SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   -----------

                                   FORM 10-QSB

                                   -----------

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

               FOR THE QUARTERLY PERIOD ENDED: NOVEMBER 30, 1997

     [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                        COMMISSION FILE NUMBER: 000-23163

                       EAGLE WIRELESS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

               TEXAS                                          76-0494995
  (State or other jurisdiction)                             (IRS Employer
 of incorporation or organization                        Identification No.)

                                910 Gemini Avenue
                            Houston, Texas 77058-2704
          (Address of principal executive offices, including zip code)

                                 (281) 280-0488
              (Registrant's telephone number, including area code)

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

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

                              Name of Each Exchange
                     TITLE OF EACH CLASS ON WHICH REGISTERED
                     ---------------------------------------
                          Common Stock, $.001 par value
                         OTC / ELECTRONIC BULLETIN BOARD

Indicate by check mark whether the registrant (i) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (ii) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]

As of November 30, 1996, there were 11,605,334 shares of Common Stock
outstanding
<PAGE>
EAGLE WIRELESS INTERNATIONAL, INC.

                                      INDEX

PART 1 -   FINANCIAL INFORMATION                                           PAGE
                                                                           ----
Item 1.    Financial Statements (Unaudited)

           Balance sheets at November 30, 1997 and 1996 ..................   3

           Statements of  Income and Retained Earnings for the Three
           Months Ended November 30, 1997 and 1996 .......................   4

           Statements of Cash Flows for the Three Months Ended
           November 30, 1997 and 1996 ....................................   5

           Statements of Shareholders' Equity for the Three Months Ended
           November 30, 1997 and 1996 ....................................   6

           Notes to the financial statements .............................  7-13

Item 2.    Management's Discussion and Analysis of Financial

           Condition and Results of Operations ...........................  14

SIGNATURES ...............................................................  15

                                      - 2 -
<PAGE>
                       EAGLE WIRELESS INTERNATIONAL, INC.
                    BALANCE SHEETS-NOVEMBER 30, 1997 AND 1996

                                   (UNAUDITED)
ASSETS
                                                      1997              1996
                                                  -----------       -----------
Current Assets:

   Cash and cash equivalents ...............      $ 2,639,817       $ 2,456,098
   Accounts receivable .....................        2,701,365           870,530
   Inventories .............................        1,315,593           588,981
   Prepaid expenses ........................           52,920             6,048
                                                  -----------       -----------
        Total current assets ...............        6,709,695         3,921,657
                                                  -----------       -----------
Property and equipment:

   Operating equipment .....................          674,868           507,764
   Less accumulated depreciation ...........         (134,179)          (49,531)
                                                  -----------       -----------
        Total property and equipment .......          540,689           458,233
                                                  -----------       -----------
Other assets ...............................           92,265            13,394
                                                  -----------       -----------
                                                  $ 7,342,649       $ 4,393,284
                                                  ===========       ===========
LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:

    Accounts payable .......................      $   123,449       $    70,475
    Accrued expenses .......................           72,358            55,027
    Customer deposits ......................          125,857
    Shareholder's advances .................          125,871           290,000
    Note payable ...........................            4,478
    Current maturities of capital lease
      obligations ..........................           24,416            33,896
    Federal income taxes payable ...........          264,012            83,421
    Deferred taxes .........................           13,056             1,700
                                                  -----------       -----------
        Total current liabilities ..........          623,162           664,854
                                                  -----------       -----------
Long-term liabilities:

   Long-term capital lease obligations,
     net of current maturities .............            1,500            25,698
   Deferred taxes ..........................           16,161             9,507
                                                  -----------       -----------
        Total long-term liabilities ........           17,661            35,205
                                                  -----------       -----------
Commitments and contingent liabilities

Shareholders' equity .......................        6,701,826         3,693,225
                                                  -----------       -----------
                                                  $ 7,342,649       $ 4,393,284
                                                  ===========       ===========

                                       -3-
<PAGE>
                       EAGLE WIRELESS INTERNATIONAL, INC.
                              STATEMENTS OF INCOME

              FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
                                   (UNAUDITED)

                                                        1997             1996
                                                      ---------       ----------
Net sales ......................................      $ 557,898       $1,138,852

Costs of goods sold:

