preferred stock
for services

Conversion of                                              66,667    100,000                                                100,000
notes payable
into preferred
stock

Conversion of         96,724         97       144,989     (96,724)  (145,086)                                                    -0-
preferred stock
to common stock

Issuance of           76,340         76        45,552                                                                        45,628
common stock
for services

Net (loss) for                                                                   (6,275,051)                             (6,275,051)
                                                                                -----------                             -----------
the year ended
December 31,
2000
</TABLE>


                                                                               5
<PAGE>

                            OMINICOMM SYSTEMS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
               For the Period January 1, 2000 to March 31, 2001
                                  (unaudited)

<TABLE>
<CAPTION>
                                                          5% Series A Convert.                                            Total
                       Common Stock        Additional      Preferred Stock       Retained                              Shareholders'
                   Number of      $.001     Paid in       Number                  Earnings    Subscription   Treasury     Equity
                    Shares        Value     Capital     Of Shares   $ No Par     (Deficit)     Receivable     Stock      (Deficit)
                    ------        -----     -------     ---------   --------    -----------   ------------    -----      ---------
<S>                <C>           <C>       <C>          <C>        <C>          <C>           <C>           <C>        <C>
Balances at        7,353,627     $ 7,975   $3,261,100   4,260,224  3,857,179    (8,927,695)       (1,140)   (293,912)   (2,096,493)
December 31,
2000

Issuance of           90,000          90       74,910                                                                       75,000
common stock

Conversion of         30,000          30       44,970     (45,000)   (45,000)                                                   -0-
preferred stock
to common stock
Conversion of         30,000          30       34,580                                                                       34,610
convertible
notes payable
to common
stock, net of
issuance costs
of $2,890

Exercise of           20,000          20       15,980                                                                       16,000
stock options

Stock issued in      126,338         126       97,732                                                                       97,858
lieu of pay and
in satisfaction
of trade
payables

Conversion of        226,038          226     112,103                                                                      112,329
notes payable
to common stock

Net loss for the                                                                  (919,341)                               (919,341)
                                                                                ----------                              ----------
</TABLE>

                                                                               6
<PAGE>

                            OMINICOMM SYSTEMS, INC.
           CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
               For the Period January 1, 2000 to March 31, 2001
                                  (unaudited)

<TABLE>
<CAPTION>
                                                          5% Series A Convert.                                            Total
                       Common Stock        Additional      Preferred Stock       Retained                              Shareholders'
                   Number of      $.001     Paid in       Number                  Earnings    Subscription   Treasury     Equity
                    Shares        Value     Capital     Of Shares   $ No Par     (Deficit)     Receivable     Stock      (Deficit)
                    ------        -----     -------     ---------   --------    -----------   ------------    -----      ---------
<S>                <C>           <C>       <C>          <C>        <C>          <C>           <C>           <C>        <C>
three months
ended March 31,
2001

Balances at        7,876,003     $8,497    $3,641,375   4,215,224  $3,812,179   $(9,847,036)  $ (1,140)     $(293,912) $(2,680,037)
                   =========     ======    ==========   =========  ==========   ===========   ========      =========  ===========
March 31, 2001
</TABLE>

    See accompanying summary of accounting policies and notes to financial
                                  statements

                                                                               7
<PAGE>

                            OMNICOMM SYSTEMS, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                        For the three months
                                                                        ended
                                                                                March 31,
                                                                           2001             2000
                                                                        ----------       -----------
<S>                                                                     <C>              <C>
REVENUES - SALES, Net                                                   $   41,094       $    24,978

COST OF SALES                                                               16,484            35,120
                                                                        ----------       -----------

GROSS MARGIN/(LOSS)                                                         24,610           (10,142)

OTHER EXPENSES
     Salaries, employee benefits and related expenses                      561,851           572,933
     Rent                                                                   41,377            60,932
     Consulting - marketing and sales                                           -0-           42,000
     Consulting - medical advisory                                              -0-           48,000
     Consulting - product development                                           -0-           28,435
     Legal and professional fees                                            42,497           199,247
     Travel                                                                 43,191           169,719
     Telephone and internet                                                 34,439            64,034
     Selling, general and administrative                                    25,907           215,196
     Interest expense, net                                                  56,505            17,023
     Depreciation and amortization                                          87,325            92,616
                                                                        ----------       -----------
TOTAL OTHER EXPENSE                                                        893,092         1,510,135
                                                                        ----------       -----------

INCOME (LOSS) BEFORE TAXES AND PREFERRED DIVIDENDS                        (868,482)       (1,520,277)

INCOME TAX EXPENSE (BENEFIT)                                                    -0-               -0-

PREFERRED STOCK DIVIDENDS                                                  (50,859)          (49,454)
                                                                        ----------       -----------

NET INCOME (LOSS)                                                       $ (919,341)      $(1,569,731)
                                                                        ==========       ===========

BASIS AND DILUTED NET INCOME (LOSS) PER SHARE                           $     (.12)      $      (.36)
                                                                        ==========       ===========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND                7,588,891         4,390,450
DILUTED                                                                 ==========       ===========
</TABLE>

    See accompanying summary of accounting policies and notes to financial
                                  statements

                                                                               8
<PAGE>

                            OMNICOMM SYSTEMS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                    For the three months ended
                                                                            March 31,
                                                                        2001         2000
                                                                    -----------   ------------
<S>                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                 $ (919,341)   $(1,569,731)

  Adjustment to reconcile net income to net cash provided by
  (used in) operating activities:
  Depreciation and amortization                                         87,325         92,616
  Common stock issued for services                                      97,858         90,000
  Change in assets and liabilities:
  Accounts receivable                                                   (2,332)           424
  Inventory                                                                 -0-         3,997
  Prepaid expenses                                                      (3,862)       (57,260)
  Intangible assets                                                   (113,500)            -0-
  Accounts payable and accrued expenses                                196,325        148,576
  Sales tax payable                                                         -0-          (641)
  Deferred revenue                                                     (12,498)            -0-
                                                                    ----------    -----------
Net cash provided by (used in) operating activities                   (670,025)    (1,292,019)

CASH FLOWS FROM INVESTING ACTIVITIES
  Equity investment in EMN                                                  -0-      (335,000)
  Purchase of WebIPA                                                        -0-         5,033
  Purchase of property and equipment                                      (848)      (130,655)
                                                                    ----------    -----------
Net cash provided by (used in) operating activities                       (848)      (460,622)

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from convertible notes                                    524,900             -0-
Payments on notes payable                                              (10,000)            -0-
Proceeds from notes payable                                             60,000             -0-
Issuance of 5% Series A convertible preferred stock, net of                 -0-       789,250
issuance costs
Issuance of common stock                                                    -0-           284
Proceeds from stock option exercise                                     16,000          4,739
                                                                    ----------    -----------
Net cash provided by (used in) financing activities                    590,900        794,273
                                                                    ----------    -----------

