<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                      For the quarter ended April 30, 2002

                                       OR

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

              For the transition period

Commission File Number 0-19726

                                  TELYNX, INC.
        (Exact name of small business issuer as specified in its charter)

                          Delaware                    94-3022377
              (State or other jurisdiction         (I.R.S. Employer
             of incorporation or organization)   Identification Number)

                        6006 North Mesa Street, Suite 600
                              El Paso, Texas 79912
                    (Address of principal executive offices)

                                 (915) 581-5828
                           (Issuer's telephone number)

 Check whether the issuer (1) 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

As of May 31, 2002, 319,611,000 shares of Class A Common Stock, no shares of
Class B Common Stock, and no shares of Series B Convertible Preferred Stock were
outstanding.

                                        1

<PAGE>

                                  TELYNX, INC.

                                   Form 10-QSB

                                      INDEX

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                             Number
                                                                                             ------
<S>                                                                                          <C>
Part I    Financial Information

          Item 1                 Financial Statements

                                 Condensed Consolidated Balance Sheets as of April 30,
                                 2002 (unaudited) and October 31, 2001 (audited)                3

                                 Condensed Consolidated Statements of Operations for
                                 the three and six months ended April 30, 2002 and 2001
                                 (unaudited)                                                    4

                                 Condensed Consolidated Statements of Cash Flows for
                                 the six months ended April 30, 2002 and 2001
                                 (unaudited)                                                    5

                                 Notes to Consolidated Financial Statements                     6


          Item 2                 Management's Discussion and Analysis of Financial
                                 Condition and Results of Operations                            8

Part II   Other Information                                                                    11

          Item 1                 Legal Proceedings                                             11
          Item 2                 Changes in Securities                                         11
          Item 3                 Defaults upon Senior Securities                               11
          Item 4                 Submission of Matters to a Vote of Security Holders           11
          Item 5                 Other Information                                             11
          Item 6                 Exhibits and Reports on Form 8-K                              11


Signature                                                                                      12
</TABLE>

                                        2

<PAGE>

                                  TELYNX, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                April 30        October 31
                                                                                  2002             2001
                                                                              --------------  --------------
                                                                               (Unaudited)      (Audited)
<S>                                                                            <C>             <C>
ASSETS
Current assets:
 Cash and cash equivalents                                                     $     13,000    $    130,000
 Accounts receivable                                                                611,000         467,000
 Prepaids and deposits                                                               76,000          51,000
                                                                               ------------    ------------

    Total current assets                                                            700,000         648,000

Deferred finance cost, net                                                          138,000         154,000

Property and equipment, net                                                          27,000          34,000
                                                                               ------------    ------------
     Total assets                                                              $    865,000    $    836,000
                                                                               ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
 Accounts payable and accrued liabilities                                      $  4,079,000    $  3,897,000
 Accrued payroll                                                                    495,000         313,000
 Notes payable to stockholders                                                      463,000         463,000
 Payable to investor                                                                250,000         250,000
 Current convertible notes payable to investors                                      55,000               0
 Deferred revenue                                                                         0          14,000
                                                                               ------------    ------------

 Total current liabilities                                                        5,342,000       4,937,000

Convertible notes payable to investors                                              718,000         582,000

 Stockholders' deficit:
 Preferred stock, $0.01 par value - no shares issued and
   outstanding at April 30, 2002: 500 shares issued  and outstanding at
   October 31, 2001                                                                      --              --
 Common stock, $0.01 par value - 1,005,000,000 authorized;
  286,165,104 shares issued and outstanding at April 30, 2002;
  200,165,277 shares issued and outstanding at October 31, 2001                   2,862,000       2,002,000


Paid in capital                                                                  31,664,000      31,966,000

Accumulated deficit                                                             (39,721,000)    (38,651,000)
                                                                               ------------    ------------

      Total stockholders' deficit                                                (5,195,000)     (4,683,000)
                                                                               ------------    ------------
      Total liabilities and stockholders' deficit                              $    865,000    $    836,000
                                                                               ============    ============
</TABLE>

      See Notes to Condensed Consolidated Financial Statements (unaudited).

