<PAGE>

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

                                    FORM 10-Q

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

               For the quarterly period ended: September 30, 2001.

                                       OR

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

                  For the transition period from ____ to ____.
                         Commission file number: 1-13521

                              HYPERCOM CORPORATION

             (Exact name of registrant as specified in its charter)

                 Delaware                             86-0828608
                 --------                             ----------
             (State or other                       (I.R.S. Employer
             jurisdiction of                        Identification
             incorporation or                           Number)
              organization)

                             2851 West Kathleen Road
                             Phoenix, Arizona 85053

               (Address of principal executive offices) (Zip Code)
                                 (602) 504-5000

              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

Number of shares of the registrant's common stock, $.001 par value per share,
outstanding as of October 31, 2001, was 39,795,554.
<PAGE>
INDEX


<TABLE>
<CAPTION>
                                                                          PAGE
<S>                  <C>                                                  <C>
         PART I.     FINANCIAL INFORMATION

         ITEM 1.     Financial Statements                                   3

                     Notes to Consolidated Financial Statements             6

         ITEM 2.     Management's Discussion and Analysis of
                     Financial Condition and Results of Operations         10

         ITEM 3.     Quantitative and Qualitative Disclosures About
                     Market Risk                                           16


         PART II.    OTHER INFORMATION

         ITEM 1.     Legal Proceedings                                     17

         ITEM 2.     Changes in Securities and Use of Proceeds             17

         ITEM 6.     Exhibits and Reports on Form 8-K                      17
</TABLE>


                                       2
<PAGE>
PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

HYPERCOM CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)


<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 30,
                                                                                     2001           DECEMBER 31,
                                                                                  (unaudited)           2000
                                                                                 --------------     ------------
<S>                                                                              <C>                <C>
ASSETS
Current assets:
      Cash and cash equivalents                                                    $   8,837          $  13,008
      Restricted cash                                                                  5,021                 --
      Marketable securities, at market                                                    --              2,110
      Accounts receivable, net of allowance for
        doubtful accounts of $3,623 and $3,655                                        83,708             79,010
      Current portion of net investment in direct financing leases                    16,759             20,023
      Inventories, net                                                                56,617             70,358
      Deferred income taxes                                                           12,947             12,946
      Prepaid taxes                                                                    2,999              3,035
      Prepaid expenses and other current assets                                       23,787             19,059
                                                                                   ---------          ---------
Total current assets                                                                 210,675            219,549

      Property, plant and  equipment, net                                             39,026             42,164
      Long-term marketable securities, at market                                         154                820
      Long-term portion of net investment in direct financing leases                  27,714             42,102
      Deferred income taxes                                                            9,024              9,024
      Goodwill, net of amortization of $7,694 and $4,609                              30,625             31,785
      Intangible assets, net of amortization of $3,801 and $2,459                      6,170              6,780
      Other assets                                                                    18,368             17,013
                                                                                   ---------          ---------
Total assets                                                                       $ 341,756          $ 369,237
                                                                                   =========          =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Accounts payable                                                                34,151             32,531
      Accrued liabilities                                                             23,145             22,137
      Deferred revenue                                                                 2,336              2,390
      Income taxes payable                                                                --              3,237
      Current portion of long-term debt                                               18,934             84,036
                                                                                   ---------          ---------
Total current liabilities                                                             78,566            144,331
      Long-term debt                                                                  53,117             16,355
      Other non-current liabilities                                                      168                404
                                                                                   ---------          ---------
Total liabilities                                                                    131,851            161,090

Stockholders' equity:
      Common stock, $.001 par value; 100,000,000 shares authorized;
         39,754,963 and 34,299,999 shares issued and outstanding at
         September 30, 2001 and December 31, 2000, respectively                           19                 14
      Additional paid-in capital                                                     175,652            152,658
      Receivables from stockholders                                                   (1,498)            (1,498)
      Retained earnings                                                               38,234             59,923
                                                                                   ---------          ---------
                                                                                     212,407            211,097
Treasury stock, 230,088 and 276,500 shares (at cost) at September 30, 2001
      and December 31, 2000, respectively                                             (2,502)            (2,950)
                                                                                   ---------          ---------
Total stockholders' equity                                                           209,905            208,147
                                                                                   ---------          ---------
Total liabilities and stockholders' equity                                         $ 341,756          $ 369,237
                                                                                   =========          =========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       3
<PAGE>
HYPERCOM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED SEPTEMBER 30,          NINE MONTHS ENDED SEPTEMBER 30,
                                                       --------------------------------          -------------------------------
                                                         2001                   2000               2001                  2000
                                                       ---------              ---------          ---------             ---------
<S>                                                    <C>                    <C>                <C>                   <C>
Net revenue                                            $  71,011              $  75,915          $ 217,180             $ 243,065
Costs and expenses:
       Costs of revenue                                   44,671                 57,941            139,905               157,071
       Research and development                            7,034                 10,280             22,303                31,590
       Selling, general and administrative                19,076                 25,472             61,419                72,179
       Special direct financing lease provision               --                     --              7,182                    --
                                                       ---------              ---------          ---------             ---------
            Total costs and expenses                      70,781                 93,693            230,809               260,840
                                                       ---------              ---------          ---------             ---------
            Income (loss) from operations                    230                (17,778)           (13,629)              (17,775)

Interest and other income                                     57                    363                512                 1,237
Interest and other expense                                (3,403)                (1,806)            (9,544)               (3,278)
Foreign currency gain (loss)                                 135                   (394)            (4,084)               (1,293)
Loss from investment in equity affiliate                      --                 (5,941)                --                (9,855)
                                                       ---------              ---------          ---------             ---------
            Loss before income taxes                      (2,981)               (25,556)           (26,745)              (30,964)
Income tax benefit                                           596                  3,923              5,349                 4,222
                                                       ---------              ---------          ---------             ---------
            Net loss                                   $  (2,385)             $ (21,633)         $ (21,396)            $ (26,742)
                                                       =========              =========          =========             =========
Net loss per share:
       Basic loss per share                            $   (0.06)             $   (0.63)         $   (0.60)            $   (0.78)
                                                       =========              =========          =========             =========
       Weighted average basic common shares               37,992                 34,264             35,583                34,147
                                                       =========              =========          =========             =========
       Diluted loss per share                          $   (0.06)             $   (0.63)         $   (0.60)            $   (0.78)
                                                       =========              =========          =========             =========
       Weighted average diluted common shares             37,992                 34,264             35,583                34,147
                                                       =========              =========          =========             =========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       4
<PAGE>
HYPERCOM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)