    Materials and supplies .....................         34,707          280,246
    Direct labor and related costs .............         84,246          125,628
    Depreciation and amortization ..............          6,100            9,856
    Other manufacturing costs ..................         91,389          138,762
    Research and development ...................         33,306           36,585
                                                      ---------       ----------
        Total costs of goods sold ..............        249,748          591,077
                                                      ---------       ----------
Gross profit ...................................        308,150          547,775
                                                      ---------       ----------
Operating expenses

    Selling, general and administrative:

        Salaries and related costs .............        113,329          137,238
        Advertising and promotion ..............        214,956           56,790
        Depreciation and amortization ..........         16,480            6,737
        Other support costs ....................         33,033          107,930
                                                      ---------       ----------
        Total operating expenses ...............        377,798          308,695
                                                      ---------       ----------
Income(loss) from operations before other
    revenues/(expenses) and taxes ..............        (69,648)         239,080

Other revenues/(expenses)

    Interest income ............................         96,011           22,524
    Interest expense ...........................         (1,075)
                                                                      ----------
        Total other revenues ...................         94,936           22,524
                                                      ---------       ----------
Income before income taxes .....................         25,288          261,604

Provisions for income taxes ....................          8,600           88,945

Net income .....................................         16,688          172,659
                                                      ---------       ----------
Retained earnings - beginning of period ........        760,698           32,204
                                                      ---------       ----------
Retained earnings - end of period ..............      $ 777,386       $  204,863
                                                      =========       ==========
Net earnings per common share:

Primary (note 1) ...............................      $     .01       $      .03
Fully diluted (note 1) .........................      $     .01       $      .01

                                       -4-

<PAGE>
                       EAGLE WIRELESS INTERNATIONAL, INC.

                            STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                1997            1996
                                                            -----------     -----------
<S>                                                         <C>             <C>        
Cash flows from operating activities

    Net income .........................................    $    16,688     $   172,658

    Adjustment to reconcile net earnings to net
       cash Used by operating activities:

         Depreciation and amortization .................         22,580          16,593
         (Increase) / Decrease in accounts receivable ..        193,916        (511,597)
         (Increase) / Decrease in inventories ..........       (303,375)        (63,670)
         (Increase) / Decrease in prepaid expenses .....          4,549          10,575
         (Increase) / Decrease in accounts payable and
            accrued expenses ...........................       (141,362)       (216,038)
         (Increase) / Decrease in deferred taxes .......          4,000
         (Increase) / Decrease in customer deposits ....                        (85,926)
         (Increase) / Decrease in federal income
            taxes payable ..............................          3,100          88,945
                                                            -----------     -----------
         Total adjustments .............................       (216,592)       (761,118)
                                                            -----------     -----------
    Net cash used by operating activities ..............       (199,904)       (588,460)

Cash flows used in investing activities

         Purchase of property and equipment ............        (84,407)        (82,029)
         (Increase) / decrease in other assets .........        (50,758)         35,882
                                                            -----------     -----------
Net cash used  by investing activities .................       (135,165)        (46,147)

Cash flows from financing activities

         Issuance of  common stock .....................        142,528       1,443,561
         (Increase) / Decrease in notes payable
            and capital leases .........................         (8,924)       (359,408)
         (Increase) / Decrease in syndication costs ....        (49,778)
         (Increase) / Decrease in shareholder's advances         (3,501)
         (Increase) / Decrease in subscriptions payable                         (97,500)
                                                            -----------     -----------

    Net cash provided by financing activities ..........         80,325         986,653

    Net increase(decrease) in cash .....................       (254,744)        352,046

Cash at the beginning of the period ....................      2,894,561       2,104,052
                                                            -----------     -----------
Cash at the end of the period ..........................    $ 2,639,817     $ 2,456,098
                                                            ===========     ===========
</TABLE>
                                       -5-
<PAGE>
                       EAGLE WIRELESS INTERNATIONAL, INC.
                  STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

              FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                 Common Stock    Preferred Stock  Paid In Capital     Retained             Total
                                                $.001 Par Value  $.001 Par Value                      Earnings
                                                  Authorized      Authorized
                                                  100,000,000      5,000,000
                                                     Shares         Shares

