# U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

# FORM 10-QSB

Quarterly Report
pursuant to Section 13 of the Securities Exchange Act of 1934
for the quarterly period ended June 30, 2002

TELEMETRIX
INC.(Exact Name of Registrant as Specified in its Charter)

Delaware   
                
               
           0-14724
       
       
                
                  
   59-345-3156
           
               
    (Jurisdiction of incorporation)
              
     (Commission File Number)
              
(I.R.S. Employer Identification Number)

Telemetrix Inc.
c/o Paul Zolman, Acting Chief Financial Officer
1225 Sage Street
Gering, Nebraska 69341
(308) 436-4090(Address, including zip code, & telephone number, of Registrant's
principal executive offices)

Indicate by check mark
whether the Registrant has:     Yes[X]  No
[   ]

| | (1)
filed all reports 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)
been subject to such filing requirements for the past 90 days.
| | ------------------------------------------------------------------

On June 30, 2002,
Registrant had 18,476,186 issued and outstanding common shares.

Transitional Small
Business Disclosure Format:     Yes
[   ]  No[X]

---

TELEMETRIX
INC.
(Commission File No. 0-14724)

# TABLE OF
CONTENTS FOR FORM 10-QSB
PART I - FINANCIAL INFORMATION

`Page
                                                                                                  ----
Item 1.    Financial Statements......................................................................3
           Condensed Consolidated Balance Sheets.....................................................3

           Consolidated Statements of Operations and Deficiency......................................4

           Consolidated Statements of Cash flows.....................................................5

           Notes to Consolidated Financial Statements................................................6

Item 2.    Management's Discussion & Analysis of Financial Condition and Results of Operations.......10`

# PART
II - OTHER INFORMATION

`Item 1.    Legal Proceedings........................................................................18
Item 2.    Changes in Securities and Use of Proceeds................................................18
Item 3.    Defaults Upon Senior Securities..........................................................19
Item 4.    Submission of Matters to a Vote of Security Holders......................................19
Item 5.    Other Information........................................................................19
Item 6.    Exhibits and Reports on Form 8-K.........................................................19
SIGNATURES .........................................................................................20`

NOTE CONCERNING FORWARD-LOOKING
INFORMATION.This Quarterly Report on SEC Form 10-Q contains
statements that anticipate the future and therefore are forward-looking
statements under the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements include statements about the
future of our industry, statements about our business plans and statements about
our strategies; i.e., any statement s other than statements of historical
facts. Forward-looking words such as "may", "will",
"expect", "anticipate", "believe",
"estimate", and "continue" or similar words indicate such
statements. Investors should read statements with these terms carefully because
they: (1) discuss the Companys future expectations; (2) contain
projections of the Companys future results of operations or of its
financial condition; or (3) contain other "forward-looking"
information. Such statements are not historical facts; they merely explain
our expectations about the future. We believe that it is important to
communicate such future expectations to our investors. However, the accuracy of
our expectations and forward-looking statements could be affected by:

| |  | our limited operating history and commercial experience;
| | - | --------------------------------------------------------

| |  | market acceptance of T3000;
| | - | ---------------------------

| |  | availability of additional capital;
| | - | -----------------------------------

| |  | protection of our intellectual property rights;
| | - | -----------------------------------------------

| |  | evolving technologies and markets;
| | - | ----------------------------------

| |  | competitive developments;
| | - | -------------------------

| |  | telecommunications regulatory environment; and
| | - | ----------------------------------------------

| |  | our ability to manage growth.
| | - | -----------------------------

These factors might cause
actual results to differ materially from the forward-looking statements as well
as materially and adversely affecting our business, operating results and
financial condition.

---

TELEMETRIX
INC.
(Commission File No. 0-14724)

CONDENSED
CONSOLIDATED BALANCE SHEETS
(As of June 30, 2002 this
financial data has not been audited or reviewed by the corporations
independent accountants)

`June 30     December 31
                                                                                2002         2001
                                                                               ------     -----------
                                       ASSETS
Current assets:
   Cash ..................................................................   $      0    $     13
   Accounts receivable, net of allowance for doubtful accounts ...........         22          26
   Note receivable-- related party .......................................        189         188
   Due from related companies ............................................          1          38
   Prepaid expenses ......................................................          9           0
                                                                             --------    --------
      Total current assets ...............................................        221         265

Construction in Progress .................................................      1,115       1,117
Property & equipment .....................................................        468         458
Goodwill .................................................................      4,529       4,529
Other Intangibles ........................................................        437         485
                                                                             --------    --------
         Total assets....................................................$      6,770    $  6,854
                                                                             ========    ========

                        LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
   Accounts payable ......................................................      2,197       1,952
   Accrued expenses ......................................................      2,910       2,327
   Due to related companies ..............................................        237         226
   Current portion-- long term debt-- related parties ....................      3,452       2,966
   Current portion of long term debt .....................................      1,200       1,200
                                                                             --------    --------
     Total current liabilities ...........................................      9,996       8,671

Long term debt-- related party ...........................................          0           0
Long term debt ...........................................................        829         829
                                                                             --------    --------
     Total long-term liabilities .........................................        829         829
       Total liabilities .................................................     10,825       9,500
                                                                             --------    --------