<TABLE>
<CAPTION>
                                                                                      NINE MONTHS ENDED
                                                                            --------------------------------------
                                                                            SEPT. 30, 2001          SEPT. 30, 2000
                                                                            --------------          --------------
<S>                                                                         <C>                     <C>
Cash flows from operating activities:
      Net loss                                                              $      (21,396)         $      (26,742)
Adjustments to reconcile net loss to net cash provided by (used in)
   operating activities:
      Amortization of discount on notes payable                                      2,396                      --
      Amortization of beneficial notes payable conversion feature                      667                      --
      Depreciation/amortization                                                     11,690                   9,247
      Bad debt expense                                                                 829                   1,369
      Deferred components of direct financing leases                                  (469)                 (2,864)
      Provision for losses on direct financing leases                               15,377                   8,388
      Provision for excess and obsolete inventory                                    2,182                   1,901
      Equity loss in affiliates                                                                              9,855
      Foreign currency loss                                                          4,084                   1,293
      Deferred income taxes                                                            (14)                    847
      Other                                                                             64                     103
Increase in accounts receivable, inventories, prepaid income taxes,
   prepaid expenses and other current assets & other assets                         (5,979)                (49,321)
(Decrease) increase in accounts payable, accrued liabilities,
   deferred revenue & income taxes payable                                          (2,745)                  5,384
                                                                            --------------          --------------
           Net cash provided by (used in) operating activities                       6,686                 (40,540)
Cash flows from investing activities:
      Advances to related parties                                                                           (2,305)
      Payments received on notes receivable                                            880                     678
      Principal payments received on direct financing leases                         9,437                   7,012
      Funding of direct financing leases                                           (15,733)                (32,949)
      Increase in restricted cash                                                   (1,380)                     --
      Acquisition of controlling interests in subsidiaries,
         net of cash acquired                                                                              (22,996)
      Acquisition of other assets                                                     (732)                 (2,040)
      Proceeds from disposal of property,
         plant & equipment                                                             213                      57
      Purchase of property, plant & equipment                                       (1,617)                 (9,424)
      Purchase of marketable securities                                                                        (94)
      Proceeds from maturity of marketable securities                                2,776                  33,279
                                                                            --------------          --------------
           Net cash used in investing activities                                    (6,156)                (28,782)
Cash flows from financing activities:
      Proceeds from notes payable                                                   18,400                 191,780
      Repayment of notes payable                                                    (7,500)               (145,258)
      Proceeds from long-term debt, net of restricted cash in 2001                  92,276                       0
      Repayment of long-term debt                                                 (123,313)                      0
      Proceeds from sale of lease receivables                                        7,977                       0
      Proceeds from issuance of common stock                                         7,827                   3,122
                                                                            --------------          --------------
           Net cash provided by (used in) financing activities                      (4,333)                 49,644
Effect of exchange rate changes on cash                                               (368)                    647
                                                                            --------------          --------------
Net decrease in cash                                                                (4,171)                (20,325)
Cash & cash equivalents, beginning of period                                        13,008                  26,093
                                                                            --------------          --------------
Cash & cash equivalents, end of period                                      $        8,837          $        5,768
                                                                            ==============          ==============
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED AND IN THOUSANDS)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements do not include all
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair statement of results for the periods have been
included. Operating results for the nine months ended September 30, 2001, are
not necessarily indicative of the results to be expected for the year ending
December 31, 2001.

Certain prior year amounts have been reclassified to conform with the current
period presentation.

This financial information is intended to be read in conjunction with Hypercom's
audited financial statements and footnotes thereto included in Hypercom's Annual
Report on Form 10-K for the year ended December 31, 2000.

NOTE 2 - RESTRICTED CASH

In connection with the securitization of direct finance leases (see Note 7), the
Company's Equipment Leasing segment ("Golden Eagle") was required to establish
restricted cash collection, collateral and reserve accounts. The accounts are
principally used for the collection of monthly equipment lease payments,
remittance of funds to service the related debt, and to maintain certain credit
enhancement and liquidity levels.

NOTE 3 - INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
                                           SEPTEMBER 30,         DECEMBER 31,
                                               2001                  2000
                                           -------------         ------------
<S>                                        <C>                   <C>
Purchased parts                            $      27,521         $     29,744
Work in progress                                   7,683                7,256
Finished goods                                    21,413               33,358
                                           -------------         ------------
                                           $      56,617         $     70,358
                                           =============         ============
</TABLE>

NOTE 4 - SEGMENT INFORMATION

As of December 31, 2000 Hypercom had two segments: Point-of-Sale (POS) and
Network Systems, and Equipment Leasing.

Hypercom's reportable segments are strategic business units that offer different
products and services. They are managed separately because each requires
different technologies and marketing strategies.

The following table presents certain segment financial information unaudited and
in thousands for the three and nine month periods ended September 30, 2001 and
2000, respectively:


                                       6
<PAGE>
For the Three Months and Period Ended September 30, 2001:

<TABLE>
<CAPTION>
                             POS AND NETWORK            EQUIPMENT
                                 SYSTEMS                 LEASING             CORPORATE            ELIMINATIONS              TOTAL
                             ---------------            ---------            ---------            ------------            ---------
<S>                          <C>                        <C>                  <C>                  <C>                     <C>
Net revenue                   $    64,172               $   6,839            $      0             $         0             $  71,011
Operating income (loss)       $     4,476               $     113            $ (4,359)            $         0             $     230
Segment Assets                $   673,988               $  76,376            $234,264             $  (642,872)            $ 341,756
</TABLE>

For the Three Months and Period Ended September 30, 2000:

<TABLE>
<CAPTION>
                             POS AND NETWORK            EQUIPMENT
                                 SYSTEMS                 LEASING             CORPORATE            ELIMINATIONS              TOTAL
                             ---------------            ---------            ---------            ------------            ---------
<S>                          <C>                        <C>                  <C>                  <C>                     <C>
Net revenue                   $    69,052               $   6,863            $      0             $         0             $  75,915
Operating income (loss)       $   (11,146)              $    (979)           $ (5,653)            $         0             $ (17,778)
Segment Assets                $   578,883               $  84,949            $152,388             $  (444,513)            $ 371,707
</TABLE>

For the Nine Months and Period Ended September 30, 2001:

