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

                                   FORM 10-KSB
                                   -----------
                                   (MARK ONE)

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

                   For the fiscal year ended December 31, 2002

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

                 For the transition period from ______ to ______

                         Commission file number 0-28606

                            NUWAVE TECHNOLOGIES, INC.
                 (name of small business issuer in its charter)

                   DELAWARE                                   22-3387630
         (State or other jurisdiction                        (IRS Employer
       of incorporation or organization)                  Identification No.)

                               ONE PASSAIC AVENUE
                           FAIRFIELD, NEW JERSEY 07004
               (Address of principal executive offices)(Zip Code)

                                 (973) 882-8810
                (Issuer's telephone number, including area code)

                                 --------------

         Securities registered under Section 12(b) of the Exchange Act:

                                      NONE

         Securities registered under Section 12(g) of the Exchange Act:
                         COMMON STOCK, $.001 PAR VALUE,
                                 PUBLIC WARRANTS

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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
[XX] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained herein, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference to Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [XX]

State issuer's revenues for its most recent fiscal year:  $285,989

Aggregate market value of the voting stock held by non-affiliates based on the
last sale price for such stock at March 31, 2003: $177,000

The number of shares of Common Stock outstanding as of March 31, 2003:
50,676,055

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



<PAGE>


                            NUWAVE TECHNOLOGIES, INC.
                                   FORM 10-KSB
                                      INDEX


PART I.........................................................................1

   ITEM 1.   BUSINESS..........................................................1
   ITEM 2.   PROPERTIES........................................................8
   ITEM 3.   LEGAL PROCEEDINGS.................................................8
   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............8

PART II........................................................................9

   ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
             MATTERS...........................................................9
   ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........10
   ITEM 7.   FINANCIAL STATEMENTS.............................................21
   ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
             AND FINANCIAL DISCLOSURE.........................................21

PART III......................................................................21

   ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
             COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT................21
   ITEM 10.  EXECUTIVE COMPENSATION...........................................23
   ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...25
   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................26
   ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.................................27
   ITEM 14.  CONTROLS AND PROCEDURES..........................................30

SIGNATURES....................................................................31

THIS FORM 10-KSB CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 27A
OF THE SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934. THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE
FORWARD-LOOKING STATEMENTS. CERTAIN FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE
ARE DISCUSSED IN ITEM 6, "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION-CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS," WITHIN THIS REPORT.


<PAGE>


                                     PART I

ITEM 1.  BUSINESS.

GENERAL

         Our mission is to identify, develop and commercialize high-margin,
proprietary technologies suited for high-volume, high-growth markets and, in
turn, achieve attractive long-term growth for our company. Our focus to date has
been and continues to be on unique technology related to image and video
enhancement designed to enrich picture and video output with clearer, more
defined detail in texture, color, contrast and tone, at low cost. Our initial
products can be used by original equipment manufacturers (OEM's) for placement
into products that produce images on display screens such as televisions or DVD
players, for supplementing and increasing video quality on existing television
monitors and video displays via set-top boxes containing our technology, the
Security and Surveillance Market in both the Governmental an private sectors and
by individuals over the Internet for improving their personal photographs. Our
patented high speed filtering technology removes approximately 70% of the
picture noise while retaining correct focus (the image and text in the image
does not blur). The three product lines based upon our proprietary technology
are: (1) retail and security/surveillance products; (2) the NUWAVE Video
Processor ("NVP") Technology; and (3) digital filtering technology.

Retail and Security/Surveillance Products

         During the second half of 2002, we announced a new line of retail video
products. The new products are powered by our new state-of-the-art "1104 ASIC
chip technology." The retail line is expected to be marketed and sold through
consumer electronic distributors, national retail chains and specialty
audio/video stores and includes a series of video game hook-up cables, an "S"
Video Enhancer (SVE) set-top box and four video selector boxes that feature the
company's proprietary technology for image enhancement. The introduction of
these products will allow consumers to mix multiple video sources, from popular
products such as DVD Players, Satellite Receivers, Video Camcorders, and Video
Game Consoles.

         During 2002 we entered into a non-exclusive alliance with Unical
Enterprises, Inc. for the marketing, sales and distribution of our newly
introduced line of proprietary products as well as a full line of consumer
electronics accessories with access to the Sylvania brand. The initial
contractual agreement expired on April 1, 2003 and we are in the process of
renewing our agreement. Unical Enterprises, Inc., a leading manufacturer and
distributor of Northwestern Bell Phones and the exclusive licensee of the
Sylvania name for home automation and consumer electronics accessories, recently
announced its entry into the video game accessories market. Along with video
game accessories we will now, with Unical's support, market a full line of
consumer electronics accessories, with access to the Sylvania brand. This line
will include products like Universal Remote Controls, Indoor TV antennas, Web
Cams, and NUWAVE ENABLED hookup cables. In connection with this agreement we
received a $2.85 million order for universal remote control units to be
delivered to Electronics Etc., Inc. over the next year. We initially anticipated
this order would begin shipping during the fourth quarter of 2002 but due to
product specification changes the order has been delayed until the customer has
approved the product revisions. We anticipate that a portion of this order will
ship during 2003. In addition to Unical, the Company is in discussions with
other potential retail distribution customers who have seen demonstrations of
our new retail products and have expressed interest in going forward.

         We recently introduced a line of NUWAVE ENABLED Security/Surveillance
image enhancement products that include NUWAVE's patented hardware chip
technology which breaks down a video signal into its chrominance and luminance


<PAGE>

components and then modifies specific parameters: color, luminance, black level,
clarity and noise reduction, to remove visual noise before reassembling the
signal and sending it to a playback device, such as a video monitor. When
integrated into a security and surveillance system, this technology has
applications for law enforcement, anti-terrorism and business surveillance, in
public locations such as airports, retail stores, sports stadiums and other
public gathering places. The Company has received and shipped its first order
from an agency of the Federal Government for this new line of
security/surveillance image enhancement products.

         The NUWAVE Video Processor (NVP) technology is proprietary
video-enhancement technology designed to significantly enhance video output
devices with clearer, sharper details and more vibrant colors when viewed on the
display screen. We are marketing this technology in the form of ASIC chips
(Application Specific Integrated Circuits) directly to OEM's who by
incorporating this enabling technology would improve picture quality in their
televisions, VCR's, DVD's, camcorders, set-top boxes and other video output
devices. This technology can also be licensed to the OEM for incorporation onto
their own ASIC design. The "NVP 104" plastic (silicon) chip was completed during
2001.

         During the second half 2002, the Company announced the completion of
its new ASIC Chip, the "NVP 1104." This new chip can create economies of scale
in the marketplace by offering a superior product with unique features, which
satisfy customer's demands for higher video quality at modest prices. It
supports the latest video standards such as component video and progressive scan
systems and includes features that are targeted at video enhancement for the
Security/Surveillance and Home Entertainment applications. These important
features together with its low cost implementation make it very attractive to
incorporate into OEM consumer audio/video products like DVD players, AV
receivers, Video Games, Satellite Receivers, AV Selectors, TV's and Retail
set-top box products. The NVP 1104 is "future proofed" due to its unique design
philosophy, and by its ability to function with the many video standards
available today. We are currently in discussions with potential retail customers
and major OEM's who have indicated their desire to incorporate our technology
into their products.

Digital Software Technology

         Our proprietary digital filters remove graininess and digital artifacts
while preserving proper focus we believe better than any other "real time"
filters that are on the market today. In October 2001, we were granted a patent
by the U.S. Patent Office covering our digital filters. We plan to license our
digital filtering technology to OEM's for embedding in products such as PC's,
printers, scanners, camcorders and DVD's, among other digital imaging devices.
These patented filters are expected to be in demand for use in processing
digital video and movies used for streaming video over the Internet. The digital
technology not only complements our proprietary analog ASIC chip technology but
can also work in conjunction with it to further improve the resulting image
quality. In April 2002, we signed an agreement with Sony Corporation, giving
Sony the non-exclusive right to use one of our filters in its digital color
printers, in return for a nominal one-time licensing fee. In January 2003, Sony
signed a new license agreement and purchased the non-exclusive right to an
upgrade to this filter. While these initial steps may lead to a growing
relationship between Sony Corporation and NUWAVE, there is no assurance that
such a relationship will develop.

         Although we anticipate deriving increased revenues from the sale of our
ASIC chips and retail products and the licensing of our proprietary digital
software, no assurance can be given that these products will be successfully
marketed or that losses will not continue to occur during such period. See
"Liquidity and Capital Resources."


                                       2
<PAGE>


BACKGROUND--VIDEO IMAGES

         The human eye perceives all images as a result of its ability to
recognize light. Light travels as continuous electromagnetic waves ("Analog
Light Waves") that are either emitted by the object being observed or reflected
from it. Analog Light Waves vary in frequency and amplitude, and can be directly
captured as images. For example, in photography, light waves strike film treated
with certain chemicals and the energy from the light wave causes chemical
reactions that change the translucency of the film. As a result, the image can
be recreated by again passing light through the film. In computers, visual
images can be stored and manipulated after Analog Light Waves have been broken
down into smaller constituent parts expressed as digital signals. These digital
signals are transmitted as bits and then reconstituted into Analog Light Waves
visible to the human eye.

         Broadcast television technology is based on Analog Light Wave
transmissions. Analog Light Waves are captured by an electronic television
camera and turned into usable electrical energy in the form of lower frequency
waves in the form of electrical currents in an electric circuit ("Analog Video
Waves"). That wave is transmitted to a receiver, where it is projected at the
standard broadcast rate of 30 frames per second ("fps") against a phosphorescent
screen. The screen then emits Analog Light Waves, making the image visible to
the human eye.

         Modern video telecommunications, such as satellite broadcasting and
cable television, generally combine both analog and digital processes in order
to capture and transmit images. For example, in digital satellite video
telecommunication the image is digitized by a computer processor and then
broadcast to a satellite. The digital information is received and rebroadcast by
the satellite directly to a receiver, and then reconstituted into energy in the
form of an analog wave and displayed at 30 fps to create a visible image.

         Bandwidths available for satellite video transmission are limited by
the Federal Communications Commission ("FCC"). These limitations significantly
restrict the amount of information that can be transmitted in any time interval
and require most information to be transmitted in a compressed digitized format.

         Given the physical limitations of satellite, cable and telephone
systems, and their increasing interactivity, ever more emphasis is being placed
on compression technology as a means to allow more data to be transmitted in any
time interval. Using a variety of techniques, portions of a digital description
of an image are omitted in the transmission of information, and, by mathematical
formula or inference, most of the omitted data is then replaced after reception.
The result of this compression technology has been to increase the number of
channels available for digital satellite broadcasting from 50 to 150, and to
significantly improve the quality of images transmitted over the Internet. We
believe that improvements in the amount of compression possible will continue.
However, as the amount of compression increases, more data will likely be lost,
and the quality of the image will deteriorate.

         Image information may be lost in the process of compression or
distorted during recording, transmission or playback because of various factors,
including signal interference or deterioration of original film quality and
camera focus. Some of the problems from this loss or distortion of image
information include lack of clarity, a "washed out" look and reduced or
inadequate black level.

         One of the methods used to compress digitized video information for
storage and transmission (other than television transmission) is to eliminate
frames. A phenomenon causing analogous results occurs when the hard drive of a
computer, or some other component, cannot retrieve or present data at
sufficiently high fps. In either case, image movement is erratic and
unrealistic. Regardless of whether the signal is compressed, the image may be
subject to random salt and pepper noise patterns.


                                       3


OUR COMPANY'S VIDEO ENHANCEMENT PRODUCTS

The NVP Technology

         Our patented NVP controls, corrects and improves analog video signals
using digital control (software). The NVP first detects and replaces all
important picture synchronization and stability attributes. It then corrects the
color and black and white information. The NVP enhances fine details of an image
and reduces distortions incurred in the course of transmitting the image,
corrects the pure black content of images and adjusts perceived light on
projected images. Fine detail enhancement is achieved by a proprietary circuit
that analyzes the form of the analog waves at the point of origin or display,
and processes the wave to significantly increase the clarity of the image.

         The NVP achieves "blackness" correction by establishing a "reference to
true black" and adjusting the rest of the color spectrum to that reference,
making a "washed out" image appear more vivid. Similar referencing currently is
available only in expensive video display units, TV monitors and projection
systems; the NVP's proprietary circuits enable the process to be performed
inexpensively on a printed circuit board, ASIC or a small portion of a
integrated circuit chip.

         The NVP also contains circuits that provide for the adjustment of light
in images and brightness of the colors presented, similar to circuits
traditionally included in televisions.

         The NVP can be used prior to further processing of the Analog Video
Wave at the source of the video signal and/or at the other end of the process
prior to the display of the video image. In the form of a chip, it can be
included in a television set, video projector or in a video conference display
or in the decoder or routing box that connects a typical television to a cable
broadcasting company or a multichannel satellite provider. The NVP also can be
included in any personal computer that has a video capture board, a device
enabling the computer to convert standard broadcast video signals into a
digitized form. This enables the image to be enhanced prior to digitization.

         We have developed patented Softsets to control the functions of the
NVP. The Softsets give both end-users and manufacturers who use the NVP in their
products the ability to manipulate the attributes of video images to their own
taste or standards. For example, the manufacturer of a set-top box who includes
the NVP and Softsets in its product could offer viewers the ability to select
predetermined optimum video parameters for "Sports," "Movies," "Drama" or other
predesignated programming from their remote control ("Active Softsets").
Additionally, program providers or other transmitters can encode their signal so
that a receiving device containing the Softsets and enhanced NVP will
automatically adjust its video parameters to a predetermined value when the
signal is received ("Passive Softsets"). The encoded signal can also be included
in the actual programming.

Digital Video and Photo Software Video Enhancement Technology

         We have developed a proprietary technology to remove noise, graininess
in pictures, to complement our clarity technology used in the NVP-104 ASIC. The
result of this development is a set of patented algorithms that remove 70% of
the picture noise while retaining correct focus (the image does not blur). In
addition, the NUWAVE algorithm process is three times faster than any other
known algorithm or filter thus allowing use in and during real time streaming
video.

         We believe our company has proprietary solutions for sale in both
analog and digital form to meet the continuing evolution and convergence of the
PC to television markets and the worldwide trend away from analog devices toward
digital devices.


                                       4
<PAGE>


Other Potential Products

         Our company, both internally and through the use of outside
consultants, continues to conduct investigation and research and development
with respect to other new technologies/products to address the digital, PC and
internet markets, which are new markets for us to participate in. We intend to
continue to use outside consultants to assure exposure to new ideas and
technology. These activities may give rise to additional products that we may
commercialize. However, there can be no assurance that our efforts will result
in marketable products or products that can be produced at commercially
acceptable costs or that the Company will have sufficient funds available to
support the development and commercialization of such products.

RESEARCH AND DEVELOPMENT

         Our Advanced Engineering Group currently operates to support the
continuing development of our products and related technology, and the
identification of additional sources of new technology. We utilize our Advanced
Engineering Group to create products and technology. These products and
technology include the NVP 104 and NVP 1104 ASIC chips, a line of retail and
Security and Surveillance products and a significant amount of the software
included in each of its products.

         The Advanced Engineering Group consists of our own employees, together
with outside consultant organizations who have on their respective staffs
engineers, technicians and support personnel who devote time to our company on
an as-needed project-by-project basis. We anticipate that the make-up of our
Advanced Engineering Group will change from time to time depending on our
current and anticipated development and commercialization plans. Our strategy
with respect to new products and technologies is to continue to utilize the
Advanced Engineering Group as well as other independent third party sources and
to increase its internal technical and engineering staff as appropriate.

         During fiscal 2002 and 2001, $681,000 and $1,165,000, respectively,
were spent on research and development activities. During the year ending
December 31, 2003, we estimate that we will spend approximately $150,000 on
research and development. Any increases or decreases to these research and
development expenditure estimates are expected to be directly related to
revenues generated from our current and forecasted product line-up.

MARKETING AND SALES

         Utilizing our proprietary technologies, we have completed development
of three product lines: (1) retail and security/surveillance products; (2) the
NUWAVE Video Processor Technology; and (3) Digital Software (PicturePreptm
Technology). These three product lines are currently being marketed to their
respective distribution channels as follows:

Retail and Security/Surveillance Products

         During the second half of 2002, we announced a new line of retail video
products. The new products are powered by the Company's new state-of-the-art
"1104 ASIC chip technology." The retail line is expected to be marketed and sold
through consumer electronic distributors, national retail chains and specialty
audio/video stores and includes a series of video game hook-up cables, an "S"
Video Enhancer (SVE) set top box and four video selector boxes that feature the
company's proprietary technology for image enhancement. The introduction of
these products will allow consumers to mix multiple video sources, from popular
products like DVD Players, Satellite Receivers, Video Camcorders, and Video Game
Consoles


                                       5
<PAGE>


         Also during the second half of 2002 we announced the newest addition to
our retail product line, a universal remote control unit. At the same time we
announced the receipt of a $2.85 million purchase order for this product from
Electronics Etc, Inc., a consumer products distributor with a wide retail
customer base. Although this product does not contain NUWAVE's proprietary
technology it is compatible with and complementary to NUWAVE's newly introduced
line of retail video enhancement products and can therefore be sold either
independent of or together with its retail video enhanced selector boxes. We
initially anticipated this order would begin shipping during the fourth quarter
of 2002 but due to product specification changes the order has been delayed
until the customer has approved the product revisions. We anticipate that a
portion of this order will ship during 2003.