Shareholders' deficit:
   Common stock, $0.001 par value; 25 million shares authorized;
   18,476,186 and 18,476,186 shares issued and outstanding
   at March 31, 2002 and December 31, 2001 respectively ..................         19          19
Additional paid-in capital ...............................................     46,879      46,808
Stock warrants ...........................................................          0           0
Foreign currency translation .............................................        199         192
Accumulated deficit ......................................................    (51,152)    (49,494)
Prepaid Consulting Services ..............................................          0        (171)
       Total shareholders' deficit .......................................     (4,065)     (2,646)
                                                                             --------    --------
            Total liabilities and shareholder's deficit..................$      6,770    $  6,854
                                                                             ========    ========`

Financial data
was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated
financial statements

---

TELEMETRIX
INC.
(Commission File No. 0-14724)

CONSOLIDATED
STATEMENTS OF OPERATIONS
(As of June 30, 2002 this
financial data has not been audited or reviewed by the corporations
independent accountants)

`Three Months Ended              Six Months Ended
                                                  June 30,                       June 30,
                                              2002         2001             2002          2001
                                              ----         ----             ----          ----
Revenue:
   Equipment sales & rental ........   $         44    $         56    $         91    $        113
   Service income ..................              0               0               0               0
                                       ------------    ------------    ------------    ------------
       Total revenue ...............             44              56              91             113
                                       ------------    ------------    ------------    ------------
Expenses:
   Cost of revenue .................             50               8             117              20
   Research & development ..........              9              39              34             102
   Selling, general & administrative            446             825             888           1,588
                                       ------------    ------------    ------------    ------------
       Total operating expenses ....            505             872           1,039           1,710
                                       ------------    ------------    ------------    ------------
 Net loss from operations ..........           (461)           (816)           (948)         (1,597)
                                       ------------    ------------    ------------    ------------
Other Expense:
   Interest expense (income) .......            105             421             773             877
   Other expense (income) ..........            (60)             (2)            (62)            (11)
                                       ------------    ------------    ------------    ------------
       Total other expense (income)              45             419             711             866
                                       ------------    ------------    ------------    ------------
Net (loss) .........................   $       (506)   $     (1,235)   $     (1,659)   $     (2,463)
                                       ============    ============    ============    ============

Weighted average shares outstanding
    during period ..................     18,486,176      16,356,523      18,486,176      16,356,523

Loss per share .....................   $      (0.03)   $      (0.08)   $      (0.09)   $      (0.15)
                                       ============    ============    ============    ============`

Financial data
was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated
financial statements

---

TELEMETRIX
INC.
(Commission File No. 0-14724)

CONSOLIDATED STATEMENTS
OF CASH FLOWS
(As of June 30, 2002 this
financial data has not been audited or reviewed by the corporations
independent accountants)

`Six Months
                                                                            Ended June 30,
                                                                            --------------
                                                                           2002        2001
                                                                           ----        ----
Cash flow from operating activities
   Net loss for the period.......................................... $   (1658)   $(2,463)

Adjustments to reconcile net loss to cash used in operations
     Stock issued in-lieu of wages .................................         0          0
     Amortization & depreciation ...................................       115        910
     Accretion of interest on debt issue costs .....................       773        709
     Accrued interest on notes payable .............................         0          0
     Changes in assets and liabilities
       In accounts receivable ......................................        (4)         9
       In other assets .............................................      (180)        (1)
       In accounts payable .........................................       245        291
       In accrued liabilities ......................................        97         59
                                                                       -------    -------
         Total adjustments .........................................      1046      1,977
              Net cash used in operating activities ................      (612)      (486)
                                                                       -------    -------
Cash flow from investing activities
   Increase in capital assets ......................................        (8)      (115)
                                                                       -------    -------
            Net cash from (used) in investing activities ...........        (8)      (115)
                                                                       -------    -------
Cash flow from financing activities
   Payments on line-of-credit ......................................         0          0
   Proceeds (payments) from long-term debt .........................         0          0
   Advances on notes receivable ....................................         1         (5)
   Proceeds from issuance of share capital .........................        71          0
   Proceeds from related companies .................................       (37)         5
   Proceeds from notes payable - related party .....................       486        456
   Change in deferred rent liability ...............................         0          0
                                                                       -------    -------
            Net cash from financing activities .....................       521        456
                                                                       -------    -------
Effect of foreign currency translation on cash .....................        86          0
                                                                       -------    -------
Net increase (decrease) in cash & cash equivalents .................       (13)      (145)
                                                                       -------    -------
Cash, beginning of period ..........................................        13        145
                                                                       -------    -------
Cash, end of period................................................. $       0    $     0
                                                                       =======    =======`

Financial data
was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated
financial statements

---

TELEMETRIX
INC.
(Commission File No. 0-14724)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(As of June 30, 2002 this
financial data has not been audited or reviewed by the corporations
independent accountants)

## 1. Description
of Business

TELEMETRIX
IS AN EARLY STAGE COMPANY WITH REVENUES LIMITED TO THOSE THAT ARE GENERATED
THROUGH THE SALE OF MONTHLY PAGING SERVICE AND RENTAL OF TOWER SPACE ON OWNED
TOWERS. TELEMETRIX HAS SIGNIFICANT ONGOING EXPENSES RELATED TO THE DEVELOPMENT
OF THE FOLLOWING PRODUCTS AND SERVICES AND THE COMPANY HAS SUBSTANTIAL DEBT AS
REFLECTED ON THE ACCOMPANYING FINANCIAL INFORMATION. TELEMETRIX TECHNOLOGIES HAS
CUSTOMERS FOR THE PAGING SERVICES PROVIDED, BUT AT THIS TIME DOES NOT HAVE ANY
CUSTOMERS FOR THE T3100 TELEMETRY DATA SYSTEM.