<TABLE>
<CAPTION>
                             POS AND NETWORK            EQUIPMENT
                                 SYSTEMS                 LEASING             CORPORATE            ELIMINATIONS              TOTAL
                             ---------------            ---------            ---------            ------------            ---------
<S>                          <C>                        <C>                  <C>                  <C>                     <C>
Net revenue                   $   195,808               $  21,372            $      0             $         0             $ 217,180
Operating income (loss)       $     7,176               $  (7,465)           $(13,338)            $         0             $ (13,629)
Segment Assets                $   673,988               $  76,376            $234,264             $  (642,872)            $ 341,756
</TABLE>


For the Nine Months and Period Ended September 30, 2000:

<TABLE>
<CAPTION>
                             POS AND NETWORK            EQUIPMENT
                                 SYSTEMS                 LEASING             CORPORATE            ELIMINATIONS              TOTAL
                             ---------------            ---------            ---------            ------------            ---------
<S>                          <C>                        <C>                  <C>                  <C>                     <C>
Net revenue                   $   225,144               $  17,921            $      0             $         0             $ 243,065
Operating income (loss)       $     2,131               $  (1,957)           $(17,949)            $         0             $ (17,775)
Segment Assets                $   578,883               $  84,949            $152,388             $  (444,513)            $ 371,707
</TABLE>


NOTE 5 - INCOME TAXES

The income tax benefit for federal, state and foreign taxes was $5.3 million and
$0.6 million for the nine and three months ended September 30, 2001,
respectively, and $4.2 million and $3.9 million for the nine and three months
ended September 30, 2000, respectively. The Company's effective rate of income
tax benefit was 20% for the nine and three months ended September 30, 2001, and
20% for the nine and three months ended September 30, 2000, respectively.

The income tax benefit for the three and nine months ended September 30, 2001
and 2000, differed from the U.S. statutory rate principally due to foreign
taxes, attributable to foreign operations, that are less than the U.S. statutory
rate, research and experimentation credits, the non-recognition of tax benefit
on foreign currency translation losses, and valuation reserves.

NOTE 6 - NET INVESTMENT IN DIRECT FINANCING LEASES

During the nine months ended September 30, 2001, Golden Eagle recorded an
incremental charge to strengthen credit reserves for certain segments of its
lease receivables in the amount of $7.2 million in addition to its normal
provision. This charge represents management's estimate of potential loan losses
that exceed its historical rate of loan losses.


                                       7
<PAGE>
The following factors contributed to Golden Eagle's decision in the first
quarter of 2001 to strengthen credit reserves:

         -        We identified several new vendor programs that were
                  established in 2000, and contributed significantly to funding
                  volume in 2000, which were experiencing losses at higher
                  levels than historic loss levels for other vendor programs.
                  These programs involved independent sales organizations
                  providing additional services to the merchants (lessees) as
                  part of the lease program. If service levels were not as the
                  merchants expected, the likelihood of their making required
                  lease payments is reduced. Losses for these programs began to
                  exceed historical levels for the quarter ended March 31, 2001;

         -        Leases funded for electronic payments software, such as
                  payment software loaded into a personal computer without the
                  need for a terminal, were at higher funding levels in 2000
                  than in previous years. Performance on these leases worsened
                  in the first quarter of 2001;

         -        The overall credit mix of the portfolio was slightly skewed (a
                  few percentage points) toward higher risk credits, commonly
                  described as C and D rated credits. C and D credit leases
                  booked in the year 2000 appeared to be performing
                  significantly worse than C and D credits in previous years as
                  we analyzed activity through March 31, 2001; and

         -        The overall softening of the economy at the start of 2001,
                  coupled with the results of our analysis of collection status
                  and default trends as of March 31, 2001, also contributed to
                  the conclusion that the increase in reserves would be
                  appropriate.

Continued losses that exceed historical trends could result in the substantial
impairment of Golden Eagle's goodwill, which amounted to $20.7 million, net as
of September 30, 2001.

Additionally, during the nine months ended September 30, 2001, Golden Eagle sold
a portion of its lease receivables. Proceeds from the sales amounted to $8.0
million. There was a corresponding reduction in net investment in financing
leases of $8.1 million as a result of these sales.

NOTE 7 - DEBT AND EQUITY TRANSACTIONS

On May 24th, 2001, Golden Eagle completed a securitization of $45.6 million in
principal balances of leases. The securitization was accounted for as a
financing transaction. In connection with the securitization, Golden Eagle,
through a special purpose subsidiary, Golden Eagle Funding Corp., issued $32
million of contract-backed term notes ("the Notes"). The Notes are
collateralized by equipment leases acquired from Golden Eagle, security interest
in the leased equipment, cash collateral and reserve accounts, as well as other
contractual rights and residual proceeds. Proceeds from the Notes were used to
payoff existing Golden Eagle debt facilities, including $4.1 million, which was
paid against Hypercom's revolving credit facility. The Notes bear interest at an
annual rate of 8.58%. Principal and interest are payable on a monthly basis
until maturity on November 16, 2006. The principal balance outstanding on the
Notes at September 30, 2001 was $27.9 million.

On June 4th, 2001, the Company entered into loan agreements with individual
investors for an aggregate sum of $3.4 million bearing interest at 7.5% per
annum. Proceeds from the loans were limited for the purpose of buying inventory
components and other inventory raw materials. The loans were convertible into
common stock at $3.16 per share. On July 30, 2001 the individual investors
elected to convert their $3.4 million in loans, plus accrued interest, into
1,088,342 shares of the Company's common stock, at $3.16 per share.

Concurrent with the individual investor loan agreements, the Company entered
into Stock Warrant agreements (Series B) whereby the individual investors can
buy an aggregate of 460,000 shares of the Company's common stock at an exercise
price of $3.16 per share. The stock warrants have a term of two years. The
estimated fair value of the Series B stock warrants at the date issued was $1.44
per share using a Black-Scholes option pricing model. The total fair value of
these stock warrants of $0.7 million was recorded as additional paid in capital
and loan discount. Amortization of the loan discount, in the amount of $0.4
million and $0.7 million, has been charged to interest expense during the
quarter and nine months ended September 30, 2001, respectively.

On June 6th, 2001, the Company entered into a $15 million loan agreement with a
bridge investor, who is a shareholder of one of the Company's largest customers.
The loan had a one-year term with interest at 7.5% per annum. Proceeds from the
loan were used to pay trade creditors and the Company's principal lending group.
On July 31, 2001, the bridge investor purchased 2,475,248 shares of the
Company's common stock for $7.5 million through a reduction in the Company's
note payable balance by the same amount. Concurrently with the sale of these
shares, the Company repaid the remaining balance of the note, of $7.5 million
out of funds from the Company's new credit facility discussed further in this
Note.