Net increase (decrease) in cash and cash equivalents                   (79,973)      (958,368)
Cash and cash equivalents at beginning of period                        90,958      1,127,263
                                                                    ----------    -----------
Cash and cash equivalents at end of period                          $   10,985    $   168,895
                                                                    ==========    ===========
</TABLE>

                                                                               9
<PAGE>

                            OMNICOMM SYSTEMS, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (unaudited)
                                  (Continued)


<TABLE>
<CAPTION>
                                                               For the three month ended
                                                                       March 31,
                                                                 2001             2000
                                                               --------         --------
     <S>                                                       <C>              <C>
     Supplemental Disclosure of Cash Flow Information:
     Cash paid during the period for:
     Income tax paid                                           $    -0-         $     -0-
                                                               -------          --------
     Interest paid                                             $23,657          $ 44,728
                                                               =======          ========
</TABLE>

Non-Cash Investing and Financing Transactions;
 Acquisition of all of the outstanding common stock of WebIPA, Inc. during the
  quarter ended March 31, 2000.

        Assets acquired, fair value              $   5,033
        Cash acquired                                5,033
                                                 ---------
        Net cash paid for acquisition            $      -0-
                                                 =========

In addition, the Company re-acquired 600,000 shares of its common stock that had
been provided to WebIPA in October 1999 as a deposit towards the consummation of
a transaction in which the Company would acquire WebIPA. The acquired shares
have been accounted for as treasury stock under the cost method of accounting.

During the year ended December 31, 2000, $400,000 of convertible notes payable
were converted into 320,000 shares of common stock.

During the year ended December 31, 2000, 1,018,604 incentive stock options were
exercised utilizing stock appreciation rights. The net proceeds to the company
would have been $293,312. The company recorded a treasury stock transaction in
the amount of $293,312 to account for the stock appreciation rights.

During the year ended December 31, 2000, a promissory note with a face value of
$100,000 was converted into 66,667 shares of the Company's preferred stock at a
rate of $1.50 per share.

During the year ended December 31, 2000, promissory notes totaling $206,118 of
principal and interest were converted into 91,608 shares of the Company's
preferred stock at a rate of $2.25 per share.

During the year ended December 31, 2000, $245,086 of the Company's convertible
Series A Preferred Stock totaling 196,724 preferred shares were converted into
163,391 shares of common stock.

During the period ended March 31, 2001, the Company issued 90,000 shares as
collateral for a bridge loan with a principal amount due of $75,000.

During the period ended March 31, 2001, $37,500 of convertible notes payable
were converted into 30,000 shares of common stock, net of issuance costs of
$2,890.

During the period ended March 31, 2001, a promissory note with a face value of
$100,000 with $12,329 in accrued interest was converted into 226,003 shares of
the Company's common stock.

During the period ended March 31, 2001, $45,000 of the Company's convertible
Series A Preferred Stock totaling 45,000 preferred shares were converted into
30,000 shares of common stock.

During the period ended March 31, 2001, $760,000 in notes payables were
converted into 12% convertible notes of the Company.

    See accompanying summary of accounting policies and notes to financial
                                  statements

                                                                              10
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)



NOTE 1:   ORGANIZATION AND NATURE OF OPERATIONS
          -------------------------------------

          OmniComm Systems, Inc. (the "Company") was originally incorporated in
          Florida in February 1997. The Company provides Internet based database
          applications that integrate significant components of the clinical
          trial process, including the collection, compilation and validation of
          data over the Internet. The Company's primary products include
          TrialMaster(TM) and WebIPA(R).

NOTE 2:   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
          ------------------------------------------

          CASH AND CASH EQUIVALENTS
          -------------------------

          Cash equivalents consist of highly liquid, short-term investments with
          maturities of 90 days or less. The carrying amount reported in the
          accompanying balance sheets approximates fair value.

          CONSOLIDATION
          -------------

          The Company's accounts include those of its two wholly owned
          subsidiaries, OmniCommerce and OmniTrial B.V. All significant
          intercompany transactions have been eliminated in consolidation.

          ACCOUNTS RECEIVABLE
          -------------------

          Accounts receivable are judged as to collectibility by management and
          an allowance for bad debts is established as necessary. As of each
          balance sheet date, no reserve was considered necessary.

          EARNINGS PER SHARE
          ------------------

          The Financial Accounting Standards Board issued Statement of Financial
          Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS 128
          replaced the previously reported primary and fully diluted earnings
          per share with basic and diluted earnings per share. Unlike primary
          earnings per share, basic earnings per share excludes any dilutive
          effects of options, warrants, and convertible securities. The diluted
          earnings per share calculation is very similar to the previously fully
          diluted earnings per share calculation method. SFAS 128 became
          effective December 31, 1997.

          Basic earnings per share were calculated using the weighted average
          number of shares outstanding of 7,588,891 and 4,390,450 for the
          periods ended March 31, 2001 and 2000; respectively. There were no
          differences between basic and diluted earnings per share. Options to
          purchase 3,554,006 shares of common stock at prices ranging from $.50
          to $5.50 per share were outstanding at March 31, 2001, but they were
          not included in the computation of diluted earnings per share because
          the options have an anti-dilutive effect. The effect of the
          convertible debt and convertible preferred stock are anti-dilutive.

          5% SERIES A CONVERTIBLE PREFERRED STOCK
          ---------------------------------------

          During the year ended December 31, 1999, the Company designated
          5,000,000 shares of its 10,000,000 authorized preferred shares as 5%
          Series A Convertible Preferred Stock. Each share is convertible into
          common stock at $1.50 per share. In the event of liquidation, these
          shareholders will be entitled to receive in preference to the holders
          of common stock an amount equal to their original purchase price plus
          all accrued but unpaid dividends. Dividends are payable at the rate of
          5% per annum, payable semi-annually.

          ADVERTISING
          -----------

          Advertising costs are expensed as incurred. Advertising costs were $0
          and $82,733 for the periods ended March 31, 2001 and 2000
          respectively.

                                                                              11
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)


          RECLASSIFICATIONS
          -----------------

          Certain items from prior periods within the financial statements have
          been reclassified to conform to current period classifications.