         During 2001, we completed development of our first retail product
utilizing the NVP ASIC chip, the VGE set-top box for use with video games and
DVD's. The VGE is a low-cost video game enhancer that provides home video
"gamers" with better video quality, to give game players an "edge" to improve
their scores. In late June 2001, we began introducing the VGE 101 through select
distributors and manufacturer's representatives for placement in nationally
known retail chains. In keeping with our focus to develop and commercialize
video enhancement technology and to keep our operating costs to a minimum our
objective was to develop, introduce and turn the manufacture and marketing of
this product over to a recognized distributor with access to the retail market
place. In December 2001, we entered into a strategic alliance with Gemini
Industries ("Gemini"), a manufacturer and distributor of consumer electronics
accessories. Gemini was granted a five-year exclusive license to market and
distribute NUWAVE's VGE in North America. Initial shipments of the VGE and ASIC
chips to Gemini took place during the first quarter of 2002. Minimum ongoing
purchase requirements under the contract were to begin in July 2002. After
having received a three-month extension Gemini still had not met their minimum
contractual purchase requirements and management determined it was in the
Company's best interest to terminate the agreement. We are considering the
contractual implications as well as our alternatives so as to not further
restrict our ability to sell and market our new line of products to the retail
marketplace.

         In line with our objectives, we entered into a non-exclusive alliance
with Unical Enterprises, Inc. for the marketing, sales and distribution of our
new line of proprietary products as well as a full line of consumer electronics
accessories with access to the Sylvania brand. Unical Enterprises, Inc., a
leading manufacturer and distributor of Northwestern Bell Phones and the
exclusive licensee of the Sylvania name for home automation and consumer
electronics accessories, recently announced its entry into the video game
accessories market. Along with video game accessories we will now, with Unical's
support, market a full line of consumer electronics accessories, with access to
the Sylvania brand. This line will include products like Universal Remote
Controls, Indoor TV antennas, Web Cams, and NUWAVE ENABLED hookup cables.

MANUFACTURING

         The Company does not contemplate that it will directly manufacture any
of its products. It has contracted with third parties to manufacture its NVP
ASIC chips and its product line up. It also may license to third parties the
rights to manufacture the products, through direct licensing, OEM arrangements
or otherwise.

         The Company intends to produce the NVP ASIC chips in accordance with a
customer's requirements supported by firm commitments rather than producing and
storing in inventory ASIC chips in anticipation of applications required by
customers in the future.


                                       6
<PAGE>


PATENTS; PROPRIETARY INFORMATION

         To the extent practicable, the Company has filed and intends to file
U.S. patents and/or copyright applications for certain of its proposed products
and technology. The Company has also filed and intends to file corresponding
applications in key industrial countries worldwide.

         In April 1996, the Company filed two U.S. patent applications on behalf
of Rave Engineering Corporation ("Rave") for its Randall connector system. One
patent was received in November 1997 and the second one in January 1998. Under
the terms of the settlement agreement with Rave, the Company retains the
exclusive license rights to these patents.

         In April 1998, the Company filed three U.S. patent applications for
certain of its independently developed products: one for the NUWAVE Video
Processor and two for the Softsets, these patents were granted in November 2000,
February 2001 and May 2001, respectively. In August 1999, the Company filed a
patent application for its digital software technology as used in PicturePrep
product line, this patent was granted in October 2001. There is no assurance
that any patent will afford us with commercially significant protection of our
technology or that we will have adequate resources to enforce our patents.

         The Company also sells its technology and products in foreign markets.
As such, it has filed for foreign patent protection in the countries forming the
European Common Union, Japan and Korea. The patent laws of other countries may
differ significantly from those of the United States as to the patentability of
the Company's products and technology. Moreover, the degree of protection
afforded by foreign patents may be different from that in the United States.
Patent applications in the United States are maintained in secrecy until the
patents are issued, if a non-publication request is timely made and the
applications are not foreign filed, and are otherwise published 18 months after
filing. Publication of discoveries in scientific or patent literature tends to
lag behind actual discoveries by several months. As a result, the Company cannot
be certain that it will be the first creator of inventions covered by any patent
applications it makes or the first to file patent applications on such
inventions.

         Management believes that the products the Company intends to market and
sell do not infringe the patents or other proprietary rights of third parties.
Further, it is not aware of any patents held by competitors that will prevent,
limit or otherwise interfere with the Company's ability to make and sell its
products. However, it is possible that competitors may have applied for, or may
in the future apply for and obtain, patents which have an adverse impact on the
Company's ability to make and sell its products. There is no assurance that
competitors will not infringe the Company's patents. Defense and prosecution of
patent suits, even if successful, are both costly and time consuming. An adverse
outcome in the defense of a patent suit could subject the Company to significant
liabilities to third parties, require disputed rights to be licensed from third
parties or require it to cease selling its products.

         The Company also relies on unpatented proprietary technology. There is
no assurance that others may not independently develop the same or similar
technology or otherwise obtain access to the Company's unpatented technology. To
protect its trade secrets and other proprietary information, the Company
requires employees, advisors and collaborators to enter into confidentiality
agreements. The Company could be adversely affected in the event that these
agreements fail to provide meaningful protection for its trade secrets, know-how
or other proprietary information.

COMPETITION

         The markets that the Company intends to enter are characterized by
intense competition, and, particularly with respect to the market for video
editing, video production and video processing products, significant price
erosion over the life of a product. The Company's products will directly compete


                                       7
<PAGE>


with those of numerous well-established companies, such as Sony Electronics,
Inc., Panasonic Division of Matsushita Electric Industrial Co., Motorola, Inc.,
Mitsubishi International Corp. and Royal Philips Electronics, NV, which design,
manufacture and/or market video technology and other products. All of these
companies have substantially greater financial, technical, personnel and other
resources than the Company and have established reputations for success in the
development, licensing, sale and service of their products and technology.
Certain of these competitors dominate their industries and have the necessary
financial resources to enable them to withstand substantial price competition or
downturns in the market for video products.

EMPLOYEES

         The Company currently has six full-time employees, of whom four are
executives and depending on its level of business activity, expects to hire
additional employees in the next 12 months, as needed, to support marketing and
sales, manufacturing and research and development. The Company also retains a
varying number of consultants on an as-needed basis.

ITEM 2.  PROPERTIES

The Company has established its headquarters in Fairfield, New Jersey. Pursuant
to the sublease relating to such facility, the Company is obligated to make
monthly rental payments of $6,090. The lease is on a month-to-month basis. The
Company's subleased portion of the facility is approximately 2,500 square feet
and the sublease entitles the Company to share certain common areas.

ITEM 3.  LEGAL PROCEEDINGS

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On December 20, 2002 the Company held a special meeting of its
stockholders to:

         1.   to elect four directors;

         2.   to authorize the Board of Directors to effect a reverse split of
              our outstanding common stock at the discretion of the Board at
              one of the following: at an exchange ratio of one-for-ten, at an
              exchange ratio of one-for-twenty, at an exchange ratio of
              one-for-thirty, at an exchange ratio of one-for-forty or at an
              exchange ratio of one-for-fifty; and as to the timing, based upon
              its view as what is in the best interests of the Company and the
              stockholders; and

         3.   to approve an amendment to the Company's Certificate of
              Incorporation to increase the number of authorized shares of our
              common stock to 140,000,000 shares, $.001 par value per share.

         The following table sets forth information regarding the number of
votes cast for and against, with respect to the matter presented at the meeting.


                                       8
<PAGE>

<TABLE>
<CAPTION>

                                                      AGAINST OR
        PROPOSAL                   FOR                 WITHHELD              ABSTENTIONS              UNVOTED

<S>        <C>                 <C>                     <C>                      <C>                       <C>
           1                   15,306,186               428,618                    0                      0

           2                   15,112,316               611,033                 11,455                    0

           3                   14,614,796              1,086,253                33,755                    0

</TABLE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         MARKET FOR COMMON EQUITY

         The Company's Common Stock, par value $.001 per share ("Common Stock")
is traded on the OTC bulletin board (OTCBB) Market under the symbol WAVE. The
OTCBB is a regulated quotation service that displays real-time quotes, last-sale
prices and volume information in over-the-counter (OTC) equity securities. Prior
to August 13, 2002, the stock had been traded on the NASDAQ SmallCap Market. The
following table sets forth the range of high and low closing sale prices for the
Common Stock as reported on the NASDAQ SmallCap Stock Market during each of the
quarters presented until August 12, 2002 and the OTCBB subsequent to August 12,
2002. The quotations set forth below are inter-dealer quotations, without retail
mark-ups, mark-downs or commissions and do not necessarily represent actual
transactions.

                                                              Common
                                                               Stock
                                                      HIGH              LOW
                 QUARTERLY PERIOD ENDED
                 March 31, 2001                       1.44              .41
                 June 30, 2001                        1.02              .60
                 September 30, 2001                   1.89              .55
                 December 31, 2001                    1.43              .86
                 March 31, 2002                       1.05              .59
                 June 30, 2002                         .71              .30
                 September 30, 2002                    .41              .07
                 December 31, 2002                     .14              .01

         As of April 7, 2003, there were approximately 175 holders of record of
the Company's Common Stock. This number does not include beneficial owners of
the Common Stock whose shares are held in the names of various dealers, clearing
agencies, banks, brokers and other fiduciaries.

         The Company has never declared or paid any cash dividends. The Company
currently intends to retain any future earnings to finance the growth and
development of its business and future operations, and therefore does not
anticipate paying any cash dividends in the foreseeable future.


                                       9
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES

         On November 19, 2002 the Company issued 48,000 shares of its common
stock to a consulting firm as partial compensation for services it rendered to
the Company.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDITION AND
         RESULTS OF OPERATIONS

                          SUMMARY FINANCIAL INFORMATION

         The summary financial data set forth below are derived from and should
be read in conjunction with the financial statements, including the notes
thereto, filed as part of this Form 10-KSB.

<TABLE>
<CAPTION>

                                              YEAR ENDED           YEAR ENDED           YEAR ENDED
     STATEMENT OF OPERATIONS DATA:           DECEMBER 31,         DECEMBER 31,         DECEMBER 31,
                                                 2002                 2001
<S>                                         <C>                  <C>                   <C>
(in thousands, except share data)
Revenues                                    $        286         $       505           $        14
Net Loss                                    $      2,674         $     4,273           $     4,289
Net loss per common share                   $      (0.19)        $     (0.40)          $     (0.42)
Weighted average number of shares             14,265,755          10,749,404            10,135,345

                                             DECEMBER 31,         DECEMBER 31,         DECEMBER 31,
          BALANCE SHEET DATA:                    2002                 2001                 2000

Working capital                             $       (283)        $       895           $     3,767
Total assets                                $        666         $     2,133           $     4,885
Total liabilities                           $        852         $       846           $       417
Stockholders' equity                        $       (186)        $     1,287           $     4,467

</TABLE>


FORWARD-LOOKING STATEMENTS

         This Report on Form 10-KSB contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements
other than statements of historical facts included in this Report, including
without limitation, the statements under "General," "Marketing and Sales,"
"Research and Development," "Manufacturing," "Liquidity and Capital Resources"
and "Plan of Operation" are forward-looking statements. The Company cautions
that forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from those indicated in the
forward-looking statements, due to several important factors herein identified.
Important factors that could cause actual results to differ materially from
those indicated in the forward-looking statements ("Cautionary Statements")
include delays in product development, competitive products and pricing, general
economic conditions, risks of intellectual property litigation, product demand
and industry capacity, new product development, commercialization of new
technologies, the Company's ability to raise additional capital, and the risk
factors detailed from time to time in the Company's annual report on Form 10-KSB
and other materials filed with the Securities and Exchange Commission ("SEC").

         All subsequent written and oral forward-looking statements attributable
to the Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.


                                       10
<PAGE>


GENERAL

         Our mission is to identify, develop and commercialize high-margin,
proprietary technologies suited for high-volume, high-growth markets and, in
turn, achieve attractive long-term growth for our company. We have been focusing
on technology related to image and video enhancement designed to enrich picture
and video output with clearer, more defined detail in texture, color, contrast
and tone, at low cost. Our initial products can be used by original equipment
manufacturers (OEM's) for placement into products that have or utilize display
screens such as televisions or DVD players, for supplementing and increasing
video quality on existing television monitors and video displays via set-top
boxes containing our technology, and by individuals over the Internet for
improving their personal photographs. Our patented high speed filtering
technology removes approximately 70% of the picture noise while retaining
correct focus (the image and text in the image does not blur). We have developed
and are currently marketing three product lines based upon our proprietary
technology. These products lines are: 1) Retail and Security/Surveillance
Products; 2) the NUWAVE Video Processor (NVP) Technology and 3) Digital
Filtering Technology (see "Marketing and Sales").

RESULTS OF OPERATIONS

         Revenues for the year ended December 31, 2002 were $286,000 as compared
to $505,000 for the prior year. Revenues for the two years were a direct result
of the introduction of our first retail product, the VGE 101 and an agreement
which made Gemini Industries, Inc. the exclusive licensee of NUWAVE's VGE retail
product. In late June 2001, we began introducing the VGE 101 through select
distributors and manufacturer's representatives for placement in nationally
known retail chains. In keeping with our focus to develop and commercialize
video enhancement technology and to keep our operating costs to a minimum our
objective was to develop, introduce and turn the manufacture and marketing of
this product over to a recognized distributor with access to the retail market
place. In December 2001, we entered into a strategic alliance with Gemini
Industries ("Gemini"), a manufacturer and distributor of consumer electronics
accessories. Gemini was granted a five-year exclusive license to market and
distribute NUWAVE's VGE in North America. Initial shipments of the VGE and ASIC
chips to Gemini took place during the first quarter of 2002. Minimum ongoing
purchase requirements under the contract were to begin in July 2002. After
having received a three-month extension Gemini still had not met their minimum
contractual purchase requirements and management determined it was in the
Company's best interest to terminate the agreement. We are considering the
contractual implications as well as our alternatives so as to not further
restrict our ability to sell and market our new line of products to the retail
marketplace. The sales for the year ended December 31, 2002 were primarily sales
of the Company's remaining domestic VGE inventory to Gemini, as the Company's
efforts were concentrated on sales of NVP 1104. Cost of Sales for 2002 was
$390,000 versus $308,000 for 2001. The increase in cost of goods sold was
primarily the result of a write-off of the Company's December 31, 2002 remaining
physical inventory in the amount of $230,000 consisting of the discontinued
domestic and European VGE product and the related NVP 104 ASIC chips. Research
and development costs for the year ended December 31, 2002 were 681,000; a
reduction of $484,000 from the prior year. This reduction included a decrease in
engineering salaries and outside consulting fees of $170,000; amortization of
$315,000 which represented amortization and impairment of the PicturePrep
software and PicturePrepClub.Com website recognized during 2001; these
reductions were offset by an increase in other expenses of $1,000. General and
administrative expenses for the year ended December 31, 2002 were $2,071,000; a
decrease of $1,629,000 from the prior year. This decrease was the result of
management's company wide cost cutting efforts resulting in major decreases in
marketing and sales expenses of $815,000, salaries of $372,000, professional
fees $132,000, investor relations of $111,000, financial consulting of $94,000,
bad debt expense of $43,000, Employee benefits of $38,000, depreciation of
$15,000 and other of $9,000.

         The net loss for the year ended December 31, 2002 of $2,674,000
compared to a net loss for the year ended December 31, 2001 of $4,273,000, a
decrease in losses of $1,599,000. The decrease in losses for the year ended 2002
were primarily attributable to decreases in advertising and sales expenses of
$815,000 relating to the reduced need for the Company market the VGE product in
the retail marketplace and concentration on marketing to OEMs; a decrease in
payroll costs of approximately $372,000 relating to reduction of staff; and
additional decreases in administrative expenses as detailed above totaling
$441,000; a decrease in Research and Development Costs of $484,000. These
decreases were offset by and a reduction in the Company's provision for income
tax benefits of $136,000; a reduction in gross profit of $301,000 partially
resulting from a write-off of obsolete inventory; and a reduction in net
interest income of $76,000.