                                       8
<PAGE>
Concurrent with the bridge investor loan agreement, the Company entered into a
Stock Warrant agreement (Series A). In accordance with the Stock Warrant
agreement, the bridge investor has a stock warrant to purchase 1,000,000 shares
of the Company's common stock, at an exercise price of $3.19 expiring June 6,
2003. The estimated fair value of the stock warrant to purchase 1,000,000 shares
of the Company's common stock, at the date issued, was $1.36 per share using a
Black-Scholes option pricing model. The total fair value of the stock warrant,
of $1.4 million was recorded as additional paid in capital and loan discount.
Amortization of the loan discount, in the amount of $0.7 million and $1.4
million, has been charged to interest expense during the quarter and nine months
ended September 30, 2001, respectively.

In addition, on July 30, 2001, additional individual investors, as well as
certain individual investors who converted their loans to stock, purchased
1,745,201 shares of the Company's common stock for $7.5 million, at $4.2975 per
share.

On August 2, 2001, the Company closed and received funding from a $45 million
credit facility with a new lending group. The credit facility includes a
revolving line of credit of $25 million and two separate term loans for $5
million and $15 million respectively. Borrowings under the revolving line of
credit are based primarily on inventory and accounts receivable levels. Proceeds
from the financing package were used to pay off the existing primary lending
group, as well as the remaining unpaid principal owed to the bridge investor.

The revolving line of credit, which has a term of three years, bears interest at
the greater of 8% per annum or the prime rate plus 2%, if amounts are
outstanding under the term loans, or the prime rate plus 1% if there are no
amounts outstanding under the term loans, and includes a $6 million letter of
credit sub-facility. The $5 million term loan bears interest at the greater of
10% per annum or the prime rate plus 3%. The $5 million term loan is repayable
in six principal installments of $833,333, with the first installment due on the
seventh month following closing, and matures one year after closing. The $15
million term loan bears interest at the greater of 14% per annum or the prime
rate plus 7%. The $15 million term loan is repayable in $250,000 principal
installments, with the first installment due on the thirteenth month following
closing, and matures three years after closing. At September 30, 2001, the prime
rate used to compute interest rates under the new credit facility was 6.0%.

Under the covenant provisions of the new credit facility, the Company has agreed
to, among other things, maintain certain specified financial ratios and
consolidated net worth, not make certain distributions with respect to the
Company's capital stock (including cash dividends), not make certain investments
and not allow subsidiaries to incur certain types and amounts of debt. In
particular, subject to special exceptions, these covenants prohibit the Company
from:

         -        incurring any additional indebtedness;

         -        incurring or permitting to exist any additional liens on the
                  Company's assets;

         -        engaging in a change of control transaction or other
                  fundamental change, such as a merger, recapitalization or
                  liquidation;

         -        disposing of the Company's assets, including equipment and
                  inventory, outside the ordinary course of business;

         -        prepaying or modifying the terms of the Company's existing
                  indebtedness, except in connection with a permitted financing;

         -        redeeming, repurchasing or paying dividends or other
                  distributions on the Company's capital stock;

         -        engaging in certain transactions with the Company's
                  affiliates;

         -        failing to maintain specified levels of EBITDA and tangible
                  net worth and ratios of senior debt and total debt to EBITDA;
                  and

         -        issuing or selling any prohibited preferred stock.

On November 13, 2001, the Company entered into a modification of certain of its
loan covenants, including the minimum EBITDA requirements, to take into
consideration the temporary impact of delayed shipments as a result of the
September 11, 2001 terrorist attacks. The delay in shipments resulted in a
shortfall under the EBITDA covenants for the quarter ended September 30, 2001.
The modification disregards the EBITDA requirement for the period ending
September 30, 2001, and sets forth new


                                       9
<PAGE>
monthly minimum EBITDA targets for both October and November of 2001. In
addition, on October 3, 2001, the Company amended its loan agreement to finalize
the monthly expense levels permitted under the new credit facility.

In connection with obtaining the new credit facility, the Company issued Series
C and D stock purchase warrants, both of which expire in 5 years. The Series C
warrant entitles the holder to purchase an initial 375,000 shares of the
Company's common stock at an exercise price of $4.00. Additionally, the Series C
warrant holder is entitled to purchase, at an exercise price of $4.00, 350,000
shares at every six-month anniversary of the issue date of the term loans while
there remain amounts outstanding under the term loans. The estimated fair value
of the Series C stock warrant to purchase 375,000 shares of the Company's common
stock, at the date issued, was $2.64 per share using a Black-Scholes option
pricing model. The fair value of the Series C stock warrant to purchase 375,000
shares of the Company's common stock, of $1.0 million was recorded as additional
paid in capital and loan discount. Amortization of the loan discount is recorded
in interest expense over a three-year term. At each six-month interval, while
amounts remain outstanding under the term loans, the Company will determine the
fair value of the additional stock warrant shares and amortize the fair value of
such shares into interest expense over six-month intervals.

The Series D warrant holder is entitled to purchase 312,477 shares of the
Company's common stock at an exercise price of $5.33, with such warrants being
issued as part of a fee for acting as placement agent in the above mentioned new
credit facility. In addition to the warrants, a cash fee of $2.5 million was
also paid and recorded as debt issuance costs. The estimated fair value of the
Series D stock warrant to purchase 312,477 shares of the Company's common stock,
at the date issued, was $2.24 per share using a Black-Scholes option pricing
model. The fair value of the Series D stock warrant, of $0.7 million was
recorded as additional paid in capital and debt issuance costs. Amortization of
the debt issuance costs, including the fair value of the Series D stock warrant
and the cash fee paid, is recorded in interest expense proportionately based on
the various terms of the new credit facility.

NOTE 8 - RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2001, the Company entered into loan
agreements as amended and restated, with a director and stockholder of the
Company in the aggregate amount of $1.6 million. The loans bear interest at 12%
annually, and are due January 31, 2003.

NOTE 9 - NEW PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards (SFAS) No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets, effective for fiscal years beginning
after December 15, 2001. Under the new rules, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized but will be subject
to annual impairment tests in accordance with the statements. Other intangible
assets will continue to be amortized over their useful lives. The Company is
currently reviewing the impact of SFAS Nos. 141 and 142 and will be performing a
fair-value analysis at a later date in connection with the adoption of SFAS No.
142 on January 1, 2002.