                                        3

<PAGE>

                                  TELYNX, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended                     Six Months Ended
                                                         April 30                              April 30
                                                         --------                              --------
                                                    2002             2001             2002             2001
                                                    ----             ----             ----             ----
<S>                                           <C>              <C>              <C>              <C>
Revenue                                       $           0    $     205,000    $     479,000    $     285,000

Cost of revenue                                           0           28,000           95,000           28,000
                                              -------------    -------------    -------------    -------------

  Gross margin                                            0          177,000          384,000          257,000

Operating expenses:
  Sales and marketing                               155,000          210,000          218,000          652,000
  Services                                           38,000          142,000           97,000          326,000
  Research and development                          100,000          242,000          156,000          472,000
  General and administrative expenses               176,000          841,000          614,000        1,741,000
                                              -------------    -------------    -------------    -------------

     Total operating expenses                       469,000        1,435,000        1,085,000        3,191,000


Loss from operations                               (469,000)      (1,258,000)        (701,000)      (2,934,000)

Other income (expense):
  Interest income                                        --               --               --               --
  Interest expense                                 (152,000)        (458,000)        (369,000)      (1,140,000)
                                              -------------    -------------    -------------    -------------

Total other expense                                (152,000)        (458,000)        (369,000)      (1,140,000)
                                              -------------    -------------    -------------    -------------

Net loss                                      $    (621,000)   $  (1,716,000)   $  (1,070,000)   $  (4,074,000)
                                              -------------    -------------    -------------    -------------

Basic and diluted net loss per Common share   $        0.00           ($0.02)          ($0.01)          ($0.08)
                                              =============    =============    =============    =============

Weighted average shares outstanding             223,552,962       69,689,681      213,215,023       48,800,405
                                              =============    =============    =============    =============
</TABLE>

      See Notes to Condensed Consolidated Financial Statements (unaudited).


                                       4

<PAGE>

                               TELYNX, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         Six Months Ended
                                                                             April 30
                                                                             --------
                                                                      2002           2001
                                                                      ----           ----
<S>                                                               <C>            <C>
Cash flows from operating activities:
  Net loss                                                        $(1,070,000)   $(4,074,000)
  Adjustments to reconcile net loss to cash used in operations:
    Depreciation and amortization                                      44,000         45,000
    Beneficial conversion cost of convertible debt and warrants       277,000      1,173,000
    Expenses and settlements paid with equity                         344,000         91,000
    Changes in assets and liabilities:
    Receivables                                                      (144,000)       182,000
    Prepaid expenses                                                  (25,000)        52,000
    Accounts payable and accrued liabilities                          364,000        970,000
    Deferred revenue                                                  (14,000)       (22,000)
    Other                                                                  --        (51,000)
                                                                  -----------    -----------

Net cash used in operating activities                                (224,000)    (1,634,000)
                                                                  -----------    -----------

Cash flows from investing activities:
  Capital expenditures                                                     --        (15,000)
                                                                  -----------    -----------

    Net cash used in investing activities                                  --        (15,000)
                                                                  -----------    -----------

Cash flows from financing activities:
  Proceeds from issuance of convertible debt                          182,000      1,400,000
  Proceeds from issuance of common stock                                   --        145,000
  Proceeds from note payable to stockholder                                --         67,000
  Payment on convertible debt                                         (75,000)            --
  Other                                                                    --         (1,000)
                                                                  -----------    -----------

    Net cash provided by financing activities                         107,000      1,611,000
                                                                  -----------    -----------

    Net change in cash and cash equivalents                          (117,000)       (38,000)

    Cash and cash equivalents at beginning of the period              130,000         42,000
                                                                  -----------    -----------

    Cash and cash equivalents at end of the period                $    13,000    $     4,000
                                                                  -----------    -----------

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Interest                                                      $        --    $        --
    Income taxes                                                           --             --
  Non-cash financing activity:
    Conversion of debt for common shares                               11,000      1,835,000
    Discount of beneficial conversion on debt                         215,000        894,000
    Payment of Imperial loan debt                                          --        678,000
</TABLE>

     See Notes to Condensed Consolidated Financial Statements (unaudited).

                                       5

<PAGE>

                                  TELYNX, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1.  ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements of the
Company for the three months ended April 30, 2002 and 2001 have been prepared on
the same basis as the audited financial statements. In the opinion of
management, such unaudited information includes all adjustments (consisting only
of normal recurring accruals) necessary for a fair presentation of this interim
information. Operating results and cash flows for interim periods are not
necessarily indicative of results for the entire year. Certain prior period
amounts have been reclassified to conform to the current period presentation.
Additionally, certain information and footnote disclosures normally included in
a full set of financial statements have been condensed or omitted pursuant to
the Securities and Exchange Commission rules and regulations. The information
included in this report should be read in conjunction with the Company's audited
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the year ended October 31, 2001 previously filed with the
Securities and Exchange Commission.

The financial statements were prepared by management without a review, pursuant
to Statement on Auditing Standard Number 71, being performed by the Company's
Independent Accountants. The Company will file a Form 10-QA upon completion of
that review.