         Revenues for the year ended December 31, 2001 were $505,000 as compared
to $14,000 for the prior year. This was a direct result of the introduction and
sales of our VGE retail product and our ASIC chips. Cost of Sales for 2001 was
$308,000 versus $4,000 for 2000 also as a direct result of the increased sales.
Research and development costs for the year ended December 31, 2001 were
$1,165,000; a reduction of $18,000 from the prior year. This reduction included
a decrease in engineering salaries and outside consulting fees of $257,000 and
miscellaneous related costs of $10,000 primarily due the completion of the
initial development of our core technologies. These reduced development costs
were partially offset by an increase in amortization and write off of
development costs related to the PicturePrep software and the PicturePrepCub.com
website over 2000 of $249,000. General and administrative expenses for the year
ended December 31, 2001 were $3,699,000, an increase of from the prior year.
Such increases were primarily a result of accounting treatment for performance
stock options granted during 2001 ($226,000), increased legal fees as a result
of additional SEC filings and contract work during 2001 ($144,000) and other
($15,000). Interest expense (net of interest income) for the year ended December
31, 2001 was $76,000 as compared to $264,000 for the prior year as a result of
lower cash balances throughout 2001 compared to 2000. During the year ended 2001
the Company showed a benefit arising from income taxes of $318,000 as compared
to a provision for income taxes in 2000 of $66,000. This change is a direct
result of estimates posted for the sale of state tax credits based on a special
New Jersey State program. As a result of the above the Company had a net loss
for the year ended December 31, 2001 of $4,273,000 compared to a net loss for
the year ended December 31, 2000 of $4,289,000, a decrease in losses of $16,000.


                                       11
<PAGE>


         Although we anticipate deriving increased revenues from the sale of our
ASIC chips and retail products and the licensing of our proprietary digital
software during 2003, no assurance can be given that these products will be
successfully marketed or that losses will not continue to occur during such
period. See "Liquidity and Capital Resources."

LIQUIDITY AND CAPITAL RESOURCES

         From its inception until the IPO in 1996, the Company relied for all of
its funding ($2,900,000 in cash plus the cancellation of the notes in the
principal amount of $350,000) on private sales of its debt and equity securities
("Private Financings"). In July 1996, the Company completed its IPO and received
net proceeds of $9,538,428. The Company used $2,073,652 of the net proceeds of
the IPO to repay the principal and interest on the outstanding notes issued to
investors in connection with the Private Financings. On February 6, 1998, the
Company issued 253,485 shares of its Common Stock for an aggregate purchase
price of $1,000,000 to a Private Limited Partnership. Between May 19, 1998 and
June 9, 1998, pursuant to a placement agency agreement with Janssen-Meyers
Associates, L.P. ("Janssen-Myers"), the Company issued 2,742,904 shares of the
Company's Common Stock and 2,057,207 Class A Redeemable Warrants for an
aggregate purchase price of $7,280,546.


                                       12
<PAGE>


         During the period, beginning August 28, 2001 and ending November 12,
2001, the Company issued a total of 844,922 of its shares at a reduced exercise
price of $1 to the holders of certain of its placement agent warrants. These
warrants were originally issued to the placement agent in connection with two
private placements of the Company's equity in May 1998 and March 2000 at
exercise prices of $3.24 and $3.95 respectively. As a special incentive offer to
the holders of the placement agent warrants, the original exercise prices was
reduced during the period August 15, 2001 to January 15, 2002.

         On February 5, 2002, the Company entered into a private placement
agreement with investors whereby the Company issued 600,000 shares of its Common
Stock for an aggregate purchase price of $330,000. On February 27, 2002 the
Company entered into agreement with an investor whereby the Company issued
214,286 shares of Common Stock and warrants to purchase up to 50,000 shares of
Common Stock for an aggregate purchase price of $150,000.The warrants have an
exercise price of $1.00 per share with exercise period of five years expiring
February 27, 2007.

         On April 15, 2002, we entered into an Equity Line of Credit Agreement
with Cornell Capital Partners, L.P., and amended and restated the Agreement as
of May 17, 2002. Pursuant to the Equity Line of Credit Agreement, as amended and
restated, we obtained an Equity Line of Credit under which, we may, at our
discretion, periodically sell to Cornell Capital Partners, L.P. shares of common
stock for a total purchase price of up to $3.0 million. For each share of common
stock purchased under the Equity Line of Credit, Cornell Capital Partners, L.P.
will pay 97% of the lowest closing bid price on the Over the Counter Bulletin
Board or other principal market on which our common stock is traded for the five
days immediately following the advance notice date. Cornell Capital Partners,
L.P. is a private limited partnership whose business operations are conducted
through its general partner, Yorkville Advisors, LLC. Further, Cornell Capital
Partners, L.P. will be paid a fee of 4% of each advance under the Equity Line of
Credit. The effectiveness of the sale of the shares under the Equity Line of
Credit is conditioned upon us registering the shares of common stock with the
Securities and Exchange Commission. As of April 9, 2003, we have registered on
Forms SB-2 with the SEC 79,000,000, shares of our common stock to be issued to
Cornell Capital Partners, L.P. upon advances under the terms of the Equity Line
of Credit Agreement. As of March 31, 2003, Cornell Capital Partners, L.P. under
the terms of the Equity Line of Credit Agreement has advanced $525,500 to NUWAVE
and we have issued 37,071,858 shares of our common stock to Cornell Capital
Partners, L.P. In addition, as of March 31, 2003 there was outstanding loan
balances due to Cornell Capital Partners, L.P. of $289,500 which we plan to
repay over the next five months from the proceeds of puts under the Equity Line
of Credit Agreement.

         In June 2002, we entered into stock purchase agreements with 16
investors whereby we issued 1,101,165 shares of our Common Stock for an
aggregate purchase price of $330,350. On December 31, 2002, we had cash and cash
equivalents of approximately $174,000 and long-term liabilities of $200,000. In
addition, on December 10, 2002, we entered into a sixty day Revolving Line of
Credit and Secured Promissory Note with Gerald Zarin, the Company's CEO. Under
the terms of the agreement, Mr. Zarin agreed to lend the Company, as needed for
working capital requirements, up to $230,000. Mr. Zarin received a commitment
fee of $8,000 in connection with this agreement. At December 31, 2002 the
Company had an outstanding balance of $115,000 under the Revolving Line of
Credit which was repaid to Mr. Zarin on January 2, 2003.

         On December 20, 2002 the Company's Stockholders voted to increase the
authorized Common Stock by 100,000,000 shares from 40,000,000 shares to
140,000,000 shares in conjunction with a reduction in Common Stock par value


                                       13
<PAGE>


from $.01 per share of Common Stock to $.001 per share of Common Stock. The
Company's Stockholders further voted to authorize the Board of Directors to
effect a reverse split of the Company's outstanding common stock at the
discretion of the Board at one of the following: at an exchange ratio of
one-for-ten, at an exchange ratio of one-for-twenty, at an exchange ratio of
one-for-thirty, at an exchange ratio of one-for-forty or at an exchange ratio of
one-for-fifty; and as to the timing, based upon its view as what is in the best
interests of the Company and the stockholders. Management anticipates that a
reverse split is likely to be effected during the current second quarter.

         We will continue to require utilization of the Cornell Capital Equity
for our working capital needs. Assuming the availability of required monthly
advances under the Equity Line of Credit, we should be able to satisfy
contemplated cash requirements for at least through the next twelve months. In
their report on the audit of NUWAVE's financial statements for the years ended
December 31, 2002, and 2001 our independent auditors included an explanatory
paragraph in their report because of the uncertainty that we could continue in
business as a going concern. In the event we are unable to raise the anticipated
operating capital needs through utilization of the Cornell Equity Line or some
other form of financing or receive cash from sales of our products, there would
be substantial doubt about our ability to continue as a going concern.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

         The following factors, among others, could cause actual results to
differ materially from those contained in forward-looking statements made in
this Annual Report on Form 10-KSB and presented elsewhere by management from
time to time.

     1.  WE HAVE PRIMARILY BEEN A DEVELOPMENT STAGE ENTERPRISE WITH ONLY A
         LIMITED OPERATING HISTORY.

         Until June of 2001 we were a development stage enterprise. At that time
we shifted to commercialization and thus have had only a limited operating
history. Since our inception in July 1995, we have been engaged primarily in
raising funds and directing, supervising, and coordinating the activities of our
Advanced Engineering Group, made up of our own employees and third-party
consultants who work with us on a project-by-project basis, in the continuing
development of the NUWAVE Video Processor (NVP) Technology, retail products
utilizing the NVP technology and our digital image enhancement software filters.
During the second half of 2001 we began producing and selling the NVP Video
Processor in an ASIC (Application Specific Integrated Chip) format for the OEM
market and our first set top box product utilizing the NVP technology the VGE
for the retail market (See Marketing and Sales). Although we experienced some
early success with these products, our prospects must be considered in light of
the risks associated with the establishment of a new and small capitalized
business in the evolving electronic video industry. In our case this is
particularly so, as further risks will be encountered in our shift from the
development to the commercialization of new products based on innovative
technology. There can be no assurance that we will be able to generate
significant revenues or achieve profitable operations.

     2.  WE HAVE A HISTORY OF INCURRING LOSSES AND WE ANTICIPATE THAT WE WILL
         CONTINUE TO INCUR LOSSES.

         To date, we have received only limited revenue from the sale of our
products. There can be no assurance that our technology and products will be
able to compete successfully in the marketplace and/or generate significant
revenue. We have incurred significant costs in connection with the development
of our technologies and proposed products and there is no assurance that it will
achieve sufficient revenues to offset anticipated operating costs. As of
December 31, 2002, we had an accumulated deficit of approximately $27,114,000.
Although we anticipate deriving revenues from the sale of products within the
next twelve months, no assurance can be given that these products will be
successfully marketed. Management anticipates that we may continue to incur


                                       14
<PAGE>


losses for at least the next twelve months. Included in such former and future
losses are research and development expenses, marketing costs, and general and
administrative expenses. We anticipate that our losses will continue until we
are able to generate sufficient revenues to support our operations.

     3.  OUR CONTINUED DEVELOPMENT EFFORTS AND FUTURE GROWTH DEPEND UPON OUR
         ABILITY TO RAISE ADDITIONAL CAPITAL WHICH MAY NOT BE AVAILABLE TO US
         WHEN NEEDED OR ON ACCEPTABLE TERMS.

         Our capital requirements in connection with our development activities
have been significant. We have been dependent upon the proceeds of sales of our
securities to private investors to fund our initial development activities.
Since our initial public offering in July 1996, we have obtained needed capital
through private placements of our securities. We anticipate, based on our
current proposed plans and assumptions relating to our operations, that we will
require additional capital in order to implement our business plan (see
Liquidity and Capital Resources and Plan of Operation). On April 15,2002, the
Company entered into a $3 million Equity Line of Credit with a qualified
investor (the "Purchaser"). Provided it is in compliance with the terms of the
agreement including the effective registration of shares to be sold, the Company
may, at its option, require the investor to purchase up to $300,000 per month of
the Company's Common Stock (the "put shares") up to a maximum of $3 million over
the next two years from the effective date. The purchase price of the put shares
will be 97% of the then market price. As of March 31, 2003, we have utilized
$525,500 of the Equity Line leaving a balance of $2,474,500. In their report on
the audit of NUWAVE's financial statements for the year ended December 31, 2002,
our independent auditors included an explanatory paragraph in each of their
reports because of the uncertainty that the Company could continue in business
as a going concern. In the event we are unable to raise the anticipated
operating capital needs through utilization of the Cornell Equity Line or some
other form of financing or receive cash from sales of our products, there would
be substantial doubt about our ability to continue as a going concern. To the
extent that any future financing involves the sale of our equity securities, our
existing stockholders could be substantially diluted.

     4.  WE DEVELOP TECHNOLOGY AND PRODUCTS USING NEW CONCEPTS, SO THERE IS
         UNCERTAINTY ABOUT MARKET ACCEPTANCE OF OUR PRODUCTS, AND WE HAVE
         LIMITED MARKETING EXPERIENCE.

         We develop technology and products using new concepts and designs in
video imagery and processing. Our prospects for success will depend on our
ability to successfully sell our products to key manufacturers and distributors
who may be inhibited from doing business with us because of their commitment to
their own technologies and products or because of our relatively small size and
lack of sales and production history. As a result, demand and market acceptance
for our technology and products are subject to a high level of uncertainty. We
currently have limited financial, personnel and other resources to undertake the
extensive marketing activities that will be necessary to market our technology
and products once their development is completed. No assurance can be given that
any of our potential customers will enter into any arrangements with us.
Further, there is no assurance that our marketing efforts will be successful.

     5.  WE DEPEND ON THE MANUFACTURERS OF PRODUCTS WHO WISH TO INCLUDE OUR NVP
         VIDEO PROCESSOR TO MAKE DESIGN MODIFICATIONS NECESSARY TO INCORPORATE
         OUR TECHNOLOGY INTO THEIR PRODUCTS.

         Commercialization of the NVP Video Processor and sale to manufacturers
of the relevant video equipment will require such manufacturers to adopt new
circuit configurations to accommodate the relevant chip in their products.
Although the NVP Video Processor meets the various video broadcast standards, we
anticipate that manufacturers wishing to use the NVP Video Processor will make
such modifications because of the benefits derived from the improved performance
of their products and the relative simplicity of such modifications. However,
there is no assurance that such modifications will be made. Also, the cost of


                                       15
<PAGE>


such modifications may inhibit or prevent their adoption. Our ability to sell
and/or license our products would be adversely affected if designers and
manufacturers fail to make such modifications.

     6.  WE WILL RELY ON OTHERS TO MANUFACTURE OUR DEVICES, AND WE MAY NOT BE
         ABLE TO MEET CUSTOMER DEMAND IF OUR SUPPLIERS CANNOT MEET OUR QUANTITY
         AND QUALITY REQUIREMENTS.

         We do not plan to directly manufacture any of our products. We contract
with third parties to manufacture our NVP Video Processor and related retail
products. We may also license to third parties the rights to manufacture our
products, either through direct licensing, original equipment manufacturer
arrangements or otherwise.

         We are dependent on third parties to manufacture our NVP ASIC (the
application specific integrated circuit-based NVP Video Processor) and related
products as well as future products we may choose to commercialize. There can be
no assurance that our current suppliers will dedicate sufficient production
capacity to satisfy our requirements within scheduled delivery times, or at all.
Failure or delay by our suppliers in fulfilling our anticipated needs would have
an adverse effect on our ability to develop and market our products. In
addition, we will be dependent on third-party vendors for many of the components
necessary for the final assembly of our products. We may have difficulty in
obtaining contractual agreements with suppliers of these materials due to, among
other things, possible material shortages or possible lack of adequate
purchasing power. While our management believes that these components are
available from multiple sources, it is anticipated that we will obtain certain
of them from a single source, or limited number of sources, of supply. In the
event that certain of these suppliers are unable or unwilling to provide us with
these components on commercially reasonable terms, or at all, delays in securing
alternative sources of supply would result and could have a material adverse
effect on our operations.

     7.  COMPETITION

         Intense competition exists in the markets that we are in. Further, with
respect to the market for video editing, video production and video processing
products, significant price erosion over the life of a product exists. Our
products will directly compete with those of numerous well-established
companies, including the following companies, which design, manufacture and/or
market video technology and other products: Sony Electronics, Inc., Panasonic
Division of Matsushita Electric Industrial Co., Motorola, Inc., Mitsubishi
International Corp., and Royal Philips Electronics, NV.

         All of the above companies have substantially greater financial,
technical, personnel and other resources than we do for production and
innovation of products, and for marketing and sales. Further, each has
established a reputation for success in the development, licensing, sale and
service of its products and technology. In addition, certain of these
competitors dominate their industries and have the necessary financial resources
to enable them to withstand substantial price competition or downturns in the
market for video products.

     8.  OUR INDUSTRY IS CHARACTERIZED BY RAPID TECHNOLOGICAL CHANGES AND
         AGGRESSIVE COMPETITION.

         Rapid changes characterize the markets for our technology and products.
Further, evolving industry standards often result in product obsolescence or
short product life cycles. Certain companies may be developing technologies or
products which may be functionally similar, or superior, to some or all of our
proposed products. As a result, our ability to compete will depend on our
ability to, among other things: complete development and introduce to the
marketplace in a timely and cost-competitive manner our products and technology;


                                       16
<PAGE>


continually enhance and improve our products and technology; adapt our products
to be compatible with specific products manufactured by others; and successfully
develop and market new products and technology.

         There is no assurance that we will be able to compete successfully or
that our competitors will not develop similar or competitive technologies or
products that render our products and technology obsolete or less marketable.
Further, there is no assurance that we will be able to successfully enhance our
proposed products or technology or adapt them satisfactorily.

     9.  TO THE EXTENT PRACTICABLE, WE HAVE FILED U.S. PATENTS AND/OR COPYRIGHT
         APPLICATIONS, BUT THERE IS NO ASSURANCE THAT ANY PATENT OR COPYRIGHT
         WILL AFFORD US COMMERCIALLY SIGNIFICANT PROTECTION.