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

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of 1995. Words such
as "believe", "expect", "intend", "anticipate", "estimate", "project", and
similar expressions identify forward-looking statements, which speak only as of
the date the statement was made. These forward-looking statements may include,
but not be limited to, projections of revenue or net income and issues that may
affect revenue or net income, projections of capital expenditures, plans for
future operations, products or services, financing needs of the Company, and
economic conditions, as well as assumptions relating to the foregoing.

Forward-looking statements are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified. Future events and actual
results could differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. Statements in this Quarterly Report,
including the Notes To The Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
describe factors, among others, that could contribute to or cause such
differences. Additional risk factors that could cause actual results to differ
materially from those expressed in such forward-looking statements, and that
could affect the Company's results of operations and financial position
generally, are set forth in Exhibit 99.1, which is attached hereto and
incorporated by reference into this Quarterly Report on Form 10-Q. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new


                                       10
<PAGE>
information, future events, or otherwise.

RESULTS OF OPERATIONS

NET REVENUE

Net revenue for the three-month period ended September 30, 2001, decreased $4.9
million or 6.5% to $71.0 million from $75.9 million in the three months ended
September 30, 2000. This decrease was principally due to delays in the receipt
of components resulting from the tragic events of September 11, 2001. Such
delays resulted in the Company temporarily being unable to fulfill approximately
$12.3 million in customer orders in Brazil. Such orders will be shipped
primarily in the fourth quarter of 2001.

Net revenue for the nine-month period ended September 30, 2001, decreased $25.9
million or 10.7% to $217.2 million from $243.1 million in the nine-month period
ended September 30, 2000. This decrease was principally due to the Company's
temporary inability to fulfill orders as noted in the preceding paragraph, and
the timing of several large Latin America orders in the nine-month period ended
September 30, 2000, which did not recur in 2001.

Net revenues from services activities, principally derived from POS support
services, comprised less than 10% of total net revenue in both the three and
nine months ended September 30, 2001, and September 30, 2000, respectively. Our
only revenues from long-term contracts in these periods were derived from our
contract with the Brazilian Health Ministry, which commenced in the second half
of 2000. Net revenues from this contract amounted to less than 10% of total net
revenue in both the three and nine months ended September 30, 2001 and September
30, 2000, respectively.

COST OF REVENUE

Hypercom's cost of revenue includes the cost of raw materials, manufacturing
labor, overhead and subcontracted manufacturing costs, as well as interest
expense with respect to direct financing leases. The costs of revenue for the
three-month period ended September 30, 2001 decreased $13.2 million or 22.8% to
$44.7 million from $57.9 million in the three months ended September 30, 2000.
Gross margin increased $8.4 million for the three-month period ended September
30, 2001, compared to the same period in the prior year. For the nine-month
period ended September 2001, costs of revenue decreased $17.2 million or 10.9%
to $139.9 million from $157.1 million in the nine-month period ended September
30, 2000. Gross margin decreased $8.7 million for the nine-month period ended
September 30, 2001, compared to the same period in the prior year.

As a percentage of revenue, gross margin increased from 23.7% in the
three-months ended September 30, 2000 to 37.1% for the three months ended
September 30, 2001. This increase is primarily attributed to improved
manufacturing efforts and the related stabilization of the interactive consumer
environment (ICE) product family and factors affecting the quarter ended
September 30, 2000, which did not recur during the quarter ended September 30,
2001.

The Company experienced increased manufacturing costs during the quarter ended
September 30, 2000 due to greater than anticipated manufacturing volumes in the
U.S. versus China, transition costs of moving the production for the ICE product
family to China, higher component costs resulting from increased purchases from
distributors, which offer extended credit terms, but higher prices, and cost
related to reworking and stabilizing the new screen based family of terminals.
These increased manufacturing costs amounted to approximately $1.4 million.
During the quarter ended September 30, 2001, the Company was in full production
of the ICE product family in China, has shifted away from purchases with
distributors and experienced less rework as the ICE product continues to
stabilize.

During the quarter ended September, 30, 2000, the Company increased its warranty
reserves in the amount of $2.4 million primarily in connection with higher sales
of the Company's new ICE product family, which at that point was early in the
life cycle of the product. During the quarter ended September 30, 2001, it was
not necessary to increase reserves due to the continued stabilization of the ICE
product family.

Further, the gross margin of the Company's equipment leasing segment increased
from 28.4% for the quarter ended September 30, 2000, to 38.5% for the quarter
ended September 30, 2001 on approximately $6.9 million in revenue for both
quarters. The primary factor contributing to this increase is a better mix of
higher credit leases and lower borrowing rates. This increase resulted in an
additional $0.7 million in gross margin.


                                       11
<PAGE>
As a percentage of revenue, gross margin increased from 35.4% in the nine-months
ended September 30, 2000 to 35.6% for the nine-months ended September 30, 2001.
This increase was primarily attributed to the stabilization of the ICE product
family during 2001. During the nine months ended September 30, 2000, the Company
experienced margins of approximately 41% through June 30, 2000 due to a larger
portion of sales from the higher margin legacy products. This higher margin
through June 30, 2000 was offset during the third quarter of 2000 by the shift
in product mix toward the ICE product and other factors discussed in the
preceding paragraphs, thereby reducing the margin for the nine months ended
September 30, 2000 to 35.4%.


RESEARCH AND DEVELOPMENT

Research and development expenses consist mainly of software and hardware
engineering costs and the cost of development personnel. Research and
development expenses for the quarter ended September 30, 2001 decreased $3.3
million or 32.0% to $7.0 million from $10.3 million in the quarter ended
September 30, 2000, and for the nine-months ended September 30, 2001 decreased
$9.3 million or 29.4% to $22.3 million from $31.6 million in the nine-months
ended September 30, 2000. This decrease was directly attributable to our cost
cutting efforts of reducing personnel and curtailing spending for research and
development materials. Since substantially all development activities related to
the introduction of the ICE product family and the ePic initiative were
completed in 2000, the overall level of research and development activities has
been reduced. Present development activities are primarily focusing on reducing
the component costs of existing product and to a much lesser extent, new product
introductions.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Sales and marketing expenses, administrative personnel costs, and facilities
operations make up the selling, general and administrative expenses. These
expenses totaled $19.1 million for the quarter ended September 30, 2001,
compared to $25.5 million for the comparative quarter in the prior year. This
$6.4 million or 25.1% decrease is attributable to worldwide cost containment
measures and the decreased revenue relative to the same quarter in the prior
year, which results in lower sales commissions.