<S>                                               <C>                <C>          <C>                 <C>               <C>        
Balance, Sept. 1, 1996 ...................        $     6,946        $--          $ 2,037,856         $  32,204         $ 2,077,006
Net income for the three months
  ended Nov. 30, 1996                                    --           --                 --             172,659             172,659
Private placement ........................              1,883         --            1,670,956              --             1,672,839
Syndication costs ........................               --           --            (229,279)              --              (229,279)
                                                  ---------------------------------------------------------------------------------
Balance Nov. 30, 1996 ....................        $     8,829        $--          $ 3,479,533         $ 204,863         $ 3,693,225
                                                  =================================================================================
Shares issued and outstanding ............          8,829,000         None
                                                  =========================

Balance, Sept. 1, 1997 ...................        $    11,510        $--          $ 5,820,180         $ 760,698         $ 6,592,388
Net income for the three
  months ended Nov. 30, 1997 .............               --           --                 --           $  16,688         $    16,688
Stock issued to retire debt,
  acquire a company and
  provide employee compensation

                                                           95         --              142,433              --               142,528
Syndication costs ........................               --           --              (49,778)             --               (49,778)
                                                  ---------------------------------------------------------------------------------
Balance Nov. 30, 1997 ....................        $    11,605        $--          $ 5,912,835         $ 777,386         $ 6,701,826
                                                  =================================================================================
Shares issued and outstanding ............         11,605,334         None
                                                  =========================
</TABLE>
                                       -6-
<PAGE>
                       EAGLE WIRELESS INTERNATIONAL, INC.
                        NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:

         Eagle Wireless International, Inc., (the Company), incorporated as a
         Texas corporation on May 24, 1993 and commenced business in April of
         1996. The Company is a worldwide supplier of telecommunications
         equipment and related software used by service providers in the paging
         and other wireless personal communications markets. The Company
         designs, manufactures, markets and services its products under the
         Eagle name. These products include transmitters, receivers,
         controllers, software and other equipment used in personal
         communications systems (including paging, voice messaging, cellular and
         message management and mobile data systems) and radio and telephone
         systems.


A)       Cash and Cash Equivalents

         The Company has $2,608,179 and $2,140,667 invested in interest bearing
         accounts at November 30, 1997 and 1996, respectively.

B)       Property and Equipment

         Property and equipment are carried at cost less accumulated
         depreciation. Depreciation is calculated by using the straight-line
         method for financial reporting and accelerated methods for income tax
         purposes. The recovery classifications for these assets are listed as
         follows:

                                                             YEARS
                                                             -----
              Machinery and equipment                          7
              Furniture and Fixtures                           7

         Expenditures for maintenance and repairs are charged against income as
         incurred and major improvements are capitalized.

C)       Inventories

         Inventories are valued at the lower of cost or market. The cost is
         determined by using the FIFO method. Inventories consist of the
         following items:

                                                            NOVEMBER 30,
                                                     ------------------------
                                                     1997                1996
                                                     ----                ----
                     Raw Materials               $   702,107          $ 290,741
                     Work in Process               1,994,690            298,240
                     Finished Goods                    4,568             - 0 - 
                                                 -----------          ---------
                                                 $ 2,701,365          $ 588,981
                                                 ===========          =========

D)       Organizational Costs

         Organizational costs are amortized using the straight - line method
         over a period of sixty (60) months. Accumulated amortization is $1,162
         for the period ended November 30, 1997.

                                      - 7 -
<PAGE>
NOTE 1 -BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: (continued)

E)       Research and Development Costs

         The Company's research and development costs occur as a result of
         obligations to perform contractual services for outside parties. These
         costs are expensed as contract revenues are earned.

F)       Income Taxes

         The Company adopted the provisions of Statement of Financial Accounting
         Standards (SFAS) No. 109, "Accounting for Income Taxes", which requires
         a change from the deferral method to assets and liability method of
         accounting for income taxes. Timing differences exist between book
         income and tax income which relate primarily to depreciation methods.