         To the extent practicable, the Company has filed and intends to file
U.S. patents and/or copyright applications for certain of its proposed products
and technology. The Company has also filed and intends to file corresponding
applications in key industrial countries worldwide.

         In April 1996, the Company filed two patent applications on behalf of
Rave for its Randall connector system. One patent was received in November 1997
and the second one in January 1998. Under the terms of the settlement agreement
with Rave, the Company retains the exclusive license rights to these patents. In
April 1998, the Company filed three patent applications for certain of its
independently developed products: one for the NUWAVE Video Processor and two for
the Softsets, these patents were granted in November 2000, February 2001 and May
2001, respectively. In August 1999, the Company filed a patent application for
its digital software technology as used in PicturePrep product line, this patent
was granted in October 2001. There is no assurance that any patent will afford
us with commercially significant protection of our technology or that we will
have adequate resources to enforce our patents.

         Management believes that the products the Company intends to market and
sell do not infringe the patents or other proprietary rights of third parties.
Further, it is not aware of any patents held by competitors that will prevent,
limit or otherwise interfere with the Company's ability to make and sell its
products. However, it is possible that competitors may have applied for, or may
in the future apply for and obtain, patents which have an adverse impact on the
Company's ability to make and sell its products. There is no assurance that
competitors will not infringe the Company's patents. Defense and prosecution of
patent suits, even if successful, are both costly and time consuming. An adverse
outcome in the defense of a patent suit could subject the Company to significant
liabilities to third parties, require disputed rights to be licensed from third
parties or require it to cease selling its products.

     10. NO DIVIDENDS

         We have not paid any cash dividends to date. Payment of dividends on
our common stock is within the discretion of our board of directors and will
depend upon our earnings, capital requirements and financial condition, and
other relevant factors. We do not intend to declare any dividends on our common
stock in the foreseeable future. Instead, we plan to retain any earnings we
receive for development of our business operations.

     11. LIMITATION ON TAX LOSS CARRYFORWARDS

         As of December 31, 2002, we had available unused net operating loss
carryforwards aggregating approximately $26,925,000 to offset future federal
taxable income. The unused net operating loss carryforwards expire in various
years from 2010 to 2021. Under Section 382 of the Internal Revenue Code of 1986,
utilization of prior net operating loss carryforwards is limited after an
ownership change. We may be subject to limitations on the use of our net
operating loss carryforwards as provided under Section 382 by reason of prior


                                       17
<PAGE>


placements of our securities and future transactions. Accordingly, there can be
no assurance that a significant amount of the existing net operating loss
carryforwards will be available to use. In the event that we achieve
profitability, as to which there can be no assurance, such limitation would have
the effect of increasing our tax liability and reducing our net income and
available cash resources in the future.

     12. LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS

         Our company's certificate of incorporation provides that we will
indemnify any of our directors, officers, employees or agents against actions,
suits or proceedings relating to our company and, subject to certain
limitations, a director shall not be personally liable for monetary damages for
breach of his fiduciary duty. In addition, we have entered into an
indemnification agreement with each of our directors. Such indemnification
agreement provides that a director is entitled to indemnification to the fullest
extent permitted by law.

     13. WE MUST ATTRACT AND RETAIN KEY PERSONNEL IN ORDER TO REMAIN
         COMPETITIVE WHICH MAY BE DIFFICULT GIVEN OUR SMALL SIZE AND LIMITED
         RESOURCES COMPARED TO MANY OF OUR COMPETITORS.

         Our operations depend largely on the continued employment of Mr. Gerald
Zarin, Chairman of the Board, President and Chief Executive Officer. If Mr.
Zarin or other members of management or key personnel resign or otherwise leave
our company, our business and financial condition could be materially adversely
affected.

     14. PROVISIONS IN THE EMPLOYMENT CONTRACT OF OUR PRESIDENT AND IN THE
         SEVERANCE AGREEMENTS OF OUR EXECUTIVE OFFICERS ARE TRIGGERED BY A
         CHANGE IN CONTROL, WHICH ALSO COULD DISCOURAGE UNSOLICITED TAKEOVER
         ATTEMPTS.

         Provisions in the employment contract of our President and our Chief
Financial Officer providing for various termination benefits are triggered by
certain changes in control of our company. Such provisions could have the effect
of discouraging, delaying or preventing unsolicited takeover attempts.

     15. PROVISIONS IN OUR COMPANY'S CERTIFICATE OF INCORPORATION COULD
         DISCOURAGE UNSOLICITED TAKEOVER ATTEMPTS WHICH COULD DEPRESS THE
         MARKET PRICE OF OUR COMMON STOCK.

         Provisions of our company's certificate of incorporation and by-laws
and of Delaware law could discourage potential acquisition proposals and could
delay or prevent a change in control. Such provisions could diminish the
opportunities for a stockholder to participate in tender offers, including
tender offers at a price above the then-current market value of our common
stock. Such provisions may also inhibit fluctuations in the market price of our
common stock that could result from takeover attempts. In addition, our board of
directors, without further stockholder approval, may issue preferred stock that
could have the effect of delaying or preventing a change in control. The
issuance of preferred stock could also adversely affect the voting power of the
holders of common stock, including the loss of voting control to others.

     16. MARKET PRICE FLUCTUATIONS

         The trading price of our common stock may be subject to wide
fluctuations in response to quarter-to-quarter variations in operating results,
general conditions in the computer, video and telecommunications industries,
changes in earnings estimates, recommendations by analysts and other events.


                                       18
<PAGE>


         Our common stock has been relatively thinly traded and we cannot
predict the extent to which a trading market will develop.

         Our common stock has been traded on the Over the Counter Bulletin Board
("OTC:BB") since August 13, 2002. Prior to that date, our common stock was
traded on the Nasdaq SmallCap Market, from which it was delisted for not meeting
the minimum requirements for continued listing. Our common stock is thinly
traded compared to larger more widely known companies in our industry. Thinly
traded common stock can be more volatile than common stock trading in an active
public market. We cannot predict the extent to which an active public market for
the common stock will develop or be sustained after this offering.

     17. OUR COMMON STOCK HAS BECOME SUBJECT TO "PENNY STOCK" RESTRICTIONS
         UNDER FEDERAL SECURITIES LAWS, WHICH COULD REDUCE THE LIQUIDITY OF OUR
         COMMON STOCK, SO STOCKHOLDERS FACE SIGNIFICANT RESTRICTIONS ON THE
         RESALE OF OUR STOCK.

         The Securities and Exchange Commission has adopted regulations, which
generally define penny stocks to be an equity security that has a market price
less than $5.00 per share or an exercise price of less than $5.00 per share,
subject to certain exemptions. On December 20, 2002, the closing price for our
common stock, as quoted on the Over the Counter Bulletin Board, was $0.02 per
share and therefore, our common stock is designated a "Penny Stock." As a penny
stock, our common stock may become subject to Rule 15g-9 under the Exchange Act
or the Penny Stock Rules. These rules include, but are not limited to, Rules
3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities
Exchange Act of 1934, as amended. These rules impose additional sales practice
requirements on broker-dealers that sell such securities to persons other than
established customers and "accredited investors" (generally, individuals with a
net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or
$300,000 together with their spouses). For transactions covered by Rule 15g-9, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. As a result, this rule may affect the ability of broker-dealers to sell
our securities and may affect the ability of purchasers to sell any of our
securities in the secondary market.

         The rules may further affect the ability of owners of our shares to
sell their securities in any market that may develop for them. There may be a
limited market for penny stocks, due to the regulatory burdens on
broker-dealers. The market among dealers may not be active. Investors in penny
stock often are unable to sell stock back to the dealer that sold them the
stock. The mark-ups or commissions charged by the broker-dealers may be greater
than any profit a seller may make. Because of large dealer spreads, investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the investor. In some cases, the stock may fall
quickly in value. Investors may be unable to reap any profit from any sale of
the stock, if they can sell it at all.

         For any transaction involving a penny stock, unless exempt, the rules
require delivery, prior to any transaction in a penny stock, of a disclosure
schedule prepared by the Securities and Exchange Commission relating to the
penny stock market. Disclosure is also required to be made about sales
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements are
required to be sent disclosing recent price information for the penny stock held
in the account and information on the limited market in penny stock.

         The penny stock restrictions will no longer apply to our common stock
if we become listed on a national exchange; we would again qualify for listing
on the Nasdaq SmallCap Market if we attain $2,000,000 minimum net tangible
assets and a $1.00 per share market price. In any event, even if our common


                                       19
<PAGE>


stock were exempt from the penny stock restrictions, we would remain subject to
Section 15(b)(6) of the Exchange Act, which gives the Securities and Exchange
Commission the authority to restrict any person from participating in a
distribution of penny stock, if the Securities and Exchange Commission finds
that such a restriction would be in the public interest.

         Stockholders should be aware that, according to the Securities and
Exchange Commission Release No. 34- 29093, the market for penny stocks has
suffered in recent years from patterns of fraud and abuse. These patterns
include:

o    control of the market for the security by one or a few broker-dealers that
     are often related to the promoter or issuer;

o    manipulation of prices through prearranged matching of purchases and sales
     and false and misleading press releases;

o    "boiler room" practices involving high pressure sales tactics and
     unrealistic price projections by inexperienced sales persons;

o    excessive and undisclosed bid-ask differentials and markups by selling
     broker-dealers; and

o    the wholesale dumping of the same securities by promoters; and

o    broker-dealers after prices have been manipulated to a desired level, along
     with the inevitable collapse of those prices with consequent investor
     losses.

     18. FUTURE SALES BY OUR STOCKHOLDERS MAY ADVERSELY AFFECT OUR STOCK AND
         OUR ABILITY TO RAISE FUNDS IN NEW STOCK OFFERINGS.

         Future Sales of our common stock in the public market could lower the
market price of our common stock. Sales may also make it more difficult for us
to sell equity securities or equity-related securities in the future at a time
and price that our management deems acceptable or at all. Of the 50,676,055
shares of common stock outstanding as of March 31, 2003 46,719,124 shares are,
or will be, freely tradable without restriction. The remaining 3,956,931 shares
of common stock held by our "affiliates" or persons who recently purchased their
shares from the company without Securities and Exchange Commission registration
are "restricted securities" and may be resold in the public market only if
registered or pursuant to an exemption from registration. Some of these shares
may be resold under Rule 144.

         In addition, there are outstanding warrants to purchase up to 4,211,176
shares of common stock.

     19. IN THE FUTURE, WE MAY ISSUE MORE SHARES OF OUR COMMON STOCK. THIS
         WOULD REDUCE EXISTING STOCKHOLDERS' PERCENTAGE OF OWNERSHIP AND MAY
         REDUCE SHARE VALUE.

         Under our amended and restated certificate of incorporation, we are
authorized to issue a total of 140 million shares of common stock and 2 million
shares of preferred stock. If we issue all or part of our remaining authorized
common stock or preferred stock this will result in dilution in the percentage
of common stock held by existing stockholders. The issuance of common stock for
future services or acquisitions or other corporate actions may have the effect
of diluting the value of the shares held by our investors, and might have an
adverse effect on the value of our shares.


                                       20
<PAGE>


     20. OUTSTANDING SHARES THAT ARE CURRENTLY RESTRICTED FROM RESALE MAY BE
         SOLD IN THE FUTURE, CAUSING THE MARKET PRICE OF OUR COMMON STOCK TO
         DECLINE SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL.

         As of December 31, 2002, we had 25,386,714 shares of our common stock
issued and outstanding, of which 21,419,709 are freely transferable and
3,967,005 shares are held by affiliates of the company who have held such shares
for more than one-year and may sell the shares pursuant to Rule 144. Rule 144
provides, in essence, that a person holding "restricted securities" for a period
of one year may sell an amount every three months equal to the greater of (a)
one percent of the company's issued and outstanding shares, or (b) the average
weekly volume of sales during the four calendar weeks preceding the sale. As
restrictions on resale end, the market price of our common stock could drop
significantly if the holders of these restricted shares sell them or are
perceived by the market as intending to sell them.

ITEM 7.  FINANCIAL STATEMENTS

         The information required by this item is incorporated by reference to
pages F-1 through F-19 of this Annual Report on Form 10-KSB.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not applicable.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

         Set forth below are the names as of April 10, 2003 and the business
experience of the directors and executive officers of the Company:

<TABLE>
<CAPTION>

                NAME                     AGE                              POSITION
-----------------------------------  ----------  -------------------------------------------------------
<S>                                      <C>
Gerald Zarin                             62      Chairman of the Board of Directors, President and Chief
                                                 Executive Officer
Edward Bohn                              57      Director
Joseph A. Sarubbi                        74      Director
Eric Lipetz                              66      Director
Jeremiah F. O'Brien                      56      Vice President, Secretary and Chief Financial Officer
Stanley Chayka                           50      Vice President - Engineering
Leonard Langsner                         48      Vice President - Sales

</TABLE>


         GERALD ZARIN has been a Director and President and Chief Executive
Officer of the Company since July 1995. He has been Chairman of the Board of
Directors since January 28, 1996. From June 1993 to July 1995, he was President
and Chief Executive Officer at AMD Consulting, Inc., a business-consulting firm.
From June 1991 until January 1993, Mr. Zarin was the Chairman, President and
Chief Executive Officer of Emerson Radio Corporation ("Emerson Radio"), which
designs and sells consumer electronics products. From November 1990 to June
1991, he was President and Chief Executive Officer of JEM, Inc., an importer of
fine furnishings. From August 1987 to October 1990, he was Senior Vice President
and Chief Financial Officer of Horn & Hardart, Inc., the parent company for


                                       21
<PAGE>


Hanover House and various other hotels and fast food chains. From 1976 to 1986,
he was President and Chief Executive Officer of Morse Electro, Inc., which
designed and sold consumer electronics products.

         EDWARD BOHN has been a Director of and a consultant to NUWAVE
Technology, Inc., since July 1995. Since March 2001, he has been Chief Financial
Officer of Nova Corp., which constructs and manages the construction of data
centers serving the telecommunications (Internet) industry both domestically and
internationally, after having been a Director and Consultant since December
1999. Since February 1995, he has been a Director and Consultant of Jennifer
Convertibles, a furniture distributor. Since September 1994, he has operated as
an independent consultant in financial and operational matters. From January
1983 to March 1994, Mr. Bohn was employed in various capacities by Emerson
Radio, including from March 1993 to March 1994, as Senior Vice President-Special
Projects; and from March 1991 to March 1993, as Chief Financial Officer and
Treasurer/Vice President of Finance. Prior to March 1991, he was Vice President
of Finance and Treasurer. Prior to Emerson he held positions as and Officer and
Assistant Controller of Jersey Central Power and Light, was Coordinator of
Internal Auditing for the GPU System, controller of a multi-million food
manufacturing company, and held various positions in a public accounting firm.

         JOSEPH A. SARUBBI has been a Director of the Company since March 1996.
From October 1993 to June 6, 1996, he was a director of The Panda Project, Inc.,
a manufacturer of computers and semiconductor packages. Since April 1988, Mr.
Sarubbi has been a self-employed management and technical consultant to various
technology companies. From February 1986 to April 1988, he was Senior Vice
President of Manufacturing Operations for Tandon Corporation, a computer
manufacturer. From December 1952 to January 1986, Mr. Sarubbi was employed by
IBM in various senior engineering positions.

         ERIC LIPETZ was elected a Director of the Company in December 2002. He
is an independent financial consultant who specializes in securing venture
capital for start-up companies and small-cap public companies seeking additional
financing and assists companies with strategic planning and M&A activities. He
started his career the Purcell Graham in 1960 and was affiliated with other
brokerage firms until 1978. From 1978 to 1987, Mr. Lipetz worked on agricultural
projects in Israel specializing in "Hot House" farming. From 1987 to 1995, Mr.
Lipetz worked on several ventures to raise funding for small companies in the
USA. From 1995 to the present, Mr. Lipetz has been active in helping Israeli
companies learn the American market and direct them to sources of capital as
well as merger activity. Also during this period, Mr. Lipetz was consulting for
International Franchise Systems (IFS), which has the exclusive license for
Dominos Pizza Europe. Currently involved with Katan Associates International and
various Israeli companies.

         JEREMIAH F. O'BRIEN has been Vice President and Secretary of NUWAVE
Technologies since July 1995. Mr. O'Brien has been the Chief Financial Officer
of NUWAVE since January 1996. Prior to joining NUWAVE, Mr. O'Brien held a
six-year post as CFO and Executive Vice President for Cardiac Resuscitator
Corporation, a medical electronic manufacturer. From September 1989 to June
1991, he served as Senior Vice President of Finance for Emerson Computer
Corporation and Emerson Technologies, Inc., both of which manufacture and sell
electronic components and products. Mr. O'Brien has also held a Corporate
Controller's position for Andin International, a jewelry manufacturing company.
Mr. O'Brien has also acted as an acted as an independent financial consultant to
various private corporations.