Telemetrix
Inc. through its subsidiary, Telemetrix Technologies has developed and patented
a universal solution for wireless telemetry. This system will be sold as a
complete end-to-end solution for telemetry data customers. The system will be
sold direct to end users through Telemetrix Technologies and Value Added
Resellers (VAR's). Telemetry is the transmission of data that represents status
information on a remote process, function or device. Telemetry enables
businesses to monitor activity, detect situations requiring intervention and
promptly respond to such situations. Examples of businesses currently using
telemetry include electric utilities, alarm companies and vending machine
operations and as the technology advances, the potential applications multiply.
Telemetry has been significantly advanced by Telemetrix development of the T3100
e-Telemetry Data SystemTM that collects and transfers telemetry data using the
Short Message Service of digital communications systems worldwide and delivers
that data to the user (customer) via the Internet. The T3100 wireless telemetry
system includes hardware (e.g., the CommCenter and Optical Reader), network
monitoring services software, and other support services. Telemetrix provides
each of the T3100 components.

Telemetrix owns and
operates a wireless GSM Personal Communications System (PCS) telecommunications
network and a paging network. The total coverage of the paging and PCS coverage
areas encompass portions of western Nebraska, southeastern Wyoming and
northeastern Colorado. Our operations consequently consist of operating the
paging system and doing T3100 research & development, product design,
manufacturing, development of telecommunications services and carrier support
services.

## Telemetrix
Technologies

Telemetrix
Technologies developed the T3100 e-Telemetry Data SystemTM
wireless telemetry hardware and software. The T3100 system can be used in an
unlimited number of ways, i.e., automatic utility meter reading, home security,
home health alarms, monitoring vending machines and numerous other specialty
applications.

The Telemetrix Model T3101
CommCenter is a proprietary hardware and software communications gateway. Using
this Telemetrix hardware and software, PCS operators in any size market can
offer additional services and increase their revenue. The T3100 system and
components have been developed and tested on the Telemetrix GSM PCS network.

---

The Telemetrix Model T3170
and T3171 Optical Meter Readers allow utility companies to retain
legacy-metering equipment in their Automatic Meter Reading and telemetry
systems. The Optical Meter Reader simply attaches to the outside of an existing
electro-mechanical utility meter, eliminating the need for an electric utility
to replace existing meters, and significantly lowers the installation cost of a
telemetry system.

Our wireless network also
serves as a showcase for new products and services, where potential carrier
customers can watch the T3100 system and CommCenter in operation.

# T3100
E-TELEMETRY DATA SYSTEMTM

Telemetrix
began testing Beta-design T3101 CommCenter, T3136 Interface Boards and
T3176 Interfaces to the CENTRON electric meters that were deployed to a major
Iowa utility in April 2002. A similar configuration was deployed at Bonneville
Power Demonstration project in Portland, Oregon.

After the successful
deployment of Beta-products, demonstration projects as the first stage of
commercial order approvals are planned in third-quarter 2002, for several cities
for water and electric meters, and a number of other applications.

e-Telemetry
Data SystemTM and e-Telemetry DataTMare Registered Trademarks of Telemetrix Inc.

The
primary focus of the Company in the second quarter 2002 was the deployment of
the Beta-T3100 Modular System hardware design at a major Iowa electric
utility. This deployment confirmed the design, the functionality of the hardware
and firmware and the Network Operation Center (NOC) Software with
the new Modular Hardware in the Gering NOC. Other demonstration projects and
Test & Evaluation orders were confirmed, and a second demonstration project
deployed in Portland, Oregon.

T&E
agreements have been negotiated, including two western Nebraska cities for water
and electric meter reading. Both of these agreements are the first step for
Automatic Meter Reading deployment projects. An order from a Florida water well
monitoring engineering company has been placed and is to be deployed in August.
Many other projects and orders are being negotiated as well.

The Telemetrix
e-Telemetry Data SystemTM will support services to telemetry
users and carriers, including telemetry network management, billing support,
system design, consulting and service bureau capabilities.

The
T3100 system:

| |  | Acquires data from remote devices.
| | - | ----------------------------------

| |  | Controls, polls and activates remote devices.
| | - | ---------------------------------------------

| |  | Manages the entire wireless telemetry system.
| | - | ---------------------------------------------

| |  | Offers real-time access to telemetry data.
| | - | ------------------------------------------

| |  | Provides Wireless Local Loop type telephony services.
| | - | -----------------------------------------------------

---

With
the availability of commercial Product in third quarter, the Company will move
to the full marketing and commercialization phase in second quarter of 2002.Numerous meetings are set, field trials are scheduled and convention
exhibits are booked.

The Company implemented
Products for the electric utility market with development licenses from
Schlumberger Sema for their CENTRON and SENTINEL Electric meters. Similar
programs are underway with gas meter and water meter companies for remote
Automatic Meter Reading.