         G) Net Earnings Per Common Share

         Net earnings per common share is shown as both primary and fully
         diluted. Primary earnings per common share are computed by dividing net
         income less any preferred stock dividends (if applicable) by the
         weighted average number of shares of common stock outstanding plus any
         dilutive common stock equivalents. Fully diluted earnings per common
         share are computed by dividing net income less any preferred stock
         dividends (if applicable) by the weighted average number of shares of
         common stock outstanding plus any dilutive and anti-dilutive common
         stock equivalents

H)       Warrants for Funding Activities

         To date, the Company has issued the following warrants: 5,033,334 Class
         A; 5,033,334 Class B; 1,050,000 Class C; 1,050,000 $.05; 1,375,000
         $.50; and 425,000 $5.00. Certain of these warrants were issued to
         individuals and trusts for their assistance in the fundraising
         activities. The Company has assigned a value of $280,343 as
         compensation for services rendered and fund raising activities.

I)       Deferred Financing Fees

         The deferred financing fees originated as a financing charge on a
         non-interest bearing notes payable in the amount of $375,000. During
         November 1996, the financing fees were expensed.

J)       Advertising and Promotion

         All advertising related costs are expensed as incurred. The Company
         does not incur any cost for direct-response advertising. For the three
         months ended November 30, 1997 and 1996, the Company had expensed
         $214,956 and $56,790 respectively.

NOTE 2 - NOTES PAYABLE:

         At November 30, 1996 the Company borrowed from a corporation $4,478.
         This unsecured note to an insurance company bears interest at 8.75% and
         is due $2,265 monthly until January 1997.

                                      - 8 -
<PAGE>
NOTE 3 - CAPITAL LEASE OBLIGATIONS:

                                                                NOVEMBER 30
                                                                -----------
                                                            1997          1996
                                                            ----          ----
Equipment lease with Compix
bearing interest at 15%, payable in
monthly installments of $624; due
July 1998  .......................................        $ 4,147        $19,201

Equipment lease with IFR bearing
interest at 15%, payable in monthly
installments of $1,427; due June 1998  ...........          9,071         40,393

Equipment lease with Associates
Capital bearing interest at 7%,
payable in monthly installments
of $1,177; due Sept. 1998  .......................         10,626

Equipment lease with IKON Office
  Solutions bearing interest at 18%
  payable in monthly installments of
  $105; due March, 2000  .........................          2,072

     Total Obligations ...........................         25,916         59,594
     Less Current Portion of
           Lease Obligations .....................         24,416         33,896
                                                          -------        -------
     Total Long - Term Capital
           Lease Obligations .....................        $ 1,500        $25,698
                                                          =======        =======

         The capitalized lease obligations are collateralized by the related
         equipment acquired with a net book value of approximately $ 34,000. The
         future minimum lease payments under the capital leases and the net
         present value of the future lease payments at November 30, 1997 are
         $29,690 of which $3,774 represents interest.

         Future obligations under the lease terms are:

                               PERIOD ENDING
                                AUGUST  31,                        AMOUNT
                                ------  ---                        ------
                                    1998                        $   28,010
                                    1999                             1,260
                                    2000                               420
                                                                 ---------
                                       Total                    $   39,690
                                                                ==========

                                      - 9 -
<PAGE>
NOTE 4 - INCOME TAXES:

         As discussed in note 1, the Company adopted the provisions of Statement
         of Financial Accounting Standards (SFAS) No. 109, "Accounting for
         Income Taxes". Implementation of SFAS 109 did not have a material
         cumulative effect on prior periods nor did it result in a change to the
         current year's provision.

A)       The effective tax rate for the Company is reconcilable to statutory tax
         rates as follows:

                                                               AUGUST 31,
                                                               ----------
                                                           1997          1996
                                                           ----          ----
                                                            %              %

          U.S. Federal Statutory Tax Rate                   34             34
                                                            --             --
          Effective Tax Rate                                34             34
                                                            ==             ==

B)       Deferred income taxes are provided for differences between financial
         statement and income tax reporting. Principal difference is the manner
         in which depreciation is computed for financial and income tax
         reporting purposes.


NOTE 5 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS:

         In July, 1996, the Board of Directors and majority shareholders
         authorized 5,000,000 shares of Preferred Stock with a par value of
         $.001. As of November 30, 1997, no Preferred Stock has been issued.