         STANLEY J. CHAYKA has been Vice President of Engineering at NUWAVE
Technology since June 2001. From April 1998 to May of 2001, he was the Director
of Engineering for A.F.A. Products Group/Liberty Media, a R&D division of
Liberty Livewire, where he was responsible for new product concept and
development in the field of Advanced Digital Television Systems. From April 1976


                                       22
<PAGE>


to March 1998, he served as Vice President and President of Corporate
Communications Consultants Inc. DBA ColorVision, where he was responsible for
the conception and development of electronic Color Correction Systems used in
television post-production. Over 19 U.S. and foreign patents were issued to
developments made by Mr. Chayka as well as an Emmy for Outstanding Engineering
Achievement from the Academy of Arts and Sciences. From 1970 to 1977, Mr. Chayka
served at various levels of engineering and management for Teletronics
International (NY) a leading post-production firm. He is a member of the
S.M.P.T.E. and the I.E.E.E. engineering societies.

         LEONARD LANGSNER has been Vice President of Sales for NUWAVE since
September, 2002. He joined the company in October 2001 as National Sales Manager
prior to his recent promotion. Lenny has over 24 years of experience in consumer
electronics. His professional career started at Willoughby Peerless, where he
was the leading buyer of audio equipment for each of the five years with the
company. For the next seven years, he was part Select Representatives group
responsible for establishing a dealer network in New York and New Jersey for
product lines including JVC, Teac, Phase Linear, JBL, Sound Design, and Midland.
From 1984 to 1993, Mr. Langsner joined Tops Appliance City as Corporate
Merchandise Manger with responsibilities of sales, product training,
commissioning, Plan-O-Grams, sales budgets and advertising. In 1994 and for the
next five years, Mr. Langsner was with RCA's accessories group as the National
Sales Manager, responsible for product and dealer brand marketing. From 1999 to
2001, Mr. Langsner headed Zenith Electronics as Sales Manager, Product
Development and Marketing Manager.

ITEM 10. EXECUTIVE COMPENSATION

                       COMPENSATION OF EXECUTIVE OFFICERS

         The following table sets forth the annual compensation paid by the
Company for services performed on the Company's behalf for the fiscal years
ended December 31, 2000, 2001 and 2002, with respect to those persons who were,
as of December 31, 2002, the Company's Chief Executive Officer and the Company's
executive officers (the "Named Executive Officers").

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                                            LONG TERM
                                                        ANNUAL COMPENSATION                            COMPENSATION AWARDS
                                                        -------------------                            -------------------
                                                                                                  SECURITIES
                                                                                                  UNDERLYING
              NAME AND                                                          OTHER ANNUAL    OPTIONS (NUMBER      ALL OTHER
         PRINCIPAL POSITION              YEAR        SALARY        BONUS        COMPENSATION     OF SHARES) (1)     COMPENSATION
         ------------------              ----        ------        -----        ------------    ---------------     ------------
<S>                                      <C>      <C>           <C>                    <C>           <C>                  <C>
Gerald Zarin, President and Chief        2002     $ 155,000     $ 30,000               $0                  0              $0
Executive Officer                        2001     $ 144,000          $0                $0            200,000              $0
                                         2000     $ 140,000     $ 50,000               $0                  0              $0

Jeremiah F. O'Brien, Chief Financial     2002     $ 122,000     $ 25,000               $0                  0              $0
Officer, Vice President and Secretary    2001     $ 108,000          $0                $0             50,000              $0
                                         2000     $ 114,000     $ 25,000               $0                  0              $0

Stanley Chayka, Vice President,          2002     $ 100,000     $ 10,000               $0                  0              $0
Engineering                              2001     $  60,000          $0                $0             20,000              $0

Leonard Langsner, Vice President,        2002     $ 102,000          $0                $0                  0              $0
Engineering                              2001     $  20,000          $0                $0             15,000              $0

</TABLE>

                                       23
<PAGE>


(1)  On January 12, 2003, the Executive Officers and Directors of the Company
     voluntarily and irrevocably surrendered all options granted to them though
     that date.

OPTION GRANTS IN LAST FISCAL YEAR

         The number of shares available for grant under the Company's 1996 Stock
Incentive Plan for Employees and Consultants (the "Employee Stock Option Plan")
is 1,205,000. Options for an aggregate of 942,000 shares have been granted under
the Employee Stock Option Plan through December 31,2002. The Company did not
issue options to its Named Executive Officers or employees during fiscal year
2002. On January 12, 2003, the Executive Officers of the Company and all
employees voluntarily and irrevocably surrendered all options granted to them
though that date.

AGGREGATED OPTION EXERCISES

         No options were exercised in fiscal year 2002 by any of the Named
Executive Officers. The following table sets forth, as of December 31, 2002, the
number of stock options and the value of unexercised stock options held by the
Named Executive Officers.

<TABLE>
<CAPTION>
                           AGGREGATED OPTION EXERCISES IN YEAR ENDED DECEMBER 31, 2002
                                            AND YEAR-END OPTION VALUES
----------------------------------------------------------------------------------------------------------------
                                                NUMBER OF SECURITIES                  VALUE OF UNEXERCISED
                                               UNDERLYING UNEXERCISED               IN-THE-MONEY OPTIONS (2)
                 NAME                     OPTIONS AT DECEMBER 31, 2002(1)             AT DECEMBER 31, 2002
------------------------------------      --------------------------------       -------------------------------
                                           EXERCISABLE       UNEXERCISABLE       EXERCISABLE       UNEXERCISABLE
                                          ------------       -------------       -----------       -------------
<S>                                          <C>                   <C>               <C>                <C>
Gerald Zarin                                 785,000               0                 $0                 $0
Jeremiah F. O'Brien                          175,000               0                 $0                 $0
Stanley Chayka                                10,000             10,000              $0                 $0
Leonard Langsner                              10,000              5,000              $0                 $0
                                          ------------       -------------       -----------       -------------
                Total                        980,000             15,000
                                          ------------       -------------       -----------       -------------
</TABLE>


(1) On January 12, 2003, the Executive Officers and Directors of the Company and
all employees voluntarily and irrevocably surrendered all options granted to
them though that date.
(2) The dollar value of the unexercised options has been calculated by
determining the difference between the fair market value of the securities
underlying the options and the exercise price of the option at fiscal year-end.

DIRECTORS' COMPENSATION

         Directors who are not employees of the Company are entitled to a fee of
$2,500 per year and $500 per meeting attended (other than telephonic meetings)
for serving on the Board of Directors. Each director is also reimbursed for
expenses incurred in connection with attendance at meetings of the Board of
Directors. For the fiscal year ended December 31, 2002 the Directors have waved
the annual fee and meeting fees, therefore, the Directors received no
compensation for the year.

EMPLOYMENT AGREEMENTS

         Mr. Zarin entered into an employment agreement with the Company, dated
as of April 1, 2000, pursuant to which he agreed to serve as the Company's
President and Chief Executive Officer through December 31, 2007 after which time
the Employment Agreement shall automatically continue for additional one year
periods (the "Renewal Terms") unless either Zarin or the Corporation notifies


                                       24
<PAGE>


the other at least six months prior to the end of the initial or any Renewal
Term. The agreement provided for an initial salary of $120,000 per year which
was increased to $150,000 on May 11, 2000. Mr. Zarin is also entitled to an
annual bonus based on the performance of the Corporation equal to (i) 50% of his
base compensation if the Company's net profits before taxes are equal to
projections to be approved by the Company's Board of Directors, (ii) 75% of his
base compensation if the Company's net profits before taxes are equal to 105% of
such projections, and (iii) 100% of his base compensation if the Company's net
profits before taxes are equal to 115% of such projections. Mr. Zarin can
terminate the agreement upon 180 days notice. The Company can terminate the
agreement for good cause at any time. If the Company elects not to renew the
Agreement and has given proper notification, Mr. Zarin will receive on the date
of termination an amount equal to 150% of his base compensation, his entitled
performance bonus and an amount equal to the average of any discretionary bonus
paid for the preceding two calendar years (the "Termination Bonuses"). If the
Company otherwise terminates the agreement without cause, or otherwise
materially breaches the agreement prior to December 31, 2005, Mr. Zarin will
receive a single payment equal to the remaining payments he would have been
entitled to receive during the unexpired portion of the agreement, an additional
two years base compensation and any termination bonuses. If the Company
otherwise terminates the agreement without cause, or otherwise materially
breaches the agreement after December 31, 2005, Mr. Zarin will receive a single
payment equal to the remaining payments he would have been entitled to receive
during the unexpired portion of the agreement, an additional three years base
compensation and any termination bonuses.

         Mr. O'Brien entered into an employment agreement with the Company,
dated as of January 12, 2003, pursuant to which he agreed to serve as the
Company's Vice- President and Chief Financial Officer through December 20, 2004
after which time the Employment Agreement shall automatically continue for
additional one year periods (the "Renewal Terms") unless either O'Brien or the
Corporation notifies the other at least six months prior to the end of the
initial or any Renewal Term. The agreement provided for an initial salary of
$120,000 per year. Mr. O'Brien can terminate the agreement upon 60 days notice.
The Company can terminate the agreement for good cause at any time. If the
Company elects not to renew the Agreement and has given proper notification, Mr.
O'Brien will receive on the date of termination an amount equal to 50% of his
base compensation, his entitled performance bonus and an amount equal to the
average of any discretionary bonus paid for the preceding two calendar years
(the "Termination Bonuses"). If the Company otherwise terminates the agreement
without cause, or otherwise materially breaches the agreement prior to December
20, 2004, Mr. O'Brien will receive a single payment equal to two years base
compensation and any termination bonuses.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
         PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OFMANAGEMENT

         The table below is based on information obtained from the persons named
therein with respect to the shares of Common Stock beneficially owned, as of the
March 31, 2003 (except as noted below), by (i) each person known by the Company
to be the owner of more than 5% of the outstanding shares of Common Stock, (ii)
each director of the Company, (iii) each executive officer of the Company, and
(iv) all executive officers and directors of the Company as a group


                                       25
<PAGE>

<TABLE>
<CAPTION>
                                                                                      PERCENTAGE OF
                                                      AMOUNT AND NATURE OF         OUTSTANDING SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER (1)            BENEFICIAL OWNERSHIP (2)               OWNED
----------------------------------------            ------------------------        -----------------
<S>                                                           <C>                         <C>
Gerald Zarin                                                  453,000                     .88%
Edward Bohn                                                     5,000                     .01
Joseph A. Sarubbi                                              35,000                     .07
Eric Lipetz                                                         0                     .00
Jeremiah F. O'Brien                                             5,000                     .01
Stanley Chayka                                                      0                     .00
Leonard Langsner                                                    0                     .00
Cornell Capital Partners, LP                                  893,783                    1.76
101 Hudson Street - Suite 3606
Jersey City, New Jersey 07302
Attn: Portfolio Manager
All executive officers and directors as a                     498,000                     .96
group (7 persons)

<FN>
         (1) Unless otherwise noted, the address of the beneficial owner is: c/o
NUWAVE Technologies, Inc., One Passaic Ave., Fairfield, NJ 07004.
         (2) The number of shares of Common Stock beneficially owned by each
person is determined in accordance with the rules of the SEC, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares as to which
the individual has sole or shared voting power or investment power and also any
shares of Common Stock which the individual has the right to acquire within 60
days after April 15, 2003 through the exercise of any stock option, warrant or
other right. The inclusion herein of any shares of Common Stock deemed
beneficially owned does not constitute an admission of beneficial ownership of
those shares. Unless otherwise indicated, the persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them.

</FN>

</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Since 1996, Edward Bohn, a director of the Company, has been acting as
a consultant to the Company from time to time on matters specified by the
Company's President. In March 1997, Mr. Bohn entered into a consulting agreement
with the Company pursuant to which he agreed to act as the Company's consultant
at a rate of $1,000 per day with a maximum of $2,750 per week regardless of the
actual time spent on the Company's behalf. For the years ended December 31, 2001
and 2002, Mr. Bohn received $0 on account of such consulting services.

         Since 1996, Joseph A. Sarubbi, a director of the Company, has been
acting as a consultant to the Company from time to time on matters specified by
the Company's President. In that connection he has received compensation on a
per diem basis of $1,000 per day. For the years ended December 31, 2001 and
2002, Mr. Sarubbi received $0 on account of such consulting services.


                                       26
<PAGE>


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS

EXHIBIT           DESCRIPTION
-------           -----------

3.1*              Articles of Incorporation of the Company (Delaware) (See
                  Exhibit 3.1(a) to Registration Statement on Form SB-2 filed
                  with the Commission on April 2, 1996).
3.2*              Certificate of Amendment to Articles of Incorporation of the
                  Company (Delaware) (See Exhibit 3.1(b) to Registration
                  Statement on Form SB-2 filed with the Commission on April 2,
                  1996).
3.3*              Certificate of Authority (New Jersey) (See Exhibit 3.1(c) to
                  Registration Statement on Form SB-2 filed with the Commission
                  on April 2, 1996).
3.4*              Amended Certificate of Authority (New Jersey) (See Exhibit
                  3.1(d) to Registration Statement on Form SB-2 filed with the
                  Commission on April 2, 1996).
3.5*              Certificate of Amendment to Articles of Incorporation of the
                  Company (Delaware) (See Exhibit 3.1(e) to Registration
                  Statement on Form SB-2 filed with the Commission on April 2,
                  1996).
3.6*              Certificate of Amendment to Certificate of Incorporation of
                  NUWAVE Technologies, Inc. (Delaware) filed on December 20,
                  2000 with the Secretary of the State of Delaware. (See
                  Exhibit 3.6 to Registration Statement on Form SB-2, filed with
                  the Commission on December 27, 2002).
3.7*              By-Laws of the Company (See Exhibit 3.2 to Registration
                  Statement on Form SB-2 filed with the Commission on April 2,
                  1996).
4.1*              Form of Common Stock Certificate (See Exhibit 4.1 to Amendment
                  No. 2 to Registration Statement on Form SB-2 filed with the
                  Commission on July 3, 1996).

4.2*              Form of Public Warrant Agreement between the Company, American
                  Stock Transfer & Trust Company and Rickel & Associates, Inc.
                  (See Exhibit 4.2 to Amendment No. 1 to Registration Statement
                  on Form SB-2 filed with the Commission on May 22, 1996).
4.3*              Form of Public Warrant Certificate (See Exhibit 4.3 to
                  Amendment No. 2 to Registration Statement on Form SB-2 filed
                  with the Commission on July 3, 1996).
4.4*              Form of Underwriter's Warrant Agreement (including Warrant
                  Certificate) between the Company and Rickel & Associates (See
                  Exhibit 4.4 to Amendment No. 1 to Registration Statement on
                  Form SB-2 filed with the Commission on May 22, 1996).
10.1*             Option Agreement for the Purchase of Common Stock dated as of
                  July 17, 1995 between NUWAVE Engineering, Inc. and Jeremiah F.
                  O'Brien (See Exhibit 10.14 to Registration Statement on Form
                  SB-2 filed with the Commission on April 2, 1996).
10.2*             Option Agreement for the Purchase of Common Stock dated as of
                  September 11, 1995 between NUWAVE Engineering, Inc. and Robert
                  I. Webb (See Exhibit 10.15 to Registration Statement on Form
                  SB-2 filed with the Commission on April 2, 1996).


                                       27
<PAGE>

10.3*             Option Agreement for the Purchase of Common Stock dated as of
                  November 9, 1995 between NUWAVE Engineering, Inc. and Lyle E.
                  Gramley (See Exhibit 10.16 to Registration Statement on Form
                  SB-2 filed with the Commission on April 2, 1996).
10.4*             Option Agreement for Purchase of Common Stock dated as of
                  March 1, 1996 between NUWAVE Technologies, Inc. and Jeremiah
                  F. O'Brien (See Exhibit 10.17 to Registration Statement on
                  Form SB-2 filed with the Commission on April 2, 1996).
10.5*             Option Agreement for Purchase of Common Stock dated as of July
                  20, 1995 between NUWAVE Technologies, Inc. and Gerald Zarin
                  (See Exhibit 10.18 to Registration Statement on Form SB-2
                  filed with the Commission on April 2, 1996). 10.6* Option
                  Agreement for Purchase of Common Stock dated as of March 1,
                  1996 between NUWAVE Technologies, Inc. and Joseph A. Sarubbi
                  (See Exhibit 10.19 to Registration Statement on Form SB-2
                  filed with the Commission on April 2, 1996).
10.7*             Option Agreement for Purchase of Common Stock dated as of
                  March 1, 1996 between NUWAVE Technologies, Inc. and Ed Bohn
                  (See Exhibit 10.20 to Registration Statement on Form SB-2
                  filed with the Commission on April 2, 1996).
10.8*             Form of Indemnification Agreement between the Company and its
                  directors, dated as of January 31, 1996 (See Exhibit 10.24 to
                  Registration Statement on Form SB-2 filed with the Commission
                  on April 2, 1996).
10.9*             Non-Employee Director Stock Option Plan (See Exhibit 10.1 to
                  Current Report on Form 8-K filed with the Commission on June
                  6, 1997).
10.10*            Form of Incentive Stock Option Agreement (See Exhibit 4.3 to
                  Registration Statement on Form S-8 filed with the Commission
                  on November 12, 1997).