          INTANGIBLE ASSETS AND GOODWILL
          ------------------------------

          Included in Intangible Assets are the following assets:

<TABLE>
<CAPTION>
                                                                       March 31, 2001
                                                                        Accumulated
                                            Cost                        Amortization
                                            ----                        ------------
          <S>                               <C>                         <C>
          Covenant not to compete                  $120,000                     $120,000
          Software development costs                 87,500                       80,209
          Organization costs                            539                          539
          Debt acquisition costs                    196,948                       53,831
                                                   --------                     --------
                                                   $404,987                     $254,579
                                                   ========                     ========

                                                                     December 31, 2000
                                                                        Accumulated
                                            Cost                        Amortization
                                            ----                        ------------
          Covenant not to compete                  $120,000                     $120,000
          Software development costs                 87,500                       72,917
          Organization costs                            539                          539
          Debt acquisition costs                     86,338                       47,850
                                                   --------                     --------
                                                   $294,377                     $241,306
                                                   ========                     ========
</TABLE>

          The covenant not to compete and the software development costs were
          acquired as a result of the acquisition of Education Navigator, Inc.
          (EdNav) on June 26, 1998. The covenant is for a two-year period and is
          being amortized ratably over that time. The software development costs
          were capitalized and are being amortized ratably over a three-year
          period, as that is the expected life of the various products.
          Amortization expense was $7,292 for software development costs for the
          period ended March 31, 2001.

          During the first three months of 2001, the Company issued Convertible
          Notes totaling $1,285,000. The fees of $113,500 associated with these
          notes will be amortized ratably over the term of the notes, which is
          through January 31, 2002. Amortization expense of debt acquisition
          costs totaled $5,981 for the period ended March 31, 2001, and
          approximately $2,890 of the debt acquisition costs were reclassified
          as stock issuance costs in connection with the conversion of $37,500
          (original cost) worth of the convertible notes into common stock of
          the Company during the period ended March 31, 2001.

          Included in Goodwill, as a result of the EdNav acquisition at March
          31, 2001 and December 31, 2000 is the cost of $475,665 and accumulated
          amortization of $436,026 and $396,388 respectively. The goodwill is
          being amortized ratably over a period of three years. Goodwill
          amortization totaled $39,638 for the period ended March 31, 2001.

                                                                              12
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)


          PROPERTY AND EQUIPMENT, AT COST
          -------------------------------

          Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                 March 31, 2001                     December 31, 2000
                                                                  Accumulated                          Accumulated
                                                  Cost            Depreciation          Cost          Depreciation
                                                  ----            ------------          ----          ------------
          <S>                                 <C>                <C>                  <C>           <C>
          Computer and office equipment        $  387,862           $108,205          $ 387,862        $   88,812
          Leasehold improvements                    2,547                313              1,699               201
          Computer software                       212,412             72,859            212,412            60,067
          Office furniture                         42,350             10,879             42,350             8,762
                                               ----------           --------          ---------        ----------
                                               $  645,171           $192,256          $ 644,323        $  157,842
                                               ==========           ========          =========        ==========
</TABLE>


          Renewals and betterments are capitalized; maintenance and repairs are
          expensed as incurred.

          Depreciation is calculated using the straight-line method over the
          asset's estimated useful life, which is 5 years for leasehold
          improvements, equipment and furniture and 3 years for software.

          Depreciation expense for the periods ended March 31, 2001 and 2000 was
          $34,414 and $24,660 respectively.

          DEFERRED REVENUE
          ----------------

          Deferred revenue represents cash advances received in excess of
          revenue earned on on-going contracts. Payment terms vary with each
          contract but may include an initial payment at the time the contract
          is executed, with future payments dependent upon the completion of
          certain contract phases or targeted milestones. In the event of
          contract cancellation, the Company is entitled to payment for all work
          performed through the point of cancellation. The Company had $14,363
          in deferred revenue relating to one contract for services to be
          performed over the next three months.

          REVENUE RECOGNITION POLICY
          --------------------------

          The Company recognizes sales, for both financial statement and tax
          purposes, when its products are shipped and when services are
          provided. The Company had $14,363 in deferred revenue relating to one
          contract for services to be rendered over the next three months.

          ESTIMATES IN FINANCIAL STATEMENTS
          ---------------------------------

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities at the date of the financial statements and the reported
          amounts of revenues and expenses during the reporting period. Actual
          results could differ from those estimates.

                                                                              13
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)


          INCOME TAXES
          ------------

          The Company accounts for income taxes in accordance with Statement of
          Financial Accounting Standards No. 109, "Accounting for Income Taxes."
          SFAS 109 has as its basic objective the recognition of current and
          deferred income tax assets and liabilities based upon all events that
          have been recognized in the financial statements as measured by the
          provisions of the enacted tax laws.

          Valuation allowances are established when necessary to reduce deferred
          tax assets to the estimated amount to be realized. Income tax expense
          represents the tax payable for the current period and the change
          during the period in the deferred tax assets and liabilities.

          STOCK BASED COMPENSATION
          ------------------------

          The Company adopted SFAS 123 to account for its stock based
          compensation plans.  SFAS 123 defines the "fair value based method" of
          accounting for stock based compensation.  Under the fair value based
          method, compensation cost is measured at the grant date based on the
          value of the award and is recognized over the service period.

          EARNINGS PER SHARE
          ------------------

          Basic earnings per shares ("EPS") is computed by dividing income
          available to common shareholders (which for the Company equals its net
          loss) by the weighted average number of common shares outstanding, and
          dilutive EPS adds the dilutive effect of stock options and other
          common stock equivalents.  Antidilutive shares aggregating 3,915,497
          have been omitted from the calculation of dilutive EPS for the period
          ended March 31, 2001.  A reconciliation between numerators and
          denominators of the basic and dilutive earnings per shares is as
          follows:

<TABLE>
<CAPTION>
                                        Period Ended March 31, 2001                       Period Ended March 31, 2000
                                        ---------------------------                       ---------------------------
                                  Net Income         Shares          Per-        Net Income          Shares            Per-
                                    (Loss)                          Share          (Loss)                             Share
                                  Numerator        Denominator      Amount        Numerator        Denominator        Amount
                                  ---------        -----------     -------        ---------        -----------        -------
     <S>                          <C>              <C>             <C>          <C>                <C>                <C>
     Basic EPS                    $(919,341)         7,588,891     $ (0.12)     $(1,569,731)         4,390,450        $  (0.36)
     Effect of Dilutive
     Securities
     None.                               -0-                -0-         -0-               -0-               -0-             -0-
                                  ---------        -----------     -------      ------------       -----------        --------
     Diluted EPS                  $(919,341)         7,588,891     $ (0.12)     $ (1,569,731)        4,390,450        $  (0.36)
                                  =========        ===========     =======      ============       ===========        ========
</TABLE>