SHORT MESSAGE SERVICE. The
T3100 uses the Short Message Service capability of existing PCS networks. This
wireless transmission technology eliminates any need for a wireline telephone
connection, offers widespread coverage and permits easy mobility. SHORT MESSAGE
SERVICE is available from licensed PCS operators; therefore, T3100 System users
need not obtain Federal Communications Commission licenses. The Company's
technology patents prevent competitors from using the Company's proprietary
technology for collecting and transmitting telemetry data using the standard
Short Message Service. The technology patents give the T3100 system a
competitive advantage.

PCS
Signaling Standards. PCS systems generally use one of three digital signal
transmission technologies: GSM, CDMA and TDMA. Each of these signaling
standards, which are incompatible with each other, has been adopted by at least
two different PCS carriers in major U.S. markets. Each standard has distinct
advantages and disadvantages. TDMA resembles the signaling standard used by many
cellular carriers. CDMA should require fewer cell sites and offer greater
capacity, call quality and hand-off advantages. However, GSM is the leading
digital wireless technology worldwide, with systems in over 170 countries
serving over 600 million subscribers. Further, major carriers like AT&T,
Cingular and TelCel Mexico have recently announced plans to change over from
TDMA to GSM technology. GSM uses an open system architecture that allows
carriers to purchase network equipment from a wider variety of vendors and
provides significant flexibility for the carrier in vendor cost leveraging and
provisioning of features, products and services. The T3100 e-Telemetry Data
System TM is currently available for use on GSM networks.

## 2. Basis of
Presentation of Interim Information

The
consolidated unaudited financial statements for June 2002, and 2001 and audited
financial statements for December 31, 2001 include the accounts of
Telemetrix Inc. (the parent company) and its wholly owned subsidiaries,
Telemetrix Solutions and Telemetrix Technologies.

The
results for three months ended June 30, 2002, do not necessarily indicate the
results of operations for the full year. These financial statements and related
footnotes should be read in conjunction with the financial statements and
footnotes thereto included in the Company's 2001 Annual Report on SEC Form
10-KSB filed with the U.S. Securities & Exchange Commission.

In Managements
opinion, the accompanying unaudited interim financial statements include all
normal adjustments necessary to present fairly the Companys financial position
at June 30, 2002, and the results from operations for the three months ended
June 30, 2002, and the cash flows for the six months ended June 30, 2002.

---

## 3.  Goodwill
as it relates to FASB 142

Telemetrix Inc. is in the
process of evaluating the goodwill using the discounted cash flow method. We
cannot estimate any impairment until our analysis is complete.

## 4. Acquired
Intangible Assets

`Acquired Intangible assets

INTANGIBLE ASSETS AS OF 3/31/02        Gross                                   Weighted
                                       Carrying   Accumulated      Yearly      Average
                                       Amount     Amortization   Amortization  Life Yrs
----------------------------------------------------------------------------------------
Patents                                55,972       (16,026)         3,731       10.71
----------------------------------------------------------------------------------------
FCC Licenses                          923,856      (502,933)        92,286        4.55
----------------------------------------------------------------------------------------

     Total                            979,828      (518,960)        96,017        4.79
----------------------------------------------------------------------------------------
Aggregate Amortization Expense:
----------------------------------------------------------------------------------------
 For period ended 3/31/02                            24,000
----------------------------------------------------------------------------------------`

## 5. Related
Party Loans

The Company did not borrow
any money during the 2nd Quarter from related parties.

## 6. Related Party
Transactions

There
were no principal increases or advances from related parties during the
2nd quarter.

The
following is a detail of the amounts due from and to related parties.

`Due from related parties
      ------------------------

      Tracy Broadcasting Company                       $    13,000
      Software Factory Inc.                            $   176,000
                                                        ----------
      Total due from related parties                   $   189,000

      Due to related parties
      ----------------------

      Becker Group of Companies (BGC) Investments      $    41,000
      Becker Group                                     $   196,000
      Total Due to Related Parties                     $   237,000

      Related party loans
      -------------------

      Michael Tracy                                    $ 2,165,000
      Michael Glaser                                   $   664,000
      Hartford Holdings                                $   164,000
      Becker Capital Management                        $   419,000
      Tracy Broadcasting Company                       $    40,000
                                                        ----------
      Total Due to Related Parties                     $ 3,452,000`

---

The
Company has a note receivable from the Software Factory, which matured May 1999.
The outstanding balance at June 30, 2002 was $196,000. The note accrued interest
at 7.5% until maturity at which time the interest rate was adjusted to 15% and a
penalty of 15% of the outstanding balance was incurred.

Current
portion-long term debt-related parties increased due to additional notes payable
from major shareholders. Principal and interest are due on demand. The proceeds
of prior period related party notes were used to fund operations.

## 7.
Commitments & Contingencies

Operating
Leases  Related Parties. The facility occupied by the
Company in Gering, Nebraska is being leased at $2,500 per month from an officer
of the Company. The lease requires Technologies to pay for utilities and taxes
and contains no provisions for renewal.

Legal
Proceedings.The Company is party to various negotiations and
legal proceedings regarding claims on contracts in the normal course of its
business. Management believes that the outcome of such negotiations and legal
proceedings, as well as commitments, will not have a material adverse effect on
the Companys consolidated and combined financial statements.