NOTE 2.  NATURE OF BUSINESS

We design and market a line of software products and related services to
telecommunications service providers. Specifically, our software is designed to
be an integral part of the operations support system environment of
telecommunications service providers. Our software is designed to track
inventory, provision new telecommunications service, and provide a tool for
managing network bandwidth. While the software is designed to manage
telecommunications service provider networks, it can also be used to track and
manage any network. Our services relate to the implementation of our software
and the general consulting surrounding network management.

We have leveraged our relationship with key industry leaders such as Hewlett
Packard in order to gain penetration in the marketplace. Specifically,
individual long standing relationships in international markets have leveraged
business for us in the Middle East as well as the Far East. The first two years
of product revenue for us were derived in large part from these sources.
Additionally, we have made significant investments by participating in industry
forums such as the Telemanagement Forum to further our position in the domestic
market. These forums provide industry standards, direction, and catalyst
function to the market in general. Telynx has participated for two years in
these activities. In combination, these two strategies have leveraged our market
awareness. Our primary product is Telynx Version 2. We have sales and support
staff located in Dallas, Texas, the Washington, D.C. area, and London, England,
as well as representative offices in Asia (Kuala Lumpur, Malaysia) and the
Middle East (Cairo, Egypt and Saudi Arabia).

NOTE 3.  DISCONTINUED OPERATIONS

On February 2, 1999, the Company transferred all of the issued and outstanding
stock of the discontinued healthcare subsidiaries (the "Subsidiaries") to
Imperial Loan Management Corporation ("Imperial"). The Company received no
proceeds from the transfer. Prior to the transfer, Imperial loaned $900,000 to
the Subsidiaries and Telynx, represented by a 10% note payable due February 1,
2000. There is a subsequent agreement allowing for interest to remain accruing
along with a monthly collection fee payable to Imperial. Imperial agreed to use
its best efforts to liquidate each of the Subsidiaries, settle outstanding
obligations and collect all amounts receivable. Upon liquidation of the
Subsidiaries and settlement of the outstanding indebtedness, Telynx is entitled
to receive one-half of the proceeds remaining after payment of Imperial's
expenses. The Company had received information from Imperial that $641,000 was
collected on the liquidation of the subsidiaries effective January 4, 2001. The
Company therefore changed its estimate of net asset value on the receivables to
$641,000. For the four months ended October 31, 2000, the Company recorded a
credit by decreasing the valuation allowance against the assets with an
offsetting $641,000 gain from disposal of discontinued operations on the income
statement. The Company considers the realization of the remaining assets to be
unlikely and the assets have been fully reserved. All other material

                                       6

<PAGE>

obligations of the Subsidiaries have been settled, including the Imperial loans
which were paid off effective January 4, 2001.

NOTE 4.  NOTES PAYABLE

Convertible Notes Payable to Investors

In July 2000, the Company entered into a Subscription Agreement, whereby up to
$17,000,000 principal amount of 6% convertible notes were offered for sale. The
notes have various maturities from August 31, 2002 to July 18, 2004. The notes
are subject to certain performance covenants and registration rights, as defined
in the Subscription Agreement. The notes are convertible into the Company's
Class A common stock on a conversion price that is the lower of (1) 85% of the
average of the three lowest closing prices for the Company's common stock quoted
on principal market for the last 30 trading days but not including the issue
date of the note or (2) 78% of the average of the three lowest closing prices
for the Company's common stock quoted on the principal market for the last 90
trading days prior to but not including the conversion date. Through October 31,
2001, $3,150,000 has been funded pursuant to this agreement. From November 1,
2001 to April 30, 2002, no monies have been received pursuant to this agreement.
Through April 30, 2002, $1,710,000 of principal with related accrued interest
has been converted to common stock. The notes convert at the option of the
holder and are subject to certain mandatory and optional redemption, as defined.
The agreement has been terminated and no further investments will be made to the
Company under this line.

Payable to Investor

On January 19, 2001, the Company issued $350,000 in principle amount of
convertible notes bearing interest at 8% which were converted into 8,000,000
shares of the Company's common stock at the holder's option during 2001. Also
during 2001, the Company received advances from the same subscriber of $250,000
which is convertible into approximately 5,714,000 shares of the Company's common
stock.

Current Convertible Notes Payable to Investors

In the first three months ended January 31, 2002, the Company issued $215,000
principle amount of 5% convertible notes payable with maturities due within one
year. Through the three months ended January 31, 2002, $75,000 of principle has
been paid off. The notes have various maturities due by January 10, 2003. The
notes are subject to certain performance covenants and registration rights. The
notes are convertible into the Company's Class A common stock on a conversion
price that is the lower of (1) 80% of the average of the three lowest closing
prices of the common stock for the 30 trading days prior to but not including
the closing date, or (2) 80% of the average of the three lowest closing prices
for the common stock for the 30 trading days prior to but not including the
conversion date.