          IMPACT OF NEW ACCOUNTING STANDARDS
          ----------------------------------

          In June 1998, the Financial Accounting Standards Board issued
          Statement of Financial Accounting Standards No. 133 "Accounting for
          Derivative Instruments and Hedging Activities" ("SFAS No. 133"), which
          is effective for all fiscal quarter of all fiscals years beginning
          after June 15, 2000, as amended by SFAS No. 137.  In June 2000, SFAS
          No. 138 was issued which amended certain provisions of SFAS No. 133.
          SFAS No. 133 establishes accounting and reporting standards for
          derivative instruments, including certain derivative instruments
          imbedded in other contracts, and for hedging activities.  In
          accordance with SFAS No. 133, an entity is required to recognize all
          derivatives as either assets or liabilities in the statement of
          financial position and measure those instruments at fair value.  SFAS
          No. 133 requires that changes in the derivative's fair value be
          recognized currently in earnings unless specific hedge accounting
          criteria are met.  Special accounting for qualifying hedges allows a
          derivative's gains and losses to offset related results on the hedged
          item in the income statement and requires that a company formally
          document, designate and assess the effectiveness of transactions that
          receive hedge accounting. The Company has not yet completed its
          evaluation of the impact of SFAS No. 133 on its consolidated financial
          statements.  However, the Company does not

                                                                              14
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)



          believe that the implementation of SFAS No. 133 will have a
          significant effect on its results of operations.

          FASB Interpretation No. 44 "Accounting for Certain Transactions
          Involving Stock Compensation" ("FIN No. 44"), provides guidance for
          applying APB Opinion No. 25, "Accounting for Stock Issued to
          Employees".  With certain exceptions, FIN No. 44 applies prospectively
          to new awards, exchanges of awards in a business combination,
          modifications to outstanding awards and changes in grantee status on
          or after July 1, 2000.  The Company does not believe that the
          implementation of FIN No. 44 will have a significant effect on its
          results of operations.

          In December 1999, The SEC issued Staff Accounting Bulletin No. 101,
          "Revenue Recognition Financial Statements" ("SAB No. 101"), which
          summarizes certain of the SEC staff's views in applying generally
          accounted principles to revenue recognition in financial statements.
          The Company will be required to adopt SAB No. 101 during fiscal year
          2001.  The Company does not believe that the implementation of SAB No.
          101 will have a significant effect on its results of operations.

NOTE 3:   OPERATIONS AND LIQUIDITY
          --------------------------

          The Company incurred substantial losses in 1999 and 2000.  Until such
          time that the Company's products and services can be successfully
          marketed the Company will continue to need to fulfill working capital
          requirements through the sale of stock and the issuance of debt.  The
          inability of the company to continue its operations, as a going
          concern would impact the recoverability and classification of recorded
          asset amounts.

          The ability of the Company to continue in existence is dependent on
          its having sufficient financial resources to bring products and
          services to market for marketplace acceptance.  As a result of its
          significant losses, negative cash flows from operations, and
          accumulated deficits for the period ending March 31, 2001, there is
          doubt about the Company's ability to continue as a going concern.

          Management believes that its current available working capital,
          anticipated contract revenues and subsequent sales of stock and or
          placement of debt instruments will be sufficient to meet its projected
          expenditures for a period of at least twelve months from March 31,
          2001.  However, any projections of future cash needs and cash flows
          are subject to substantial uncertainty.  There can be no assurance
          that financing will be available in amounts or on terms acceptable to
          us, if at all.

NOTE 4:   ACQUISITION
          -----------

          WebIPA, Inc. Acquisition
          ------------------------

          On February 9, 2000, the Company acquired WebIPA, Inc., a Florida
          corporation pursuant to an Agreement and Plan of Acquisition dated
          January 26, 2000. In consideration of receiving all of the issued and
          outstanding shares of WebIPA Inc., OmniComm issued 1,200,000
          restricted shares of common stock to the shareholders of WebIPA Inc.

          The Company accounted for its acquisition of WebIPA under the purchase
          method of accounting.  At the time of the transaction WebIPA was a
          development stage company with approximately $5,033 in assets and no
          recorded liabilities.

                                                                              15
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                MARCH 31, 2001
                                  (unaudited)


NOTE 5:   EQUITY INVESTMENT
          -----------------

          European Medical Network (EMN) Investment, at cost

          On March 20, 2000 the Company entered into a stock purchase agreement
          under which it agreed to purchase a 25% interest in Medical Network AG
          EMN, a Swiss company ("EMN"). The agreement, set to close on April 20,
          2000, provided that the purchase price for 25% of EMN's stock equity
          was $838,500 to be paid partly in cash and stock. Two cash payments
          totaling US $645,000 were to be paid in installments as follows:
          $335,000 on March 20, 2000, upon which EMN would deliver 10% of its
          stock equity, and $310,000 on April 20, 2000, upon which EMN would
          deliver the remaining 15% of its stock equity. In addition, the
          Company was to provide 41,883 shares of restricted common stock to
          EMN. Pursuant to the terms of the stock purchase agreement, on March
          20, 2000, EMN's shareholders entered into an agreement that provided
          for the Company to have one seat on EMN's board of directors and the
          right to veto any sale of equity in excess of 49% of the total issued
          and outstanding equity of EMN.

          On March 20, 2000, the Company paid EMN $335,000, received 10% of
          EMN's equity and a seat on EMN's board. On April 20, 2000, the Company
          did not make the second payment of $310,000 or the stock payment of
          41,883 shares to EMN and the stock purchase agreement did not close.
          On July 11, 2000, the Company and EMN agreed to renegotiate the terms
          of their agreement subject to the Company's success in finding
          adequate financing. As part of the renegotiation the Company has
          resigned its seat on EMN's board and offered to sell its 10% interest
          back to EMN. The Company accounts for its investment in EMN under the
          cost method of accounting. The Company has established a valuation
          allowance of $335,000 against its investment in EMN to reflect the
          uncertainty of the fair market value of the investment as of March 31,
          2001 and December 31, 2000.


NOTE 6:   NOTES PAYBLE
          ------------

          Education Navigator
          --------------------

          As of March 31, 2001, the Company owed $147,500 to the selling
          stockholders of Education Navigator.  The notes are payable over two
          years and bear interest at 5.51% annually.  The amount payable during
          fiscal 2001 is $157,500.  At March 31, 2001 the Company was in default
          under the terms of the promissory notes governing the debt.

          Short-term Borrowings
          ---------------------

          At March 31, 2001 the Company owed $462,500 under short-term notes
          payable.  The notes bear interest at rates ranging from 8% to 18%.
          The average original term of the promissory notes is 195 days.  One of
          the notes is collateralized by common stock, the other notes are not
          collateralized.  The note holders were granted stock warrants in the
          Company at prices ranging from $.50 to $2.25 per share.  As of March
          31, 2001 the Company was in default on four of the notes with
          principal owed of approximately $402,500.