10.11*            Form of Non-Employee Director Stock Option Agreement (See
                  Exhibit 4.4 to Registration Statement on Form S-8 filed with
                  the Commission on November 12, 1997).
10.12*            Form of Non-Qualified Stock Option Agreement covering options
                  not granted under either the 1996 Performance Incentive Plan
                  or the Non-Employee Director Stock Option Plan (See Exhibit
                  4.5 to Registration Statement on Form S-8 filed with the
                  Commission on November 12, 1997).
10.13*            Letter Agreement, dated March 3, 1998, between NuWave
                  Technologies, Inc. and Janssen/Meyers Associates, L.P. (See
                  Exhibit 10.41 to Annual Report on Form 10-KSB filed with the
                  Commission on March 25, 1998).
10.14*            Warrant, dated March 3, 1998, executed by NuWave Technologies,
                  Inc. in favor of Janssen/Meyers Associates, L.P., to purchase
                  up to 400,000 shares of Common Stock, par value $.01 per
                  share, of NuWave Technologies, Inc. (See Exhibit 10.41 to
                  Annual Report on Form 10-KSB filed with the Commission on
                  March 25, 1998).
10.15*            Placement Agency Agreement, dated as of May 11, 1998, between
                  Janssen-Meyers Associates, L.P. and NuWave Technologies, Inc.
                  (See Exhibit 10.1 to Current Report on Form 8-K filed with the
                  Commission on June 11, 1998).
10.16*            Warrant Agreement, dated May 15, 1998, between NuWave
                  Technologies, Inc. and American Stock Transfer & Trust Company
                  (See Exhibit 10.3 to Current Report on Form 8-K filed with the
                  Commission on June 11, 1998).


                                       28
<PAGE>

10.17*            Form of Warrant Certificate (See Exhibit 10.4 to Current
                  Report on Form 8-K filed with the Commission on June 11,
                  1998).
10.18*            Form of Placement Agent Warrant Certificate (See Exhibit 10.6
                  to Current Report on Form 8-K filed with the Commission on
                  June 11, 1998).
10.19*            Form of Subscription Agreement (See Exhibit 10.7 to Current
                  Report on Form 8-K filed with the Commission on June 11,
                  1998).
10.20*            Agreement, dated February 1, 1999, between NuWave
                  Technologies, Inc. and Terk Technologies Corp. (See Exhibit
                  10.54 to Annual Report on Form 10-KSB filed with the
                  Commission on March 31, 1999).
10.21*            Option Agreement for Purchase of Common Stock dated as of
                  September 28, 1999 between NUWAVE Technologies, Inc. and
                  Richard E. Ekstract. (See Exhibit 10.55 to Annual Report on
                  Form 10-KSB filed with the Commission on March 30, 2000).
10.22*            Placement Agency Agreement, dated as of February 14, 2000,
                  between Janssen-Meyers Associates, L.P. and NUWAVE
                  Technologies, Inc. (See Exhibit 10.56 to Annual Report on Form
                  10-KSB filed with the Commission on March 30, 2000).
10.23*            Warrant Agreement, dated March 13, 2000, between NUWAVE
                  Technologies, Inc. and American Stock Transfer & Trust
                  Company. (See Exhibit 10.57 to Annual Report on Form 10-KSB
                  filed with the Commission on March 30, 2000).
10.24*            Form of Warrant Certificate. (See Exhibit 10.58 to Annual
                  Report on Form 10-KSB filed with the Commission on March 30,
                  2000).
10.25*            Form of Subscription Agreement. (See Exhibit 10.59 to Annual
                  Report on Form 10-KSB filed with the Commission on March 30,
                  2000).
10.26*            Placement Agent Warrant Agreement, dated March 13, 2000,
                  between NUWAVE Technologies, Inc. Janssen-Meyers Associates,
                  L.P. (See Exhibit 10.60 to Annual Report on Form 10-KSB filed
                  with the Commission on March 30, 2000).
10.27*            Restated Employment Agreement dated as of April 1, 2000,
                  between NUWAVE Technologies, Inc. and Gerald Zarin. (See
                  Exhibit 10.27 to Annual Report on Form 10-KSB filed with the
                  Commission on April 2, 2001).
10.28*            Restated sublease agreement dated September 18, 2000, between
                  NUWAVE Technologies, Inc. and Simon, Sarver & Rosenberg. (See
                  Exhibit 10.28 to Annual Report on Form 10-KSB filed with the
                  Commission on April 2, 2001).
10.29*            Agreement dated April 7, 2000, between NUWAVE Technologies,
                  Inc. and Eastman Kodak. (See Exhibit 10.29 to Annual Report on
                  Form 10-KSB filed with the Commission on April 2, 2001).

10.30*            Option Agreement for Purchase of Common Stock dated as of
                  August 14, 2001 between NUWAVE Technologies, Inc. and SHEEWAY
                  (Hong Kong) LTD. (See Exhibit 10.30 to Annual Report on Form
                  10-KSB, filed with the Commission on April 15, 2002).

10.31*            Option Agreement for Purchase of Common Stock dated as of
                  April 30, 2001 between NUWAVE Technologies, Inc. and Richard
                  Ekstract. (See Exhibit 10.31 to Annual Report on Form 10-KSB,
                  filed with the Commission on April 15, 2002).

10.32*            Option Agreement for Purchase of Common Stock dated as of
                  June 12, 2001 between NUWAVE Technologies, Inc. and Gerald
                  Zarin. (See Exhibit 10.32 to Annual Report on Form 10-KSB,
                  filed with the Commission on April 15, 2002). 10.33* Option
                  Agreement for Purchase of Common Stock dated as of June 12,
                  2001 between NUWAVE Technologies, Inc. and Jeremiah F.
                  O'Brien. (See Exhibit 10.33 to Annual Report on Form 10-KSB,
                  filed with the Commission on April 15, 2002).

10.34*            Form of Warrant Agreements, dated February 5, 2002. (See
                  Exhibit 10.34 to Annual Report on Form 10-KSB, filed with the
                  Commission on April 15, 2002).

10.35*            Form of Warrant Agreements, dated February 27, 2002. (See
                  Exhibit 10.35 to Annual Report on Form 10-KSB, filed with the
                  Commission on April 15, 2002).

10.36*            Agreement, effective December 2001, between NUWAVE
                  Technologies, Inc. and Gemini Industries, Inc. (See Exhibit
                  10.36 to Annual Report on Form 10-KSB, filed with the
                  Commission on April 15, 2002).


                                       29
<PAGE>


10.37*            Sales Representation & Fulfillment Agreement, effective
                  June 15, 2001, between NUWAVE Technologies, Inc. and L.B.E.
                  Limited T/A Partners In Europe (PIE) (See Exhibit 10.37 to
                  Annual Report on Form 10-KSB, filed with the Commission on
                  April 15, 2002).

10.38*            Stock Purchase Agreement, dated as of February 5, 2002. (See
                  Exhibit 10.38 to Annual Report on Form 10-KSB, filed with the
                  Commission on April 15, 2002).

10.39*            Stock Purchase Agreement, dated as of February 27, 2002. (See
                  Exhibit 10.30 to Annual Report on Form 10-KSB, filed with the
                  Commission on April 15, 2002).

10.40*            Amended and Restated Equity Line of Credit Agreement, dated as
                  of May 17, 2002, between NUWAVE Technologies, Inc. and Cornell
                  Capital Partners, L.P. (See Exhibit 10.45 to Registration
                  Statement on Form SB-2 (File No. 333-89012) filed with the
                  Commission on May 24, 2002)

10.41*            Placement Agent Agreement, dated as of April 15, 2002, between
                  NUWAVE Technologies, Inc. and Westrock Advisors, Inc. (See
                  Exhibit 10.42 to Registration Statement on Form SB-2, filed
                  with the Commission on April 29, 2002.)

10.42*            Registration Rights Agreement, dated as of April 15, 2002,
                  between NUWAVE Technologies, Inc. and Cornell Capital
                  Partners, L.P. (See Exhibit 10.43 to Registration Statement on
                  Form SB-2, filed with the Commission on April 29, 2002.)

10.43*            Escrow Line of Credit Agreement, dated as of April 15, 2002,
                  between NUWAVE Technologies, Inc. and Cornell Capital
                  Partners, L.P. (See Exhibit 10.44 to Registration Statement on
                  Form SB-2, filed with the Commission on April 29, 2002.)

10.44*            Form of Stock Purchase Agreement, dated as of June 2002,
                  between NUWAVE and certain investors. (See Exhibit 10.45 to
                  Registration Statement on Form SB-2, filed with the Commission
                  on July 11, 2002.)

10.45*            Form of Selling Stockholders Agreement, dated as of July 2002,
                  among NUWAVE and the Purchasers. (See Exhibit 10.46 to
                  Registration Statement on Form SB-2, filed with the Commission
                  on July 11, 2002.)

10.47*            Revolving Line of Credit Secured Demand Promissory Note, dated
                  December 10, 2002, to Gerald Zarin by NUWAVE Technologies,
                  Inc. (See Exhibit 10.47 to Registration Statement on Form
                  SB-2, filed with the Commission on December 27, 2002).

23.1**            Consent of Eisner LLP.

99                Certifications pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.


*    The exhibits thus designated are incorporated herein by reference as
     exhibits hereto. Following the description of such exhibits is a reference
     to the copy of the exhibit heretofore filed with the Commission, to which
     there have been no amendments or changes.

**   Filed herewith.

b)       REPORTS ON FORM 8-K:

              None

ITEM 14. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

         Our Chief Executive Officer and Chief Financial Officer have reviewed
and evaluated the effectiveness of the Company's disclosure controls and
procedures (as defined in Exchange Act Rules 240.13a-14(c) and 15d-14(c) as of a
date within 90 days before the filing date of this quarterly report. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company's current disclosure controls and procedures are
effective and timely, providing all material information relating to the Company
required to be disclosed in reports filed or submitted under the Exchange Act.

Changes in Internal Controls

         There have not been any significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation. We are not aware of any significant
deficiencies or material weaknesses, therefore no corrective actions were taken.


                                       30
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          NUWAVE TECHNOLOGIES, INC.
                                         (Registrant)

Date: April 14, 2003                      By:  /s/ Gerald Zarin
                                             -----------------------------
                                                   Gerald Zarin
                                          Chairman of the Board, President
                                          and Chief Executive Officer

                                POWER OF ATTORNEY

         Each director and/or officer of the Company whose signature appears
below hereby appoints Gerald Zarin and Jeremiah O'Brien, and each of them, as
his attorney-in-fact to sign in his name and behalf, in any and all capacities
stated below and to file with the Commission any and all amendments, including
post-effective amendments, to this Annual Report.

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

SIGNATURE                           TITLE                               DATE

/s/ Gerald Zarin
------------------------          President, Chief Executive      April 14, 2003
Gerald Zarin                      Officer and Chairman of
                                  the Board (Principal
                                  Executive Officer)

/s/ Jeremiah F. O'Brien
------------------------          Chief Financial Officer and     April 14, 2003
Jeremiah F. O'Brien               Secretary (Principal
                                  Financial Officer and
                                  Accounting Officer)

/s/ Ed Bohn
------------------------          Director                        April 14, 2003
Ed Bohn

/s/ Joseph A. Sarubbi
------------------------          Director                        April 14, 2003
Joseph A. Sarubbi

/s/ Eric Lipetz
------------------------          Director                        April 14, 2003
Eric Lipetz


                                       31
<PAGE>


                                 CERTIFICATIONS

I, GERALD ZARIN, certify that:

1. I have reviewed this annual report on Form 10-KSB of NUWAVE TECHNOLOGIES,
INC.

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 14, 2003

   /s/ Gerald Zarin
------------------------------
Name:  Gerald Zarin
Title: Chief Executive Officer


<PAGE>


                                 CERTIFICATIONS

I, JEREMIAH F. O'BRIEN certify that:

1. I have reviewed this annual report on Form 10-KSB of NUWAVE TECHNOLOGIES,
INC.

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: April 14, 2003

   /s/ Jeremiah F. O'Brien
------------------------------
Name:  Jeremiah F. O'Brien
Title: Chief Financial Officer


<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER          DESCRIPTION
------          -----------

23.1*           Consent of Richard A. Eisner & Co., LLP.

99*             Certifications


* Filed herewith.


                                       32
<PAGE>


                            NUWAVE TECHNOLOGIES, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                                       PAGE(S)
                                                                       -------

Independent Auditor's Report........................................     F-2

Balance Sheet as of December 31, 2002...............................     F-3

Statements of Operations for the two years ended December 31, 2002..     F-4

Statements of Stockholders' Equity (Capital Deficit) for two years
  ended December 31, 2002...........................................     F-5

Statements of Cash Flows for the two years ended December 31, 2002..  F-6 - F-7

Notes to Financial Statements.......................................  F-8 - F-19


                                      F-1
<PAGE>


INDEPENDENT AUDITORS REPORT

Board of Directors and Stockholders
NUWAVE Technologies, Inc.
Fairfield, New Jersey


We have audited the accompanying balance sheet of NUWAVE Technologies, Inc. as
of December 31, 2002, and the related statements of operations, stockholders'
equity (capital deficit), and cash flows for each of the years in the two-year
period ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements enumerated above present fairly, in all
material respects, the financial position of NUWAVE Technologies, Inc. as of
December 31, 2002, and the results of its operations and its cash flows for each
of the years in the two-year period ended December 31, 2002, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has experienced recurring net losses, its
operating activities have resulted in cash out flows, and at December 31, 2002
it has both a negative working capital position and a capital deficit. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


/s/ Eisner LLP


Florham Park, New Jersey
March 28, 2003


                                      F-2
<PAGE>


                              NUWAVE TECHNOLOGIES, INC.

                                  Balance Sheet
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                             ASSETS
                                                                     December 31,
                                                                         2002
                                                                     ------------
<S>                                                                   <C>
Current assets:

   Cash and cash equivalents                                          $     174

   Accounts receivable, net                                                  11

   Inventory                                                                 25

   Prepaid expenses and other current assets                                159
                                                                      ---------
             Total current assets                                           369

Property and equipment                                                       47

Other assets                                                                 20

Deferred tax benefit                                                        230
                                                                      ---------
             Total assets                                             $     666
                                                                      =========


       LIABILITIES AND STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)

Current liabilities:

   Accounts payable and accrued liabilities                           $     537

   Note payable to officer/stockholder                                      115
                                                                      ---------
             Total current liabilities                                $     652
                                                                      ---------

Long-term liabilities:

   Note payable                                                             200
                                                                      ---------
             Total liabilities                                              852
                                                                      ---------

Commitments

Capital deficit:

   Series A Convertible Preferred Stock, noncumulative,
     $.01 par value; authorized 400,000 shares; none issued

   Preferred stock, $.01 par value; authorized 1,000,000
     shares; none issued - (preferences and
     rights to be designated by the Board of Directors)

   Common stock, $.001 par value; authorized 140,000,000 shares;
     25,386,714 shares issued and outstanding                                25

   Additional paid in capital                                            26,903

   Accumulated deficit                                                  (27,114)
                                                                      ---------

             Total capital deficit                                         (186)
                                                                      ---------

             Total liabilities and capital deficit                    $     666
                                                                      =========
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                      F-3
<PAGE>


                            NUWAVE TECHNOLOGIES, INC.

                            STATEMENTS OF OPERATIONS
                 (In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                      Year             Year
                                                      ended            ended
                                                   December 31,     December 31,
                                                      2002             2001
                                                   ------------     ------------
<S>                                               <C>              <C>
Net sales                                         $        286     $        505

Cost of sales                                             (390)            (308)
                                                  ------------     ------------
                                                          (104)             197
                                                  ------------     ------------
Operating expenses:

Research and development expenses                         (681)          (1,165)

General and administrative expenses                     (2,071)          (3,699)
                                                  ------------     ------------
                                                        (2,752)          (4,864)
                                                  ------------     ------------
          Loss from operations                          (2,856)          (4,667)
                                                  ------------     ------------
Other income (expense):

          Interest income                                    5               88

          Interest expense                                  (5)             (12)
                                                  ------------     ------------
                                                             -               76
                                                  ------------     ------------
Loss before benefit from income taxes                   (2,856)          (4,591)

          Benefit from income taxes                        182              318
                                                  ------------     ------------
          Net loss                                $     (2,674)    $     (4,273)
                                                  ============     ============
Basic and diluted loss per share:

          Weighted average number of
          common shares outstanding                 14,265,755       10,749,404
                                                  ============     ============

          Basic and diluted loss per share             $ (0.19)         $ (0.40)
                                                  ============     ============
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                      F-4
<PAGE>


                            NUWAVE TECHNOLOGIES, INC.