Selling, general and administrative expenses for the nine-month period ended
September 30, 2001 decreased $3.6 million or 5.0% to $68.6 million from $72.2
million in the nine-month period ended September 30, 2000. This decrease was
also the result of cost containment efforts and lower sales commission expenses.

SPECIAL DIRECT FINANCING LEASE PROVISION

During the quarter ended March 31, 2001, the Company's Equipment Leasing segment
recorded an incremental charge to strengthen credit reserves for certain
segments of its lease receivables in the amount of $7.2 million in addition to
its normal provision. This charge represents management's estimate of potential
loan losses that exceed its historical rate of loan losses.

The following factors contributed to Golden Eagle's decision in the first
quarter of 2001 to strengthen credit reserves:

         -        We identified several new vendor programs that were
                  established in 2000, and contributed significantly to funding
                  volume in 2000, which were experiencing losses at higher
                  levels than historic loss levels for other vendor programs.
                  These programs involved independent sales organizations
                  providing additional services to the merchants (lessees) as
                  part of the lease program. If service levels were not as the
                  merchants expected, the likelihood of their making required
                  lease payments is reduced. Losses for these programs began to
                  exceed historical levels for the quarter ended March 31, 2001;

         -        Leases funded for electronic payments software, such as
                  payment software loaded into a personal computer without the
                  need for a terminal, were at higher funding levels in 2000
                  than in previous years. Performance on these leases worsened
                  in the first quarter of 2001;

         -        The overall credit mix of the portfolio was slightly skewed (a
                  few percentage points) toward higher risk credits, commonly
                  described as C and D rated credits. C and D credit leases
                  booked in the year 2000 appeared to be performing
                  significantly worse than C and D credits in previous years as
                  we analyzed activity through March 31, 2001; and

         -        The overall softening of the economy at the start of 2001,
                  coupled with the results of our analysis of collection status
                  and default trends as of March 31, 2001, also contributed to
                  the conclusion that the increase in reserves would be
                  appropriate.


                                       12
<PAGE>
Continued losses that exceed historical trends could result in the substantial
impairment of Golden Eagle's goodwill, which amounted to $20.7 million, net as
of September 30, 2001.

LOSS FROM OPERATIONS

Income from operations for the quarter ended September 30, 2001 increased $18.0
million to $0.2 million compared to a loss of $17.8 million for the same quarter
in the prior year. The increase resulted primarily from the gross margin
improvement and expense reductions when compared to the same quarter of the
prior year.

For the nine-months ended September 30, 2001 the loss from operations of $13.6
million compares to a loss of $17.8 million for the same period in the prior
year. This improvement results primarily from reductions in research and
development and selling, general and administrative expenses of $20.0 million
offset by the special direct financing lease provision of $7.2 million and lower
revenues, resulting in a decrease in gross margin of $8.7 million.

NET INTEREST, FOREIGN CURRENCY LOSSES AND OTHER ITEMS

Interest and other income of $0.1 and $0.5 million for the three and nine-month
periods ended September 30, 2001, respectively consisted primarily of returns on
short and long-term investments. The Company incurred interest and other expense
of $3.4 million during the quarter ended September 30, 2001, which consisted
primarily of interest expense of $2.9 million on borrowings for notes payable,
long-term debt, and amortization of loan discounts from warrants issued. Other
expenses in the amount of $0.5 million consisted primarily of charges associated
with the requirements under the debt forbearance agreements and other related
costs associated with being in default with its lenders. Interest and other
expense for the nine-month period ended September 30, 2001 of $9.5 million
consisted of the same items noted above for the whole nine month period, as well
as amortization of a beneficial conversion feature on convertible notes payable,
whereas the nine-month period ended September 30, 2000 consisted principally of
non-default interest on long-term debt. Foreign currency gain of $0.1 million
during the three-month period ended September 30, 2001, resulted principally
from the favorable translation of its net foreign investments in the United
Kingdom which offset losses in Brazil.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations primarily through cash
generated from operations and from borrowings under a line of credit. The
Company has also used securitization conduits to finance lease receivables
generated by its Golden Eagle Leasing subsidiary, as well as borrowings under
notes payable to fund working capital requirements and reduce its bank debt.

As a result of the Company's efforts to cut costs and increase cash flows, cash
flows from operations improved from a negative $40.5 million in the nine-month
period ended September 30, 2000, to a positive cash flow from operations of $6.7
million for the nine-month period ended September 30, 2001. This improvement was
primarily a result of cuts in research and development expenses and reductions
in inventory balances. At September 30, 2001, we had accounts receivable of
$83.7 million, an increase of $4.7 million over the balance at December 31, 2000
of $79 million. This increase was primarily the result of receivables on our
Brazilian Health Ministry contract in September 2001 in the amount of $11.6
million compared to approximately $2.6 million receivable on the same contract
at December 31, 2000. During the nine months ended September 30, 2001, and as a
result of nearing the completion of the delivery stages of this contract, we
attained scheduled performance milestones under the Brazilian contract at the
end of June 30, 2001, well above the level that existed at December 31, 2000.
Such performance milestones are based on approval from the Brazilian Health
Ministry, after full delivery of products and services for each scheduled
performance milestone. Payment is generally received within four months after
such approval. Excluding the net increase in accounts receivable of $9.0 million
attributed to the Brazilian contract, accounts receivable decreased $4.3 million
as a result of our emphasis on lowering accounts receivable balances through
stricter enforcement of credit policies and increased collection efforts.
Payment terms on our terminal product sales generally range from net 30 to 60
days depending on the circumstances of each order. The Company used $6.2 million
in investing activities. Long-term debt decreased $28.3 million to $72.1 million
at September 30, 2001, from $100.4 million at December 31, 2000. Working capital
and cash was $132.1 million and $8.8 million at September 30, 2001, compared to
$75.2 and $13.0 million at December 31, 2000, respectively.


                                       13
<PAGE>
Capital expenditures totaled $1.6 million for the nine months ended September
30, 2001, compared to $9.4 million for the nine months ended September 30, 2000.
Depreciation expense was $7.3 million and $5.5 million for the nine months ended
September 30, 2001 and 2000, respectively.