         In July, 1996, the Board of Directors and majority shareholders adopted
         a stock option plan under which 400,000 shares of Common Stock have
         been reserved for issuance. As of November 30, 1997, 14,875 options
         have been granted pursuant to such plan. None of these options have
         been exercised.

         In May of 1996, the Company received an aggregate of $375,000 in bridge
         financing in the form of interest-free convertible notes from
         unaffiliated individuals. Holders of $369,000 of these notes converted
         into 369,000 shares of Company common stock, and the balance of $6,000
         was retired in November of 1996. In conjunction with the issuance of
         such indebtedness, the Company has issued such investors $.50 Warrants
         to purchase 375,000 shares of common stock, and $5.00 Warrants to
         purchase up to 375,000 shares of common stock.

         Due to the lack of a public market, shareholders and warrant-holders
         are inherently restricted from exercising their warrants. A minimal
         value has therefore been assigned as compensation for these warrants
         and recorded as syndication costs.

         The Company has issued and outstanding the following warrants which
         have not yet been exercised at November 30, 1997:

                  1,050,000 stock purchase warrants which expire July, 1999.
                  These warrants are subject to restrictions regarding the
                  timing of exercise, the ability of the Company to become a
                  public company and future marketability of the common stock.
                  The warrants are to purchase fully paid and non-assessable
                  shares of the common stock, par value $.001 per share at a
                  purchase price of $.05 per share. These warrants, however, are
                  not exercisable until and unless the shares of Common Stock
                  trade at a minimum of $5.50 per share for twenty consecutive
                  trading days, yet still expire July, 1999 if not exercised.

                                     - 10 -
<PAGE>
NOTE 5 -  PREFERRED STOCK, STOCK OPTIONS, AND WARRANTS: (continued)

                  1,375,000 stock purchase warrants which expire July, 1999.
                  These warrants are subject to restrictions regarding the
                  timing of exercise, the ability of the Company to become a
                  public company and future marketability of the common stock.
                  The warrants are to purchase fully paid and non-assessable
                  shares of the common stock, par value $.001 per share at a
                  purchase price of $.50 per share. These warrants, however, are
                  not exercisable until and unless the shares of Common Stock
                  trade at a minimum of $5.50 per share for twenty consecutive
                  trading days, yet still expire July, 1999 if not exercised.

                  425,000 stock purchases warrants which expire July, 1999. The
                  warrants are to purchase fully paid and non-assessable shares
                  of the common stock, par value $.001 per share at a purchase
                  price of $5.00 per share. These warrants are subject to
                  restrictions regarding the timing of exercise. The underlying
                  shares of common stock were registered for resale on September
                  4, 1997 under the Securities Act of 1933.

                  5,033,334 Class A stock purchase warrants which expire August
                  31, 2000. These warrants are subject to restrictions regarding
                  the timing of exercise, the ability of the Company to become a
                  public company and future marketability of the common stock.
                  The warrants are to purchase fully paid and non-assessable
                  shares of the common stock, par value $.001 per share at a
                  purchase price of $4.00 per share. If, however, the closing
                  bid price of the Common Stock shall have equaled or exceeded
                  $5.50 per share for a period of twenty consecutive trading
                  days at any time, the Company may redeem the Class A Warrants
                  by paying holders $.05 per Class A Warrant. The underlying
                  shares of common stock were registered for resale on September
                  4, 1997 under the Securities Act of 1933.

                  5,033,334 Class B stock purchase warrants which expire August
                  31, 2000. These warrants are subject to restrictions regarding
                  the timing of exercise, the ability of the Company to become a
                  public company, and future marketability of the common stock.
                  The warrants are to purchase fully paid and non-assessable
                  shares of the common stock, par value $.001 per share, at a
                  purchase price if $6.00 per share. If, however, the closing
                  bid price of the Common Stock shall have equaled or exceeded
                  $7.50 per share for a period of twenty consecutive trading
                  days at any time, the Company may redeem the Class B Warrants
                  by paying holders $.05 per Class B Warrant. The underlying
                  shares of common stock and Class B Warrants were registered
                  for resale on September 4, 1997 under the Securities Act of
                  1933.