Notes Payable to Shareholders

We have notes payable to shareholders in the amount of $151,000 bearing an
interest rate at 7% per annum and notes payable in the amount of $312,000
bearing an interest rate at 8% per annum.

                                       7

<PAGE>

Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward-looking Statements

         This document contains forward-looking statements that involve risks
and uncertainties that could cause the results of Telynx to differ materially
from those expressed or implied by such forward-looking statements. These risks
include the timely development, production and acceptance of new products and
services and their feature sets; the challenge of managing asset levels; the
flow of products into third-party distribution channels; the difficulty of
keeping expense growth at modest levels while increasing revenues; risks
associated with the settlement of accounts payable claims; and other risks
detailed from time to time in Telynx' Securities and Exchange Commission
filings.

         The words "anticipate," "believe," "estimate," "expect," "intend,"
"will," and similar expressions, as they relate to Telynx or its management
team, may identify forward-looking statements. Such statements reflect the
current views of Telynx with respect to future events and are subject to certain
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described herein as anticipated,
believed, estimated or expected. Telynx does not intend to update these
forward-looking statements.

RESULTS OF OPERATIONS

Three Months Ended April 30, 2002 as compared to Three Months Ended April 30,
2001

     Revenues. Revenues from operations decreased 100% from $205,000 for the
three months ended April 30, 2001 to $0 for the three months ended April 30,
2002. The decrease is mainly attributable to training and consulting income of
$101,000 along with software license revenues of approximately $104,000 realized
by the Company during the three months ended April 30, 2001.

     Cost of Revenues. Cost of revenues from operations decreased 100% from
$28,000 for the three months ended April 30, 2001 to $0 for the three months
ended April 30, 2002. The decrease is mainly attributable to the costs of
license sales and consulting expenses incurred during the three months ended
April 30, 2001.

     Sales and Marketing. Sales and marketing expenses decreased 26% from
$210,000 for the three months ended April 30, 2001 to $155,000 for the three
months ended April 30, 2002. The decrease of $55,000 is mainly attributable to
salaries and benefits cost reduction of $46,000 and reduction of other expenses
including travel and miscellaneous office expenses of $9,000.

     Services. Services expenses decreased 73% from $142,000 for the three
months ended April 30, 2001 to $38,000 for the three months ended April 30,
2002. The decrease of $104,000 is mainly attributable to salaries and benefits
cost reduction of $91,000 and reduction of other expenses including travel and
miscellaneous office expenses of $13,000.

     Research and Development. Research and development expenses decreased 59%,
from $242,000 for the three months ended April 30, 2001 to $100,000 for the
three months ended April 30, 2002. The decrease of $142,000 is mainly
representative of salaries and benefits expense reduction of $111,000 and
reduction of other general office expenses of $31,000.

     General and Administrative. General and administrative expenses decreased
79%, from $841,000 for the three months ended April 30, 2001 to $176,000 for the
three months ended April 30, 2002. The decrease of $665,000 is mainly
representative of decreased salaries and benefits expense of $13,000, reduction
of travel related costs of $73,000, reduction of outside professional services
of $111,000, gain on settlement of liabilities of $188,000 and reduction of
other general office expenses of approximately $280,000.

     Interest. Interest expense decreased from $458,000 for the three months
ended April 30, 2001 to $152,000 for the three months ended April 30, 2002. The
decrease is mainly attributable to a beneficial conversion feature of the
convertible notes and warrants issued on July 27, 2000 and effective December
31, 2000, in accordance with EITF's

                                       8

<PAGE>

00-27 and 98-5. The charge is the amortization expense related to the discount
recorded on the conversion feature versus the fair market price.

Six Months Ended April 30, 2002 as compared to Six Months Ended April 30, 2001

     Revenues. Revenues from operations increased 68% from $285,000 for the six
months ended April 30, 2001 to $479,000 for the six months ended April 30, 2002.
The increase of $194,000 is mainly attributable consulting revenues of $417,000
offset by reductions in license revenue of $122,000 and consulting and training
revenues of $101,000.

     Cost of Revenues. Cost of revenues from operations increased 239% from
$28,000 for the six months ended April 30, 2001 to $95,000 for the six months
ended April 30, 2002. The increase of $67,000 is mainly attributable to the
increased costs of consulting of $89,000 offset by license and training costs of
$22,000.