NOTE 7:   CONVERTIBLE NOTES
          -----------------

          During the first quarter of 1999, the Company issued Convertible Notes
          Payable in the amount of $862,500 pursuant to a Confidential Private
          Placement Memorandum. There were costs of $119,625 associated with
          this offering. The notes bear interest at ten percent annually,
          payable semi-annually. The notes are convertible after maturity, which
          is five years, into shares of common stock of the Company at $1.25 per
          share, including registration rights. As of March 31, 2001
          approximately $437,500 of the Convertible Notes had been converted
          into 350,000 shares of common stock of the Company.

                                                                              16
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                March 31, 2001
                                  (unaudited)


          During the first quarter of 2001, the Company issued Convertible Notes
          Payable in the amount of $1,285,000 pursuant to a Confidential Private
          Placement Memorandum. There were costs of $113,500 associated with
          this offering. The net proceeds to the Company were $1,285,000, with
          the costs of $113,500 accrued at March 31, 2001. The notes bear
          interest at twelve percent annually, payable at maturity. The notes
          are convertible after maturity, which is January 31, 2002, into shares
          of common stock of the Company at $0.50 per share, including
          registration rights.

NOTE 8:   COMMITMENTS AND CONTINGENCIES
          -----------------------------

          The Company currently leases office space requiring minimum annual
          base rental payments for the fiscal periods shown as follows:

                2001           $ 86,460
                2002            116,125
                2003                  0
                2004                  0
                2005                  0
                               --------
                Total          $202,585
                               ========


          In addition, to annual base rental payments, the company must pay an
          annual escalation for operating expenses as determined in the lease.

          CONTINGENT LIABILITIES
          ----------------------

          On or about September 6, 2000, the Company's wholly owned subsidiary,
          OmniTrial B.V. ("OmniTrial") submitted a petition for bankruptcy
          protection from the bankruptcy court of the Netherlands. The court
          appointed a liquidating trustee and the case is still pending. The
          Company is claiming that certain assets of OmniTrial have been paid
          for by the Company and therefore should not be part of the liquidating
          assets of OmniTrial. The bankruptcy trustee has rejected that claim
          and has told the Company that the assets as part of the OmniTrial
          bankruptcy estate would be sold to diminish any deficiency of the
          estate. The Company would like to resolve its disputes with the
          trustee, but if unable to do so, intends to contest the outstanding
          matters in the bankruptcy court of the Netherlands.

          On January 26, 2001, a former employee of the Company, Eugene A.
          Gordon filed a lawsuit in the Circuit Court of the 11th Judicial
          Circuit in and for Dade County, Florida alleging breach of his
          employment contract with the Company. The plaintiff alleges the
          Company owes him more than $100,000 for back payment of salary per the
          terms of his employment contract. The Company disputes Mr. Gordon's
          allegations and is vigorously defending this lawsuit.

          On February 2, 2001, an advertising firm, Wray Ward Laseter filed a
          lawsuit in the Superior Court of North Carolina against the Company.
          The plaintiff alleges claims totaling approximately $84,160 against
          the Company for fees associated with advertising, marketing and public
          relations services provided between March and September 2000. On or
          about April 27, 2001, the Company and Wray Ward Laseter entered into a
          settlement agreement which provides that the plaintiff dismiss the
          lawsuit with prejudice and release its claims against the Company in
          return for a series of payments totaling $66,000.

          On February 16, 2001, a staffing agency, Temp Art, Inc. filed a
          lawsuit in the County Court in and for Miami-Dade County, Florida.
          The plaintiff alleges the Company breached its contract and owes
          approximately $13,126 for back payment of services rendered plus
          interest and costs.  The Company disputes Temp Art's allegations and
          is vigorously defending this lawsuit.

                                                                              17
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                March 31, 2001
                                  (unaudited)


          In December 2000, the Company received a demand letter from a former
          employee for fees owed relating to an advisers agreement between him
          and the Company.  The demand letter sought $37,500 in the form of past
          due fees.  The former employee later increased his demand to $50,000.
          After its initial settlement offer was rejected, the Company advised
          the former employee that it intended to vigorously defend itself
          against any claims and assert its own claims against him.  The Company
          disputes his allegations and intends to vigorously defend itself
          should a lawsuit be filed.

NOTE 9:   RELATED PARTY TRANSACTIONS
          --------------------------

          The Company was owed $0 and $3,406 at March 31, 2001 and March 31,
          2000, respectively, from a shareholder.  The interest rate was 6%
          annually.

          On July 18, 2000 the Company borrowed $50,000 from Guus van Kesteren a
          Director of the Company. The promissory note carries an interest rate
          of 12% per annum and has a maturity date of September 30, 2000. In
          addition, the Company granted Mr. van Kesteren an option to purchase
          20,000 shares of the Company's common stock at a price of $2.25. At
          the Company's request Mr. van Kesteren elected to convert the
          promissory note as part of a private placement of debt of the Company.
          The private placement debt will accrue interest at 12% per annum and
          is convertible into common stock of the Company at a rate of $0.50 per
          share on January 31, 2002.

          On August 17, 2000 the Company borrowed $100,000 from Noesis N.V. a
          shareholder of the Company. The promissory note carries an interest
          rate of 8% per annum and has a maturity date of January 1, 2001. At
          the Company's request Noesis elected to convert the promissory note as
          part of a private placement of debt of the Company. The private
          placement debt will accrue interest at 12% per annum and is
          convertible into common stock of the Company at a rate of $0.50 per
          share on January 31, 2002.

          On October 26, 2000 the Company borrowed $250,000 from Profrigo N.V. a
          shareholder of the Company. The promissory note carries an interest
          rate of 5% per annum and has a maturity date of January 1, 2001. At
          the Company's request Profrigo elected to convert the promissory note
          as part of a private placement of debt of the Company. The private
          placement debt will accrue interest at 12% per annum and is
          convertible into common stock of the Company at a rate of $0.50 per
          share on January 31, 2002.

          On November 22, 2000 the Company borrowed $150,000 from Profrigo, N.V,
          a shareholder of the Company. The promissory note carries an interest
          rate of 18% per annum and has a maturity date of January 15, 2001. In
          addition, the Company granted Profrigo an option to purchase 150,000
          shares of the Company's common stock at a price of $0.75. The
          promissory note is currently in default and continues to accrue
          interest at the rate of 18% per annum.

          On December 22, 2000 the Company borrowed $60,000 from Guus van
          Kesteren a Director of the Company. The promissory note carries an
          interest rate of 5% per annum and has a maturity date of January 1,
          2001. At the Company's request Mr. van Kesteren elected to convert the
          promissory note as part of a private placement of debt of the Company.
          The private placement debt will accrue interest at 12% per annum and
          is convertible into common stock of the Company at a rate of $0.50 per
          share on January 31, 2002.