Employment
Contracts.The Company is party to one employment contract, which
require total annual salary payments of approximately $72,000. This contract
expires in June 2003 with option to extend.

Maintenance
Agreements. The Company has maintenance agreements with hardware vendors
for the operating equipment of the GSM Network Operation Center. These amount to
$10000 per month.

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

The
following discussion should be read in conjunction with the unaudited
Consolidated Financial Statements and related notes. The results presented in
this report do not necessarily indicate the results to be expected in any future
periods. This discussion contains forward-looking statements based on our
current expectations, which involve risks and uncertainties. These risks and
uncertainties mean that future events could dramatically differ from our
forward-looking statements.

---

## OVERVIEW.

The
Companys T3100 wireless telemetry system uses a patented method for
automatically collecting and transmitting telemetry data over the Short Message
Service control channel of digital communications networks (PCS systems).
Telemetrix was granted patents covering this proprietary technology in January
and November 2000. In April 2002, Telemetrix received another Granted Patent #
6,369,719.

The Company has experienced
substantial change over the past two reporting years. During April 1999, the
Company was formed through a corporate combination between Arnox Corporation and
Telemetrix Resource Group, Inc. Arnox was an inactive corporate shell prior to
the combination. In September 1999, Tracy Corporation II d/b/a/ Western Total
Communication was acquired for stock. Telemetrix Resource Group, Inc. was
comprised of Telemetrix Resource Group, LTD, a Canadian corporation, which was
later renamed Telemetrix Solutions. Telemetrix Solutions offered billing
services and consulting to telephony companies. Western Total Communications,
later renamed Telemetrix Technologies, was formed in 1982 to provide wide area
paging in western Nebraska, eastern Wyoming and northeastern Colorado. It
acquired two PCS licenses (30 MHz and 10MHZ) for Business Trading Area 411, as
defined by the Federal Communications Commission, and has constructed the 30 MHz
licensed network. It is also certified as a competitive local exchange carrier
(CLEC) in the State of Nebraska. Telemetrix Technologies developed
the T3000 wireless telemetry system.

In addition to the
corporate formation during 1999, the Company focused on the research and
development of the T3000 System, a first generation system. The Second
Generation T3100 e-Telemetry Data SystemTM was deployed in
Beta-deployments in the second quarter of 2002, and commercial orders
have been placed for deployment in third quarter 2002. The software development
required for the T3100 was completed in the first quarter of 2002. The
redesigned Modular T3100 Hardware was finished and Beta-Product was
delivered and successfully deployed at an electrical utility in Iowa. Test &
Evaluation Agreements are being negotiated for additional Beta-field
installations with other electrical utilities, and other industrial
applications, scheduled for 3rd quarter 2002. During 2002, we will increase our
marketing efforts to create the demand for our systems. No trade shows were
attended in the 2nd Quarter, and the next scheduled trade shows are
in September (AMRA-San Antonio) and October (Remote-Denver).

The
next evolution of the T3100 system will be the enhancement with European GSM and
TDMA licensed frequencies. A GSM/GPRS GSM module capable of utilizing all 4 GSM
frequencies (800/1800/900/1900) is being incorporated into the T3100 CommModule
at this time. We expect this to shorten the development cycle for Products to
satisfy export customer orders and opportunities. This will allow for a broader
geographical distribution of our system.

Currently,
the Company is seeking additional financing. It is estimated that no more than
an additional $6 million will be required for manufacturing inventory, working
capital and to re-pay current liabilities. The Company has immediate need for
short and long term financing.

Telemetrix
Inc. expects to continue as a going concern. The strategic plan is to partially
exit the design phase of the business after trial and testing of products.
Production will then commence from contracts generated and develop an income
stream from operations. Previous to and including this reporting period, minimal
revenue has been derived from operations and most of the funding has been
through financing activities. In mid 2003, positive cash flow from operations is
expected to materialize.

---

## Other Developments

On
April 9, 2002, United States Patent #6,369,719 was issued to Telemetrix. The
patent covers claims which relate to the use of the Telemetrix T3100
e-Telemetry Data SystemTMfor remotely monitoring and
transmitting data and other information received from utility and other devices
over the GSM or TDMA technology digital network via a control channel. This is
in addition to Patent #6,150,955 granted November 29, 2000 for monitoring
certain digital packets associated with a digital communications system control
channel, identifying of certain packets and replacing of certain non-information
bearing packets with packets that contain useful data and information.
Advantageously, this system and method does not impact the capacity of the
digital communications network. These patents enhance Patent #6,014,089 granted
January 11, 2000 for an apparatus and method for transmitting data to and from a
data collection device using the short message service functionality of the
control channel of a personal communications system transmission protocol.

During
2nd Quarter 2002, the relationship established on December 1, 2000,
between Telemetrixand Ericsson was reaffirmed. This entailed a Reseller
Agreement with Ericsson Messaging Systems, Inc. a wholly owned subsidiary of L.
M. Ericsson (Ericsson), whereby, Ericsson will resell the hardware
components of Telemetrix patented T3100 e-Telemetry Data
SystemTM. The agreement calls for Telemetrix to
provide Ericsson, for resale, all of the hardware components of the T3000e-Telemetry Data SystemTM including the T3500 and T3600 Optical
Readers. On the same day, Telemetrixentered into a Software Original
Equipment Manufacturer (OEM) Agreement with Ericsson, whereby
Telemetrix will provide software to Ericsson on an OEM basis for Ericsson to
sell under their brand name(s). The software will be used in association with
the Telemetrix patented T3100 e-Telemetry Data SystemTM. The
agreement calls for Telemetrix to provide Ericsson with Telemetrix
e-Telemetry DataTM Software that Ericsson will deploy to
customers and PCS operators throughout North America and the world, under
Ericsson's brand and labeled with the phrase Powered by Ericsson.