     Sales and Marketing. Sales and marketing expenses decreased 67% from
$652,000 for the six months ended April 30, 2001 to $218,000 for the six months
ended April 30, 2002. The decrease of $434,000 is mainly representative of
reductions in salaries and benefit cost of $294,000, travel related expenses of
$60,000 and miscellaneous office expenses of $80,000.

     Services. Services expenses decreased 70% from $326,000 for the six months
ended April 30, 2001 to $97,000 for the six months ended April 30, 2002. The
decrease of $229,000 is mainly attributable to reduction in salaries and
benefits cost of $182,000, travel related expenses of $24,000 and miscellaneous
office expenses of $23,000.

     Research and Development. Research and development expenses decreased 67%,
from $472,000 for the six months ended April 30, 2001 to $156,000 for the six
months ended April 30, 2002. The decrease of $316,000 is mainly representative
of reductions in salaries and benefit costs of $244,000, travel related expenses
of $67,000 and miscellaneous office expenses of $5,000.

     General and Administrative. General and administrative expenses decreased
65%, from $1,741,000 for the six months ended April 30, 2001 to $614,000 for the
six months ended April 30, 2002. The decrease of $1,127,000 is mainly
representative of decreased salaries and benefit costs of $383,000, travel
related costs of $108,000, reduction of outside professional services of
$189,000, gain on settlement of liabilities of $239,000 and reduction of other
general office expenses of approximately $208,000.

     Interest. Interest expense decreased from $1,140,000 for the six months
ended April 30, 2001 to $369,000 for the six months ended April 30, 2002. The
decrease is mainly attributable to a beneficial conversion feature of the
convertible notes and warrants issued on July 27, 2000 and effective December
31, 2000, in accordance with EITF's 00-27 and 98-5. The charge is the
amortization expense related to the discount recorded on the conversion feature
versus the fair market price.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's operating activities used cash of $224,000 during the six
months ended April 30, 2002 compared to a use of $1,634,000 for the six months
ended April 30, 2001. The primary reason for the use of cash in operating
activities in 2002 is the net loss of $1,070,000 offset by non-cash expenses of
$665,000 to equal $405,000. The adjusted net loss in operations of $405,000 is
further decreased by $181,000 due to changes in assets and liabilities used in
operating activities.

     During the six months ended April 30, 2002, the Company had no investing
activities as compared to the six months ended April 30, 2001 of $15,000.

     Net cash provided by financing activities of $107,000 during the six months
ended April 30, 2002 consist of proceeds from the issuance of convertible debt
of $182,000 offset by cash payments of $75,000 on convertible debt as compared
to net cash provided by financing activities of $1,611,000 during the six months
ending April 30, 2001.


                                       9

<PAGE>

     In the first three months ended January 31, 2002, the Company issued
$215,000 principle amount of 5% convertible notes payable with maturities due
within one year. Through the three months ended January 31, 2002, $75,000 of
principal of these notes have been paid off. The notes have various maturities
due by January 10, 2003. The notes are subject to certain performance covenants
and registration rights. The notes are convertible into the Company's Class A
common stock on a conversion price that is the lower of (1) 80% of the average
of the three lowest closing prices of the common stock for the 30 trading days
prior to but not including the closing date, or (2) 80% of the average of the
three lowest closing prices of the common stock for the 30 trading days prior to
but not including the conversion date.

     The Company believes that its current negative operational cash flow will
be alleviated by increased sales. However, there can be no assurance that sales
will increase or additional capital will be available on terms favorable to us.
If adequate funds are not available to us, our operations would be impaired,
including any operational efficiencies to provide our client base with superior
services and performance. If we are unable to raise additional capital in the
future, we may not be able to continue as a going concern. As a result of the
above conditions, the Company's most recent audited financial statements
contained a going concern opinion.


                                       10

<PAGE>

Part II. Other Information

Item 1.  Legal Proceedings

                Telynx is a party to various litigation matters primarily
                involved with vendors and arising out of the ordinary course of
                business. Aggressive efforts are being pursued to defend or
                otherwise resolve the claims and any pending litigation.

Item 2.  Changes in Securities

                None.

Item 3.  Defaults Upon Senior Securities

                None.

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

                None.

Item 5.  Other Information

                None.

Item 6.  Exhibits and Reports on Form 8-K

         (a)    Exhibits

                None

         (b)    Reports on Form 8-K

                None


                                       11

<PAGE>

                                   SIGNATURES

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

Dated:        June  19, 2002


Telynx, Inc.




/s/  Kent J. Van Houten
------------------------------------------------------
Kent J. Van Houten
Vice President of Finance and Chief Financial Officer
(Principal Financial Officer)

                                       12