          On December 22, 2000 the Company borrowed $50,000 from Profrigo N.V. a
          shareholder of the Company. The promissory note carries an interest
          rate of 5% per annum and has a maturity date of January 1, 2001. At
          the Company's request Profrigo elected to convert the promissory note
          as part of a private placement of debt of the Company. The private
          placement debt will accrue interest at 12% per annum and is
          convertible into common stock of the Company at a rate of $0.50 per
          share on January 31, 2002.

                                                                              18
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                March 31, 2001
                                  (unaudited)


          On February 20, 2001 the Company borrowed $60,000 from Guus van
          Kesteren a Director of the Company.  The promissory note carries an
          interest rate of 12% per annum and has a maturity date of August 20,
          2001.  In addition, the Company granted Mr. van Kesteren an option to
          purchase 20,000 shares of the Company's common stock at a price of
          $0.30.


NOTE 10:  POST-RETIREMENT EMPLOYEE BENEFITS
          ---------------------------------

          The Company does not have a policy to cover employees for any health
          care or other welfare benefits that are incurred after employment
          (post-retirement).  Therefore, no provision is required under SFAS's
          106 or 112.

NOTE 11:  STOCK BASED COMPENSATION
          ------------------------

          ACCOUNTING FOR STOCK-BASED COMPENSATION
          ---------------------------------------

          Statement of Financial Accounting Standards No. 123, "Accounting for
          Stock-Based Compensation", ("SFAS No. 123") requires that stock awards
          granted subsequent to January 1, 1995, be recognized as compensation
          expense based on their fair value at the date of grant.
          Alternatively, a company may use Accounting Principles Board Opinion
          No. 25, "Accounting for Stock Issued to Employees", ("APB 25") and
          disclose pro forma income amounts which would have resulted from
          recognizing such awards at their fair value.  The Company has elected
          to account for stock-based compensation expense under APB 25.


          STOCK OPTION PLAN
          -----------------

          In 1998 the Company's Board of Directors approved the OmniComm Systems
          1998 Stock Option Plan. (the "1998 Plan"). The Plan provides for
          granting Incentive Stock Options, Nonqualified Stock Options, Stock
          Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit
          Awards and Performance Share Units. Pursuant to the 1998 Plan the
          Company may grant options to purchase up to 3,000,000 shares of the
          Company's common stock. The term of each option may not exceed ten
          years from the date of grant, and options vest in accordance with a
          vesting schedule established by the plan administrator.


          The Company's share option activity and related information is
          summarized below:

<TABLE>
<CAPTION>
                                              Period ended March 31,
                                                March 31, 2001                       December 31, 2000
                                                         Weighted                               Weighted
                                                         Average                                Average
                                                         Exercise                               Exercise
                                          Options         Price                   Options        Price
<S>                                       <C>            <C>                    <C>             <C>
Outstanding at beginning of period        3,316,006           $   2.28           3,562,916          $   1.00
          Granted                           345,000           $   0.64           1,851,994          $   3.46
          Exercised                          20,000           $   0.80           1,045,894          $   0.30
          Cancelled                          87,000           $   2.00           1,053,010          $   1.97
                                          ---------           --------          ----------          --------

Outstanding at end of period              3,554,006           $   2.14           3,316,006          $   2.28
                                          =========           ========          ==========          ========
Exercisable at end of period              1,662,051           $   1.89           1,512,848          $   2.19
                                          =========           ========          ==========          ========
</TABLE>


                                                                              19
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                March 31, 2001
                                  (unaudited)

          During the second and third quarters of 1999, the Company issued
          86,377 and 68,000, respectively, common shares to employees and
          advisors under its stock bonus arrangement. The Company adopted SFAS
          123 to account for its stock based compensation plans. SFAS 123
          defines the "fair value based method" of accounting for stock based
          compensation. Under the fair value based method, compensation cost is
          measured at the grant date based on the value of the award and is
          recognized over the service period. In accordance with this method,
          the Company recognized expense of $56,145 and $44,200, respectively,
          during the second and third quarters of 1999, and $41,980 during the
          third quarter of 2000.

          During 2000 the Company issued an aggregate of 187,330 shares of
          common stock to employees and advisors with a fair market value as
          measured on the date of issuance of $324,482 for services rendered
          under employment and consulting agreement. In addition, the Company
          issued 126,781 shares of preferred stock with a fair market value as
          measured on the date of grant of $190,172 to a financial advisor in
          accordance with a consulting agreement.

          During 2001 the Company issued an aggregate of 70,263 shares of common
          stock to employees and advisors with a fair market value as measured
          on the date of issuance of $33,321 for services rendered under
          employment and consulting agreement.

NOTE 12:  OMNITRIAL, B.V. BANKRUPTCY
          --------------------------

          OmniTrial B.V., a wholly owned subsidiary of the Company, was
          incorporated on October 15, 1999, in the Netherlands. On August 28,
          2000, the Board of Directors of the Company voted to authorize David
          Ginsberg, D.O., it's President and Chief Executive Officer, to vote on
          any resolution pertaining to OmniTrial, including approval of a
          bankruptcy filing. On August 30, 2000, the Board of Directors of
          OmniTrial issued a written consent to apply for bankruptcy, which was
          instituted in The Netherlands on or about September 6, 2000. A
          liquidating trustee was appointed and the case is still pending as of
          this date.

          The Company requested that the bankruptcy trustee return to the
          Company several computer servers, which the Company claims it owns
          separately from OmniTrial. The bankruptcy trustee refused to return
          the servers and alleged that the Company caused the bankruptcy due to
          its mismanagement of OmniTrial. The Company is currently attempting to
          negotiate a settlement with the trustee. If the Company is unable to
          settle the matter with the trustee, it intends to defend its rights in
          the bankruptcy court in The Netherlands.