During
2nd Quarter 2002, commercialization efforts were enhanced by the
following Demonstration Project or Test-And-Evaluation Agreements and
commitments that will be deployed when commercial product is available in
3rd Quarter 2002:

| |  | Hawaii Electric Company - Electric Utility meter reading on Island of Oahu;
| |  | ---------------------------------------------------------------------------

| |  | PSP Products - 40K generator set management and monitoring system;
| |  | ------------------------------------------------------------------

| |  | Spectrum Engineering - Well Monitoring and Management Systems;
| |  | --------------------------------------------------------------

| |  | City of Gering - Water and Electric Meter reading and monitoring;
| |  | -----------------------------------------------------------------

| |  | City of Scottsbluff - Water and Electric Meter reading and Monitoring;
| |  | ----------------------------------------------------------------------

| |  | SILCO - Lube Oil tank monitoring in quick-lube operations;
| |  | ----------------------------------------------------------

| |  | And many more are in negotiation and development.
| |  | -------------------------------------------------

---

## Marketing & Sales

The
T3100 is in test and evaluation program at many Clients, and will move to the
full marketing and commercialization phase in third quarter of 2002.Numerous meetings are set, field trials are scheduled and convention
exhibits are booked. The first, second-generation Modular T3100 e-Telemetry
Data SystemTM was installed in April 2002 at a major Iowa
utility company. Many other demonstration projects were installed in the second
quarter, and more are scheduled for third quarter 2002. Commercial Product
contracts were let with our outside contract manufacturer for delivery in Third
Quarter 2002.

Through
the relationship with Ericsson, and through direct discussions with the major
GSM-PCS carriers (VoiceStream, AT&T Wireless, Cingular, Iowa Wireless,
WestLink and others), Telemetrix will use wireless operators (carriers), with
established relationships in their service market and coverage area, to
capitalize on their market presence, and their wireless brand awareness, with
focus on their corporate clients. Telemetrix e-Telemetry Data System will
make the PCS operator (a) the most competitively priced telemetry data service
in their operating region, (b) provide a complete and installed infrastructure
which does not have to be maintained by the telemetry data users, and (c)
provide financial incentives for the PCS operator to generate additional
revenues through the use of SM telemetry data on their networks. The wireless
operators are seen as the leaders in communication technology, therefore, their
reputation, stature and standing will generate credibility for the delivery of
new wireless telemetry data technology, which cannot be delivered by any other
entity in a market, at a competitive price.

Telemetrix
Inc. is positioned to quickly gain nationwide capability and to become a
nationwide telemetry data service provider.

## Regulation

Wireless
telecommunications services are subject to significant regulation and the
Company could become subject to additional regulatory requirements as our
services grow. Pursuant to the Communications Act of 1934, as amended (the
"Communications Act") including amendments by the Telecommunications
Act of 1996, the FCC regulates the facilities and services we use to provide,
originate, or terminate interstate or international communications. Provision of
PCS and other wireless services requires radio frequency licenses from the FCC
or a contractual arrangement with a licensee. The provision of local exchange
service through wireless local loop may be subject to state regulation.
Approvals from state and local governments may be required to utilize public
rights-of-way necessary to install and to operate networks, transmission towers,
equipment, and other facilities. Furthermore, transfers of control of
certificated carriers and assignments of regulatory authorizations often require
prior approval from the FCC and state regulatory agencies.

---

The
Companys telecommunications services also must comply with federal and
state common carrier regulations, including certification, notification,
registration and tariffing requirements. Although the FCC eliminated the
tariffing requirements for interstate non-dominant carriers, such carriers must
continue to file interstate tariffs until a federal court completes reviewing
such detariffing and declares that the detariffing order is lawful. When
necessary, we will file interstate tariffs with the FCC and state tariffs with
the State of Nebraska and any other states where the Company is certified to
provide wireless local exchange services. The FCC and numerous state agencies
also impose prior approval requirements on transfers of control of certificated
carriers and assignments of regulatory authorizations. States also often require
prior approvals or notifications for the issuance of stock, bonds or other forms
of indebtedness. The FCC and state regulatory agencies generally retain the
right to sanction a carrier, impose forfeitures, mandate refunds or impose other
penalties in the event of regulatory non-compliance by a carrier. There can be
no assurance that future regulatory, judicial or legislative activities will not
have a material adverse effect on the business, operating results and financial
condition of the Company or that domestic or international regulators or third
parties will not raise material issues with regard to the Company's compliance
or non-compliance with applicable laws and regulations.

## Employees

The
Company had 11 full-time employees on June 30, 2002. The Company employs certain
employees pursuant to offer letters, which might lead to employment contracts.
See "Management". While Nebraska is an Open Shop State, no
Company employees are members of labor unions. The Company also utilizes
independent contractors and consultants.