              STATEMENTS OF STOCKHOLDERS' EQUITY (CAPITAL DEFICIT)
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                                                       TOTAL
                                                                                                   SHAREHOLDERS'
                                                  COMMON STOCK        ADDITIONAL                      EQUITY
                                            ----------------------     PAID-IN      ACCUMULATED      (CAPITAL
                                              SHARES       AMOUNT      CAPITAL        DEFICIT         DEFICIT)
                                            ----------    --------    ----------    -----------    -------------
<S>                                         <C>           <C>          <C>           <C>             <C>
Balance at December 31, 2000                10,557,729    $    106     $ 24,528      $ (20,167)      $  4,467

Common shares issued in
  connection with the exercise of
  844,922 warrants.....................        844,922           8          837                           845

Options and warrants to purchase
  common stock issued in connection
  with consulting agreements...........                                     248                           248

Net loss for the year ended
  December 31, 2001....................                                                 (4,273)        (4,273)
                                            ----------    --------     --------      ---------       --------

Balance at December 31, 2001...........     11,402,651    $    114     $ 25,613      $ (24,440)      $  1,287

Common shares and 130,000
  warrants to purchase common
  shares issued in a private
  placement............................      1,915,451          19          712                           731

Options and warrants to purchase
  common stock issued
  for services.........................                                     200                           200

Common shares issued under the
  equity line of credit................     12,020,612         120          150                           270

Common shares issued for
  services.............................         48,000

Change in common stock par value.                             (228)         228

Net loss for the year ended
  December 31, 2002....................                                                 (2,674)        (2,674)
                                            ----------    --------     --------      ---------       --------

Balance at December 31, 2002...........     25,386,714    $     25     $ 26,903      $ (27,114)      $   (186)
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                      F-5
<PAGE>


                            NUWAVE TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                        Year             Year
                                                                        ended            ended
                                                                     December 31,     December 31,
                                                                        2002             2001
                                                                     ------------     ------------
<S>                                                                   <C>              <C>
Cash flows from operating activities:

   Net loss                                                           $  (2,674)       $  (4,273)

   Adjustments to reconcile net loss to net cash used
   in operating activities:

   Provision for doubtful accounts                                                            43

   Depreciation expense                                                      32               48

   Loss on disposal of equipment                                              7

   Amortization and impairment of website development costs                                  144

   Amortization and impairment of software development costs                                 152

   Decrease (increase) in accounts receivable                               127             (181)

   Decrease (increase) in inventory                                         388             (368)

   Decrease in prepaid expenses and other
   current assets                                                            20              113

   Decrease in other assets                                                  10               25

   Decrease (increase) in deferred tax benefits                              50              (40)

   (Decrease) Increase in accounts payable and accrued liabilities         (309)             429

   Issuance of options and warrants for consulting services                 200              248
                                                                      ---------        ---------

             Net cash used in operating activities                       (2,149)          (3,660)
                                                                      ---------        ---------
Cash flows from investing activities:

   Purchase of property and equipment                                        (7)             (21)

   Proceeds from sale of equipment                                            3
                                                                      ---------        ---------
             Net cash used in investing activities                           (4)             (21)
                                                                      ---------        ---------

                                            (Continued)
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                      F-6
<PAGE>


                            NUWAVE TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS
                        (In thousands except share data)
                                   (Continued)

<TABLE>
<CAPTION>
                                                                        Year             Year
                                                                        ended            ended
                                                                     December 31,     December 31,
                                                                        2002             2001
                                                                     ------------     ------------
<S>                                                                   <C>              <C>
Cash flows from financing activities:

   Proceeds from debt                                                       640

   Proceeds from equity offering                                            850

   Costs incurred for equity offerings and warrants                        (174)

   Issuance of common stock in connection with
   exercise of warrants                                                                      845
                                                                      ---------        ---------
   Net cash provided by financing activities                              1,316              845
                                                                      ---------        ---------
   Net decrease in cash and cash equivalents                               (837)          (2,836)

Cash and cash equivalents at the beginning of the year                    1,011            3,847
                                                                      ---------        ---------
   Cash and cash equivalents at the end of the year                   $     174        $   1,011
                                                                      =========        =========
Supplemental disclosure of cash flow information:

   Interest paid during the period                                    $       5        $      12
                                                                      =========        =========
Supplemental disclosures of non-cash financing activities:

   During 2002, the Company issued 9,368,724
   shares of common stock in settlement of debt
   aggregating $325,000.
</TABLE>


   The accompanying notes are an integral part of these financial statements


                                      F-7
<PAGE>


1.   ORGANIZATION AND BUSINESS

     NUWAVE Technologies, Inc. (the Company or "NUWAVE") was incorporated in
Delaware on July 17,1995. The Company's focus is on technology related to
enhancing image and video output. The Company has developed a proprietary
video-enhancement technology known as the NUWAVE Video Processor (NVP)
technology. In addition the Company has developed patented high speed filtering
technology. NUWAVE has three product lines 1) the NUWAVE Video Processor (NVP)
Technology, 2) Retail Products and Security/Surveillance products and 3) Digital
Filtering Technology.

     The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplates continuation of the Company as a going concern and realization of
assets and settlement of liabilities and commitments in the normal course of
business. The Company has incurred substantial losses since its inception and
anticipates continued net losses. The Company will continue to require
utilization of the Equity line of Credit (see Note 7) for its working capital
needs. Assuming the availability of required advances under the Equity Line, the
Company may be able to satisfy its contemplated cash requirements through
December 31, 2003. In the event the Company is unable to raise an amount
sufficient to meet its anticipated working capital needs through utilization of
the Equity Line or some other form of financing or receive sufficient cash
through the sale of its products, the Company may be required to curtail
operations or seek financing under unfavorable terms. There is no assurance the
Company will achieve significant sales of any of its products or technology. In
addition, the Company operates in an environment of rapid change in technology
and is dependent upon the services of its employees and its consultants. If the
Company is unable to successfully market its NVP and digital filtering
technology and related products it is unlikely that the Company could continue
its business. Substantial doubt exists about the ability of the Company to
continue as a going concern. These financial statements include no adjustments
that might be necessary as a result of this uncertainty.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amount of assets
and liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenue and expenses
during the reporting period. The most significant estimates relate to the
valuation allowance in connection with deferred tax assets. Actual results could
differ from those estimates.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include all cash balances, money market
instruments, and other highly liquid investments with insignificant interest
rate risk and original maturities of three months or less. At December 31, 2002,


                                      F-8
<PAGE>


$174,000 of money market accounts and commercial checking accounts, the fair
value of which approximate cost, are included in cash and cash equivalents.

INVENTORY

     Inventory is stated at the lower of cost (first-in, first-out method) or
market.

PROPERTY AND EQUIPMENT

     Property and equipment are recorded at cost less accumulated depreciation.
The cost of maintenance and repairs is charged against results of operations as
incurred.

     Depreciation is charged against results of operations over the estimated
useful lives of the related assets.

     Sales and retirements of depreciable property are recorded by removing the
related cost and accumulated depreciation from the accounts. Gains or losses on
sales and retirements of property and equipment are reflected in the results of
operations.

REVENUE RECOGNITION

     Revenue is recognized when products are shipped to customers.

RESEARCH AND DEVELOPMENT EXPENSES

     Research and development costs are expensed as incurred.

ADVERTISING EXPENSES

     The Company expenses advertising costs as incurred which consist primarily
of promotional items, print and digital media. Advertising and promotional
expenses charged to operations for the years ended December 31, 2002 and
December 31, 2001 amounted to $5,000 and $265,000 respectively.

CONCENTRATIONS

     The Company's financial instruments that are exposed to concentrations of
credit risk consist of cash and cash equivalents. The Company places its cash
and cash equivalents in high quality institutions with three types of accounts,
1) an operating account where the cash balance is in excess of the FDIC
insurance limit, 2) a money market fund which invests only in U.S. Government
securities and 3) certificates of deposit.

     For the year ended December 31, 2002 one customer accounted for sales of
approximately $268,000 (94%).

PER SHARE DATA

     The basic per share data has been computed on the basis of the loss for the
period divided by the historic weighted average number of shares of common stock
outstanding. All potentially dilutive securities have been excluded from the
computations since they would be antidilutive. Potentially dilutive stock


                                      F-9
<PAGE>


options and warrants aggregated 7,023,337 and 10,648,320 as of December 31, 2002
and 2001, respectively.

     The following table summarizes the pro forma operating results of the
Company had compensation costs for the stock options granted been determined in
accordance with the fair- value-based method of accounting for stock based
compensation as prescribed by SFAS No. 123. Since certain option grants awarded
during 2002 and 2001 vest over several years and additional awards are expected
to be issued in the future, the pro forma results noted below are not likely to
be representative of the effects on future years of the application of the
fair-value-based method.

<TABLE>
<CAPTION>
                                                                YEAR ENDED
                                                   --------------------------------------
                                                   DECEMBER 31, 2002    DECEMBER 31, 2001
                                                   -----------------    -----------------
<S>                                                   <C>                  <C>
Net loss........................................      $(2,674,000)         $(4,273,000)
Proforma stock option expense...................          (28,000)            (132,000)
Pro forma net loss..............................      $(2,702,000)         $(4,405,000)
                                                      ===========          ===========
Basic and diluted loss per share................      $      (.19)         $      (.40)
Proforma stock option expense...................                                  (.01)
                                                             -----                -----
Pro forma basic and diluted loss per share......      $      (.19)         $      (.41)
                                                             =====                =====
</TABLE>

     For the purpose of the above pro forma information, the fair value of these
options was estimated at the date of grant using the Black-Scholes option
pricing model. The weighted-average fair value of the options granted during
2001 was $.78. The following weighted-average assumptions were used in computing
the fair value of option grants for 2001: weighted-average risk-free interest
rates ranged from 5.09% to 5.39%; zero dividend yield; volatility of the
Company's Common Stock of 110%; and an expected life of the options of ten
years.

INCOME TAXES

     The Company recognizes deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined on the basis of the differences between the tax basis of
assets and liabilities and their respective financial reporting amounts
("temporary differences") at enacted tax rates in effect for the years in which
the differences are expected to reverse.

RECENT ACCOUNTING PRONOUNCEMENTS

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement supercedes SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." The statement retains the previously existing
accounting requirements related to the recognition and measurement of the
impairment of long-lived assets to be held and used while expanding the
measurement requirements of long-lived assets to be disposed of by sale to
include discontinued operations. It also expands the previously existing
reporting requirements for discontinued operations to include a component of an
entity that either has been disposed of or is classified as held for sale. The
Company implemented SFAS No. 144 on January 1, 2002. Management does not expect
this statement to have a material impact on the Company's financial position or
results of operations.

     In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("SFAS
146"), which addresses financial accounting and reporting for costs associated
with exit or disposal activities and supersedes Emerging Issues Task Force


                                      F-10
<PAGE>


("EITF") Issue 94-3, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred
in a Restructuring). SFAS 146 requires that a liability for a cost associated
with an exit or disposal activity be recognized when the liability is incurred.
Under EITF Issue 94-3, a liability for an exit cost as defined in EITF Issue
94-3 was recognized at the date of an entity's commitment to an exit plan. SFAS
146 also establishes that the liability should initially be measured and
recorded at fair value. SFAS 146 is effective for exit and disposal activities
initiated after December 31, 2002. Management is currently evaluating the
provisions of SFAS 146 but expects that they will not have a material impact on
the Company's results of operations and financial position upon adoption.

     In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others. FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for financial statements of interim or annual reports
ending after December 15, 2002. Management does not expect this statement to
have a material impact on the Company's financial position or results of
operations.

     In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure ("SFAS 148"). SFAS 148 amends Statement No. 123, Accounting for
Stock-Based Compensation ("SFAS 123"), to provide alternative methods for
voluntary transition to SFAS 123's fair value method of accounting for
stock-based employee compensation ("the fair value method"). SFAS 148 also
requires disclosure of the effects of an entity's accounting policy with respect
to stock-based employee compensation on reported net income (loss) and earnings
(loss) per share in annual and interim financials statements. The provisions of
SFAS 148 are effective in fiscal years beginning after December 15, 2002.
Management has not yet determined whether it will adopt the fair value or
disclosure only provisions. Accordingly, management is unable to determine the
statement's impact on the Company's financial position or results of operations.

     In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation of Variable Interest Entities. In general, a variable interest
entity is a corporation, partnership, trust, or any other legal structure used
for business purposes that either (a) does not have equity investors with voting
rights or (b) has equity investors that do not provide sufficient financial
resources for the entity to support its activities. FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary of the
entity if the investors do not have the characteristics of a controlling
financial interest or do not have sufficient equity at risk for the entity to
finance its activities without additional subordinated financial support from
other parties. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003. The consolidation
requirements apply to older entities in the first fiscal year or interim period
beginning after June 15, 2003. Certain of the disclosure requirements apply in
all financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. Management does not expect this
statement to have a material impact on the Company's financial position or
results of operations.


                                      F-11
<PAGE>


3.   PREPAID EXPENSES AND OTHER CURRENT ASSETS

     Prepaid expenses and other current assets consist of the following:

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 2002
                                                        -----------------
<S>                                                         <C>
Prepaid Insurance.............................              $123,000
Other.........................................                36,000
                                                            --------
     Total....................................              $159,000
                                                            --------
</TABLE>

4.   PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                 USEFUL LIVES IN   DECEMBER 31,
                                                      YEARS            2002
                                                 ---------------   ------------
<S>                                                    <C>          <C>
Furniture and Fixtures........................         10           $   6,000
Computers.....................................          5             221,000
Equipment.....................................          5             100,000
Automobiles...................................          2              11,000
                                                                    ---------
                                                                    $ 338,000
   Less, accumulated depreciation.............                        291,000
                                                                    ---------
                                                                    $  47,000
                                                                    =========
</TABLE>

5.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

     Accounts payable and accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                                       2002
                                                                   ------------
<S>                                                                 <C>
Accounts payable..............................                      $ 341,000
Legal and accounting fees.....................                        168,000
Accrued payroll...............................                         28,000
                                                                    ---------
                                                                    $ 537,000
                                                                    =========
</TABLE>

     Substantially all accounts payable are past due.

6.   DEBT

NOTE PAYABLE OFFICER/STOCKHOLDER

     On December 10, 2002, the Company entered into a sixty day Revolving Line
of Credit and Secured Promissory Note with Gerald Zarin, the Company's CEO and
stockholder. Under the terms of the agreement, Mr. Zarin agreed to lend the
Company, as needed for working capital requirements, up to $230,000. At December
31, 2002 there was an outstanding balance of $115,000 , which was repaid on
January 2, 2003. Advances under the line of credit accrue interest at 18% per
annum Included in the statement of operations is interest expense and a
commitment fee of $1,000 and $8,000, respectively.


                                      F-12
<PAGE>


NOTE PAYABLE

     In connection with the Equity Line of Credit (see Note 7), the Company
received loans aggregating $525,000. During 2002, in accordance with the Equity
Line of Credit, through the issuance of its common stock the Company repaid
$325,000. The three notes are non-interest bearing for the first 120, 140 or 163
days after which the notes will bear interest at 24%.

7.   CAPITAL TRANSACTIONS

COMMON STOCK AND WARRANTS

     On December 20, 2002, the stockholders approved increasing the number of
shares authorized from 40,000,000 to 140,000,000 and reducing the par value per
share from $0.01 to $0.001. The change in par value has been reflected in the
financial statements.

     On August 16, 2001, the Company offered to the holders of its placement
agent warrants the opportunity to exercise such warrants at a reduced exercise
price of $1 per share of common stock. During the period, beginning August 28,
2001 and ending November 12, 2001, the Company received a total of $844,922 and
issued a total of 844,922 of its common shares to the holders of its placement
agent warrants, who chose to take advantage of this offer. On January 15, 2002
this reduced price offer expired and the original exercise price per share was
reinstated.

     On February 5, 2002, the Company entered into a private placement agreement
with investors whereby the Company issued 600,000 shares of the Company's Common
Stock for an aggregate purchase price of $330,000. In connection with this
agreement, the Company issued to the Placement Agent a Placement Agent Warrant,
exercisable to purchase up to 30,000 shares of Common Stock, representing five
percent of the total of the stock issued in the Offering. The warrants shall be
exercisable for a period of five years, expiring on February 5, 2007, at an
exercise price of $.55 per share. The Placement Agent also received a cash
placement fee of eight percent of the purchase price and a non-accountable
allowance equal to two percent of the purchase price, totaling $33,000.