Credit Agreements and Liquidity Concerns

During May, June, July and August of 2001, the Company completed a series of
financing transactions as follows;

On May 24, 2001, Golden Eagle securitized approximately $45 million of its
equipment leases (based on total discounted contract balances at the closing
date). The securitization was accomplished through the sale by Golden Eagle of
these receivables to a newly formed bankruptcy remote company, Golden Eagle
Funding Corp. ("GEF"). GEF issued notes in the principal amount of approximately
$32 million which are secured by the lease receivables. The interest rate on the
notes is 8.58 % per annum and the notes mature on November 16, 2006.

On June 6, 2001, the Company entered into certain interim financing arrangements
pending the completion of the refinancing of the Company's credit facilities.
The Company borrowed $15 million from Michelle Investments LLC, a shareholder of
one of the Company's significant customers, pursuant to a Loan and Security
Agreement. The loan bore interest at 7.5% per annum and had a maturity date of
June 6, 2002. In connection with the Michelle Investments loan, the Company
granted to Michelle Investments a Series A Warrant to purchase up to 1,000,000
shares of the Company's common stock, subject to certain adjustments, at an
exercise price of $3.19 per share. In July 2001, the Company and Michelle
Investments entered into a Stock Purchase Agreement under which Michelle
Investments purchased 2,475,248 shares of the Company's common stock at a price
of $3.03 per share. Michelle Investments paid for the stock through a $7.5
million reduction of the outstanding balance under this loan. Concurrently with
the issuance of these shares to Michelle Investments, the Company repaid the
remaining balance of the loan out of funds available under the Company's new
credit facility.

Also on June 6, 2001, the Company borrowed an aggregate of $3.4 million from a
group of eight investors pursuant to a Loan Agreement. The loans bore interest
at 7.5% per annum and had a maturity date of September 5, 2001. The promissory
notes evidencing the loans are convertible into shares of the Company's common
stock at a conversion rate of $3.16 per share. In connection with this
borrowing, the Company issued to the lenders Series B Warrants to purchase up to
460,000 shares of the Company's common stock in the aggregate at an exercise
price of $3.16 per share. In July 2001, all of the notes, plus accrued interest,
were converted into an aggregate of 1,088,342 shares of common stock. In
addition, the Company entered into a Stock Purchase Agreement with several
investors, including four of the Series B Warrant holders, under which they
purchased an aggregate of 1,745,201 shares of common stock at a price of $4.2975
per share.

As a condition to obtaining forebearance from the Company's principal lenders
under pre-existing loan agreements, and to secure the $3.4 million in loans
above, George Wallner, Chairman and Chief Strategist and a principal
stockholder, agreed to loan the Company $3.1 million and to subordinate these
loans to the Company's other indebtedness, including the Company's new lending
facility.

On August 2, 2001, the Company replaced its principal credit facility with a new
$45 million senior secured credit facility comprised of a $25 million revolving
credit facility and two separate term loans for $5 million and $15 million. The
maximum borrowing capacity under this facility is based on inventory and
receivables levels and other factors. The borrowers under the new credit
facility are the Company and seven of its domestic subsidiaries, and the
guarantors consist of Golden Eagle and two of the Company's foreign
subsidiaries.

The revolving credit facility, which has a term of three years, bears interest
at the greater of 8% per annum or the prime rate plus 2%, or prime rate plus 1%
if no amounts are outstanding on the term loans, and includes a $6 million
letter of credit sub-facility. The $5 million term loan bears interest at the
greater of 10% per annum or the prime rate plus 3%. The $5 million term loan is
repayable in six principal installments of $833,333, with the first installment
due on the seventh month following closing, and matures one year after closing.
The $15 million term loan bears interest at the greater of 14% per annum or the
prime rate plus 7%. The $15 million term loan is repayable in $250,000 principal
installments, with the first installment due on the thirteenth month following
closing, and matures three years after closing. At September 30, 2001, the prime
rate used to compute interest rates under the new credit facility was 6.00%.

Under the covenant provisions of the new credit facility, Hypercom has agreed
to, among other things, maintain certain specified financial ratios and
consolidated net worth, not make certain distributions with respect to the
Company's capital stock (including


                                       14
<PAGE>
cash dividends), not make certain investments and not allow the Company's
subsidiaries to incur certain types and amounts of debt.

On November 13, 2001, the Company entered into a modification of certain of its
loan covenants, including the minimum EBITDA requirements, to take into
consideration the temporary impact of delayed shipments as a result of the
September 11, 2001 terrorist attacks. The delay in shipments resulted in a
shortfall under the EBITDA covenants for the quarter ended September 30, 2001.
The modification disregards the EBITDA requirement for the period ending
September 30, 2001, and sets forth new monthly minimum EBITDA targets for both
October and November of 2001. In addition, on October 3, 2001, the Company
amended its loan agreement to finalize the monthly expense levels permitted
under the new credit facility.

Due to the high cost of funds and the maturity date of a portion of the debt
under the new credit facility, the Company anticipates refinancing all or a
portion of this indebtedness within the next 9 months. The Company may seek to
refinance the new senior credit facility by obtaining additional capital from
current or third party sources. The Company's ability to obtain additional
capital is dependent upon future operating performance, general economic and
competitive conditions and financial, business and other factors, many of which
the Company cannot control. The Company's inability to obtain additional capital
could place the Company in default under its principal credit agreement or
otherwise have an adverse effect on the Company's business and stock price.

As partial consideration for the senior secured credit facility, the Company
issued to one of its lenders, Ableco Finance LLC, a Series C Warrant to purchase
up to 375,000 shares of common stock at an exercise price of $4.00 per share.
The Series C Warrant is exercisable over a period of five years. The Series C
Warrant may be exercised, at the same exercise price, for either an additional
350,000 shares at every six-month anniversary of the issue date of the term
loans while there remain amounts outstanding under the term loans. The Company
also paid to Roth Capital Partners LLC, which assisted in obtaining the new
credit facility, a fee of $2.5 million and issued to it a Series D Warrant to
purchase up to 312,477 shares of the Company's common stock at an exercise price
of $5.33 per share. The Series D Warrant is exercisable over a period of five
years. This fee and the value of the Series C and D Warrants will be amortized
as part of the loan costs, and effectively increase the interest rate.

The Company continues to accelerate cash generation through aggressively
pursuing collection of trade receivables, reducing inventories and reducing
costs.