## CORPORATE HISTORY

Telemetrix
was formed through a corporate combination ("Combination") between
Arnox Corporation, Telemetrix Resource Group Inc. ("TRGUS") and
Tracy Corporation II d/b/a Western Total Communications ("WTC"). Arnox
was originally formed in 1983 to develop, manufacture, market and license fire
retardant products and technology, and Arnox's stock was listed for trading on
the NASDAQ system. However, a 1989 bankruptcy left Arnox as an inactive shell
without material assets, liabilities or operations. WTC was formed in 1982 as a
paging company operating in western Nebraska. TRGUS was formed in 1998
after its founders acquired the rights to an initial version of the TRACCS
Software; TRGUS's principal activity was licensing the TRACCS Software to
Telemetrix Resource Group Ltd.("TRGCanada"), which offered some
Customer Care Services in Canada; TRGUS then acquired TRGCanada in
early 1999. In a "reverse takeover" during the second and third
quarters of 1999, the stockholders of WTC and TRGUS ("Principal
Stockholders") acquired 11,500,000 Shares (approximately 90%) from
Arnox in exchange for all WTC and TRGUS stock; as a result, the Principal
Stockholders acquired control of Arnox. After the Combination, the companies
changed their names to reflect their complementary businesses:

| |  | Arnox became Telemetrix Inc. (Telemetrix);
| | - | --------------------------------------------

TRG-US became Telemetrix
Solutions Ltd. (Telemetrix Solutions; for the collective activities
of both TRG-US and TRGCanada, we use "TRG" and "Telemetrix
Solutions" for activities before and after, respectively, the Combination);
WTC became Telemetrix Technologies Inc. (Telemetrix Technologies; we
use "WTC" and "Telemetrix Technologies" for activities
before and after, respectively, the Combination).

---

OPERATIONS
ANALYSIS

# WIRELESS
SERVICES

Our
wireless communications services currently consist of paging operations in
Nebraska, Wyoming and Colorado over the WTC Network. These operations (paging
services plus equipment sales, rentals and repairs) now generate approximately
$16,000 in monthly revenue. We will not expand the paging operations but instead
will integrate them into the PCS operations. We acquired the PCS licenses in
1996, began network deployment in late 1997 and finished network deployment in
April 1999. The network has primarily been used for the research and development
of the T3000.

## Operating
Expenses

As
we develop our products and services and ready them for market, the operating
expenses principally consist of research & development, pre-production,
license and general & administrative costs. When we launch products and
services, sales & marketing expenses substantially increase, while research
& development, pre-production and license costs decrease. After sales of
products and services reach "regular" levels, the principal operating expenses
will be research & development, sales & marketing, manufacturing,
general & administrative. Since we are still in the initial stages of our
business plan, we believe that operating expenses, particularly for wireless
telemetry and wireless telecommunications, will continue to increase during the
next year as we continue development and commercialization, pre-production and
manufacturing and expand our operations.

# DEVELOPMENT
AND COMMERCIALIZATION

Our
development and commercialization activities will principally focus on
completing T3100 for commercial release in July 2002. We expect product
development, applications development and commercialization will always
constitute a significant operating expense because we must continually develop,
enhance and upgrade our products and services. For example, we must extend T3100
to integrate other wireless technologies such as GPRS, TDMA and CDMA.

# Capital
Expenditures

The most significant
capital expenditure will be deploying and equipping the T3100 Network
Operation Center (T-NOC). The T-NOC is the central repository of
telemetry information and acts as the gateway between the PCS service providers
and the Telemetry Users of T3100 (e.g., utilities and alarm companies).

---

# LICENSING

Some
of our products and services utilize intellectual property of other parties,
which generally requires us to pay license fees. Such license fees can take the
form of initial payments, continuing royalties or both types of payments. We
also must reserve funds to pay licenses on essential patents on the
GSM radio and protocols, which is a standard practice in the industry.

# PRE-PRODUCTION

Pre-production
costs include certification by the Underwriters Laboratory and ANSI to prove
that our T3100 device complies with electronic emissions, safety and system
interoperability standards.

# SALES &
MARKETING

Sales
& Marketing expenses include salaries and commissions for sales staff, trade
show expenses, consulting fees and advertising. Since our Companys,
products and services are innovative and relatively unknown, we must conduct
considerable market development programs to create awareness of our products and
services.

# MANUFACTURING

The
largest manufacturing expense will be costs associated with component purchase
guarantees to manufacturers. Initially, a minimum inventory of the Modular T3100
CommCenter and InterfaceBoards will be maintained. Large commercial production
runs of Product will be against signed purchase orders from customers, and
down-payments with orders to decrease the Companies working capital demand.
Since T3100 includes some customized components and custom circuit boards, we
must commit to large volume purchases to ensure timely delivery and to lower
costs. Large production runs avoid multiple set-up charges and therefore are
more economical, especially since third parties will manufacture the T3100 units
for us.

# GENERAL
& ADMINISTRATIVE

General
& administrative expenses primarily consist of salaries and related expenses
of management, support personnel, occupancy fees, professional fees, general
corporate and administrative expenses. As the size and scope of our business
grow, we may expand our corporate and administrative staff, especially
accounting and contract management.