                                                                              20
<PAGE>

                            OMNICOMM SYSTEMS, INC.
            NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                March 31, 2001
                                  (unaudited)


NOTE 13:  INCOME TAXES
          ------------

          Income taxes are accrued at statutory US and state income tax rates.
          Income tax expense is as follows:

<TABLE>
<CAPTION>
                                                         3/31/01            3/31/00
                                                         =======            =======
          <S>                                           <C>               <C>
          Current tax expense (benefit):
                      Income tax at statutory rates     $      -0-        $      -0-

          Deferred tax expense (benefit):
                      Amortization of goodwill and        (17,660)          (17,660)
                      covenant
                      Operating loss carryforward        (309,150)         (518,629)
                                                        ---------         ---------
                                                         (326,810)         (536,289)
          Valuation allowance                             326,810           536,289
                                                        ---------         ---------
          Total tax expense (benefit)                   $      -0-        $      -0-
                                                        =========         =========
</TABLE>

          The tax effects of significant temporary differences, which comprise
          the deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                                         3/31/01           12/31/00
                                                         =======           ========
          <S>                                          <C>                <C>
          Deferred tax assets:
          Amortization of intangibles                  $   241,962        $   224,302
          Operating loss carryforwards                   3,445,239          3,136,089
                      Gross deferred tax assets          3,687,201          3,360,391
                      Valuation allowance               (3,687,201)        (3,360,391)
                                                       -----------        -----------
                      Net deferred tax asset           $        -0-       $        -0-
                                                       ===========        ===========
</TABLE>

          The Company has net operating loss carryforwards (NOL) for income tax
          purposes of approximately $9,143,552. This loss is allowed to be
          offset against future income until the year 2021 when the NOL's will
          expire. Other timing differences relate to depreciation and
          amortization for the stock acquisition of Education Navigator in 1998.
          The tax benefits relating to all timing differences have been fully
          reserved for in the valuation allowance account due to the lack of
          operating history and the substantial losses incurred in 2000.


NOTE 14:  INTERIM FINANCIAL REPORTING
          ---------------------------

          The unaudited financial statements of the Company for the period from
          January 1, 2001 to March 31, 2001 have been prepared by management
          from the books and records of the Company, and reflect, in the opinion
          of management, all adjustments necessary for a fair presentation of
          the financial position and operations of the Company as of the period
          indicated herein, and are of a normal recurring nature.

                                                                              21
<PAGE>

                          FORWARD-LOOKING STATEMENTS
                          --------------------------

Statements contained in this Form 10-KSB that are not historical fact are
"forward looking statements". These statements can often be identified by the
use of forward-looking terminology such as "estimate", "project", "believe",
"expect", "may", "will", "should", "intends", or "anticipates" or the negative
thereof or other variations thereon or comparable terminology, or by discussions
of strategy that involve risks and uncertainties. We wish to caution the reader
that these forward-looking statements, such as statements relating to timing,
costs and of the acquisition of, or investments in, existing business, the
revenue or profitability levels of such businesses, and other matters contained
in this Form 10-KSB regarding matters that are not historical facts, are only
predictions.  No assurance can be given that plans for the future will be
consummated or that the future results indicated, whether expressed or implied,
will be achieved.  While sometimes presented with numerical specificity, these
plans and projections and other forward-looking statements are based upon a
variety of assumptions, which we consider reasonable, but which nevertheless may
not be realized.  Because of the number and range of the assumptions underlying
our projections and forward-looking statements, many of which are subject to
significant uncertainties and contingencies that are beyond our reasonable
control, some of the assumptions inevitably will not materialize, and
unanticipated events and circumstances may occur subsequent to the date of this
Form 10-KSB.  Therefore, our actual experience and results achieved during the
period covered by any particular projections or forward-looking statements may
differ substantially from those projected.  Consequently, the inclusion of
projections and other forward- looking statements should not be regarded as a
representation by us or any other person that these plans will be consummated or
that estimates and projections will be realized, and actual results may vary
materially.  There can be no assurance that any of these expectations will be
realized or that any of the forward-looking statements contained herein will
prove to be accurate.  The Company does not undertake any obligation to update
or revise any forward-looking statement made by it or on its behalf, whether as
a result of new information, future events or otherwise.

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<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following information should be read in conjunction with the Consolidated
Financial Statements and Notes thereto and other information set forth in this
report.

General

The Company changed the focus of its core business during 1999. The company is a
provider of Internet based database products that integrate significant
components of the clinical trial process, including the collection, compilation
and validation of clinical trial data. Prior to 1999 the Company was a computer
systems integrator providing services and hardware sales for the installation of
local and wide area networks.

The Company expects to continue phasing out the systems integration segment of
its business throughout 2001. Virtually all of the Company's personnel are
involved in the development and marketing of the Company's TrialMaster product.

Period Ended March 31, 2001 Compared With the Period Ended March 31, 2000

Results of Operations

Revenues

Revenues for the period ended March 31, 2001 were $41,094 compared to $24,978
for the same period in 2000. Revenues associated with the Company's Internet
based clinical trial products were approximately $18,348 and $0 for 2001 and
2000 respectively. Systems integration revenues in 2001 were approximately
$22,746 versus $24,978 in fiscal 2000. The Company expects systems integration
revenues in 2001 to parallel the results achieved in 2000

The Company's TrialMaster product is currently being sold as an application
service provider ("ASP") that provides electronic data capture ("EDC") and other
services such as an enterprise management suite which assists its clients in the
pharmaceutical, biotechnology and medical device industries in accelerating the
completion of clinical trials.

TrialMaster contracts provide for pricing that is based on both the size and
duration of the clinical trial.  Size parameters include the number of patients
participating in the trial and the number of data points being collected per
patient.  The client will pay a trial setup fee based on the previously
mentioned factors, and then pay an on-going maintenance fee for the duration of
the clinical trial that provides software and network support during the trial.
Generally, these contracts will range in duration from 12 months to several
years.  The maintenance fee revenues are earned and recognized monthly.  Costs
associated with contract revenues are recognized as incurred.

                                                                              23
<PAGE>

Cost of Sales

Cost of sales was $16,484 or 40.1% for the period ended March 31, 2001 versus
$35,120 or 140.6% for the period ended March 31, 2000.  The absolute decrease in
cost of sales is attributable to the Company's curtailment of its systems
integration business segment.  The decrease in cost of sales on a percentage
business is primarily the result of the Company increasing sales of its
TrialMaster product which should provide significantly higher gross margins than
the systems integration segment of its business.

The Company does not anticipate that systems integration costs will be a
significant source of expense in 2001.  The Company's anticipates that the
commercialization of its database product TrialMaster and its related components
will be the source of most of its cost of sales.

Other Expenses

Salaries, Employee Benefits and Related Expenses

Salaries and related expenses is the Company's biggest expense at 62.9% of total
Other Expenses for 2001.  Salaries and related expenses totaled $561,851 in 2001
compared to $572,933 in 2000.  The Company increased its personnel in 2000 in
anticipation of marketing both TrialMaster and WebIPA.  The increase encompassed
additional computer programmers, and increased sales and marketing personnel.
The Company has reduced its sales and marketing personnel primarily through the
closure of its European office based on its decision to focus on building its
clinical trial clientele domestically in the US.  In addition, the Company was
able to reduce its research and development personnel through the consolidation
of its Tampa, Florida and Miami, Florida offices.  The Company currently employs
approximately 18 employees out of its Miami corporate office.  The Company
expects to increase headcount within its technology-based functions in concert
with anticipated increases in TrialMaster clients during fiscal 2001.