BACKLOG

As of September 30, 2001, Hypercom had backlog of $158.2 million, compared to
$157 million at the same date in 2000.

The Company includes in its backlog all revenue specified in signed contracts
and purchaser orders to the extent that the Company contemplates recognition of
the related revenue within one year. There can be no assurance that the
contracts included in backlog will actually generate the specified revenues or
that the actual revenues will be generated within the one-year period.


                                       15
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Hypercom is exposed to financial market risks, including changes in interest
rates and foreign currency exchange rates. Nevertheless, the fair value of
Hypercom's investment portfolio or related income would not be significantly
impacted by either a 100 basis point increase or decrease in interest rates, due
primarily to the short-term nature of the major portion of Hypercom's investment
portfolio.

A substantial portion of Hypercom's revenue and capital spending is transacted
in U.S. dollars. However, Hypercom does at times enter into these transactions
in other currencies, such as the Hong Kong dollar, Australian dollar, Brazilian
Real and other Asian and European currencies. Hypercom has, from time to time,
established revenue and balance sheet hedging programs to protect against
reductions in value and cash flow volatility caused by changes in foreign
exchange rates. Such programs are intended to reduce market risks, but do not
always eliminate the impact of foreign currency exchange volatility. The Company
incurred translation gain of $0.1 million during the quarter ended September 30,
2001, principally from the favorable translation of its net foreign investments
in the United Kingdom, which offset losses in Brazil.

Hypercom does not purchase or hold any derivative financial instruments for the
purpose of speculation or arbitrage. See information/discussion appearing in
subcaption "Risks Associated with International Operations and Foreign Currency
Fluctuations" of "CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND
RISK FACTORS" set forth in Exhibit 99.1, attached hereto.


                                       16
<PAGE>
PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

See Item 3 of Part I of Hypercom's Form 10-K for the year ended December 31,
2000, for disclosures regarding pending matters.

Arbitration Matter:

On September 21, 2001, the Company received a demand for arbitration from
Leonard Friedlander and Lawrence Lawler, Jr., sellers of a microticket leasing
business acquired by the Company in January 2000 (operated now as a Company
subsidiary, Golden Eagle Leasing Financial, Inc.). They have alleged violations
of the earn-out provisions of the purchase and sale agreement, and their
employment contracts, and seek millions of dollars in cash and stock. The
Company believes these claims are without merit and intends to vigorously defend
them. No assurance can be made as to the ultimate outcome.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (c) Pursuant to Item 701 (a)-(e) of Regulation S-K, the following
information is provided as to all equity securities of Hypercom Corporation
issued by the Company during the period covered by this report that were not
registered under the Securities Act of 1933, as amended, and have not been
previously reported in a quarterly report on Form 10-Q, or on an annual report
on Form 10-K.

1.       On July 31, 2001, as partial placement fee related to the senior
         secured credit facility, the Company issued to Roth Capital Partners
         LLC, a Series D Warrant to purchase up to 312,477 shares of the
         Company's common stock at an exercise price of $5.33 per share. The
         Series D Warrant is exercisable over a period of five years.

2.       On August 2, 2001, as partial consideration for the senior secured
         credit facility, the Company issued to one of its lenders, Ableco
         Finance LLC, a Series C warrant to purchase up to 375,000 shares of
         common stock at an exercise price of $4.00 per share. The Series C
         warrant is exercisable over a period of five years. The Series C
         Warrant may be exercised, at the same exercise price, for an additional
         350,000 shares at every six-month anniversary of the issue date of the
         term loans while there remains amounts outstanding under the term
         loans.

See Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for additional information on these transactions.

The foregoing transactions were effected pursuant to Section 4(2) of the
Securities Act of 1933, governing non-public transactions.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits


<TABLE>
<CAPTION>
EXHIBIT NUMBER      DESCRIPTION OF EXHIBIT
<S>                 <C>
     3.1*           Amended and Restated Certificate of Incorporation of
                    the Company.

     3.2*           Amended and Restated Bylaws of the Company.

     4*             Amended and Restated Certificate of Incorporation of
                    the Company.

    10.1            Amendment No. One dated October 3, 2001, to Loan and
                    Security Agreement dated July 31, 2001, by and among
                    Hypercom Corporation, its subsidiaries and Foothill
                    Capital Corporation.

    10.2            Amendment No. Two dated November 13, 2001, to Loan and
                    Security Agreement dated July 31, 2001, by and among
                    Hypercom Corporation, its subsidiaries and Foothill
                    Capital Corporation.

    11.1            Statement re Computation of Per Share Earnings.
</TABLE>


                                       17
<PAGE>
<TABLE>
<S>                 <C>
    99.1            Cautionary Statement Regarding Forward-Looking
                    Statements and Risk Factors.
</TABLE>

* Incorporated by reference to the Company's Registration Statement on Form S-1.
  (Registration Statement No. 333-35641).

(b) The Company filed Form 8-K's as follows:

    -   July 30, 2001, re: New credit facility and privately-placed common
        equity.



                                       18
<PAGE>
SIGNATURES

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

HYPERCOM CORPORATION

Date: November 13, 2001              By: /s/ Jonathon E. Killmer
                                     ---------------------------
                                     Jonathon E. Killmer

                                     Executive Vice President, Chief Financial
                                     Officer, Chief Operating Officer and Chief
                                     Administrative Officer (duly authorized
                                     officer and Principal Financial Officer)


                                       19
<PAGE>
                               Index to Exhibits

<TABLE>
<CAPTION>
EXHIBIT NUMBER      DESCRIPTION OF EXHIBIT
<S>                 <C>
     3.1*           Amended and Restated Certificate of Incorporation of
                    the Company.

     3.2*           Amended and Restated Bylaws of the Company.

     4*             Amended and Restated Certificate of Incorporation of
                    the Company.

    10.1            Amendment No. One dated October 3, 2001, to Loan and
                    Security Agreement dated July 31, 2001, by and among
                    Hypercom Corporation, its subsidiaries and Foothill
                    Capital Corporation.

    10.2            Amendment No. Two dated November 13, 2001, to Loan and
                    Security Agreement dated July 31, 2001, by and among
                    Hypercom Corporation, its subsidiaries and Foothill
                    Capital Corporation.

    11.1            Statement re Computation of Per Share Earnings.

    99.1            Cautionary Statement Regarding Forward-Looking
                    Statements and Risk Factors.
</TABLE>

* Incorporated by reference to the Company's Registration Statement on Form S-1.
  (Registration Statement No. 333-35641).