## RESULTS OF
OPERATIONS

Quarter and six
months ended June 30, 2002 compared to quarter and six months ended June 30,
2001

The
following discussion contains comparisons between the quarter (Recent
Quarter) and six months ended June 30, 2002 (Recent Period)
and the quarter (Prior Quarter) and six months (Prior Period)
ended June 30, 2001. The financial statement for the prior period includes
Telemetrix Technologies.

---

During
the Recent Period, our prime focus has been the finalization of the hardware
development and software development for the T3100 System, as well, making
significant progress in marketing the T3100 to the marketplace.

Revenue
totaled $44,000 during the Recent Period, compared to $56,000 for the Prior
Period. During the Recent Period, we received $44,000 from equipment sales and
rentals. The decrease in revenues from the Prior Period is due to the switch
consumers are making from pagers to cellular phones. We expect revenue to
increase substantially over the next 12 to 18 months as we launch the T3100
System.

Operating
expenses were $505,000 during the Recent Period. These expenses
are primarily due to the software development costs for the T3100 technology and
other operating costs. Operating expenses were $872,000 for the Prior Period.

Costs
of Revenue was approximately $50,000 for the Recent Period. These expenses
primarily consist of the costs of the equipment sold, commissions of sales
employees, agent fees and repair parts for the WTC paging operations.
Approximately $49,000 of that is depreciation.

Selling,
General and Administrative expenses were $446,000 for the Recent Period. The
primary component of the SG&A expense is salary costs for the T3100 and
administrative costs of Telemetrix Technologies.

Interest
expense was $773,000 for the Recent Period. This expense
represents primarily the interest charges on the convertible debentures that
occurred in 2000 as well as interest charged on loans from related parties. The
proceeds from the convertible debentures and related party loans were used to
fund the research and development of the T3100 as well as operations. Interest
expense for the Prior Period was $709,000 for interest on loans from related
parties.

Net
loss. We reported a net loss of $1.658 million for the Recent
Period. The principal components of this net loss for the Recent Period were,
interest expense of $773,000, and SG&A expenses of $446,000. We did not
reflect any benefit for income taxes due to the uncertainty surrounding the
realization of the favorable tax attributes in future tax returns.

Accumulated
Deficit. Accumulated deficit for the Recent Quarter was $51.152
million. The primary component of the accumulated deficit is the amortization
and the subsequent write-off of the TRACCS software. The TRACCS software was
used for the billing service bureau operation. The software value was
written-off in late 1999. The total amount of amortization and write-off was $25
million.

LIQUIDITY
AND CAPITAL RESOURCES. During the Recent Period, we used $612,000 in cash
for operations, primarily for salaries, marketing expenses and other operating
expenses. During the Recent Period we generated cash flow from financing
activities of $521,000 that primarily came in the form of notes payable with
related parties and stock issued for operating expenses.

---

FUNDING
REQUIREMENTS. In order to pay operating expenses and achieve self-sustaining
operations, we expect to require substantial funding during the next twelve
months. We will need funds for:

## Development
and Commercialization

Development
and commercialization prior to commercial distribution will require
approximately $100,000. This includes documentation for training, customer user
and installation manuals, licensing fees, compliance testing (i.e., FCC, ANSI,
UL, and CE Mark), software interface development, and completion of
manufacturing design. After commercial distribution begins, $800,000 will be
required for the integration of TDMA, CDMA, the European GSM module and new
technologies.

## Working
Capital

Working
capital will be required to fund the operations until it reaches positive cash
flow. Working capital will be used for salaries and wages for our customer
service, network management, marketing, and administrative employees. It will
also be used for marketing expense including advertising and trade show, and
other operating expenses such as rent, office supplies, postage and professional
fees. Working capital also includes a reserve for unanticipated expenses.

## Manufacturing
Expense

The
anticipated demand for the T3100 will require the manufacturing of Product for
inventory prior to sale. We estimate that an initial 2,000 units will be
required at a cost of approximately $500,000.

## Repay Current
Liabilities

During
our start-up phase, we incurred several lines of credit and above normal levels
of accounts payable. Approximately $270,000 will be used to partially pay down
the accounts payable to a normal level.

# PART
II - OTHER INFORMATION

## Item 1. Legal
Proceedings

The
Company is party to various negotiations and legal proceedings regarding claims
on contracts in the normal course of its business. Management believes that the
outcome of such negotiations and legal proceedings, as well as commitments, will
not have a material adverse effect on the Company's consolidated and combined
financial statements.

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

(a)
   Not Applicable.

---

(b)
   Not Applicable.

(c)
Issuance of Unregistered Securities - There weren't any unregistered securities
issued during this period that have not been previously reported.

(d)
Not Applicable.

## Item 3.
Defaults Upon Senior Securities.

(a)
Not Applicable.

(b)
Not Applicable.

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

No
matters were submitted for a vote of Security Holders.

## Item 5.
Other Information

None.

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

(a)
Exhibits.  None

(b)
Reports on Form 8-K. None

---

# SIGNATURES

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

TELEMETRIX INC., a Delaware corporation
August 15, 2002          
            
            
            
            
            
            
        By:
/s/PAUL ZOLMAN    
            
                
                
                
               
                
                
         
       Paul Zolman
                
                
                
                
               
                
                
         
       Signing for Registrant

---

# INDEX TO
EXHIBITS FILED WITH THIS QUARTERLY REPORT

## Exhibit    
                
                
                
                
                
               
            
                
              
                
                
               
Exhibit Page

None

---