Rent

Rent expense was $41,377 for the period ended March 31, 2001 compared with
$60,932 for the comparable period in fiscal 2000.  The decrease can be
attributed to approximately $14,275 in rent expense for the Company's office in
Amsterdam incurred in fiscal 2000 which did not recur in 2001 due to the closure
of the Amsterdam office in connection with the bankruptcy filing of the
Company's European subsidiary, OmniTrial B.V.

Consulting Expenses

Consulting expenses, which are comprised of medical advisory, product
development and marketing and sales consultants were $0 for the period ended
March 31, 2001 compared to $118,435 in fiscal 2000. The decrease can be
attributed to several factors.  There was a decrease in marketing and sales
consulting expense of $48,000 caused by the conversion of two sales consultants
into marketing executives of the Company.  There was a decrease of $42,000 in
medical advisory consulting expenses that is directly correlated to a
restructuring of the Company's medical advisory board.  Product development fees
were reduced by $28,435 through the discontinued use of temporary employees
within the Company's research and development function.

                                                                              24
<PAGE>

Legal and Professional Fees

Legal and professional fees decreased to $42,497 in the period ended March 31,
2001 compared to $199,247 in the same period in 2000. The decrease can be
attributed to investment banking and financial advisory fees totaling $55,001 in
2000. Legal and accounting fees were $42,497 in 2001 compared to $54,247 for the
same period in fiscal 2000.

Telephone and Internet

Telephone and Internet related costs decreased by $29,595 due to the decreased
telephone and Internet access costs associated with the closing of the Company's
offices in Amsterdam, the Netherlands and Tampa, Florida.  The Company does not
anticipate an increase in access charges during fiscal 2001 based on its own
existing communications infrastructure and its projected 2001 workload.

Selling, General and Administrative

Selling, general and administrative expenses ("SG&A") includes all office
oriented expenses, advertising, public relations and marketing costs and all
other expenses not directly chargeable to either cost of sales or specifically
detailed income statement categories.  These expenses were approximately $25,907
in fiscal 2001 compared to $215,196 in fiscal 2000.  A portion of the decrease
is a result of increased expenditures for advertising ($11,816), conferences and
seminars ($47,793) marketing ($70,916) and general office related costs
($38,104) in comparison with fiscal 2000. In addition, the Company had SG & A
expenses of approximately $79,000 in its European operation.

Depreciation and Amortization

Depreciation and amortization expense was $87,325 for fiscal 2001 compared with
$92,616 for fiscal 2000.  The decrease is a result of an increase in
depreciation expense in 2001 of approximately $9,756 that is associated with
additional computer and office equipment offset by a $15,000 decrease in the
amortization of the non-compete covenant associated with the Education Navigator
acquisition in 1998.

Liquidity and Capital Resources

The Company changed its primary focus to providing Internet based database
applications to the clinical trial industry in mid 1998.  At that time it began
phasing out its systems integration business segment.  Since the Company made
TrialMaster and its related components its primary business the Company has
relied primarily on the proceeds from the sale of debt and equity securities to
fund its operations.

                                                                              25
<PAGE>

Cash and cash equivalents decreased by $79,973 to $10,985 at March 31, 2001.
This was the result of cash provided by financing activities of $590,900 offset
by cash used in operating activities of approximately $670,025 and $848 in
investing activities.  The significant components of the activity include a loss
from operations of approximately $919,341, an increase in debt acquisition costs
of $113,500 related to a private placement of the Company's debt, the purchase
of property and equipment of approximately $848, offset by an increase in
accounts payable and accrued expenses of approximately $196,325 and
approximately $600,900 the company raised through the sale of debt and equity
securities.

Because of the losses experienced in 1999 and 2000 the Company has needed to
continue utilizing the proceeds from the sale of debt and equity securities to
fund its working capital needs.  The capital markets during the latter half of
fiscal 2000 continuing through the present provided a difficult climate for the
raising of capital because of the decline in value of publicly held technology
stocks and the corresponding apprehension on the part of investors to invest in
technology oriented firms.  The softness in the capital markets coupled with the
losses experienced caused working capital shortfalls.  To compensate for its
working capital needs the Company has used a combination of equity financing and
short-term bridge loans.

The Company's primary capital requirements are for daily operations and for the
continued development and marketing of the TrialMaster system.  The Company's
Management believes that its current available working capital, anticipated and
subsequent sales of stock and or debt financing will be sufficient to meet its
projected expenditures for a period of at least twelve months from March 31,
2001.  The Company's capital requirements, will need to be funded through debt
and equity financing, of which there can be no assurance that such financing
will be available or, if available, that it will be on terms favorable to the
Company.

                                                                              26
<PAGE>

PART II -OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

Private Placement

     On January 1, 2001, Noesis Capital Corp., as placement agent, began the
distribution of a Confidential Private Placement Memorandum to accredited
investors on behalf of the Company. The terms of the offering are as follows:

     Amount: $2,500,000 , Best Efforts.

     Offering:  50 Units Maximum. Each Unit consists of a one (1) year
convertible note (the "Note") in the principal amount of $50,000, bearing 12%
annual interest, payable at maturity (January 31, 2002) with the principal
convertible into shares of common stock, $.001 par value, of the Company
("Common Stock" or "Shares") at $0.50 per Share, subject to customary
anti-dilution provisions.

     Price:     $50,000 per Unit. The Company will accept subscriptions for
partial Units.

     Registration Rights: Demand (so long as 50% of the aggregate amount of the
total offering files notices) and PiggyBack registration rights.

     Use of Proceeds:  Operating and Marketing Expenses

     Conditions:

     (1) Regulation D of the Securities Act of 1933, as amended.
     (2) Suitability Standards; Accredited Investors Only.
     (3) Board of Directors: Northeast Securities, placement agent, shall have
     the right to designate one observer with the same notice and reimbursement
     of expenses as other directors.
     (4) Termination Date: March 31, 2001, unless earlier terminated or extended
     by the Company.
     (5) Placement Fee: 5% Commission (cash); warrants to purchase a number of
     shares equal to 10% of the number of shares issuable upon conversion of the
     Notes sold in the offering, at an exercise price of $.50 per share,
     exercisable for a period of five (5) years, commencing on the final closing
     date of the offering.

The private placement has been extended for an additional one hundred and twenty
(120) days.


Item 6. Exhibits and Reports on Form 8-K

  (a)    Exhibits.
         None.

  (b)    Reports on Form 8-K.
         None.

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<PAGE>

                                  SIGNATURES
                                  ----------

       In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

OmniComm Systems, Inc.
---------------------
Registrant
----------



By:    Ronald T. Linares, Vice President of Finance, Chief Financial and
       -----------------------------------------------------------------
       Accounting Officer
       ------------------
Date:  September 12, 2001
       ------------------

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