     On February 27, 2002, the Company entered into agreement with an investor
whereby the Company issued 214,286 shares of Common Stock for an aggregate
purchase price of $150,000 and warrants to purchase up to 50,000 shares of
Common Stock at an exercise price of $1.00 per share with an exercise period of
five years expiring February 27, 2007. Under the terms of the agreement a
consultant was paid a finder's fee of $1,500 representing one percent of the
purchase price.

     On April 15, 2002, the Company entered into a $3.0 million Equity Line of
Credit Agreement with Cornell Capital Partners, LP (the "Purchaser"). Provided
the Company is in compliance with the terms of the Agreement, the Company may,
at its option, periodically require the Purchaser to purchase up to $100,000 in
any seven day period of the Company's Common Stock (the "put" shares) up to a
maximum of $3.0 million over the next two years, commencing on May 31, 2002 (the
effective date of a Securities Act of 1933 (the "Securities Act") registration
statement on Form SB-2 for the registration of 5,000,000 shares of Common Stock
to be sold under the Equity Line of Credit, plus 238,095 shares of common stock
mentioned below). The Company issued to the Purchaser 218,095 shares of Common
Stock as a commitment fee for entering into the Equity Line of Credit Agreement.
In addition, the Company issued to the placement agent 20,000 shares of NUWAVE's
common stock. For each share of Common Stock purchased under the Equity Line of
Credit, the Purchaser will pay 97% of the then Market Price (as defined in the
Equity Line of Credit), and will be paid a fee of 4% of each advance.


                                      F-13
<PAGE>


     The Equity Line of Credit is non-exclusive; thereby permitting the Company
to offer and sell its securities to third parties while the Equity Line of
Credit is in effect. NUWAVE has the option to terminate the Equity Line of
Credit Agreement at any time, provided there is no pending advance thereunder.

     Between June 7, 2002 and June 30, 2002 the Company entered into agreements
with various investors whereby a total of 1,101,165 shares of Common Stock and
warrants exercisable at $1 per share for 50,000 shares of common stock were
issued for an aggregate purchase price of $330,350. In connection with the
issuance of these shares, the Company incurred costs of $35,664 in placement
agent fees and expenses.

     On July 3, 2002, 2,530,000 of the Company's unexercised Public Warrants,
issued in the Company's initial public offering expired.

     As of December 31, 2002, under the terms of the Equity Line of Credit
Agreement the Company issued 11,782,517 shares of our common stock to Cornell
Capital Partners, L.P. in exchange for $365,000

     At December 31, 2002 there were 5,655,480 warrants outstanding as follows:

<TABLE>
<CAPTION>
       NUMBER OF                           WEIGHTED
     COMMON SHARES                         AVERAGE
      UNDERLYING       EXERCISE PRICE      EXERCISE      EXPIRATION
       WARRANTS        RANGE PER SHARE      PRICE          DATES
     -------------     ---------------     --------      ----------
<S>                     <C>                 <C>        <C>
       4,668,980        $1.22 - $4.00       $3.54       March 2003 to
                                                        December 2003
         231,500        $1.07 - $1.40       $1.25      November 2004 to
                                                        December 2004
         600,000        $0.75 - $2.00       $1.40      February 2005 to
                                                        November 2005
         155,000        $0.10 - $1.00       $0.77      January 2007 to
                                                        October 2007
</TABLE>

STOCK OPTIONS

     The Company accounts for stock options in accordance with Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB
No. 25") and related interpetations. Under APB No. 25, generally, no
compensation expense is recognized in the financial statements in connection
with the awarding of stock option grants to employees provided that, as of the
grant date, all terms associated with the award are fixed and the quoted market
price of the Company's stock, as of the grant date, is not more than the amount
an employee must pay to acquire the stock as defined; however, to the extent
that stock options are granted to non employees, for goods or services, the fair
value of these options is included in operating results as an expense.

     A summary of the Company's stock option activity under its plans (which are
discussed below), and related information, is as follows:


                                      F-14
<PAGE>


<TABLE>
<CAPTION>
                                                                         WEIGHTED
                                         NUMBER OF                       AVERAGE      NUMBER OF
                                          COMMON      EXERCISE PRICE     EXERCISE      SHARES
                                          SHARES      RANGE PER SHARE     PRICE      EXERCISABLE
                                         ---------    ---------------    --------    -----------
<S>                                      <C>           <C>                <C>         <C>
Outstanding at December 31, 2000....     1,392,000     $1.00 - $6.88      $3.01       1,282,340
Granted.............................       442,143     $0.61 - $1.16      $0.85
Cancelled...........................      (206,143)    $0.79 - $6.00      $2.28
                                         ---------
Outstanding at December 31, 2001....     1,628,000     $0.61 - $6.88      $2.52       1,492,171
                                         =========                                    =========
Cancelled...........................       260,143     $0.73 - $6.88      $3.80
                                         ---------
Outstanding at December 31, 2002....     1,367,857     $0.61 - $6.75      $2.29       1,349,526
                                         =========                                    =========
</TABLE>

     Exercise prices and weighted-average contractual lives for stock options
outstanding as of December 31, 2002 are as follows:

<TABLE>
<CAPTION>
                             OPTIONS OUTSTANDING               OPTIONS EXERCISABLE
                   --------------------------------------    -----------------------
                                   WEIGHTED
                                    AVERAGE      WEIGHTED                   WEIGHTED
                                   REMAINING     AVERAGE                    AVERAGE
   RANGE OF          NUMBER       CONTRACTUAL    EXERCISE      NUMBER       EXERCISE
EXERCISE PRICES    OUTSTANDING       LIFE         PRICE      EXERCISABLE     PRICE
---------------    -----------    -----------    --------    -----------    --------
<S>                  <C>             <C>          <C>          <C>           <C>
$ 0.61 - $ 2.56      725,357         4.64         $1.26        707,026       $1.27
$ 3.00 - $ 3.25      603,000         5.40         $3.25        603,000       $3.25
$ 5.87 - $ 6.88       39,500         1.67         $6.61         39,500       $6.61
</TABLE>

     As a result of performance incentive stock options granted and earned
during 2001, the Company incurred a charge to operations of $216,000 in 2001.

     At December 31, 2002, there were 7,095,480 shares of the Company's Common
Stock reserved for the exercise of warrants and options under the plans.

Performance Incentive Stock Option Plan

     On January 31, 1996, the Company adopted its 1996 Performance Incentive
Stock Option Plan (the "Plan"). Under the Plan, incentive and nonqualified stock
options, stock appreciation rights and restricted stock may be granted to key
employees and consultants (the "Participants") by certain disinterested
directors of the Board of Directors. Any incentive option granted under the Plan
will have an exercise price of not less than 100% of the fair market value of
the shares on the date on which such option is granted. With respect to an
incentive option granted to a Participant who owns more than 10% of the total
combined voting stock of the Company or of any parent or subsidiary of the
Company, the exercise price for such option must be at least 110% of the fair
market value of the shares subject to the option on the date on which the option
is granted. A nonqualified option granted under the Plan (i.e., an option to
purchase the common stock that does not meet the Internal Revenue Code's
requirements for incentive options) must have an exercise price of at least the
par value of the stock. Stock appreciation rights may be granted in conjunction
with the grant of an incentive or nonqualified option under the Plan or
independently of any such stock option. The directors determine the vesting of
the options under the Plan at the date of grant. A maximum of 1,205,000 options
can be awarded under the Plan (as amended May 26, 1998). No options were issued


                                      F-15
<PAGE>


during the year ended December 31, 2002 under the Performance Incentive Stock
Option Plan.

Non-Employee Director Stock Option Plan

     On November 25, 1996, the Company established a Non-Employee Director Stock
Option Plan (the "Director's Plan"). The Director's Plan provides that each
member of the Board of Directors (an "Eligible Director") who otherwise (1) is
not currently an employee of the Company, or (2) is not a former employee still
receiving compensation for prior services (other than benefits under a
tax-qualified pension plan) shall be eligible for the grant of stock options
under the Director's Plan. Each Eligible Director at the time of his election to
the Board of Directors, shall be granted an option to purchase 3,000 shares of
the Company's common stock at an exercise price equal to closing price of such
common stock at close of business at the date of such grant, such option to vest
immediately and to expire five years from the date of such grant.

     Beginning with the annual meeting of the stockholders of the Company held
on May 29, 1997 and provided that a sufficient number of shares remain available
under the Director's Plan, each year immediately following the date of the
annual meeting of the Company there automatically will be granted to each
Eligible Director who is then serving on the Board an option to purchase 5,000
shares of the Company's Common Stock. The first 1,000 options vest immediately,
the remainder vest equally over the next four years from the date of grant and
are exercisable at the closing price of such shares of common stock at the date
of grant. Such options expire five years from the date of vesting. No options
were issued during the year ended December 31, 2002 under the Director's Plan.

     The maximum number of shares of Common Stock with respect to which options
may be granted under the Director's Plan (as amended May 26, 1998) is 235,000
shares.

8.   EMPLOYEE BENEFIT PLAN

     The Company maintains a noncontributory Employee Savings Plan, in
accordance with the provisions of Section 401(k) of the Internal Revenue Code.
Pursuant to the terms of the plan, participants can defer a portion of their
income through contributions to the Plan. During the year ended December 31,
2002, the Company did not make any discretionary additional contributions to the
plan.

9.   INCOME TAXES

     The tax effect of temporary differences consists of the following:

<TABLE>
<CAPTION>
                                                            DECEMBER 31,
                                                                2002
                                                            ------------
<S>                                                        <C>
     Deferred tax assets:
        Research credits..............................         186,000
        Net operating loss carryforward...............       9,633,000
                                                           -----------
                                                             9,819,000
     Deferred tax liabilities:
        Property, equipment and software..............          28,000
                                                           -----------
                                                             9,791,000
        Valuation allowance...........................      (9,561,000)
                                                           -----------
                                                           $   230,000
                                                           ===========
</TABLE>


                                      F-16
<PAGE>


     Income tax benefit (expense) as of December 31, 2002 and 2001 consists of
the following:

<TABLE>
<CAPTION>
                                                        2002         2001
                                                        ----         ----
<S>                                                  <C>          <C>
          State............................
             Current.......................          $ 232,000    $ 278,000
             Deferred......................            (50,000)      40,000
                                                     ---------    ---------
                                                     $ 182,000    $ 318,000
                                                     =========    =========
</TABLE>

     In accordance with New Jersey statues, the Company has entered into an
agreement to sell certain New Jersey net operating losses and research and
development credits accordingly, a state income tax benefit (expense) and
deferred tax asset has been recognized in 2002 and 2001.

     The increase in valuation allowances for the years ended December 31, 2002
and 2001 were $968,000 and $1,520,000, respectively.

     The difference between the statutory federal income tax rate and the
effective rate for the Company's income tax benefit for each of the years ended
December 31, 2002 and 2001, respectively, is summarized as follows:

<TABLE>
<CAPTION>
                                                                        2002      2001
                                                                        ----      ----
<S>                                                                    <C>       <C>
     Statutory federal income tax rate...............................   34.0%     34.0%
     State income tax benefit (expense) net of federal tax effect....    4.2%      4.6%
     Increase in valuation allowance.................................  (33.9)%   (31.9)%
     Miscellaneous...................................................   (2.1)%     0.2%
     Effective income tax rate.......................................    6.4%      6.9%
</TABLE>

     As of December 31, 2002, the Company has unused net operating loss
carryforwards of $26,925,000 available for federal income tax purposes. The
unused net operating loss carryforwards expire in various years from 2010 to
2022. The Company, in the future, may be subject to limitations on the use of
its NOL's as provided under Section 382 of the Internal Revenue Code.

10.  COMMITMENTS

LEASES

     The Company leases shared office space on a month-to-month basis. Rent
expense incurred for the years ended December 31, 2002 and December 31, 2001
amounted to $77,000 and $90,000, respectively.

EMPLOYMENT AGREEMENTS

     Mr. Zarin, the CEO, entered into an employment agreement with the Company,
dated as of April 1, 2000, pursuant to which he agreed to serve as the Company's
President and Chief Executive Officer through December 31, 2007 after which time
the Employment Agreement shall automatically continue for additional one year
periods (the "Renewal Terms") unless either Mr. Zarin or the Corporation
notifies the other at least six months prior to the end of the initial or any


                                      F-17
<PAGE>


Renewal Term. The agreement provided for an initial salary of $120,000 per year
which was increased to $150,000 on May 11, 2000. Mr. Zarin is also entitled to
an annual bonus based on the performance of the Corporation equal to (i) 50% of
his base compensation if the Company's net profits before taxes are equal to
projections to be approved by the Company's Board of Directors, (ii) 75% of his
base compensation if the Company's net profits before taxes are equal to 105% of
such projections, and (iii) 100% of his base compensation if the Company's net
profits before taxes are equal to 115% of such projections. Mr. Zarin can
terminate the agreement upon 180 days notice. The Company can terminate the
agreement for good cause at any time. If the Company elects not to renew the
Agreement and has given proper notification, Mr. Zarin will receive on the date
of termination an amount equal to 150% of his base compensation, his entitled
performance bonus and an amount equal to the average of any discretionary bonus
paid for the preceding two calendar years (the "Termination Bonuses"). If the
Company otherwise terminates the agreement without cause, or otherwise
materially breaches the agreement prior to December 31, 2005, Mr. Zarin will
receive a single payment equal to the remaining payments he would have been
entitled to receive during the unexpired portion of the agreement, an additional
two years base compensation and any termination bonuses. If the Company
otherwise terminates the agreement without cause, or otherwise materially
breaches the agreement after December 31, 2005, Mr. Zarin will receive a single
payment equal to the remaining payments he would have been entitled to receive
during the unexpired portion of the agreement, an additional three years base
compensation and any termination bonuses.

     Mr. O'Brien, the CFO, entered into an employment agreement with the
Company, dated as of January 12, 2003, pursuant to which he agreed to serve as
the Company's Vice- President and Chief Financial Officer through December 20,
2004 after which time the Employment Agreement shall automatically continue for
additional one year periods (the "Renewal Terms") unless either Mr. O'Brien or
the Corporation notifies the other at least six months prior to the end of the
initial or any Renewal Term. The agreement provided for an initial salary of
$120,000 per year. Mr. O'Brien can terminate the agreement upon 60 days notice.
The Company can terminate the agreement for good cause at any time. If the
Company elects not to renew the Agreement and has given proper notification, Mr.
O'Brien will receive on the date of termination an amount equal to 50% of his
base compensation, his entitled performance bonus and an amount equal to the
average of any discretionary bonus paid for the preceding two calendar years
(the "Termination Bonuses"). If the Company otherwise terminates the agreement
without cause, or otherwise materially breaches the agreement prior to December
20, 2004, Mr. O'Brien will receive a single payment equal to two years base
compensation and any termination bonuses.

11.  FINANCIAL INSTRUMENTS

     Statement of Financial Accounting Standards No. 107 "Disclosures about Fair
Values of Financial Instruments" ("SFAS 107") requires disclosure of fair value
information about financial instruments, whether or not recognized on the
balance sheet, for which it is practicable to estimate that value. Because no
market exists for certain of the Company's assets and liabilities, fair value
estimates are based upon judgments regarding credit risk, investor expectation
of economic conditions, normal cost of administration and other risk
characteristics, including interest rate and prepayment risk. These estimates
are subjective in nature and involve uncertainties and matters of judgment,
which significantly affect the estimates.

     The following summarizes the information about the fair value of the
financial instruments recorded on the Company's financial statements in
accordance with FAS 107:


                                      F-18
<PAGE>


<TABLE>
<CAPTION>
                                                         DECEMBER 31, 2002
                                                  --------------------------------
                                                    CARRYING VALUE    FAIR VALUE
                                                    --------------    ----------
<S>                                                   <C>              <C>
Cash and cash equivalents.......................      $174,000         $174,000
Note payable to officer/stockholder.............       115,000          115,000
Note Payable....................................       200,000          200,000
</TABLE>

     The methodology and assumptions utilized to estimate the fair value of the
Company's financial instruments are as follows:

Cash and cash equivalents
    The carrying amount of cash approximates fair value.
Note payable officer/stockholder and note payable
    Since these are short term, the carrying amounts approximate fair value.

12.  SUBSEQUENT EVENTS

     On January 12, 2003 the Company's employees and directors rescinded their
interest in 1,189,000 of the Company's options that had been granted to them.

     On January 23, 2003 and March 6, 2003 the Company received loans from
Cornell Capital Partners, LP each in the amount of $125,000. The loans were
secured by advance puts under the Equity Line of Credit Agreement. From January
1, 2003 through March 28, 2003, $145,000 of outstanding loans have been repaid
from the proceeds of puts under the Equity Line of Credit Agreement, leaving a
current balance of $305,000. From January 1, 2003 through March 28, 2003, under
the terms of the Equity Line of Credit Agreement, the Company has received a
total of $145,000 and had issued 21,210,393 shares of common stock.

     On March 14, 2003, 1,044,304 warrants issued in a private placement on
March 14, 2000 expired.


                                      F-19