                  1,050,000 Class C stock purchase warrants which expire August
                  31, 2000. These warrants are subject to restrictions regarding
                  the timing of exercise, the ability of the Company to become a
                  public company, and future marketability of the common stock.
                  The warrants are to purchase fully paid and non-assessable
                  shares of the common stock, par value $.001 per share, at a
                  purchase price if $2.00 per share. If, however, the closing
                  bid price of the Common Stock shall have equaled or exceeded
                  $7.50 per share for a period of twenty consecutive trading
                  days at any time, the Company may redeem the Class C Warrants
                  by paying holders $.05 per Class C Warrant. The underlying
                  shares of common stock were registered for resale on September
                  4, 1997 under the Securities Act of 1933.

                                     - 11 -
<PAGE>
NOTE 5 -  PREFERRED STOCK, STOCK OPTIONS, AND WARRANTS: (continued)

         The warrants outstanding are segregated into two categories
         (exercisable and non-exercisable). They are summarized as follows:
<TABLE>
<CAPTION>

           CLASS  OF             EXERCISABLE
           WARRANTS      NOV. 31, 1997   NOV. 31, 1996       NON-EXERCISABLE  EXERCISE PRICE
           --------      -------------   -------------       ---------------  --------------
<S>         <C>                                 <C>                             <C>      
            $   .01       Exercised             700,000               --        $     .01
                 .05        --                   --                1,050,000          .05
                 .50        --                   --                1,375,000          .50
               5.00          425,000            425,000               --             5.00
                  A       5,033,334           4,748,334               --             4.00
                  B       5,033,334           4,748,334               --             6.00
                  C       1,050,000              --                   --                                                2.00
                         ----------          ----------            ---------
                Total    11,541,668          10,621,668            2,425,000
                         ==========          ==========            =========
</TABLE>

NOTE 6 - SEGMENT INFORMATION:

         The Company had gross revenues of $557,898 for the three months ended
         November 30, 1997. The following customers individually represent a
         greater than ten percent of these revenues.

                                                        NOVEMBER 30, 1997
           CUSTOMER                                AMOUNT           PERCENTAGE
           --------                                ------           ----------
           A                                    $   195,115             34%
           B                                    $   113,186             20%
           C                                    $    75,268             13%

NOTE 7  - INVESTMENT IN LINK - TWO COMMUNICATIONS, INC.:

         The Company and Link - Two Communications, Inc. (Link II) have executed
         an agreement, whereby the Company would receive up to an eight percent
         equity interest in Link II in lieu of accruing finance charges on the
         outstanding balance owed by Link II to the Company. Under the
         agreement, equity in Link II was earned at a rate of 0.2% per month per
         $100,000 payable and outstanding for more than thirty days. At November
         30, 1997 and 1996, the Company had earned a 6.8% and 0%,respectively,
         minority equity interest in Link II. This is evidenced by the issuance
         of 240,000 shares of Link II common stock to the Company. As of
         November 30, 1997, the Company has recorded it share of losses in this
         unconsolidated affiliate. The loss for the three months ended November
         30, 1997 totaled $5,000. Certain principal stockholders (or affiliates
         thereof) of the Company, including James Futer, executive vice
         president, director, and chief operating officer, and A.L. Clifford, a
         director of the Company, are also principal stockholders of Link II.
         Mr. Clifford is also the chairman, president, and chief executive
         officer of Link II and Dr. Cubley is a director of Link II.

NOTE 8 - RISK FACTORS:

         At November 30, 1997, substantially all of the Company's business
         activity has remained within the United States and has been extended to
         the wireless infrastructure industry. Through the normal course of
         business, the Company generally does not require its customers to post
         any collateral. However, because Link-Two Communications, Inc.
         constitutes a significant customer with respect to its current accounts
         receivable balance, the two companies have reached an agreement whereby
         the Company has received a minority interest in Link -Two
         Communications, Inc. as well as interest computed at twelve percent on
         the monthly indebtedness to the Company. Although the Company has
         concentrated its efforts in the wireless infrastructure industry at
         November 30, 1997, it is management's belief that the Company faces
         little credit or economic risk due to the continuous growth the market
         is experiencing.

                                     - 12 -
<PAGE>
NOTE 9 - SHAREHOLDERS' ADVANCES:

         Certain officers and an employee advanced the Company $290,000. At
         November 30, 1997 and 1996, the Company owes $125,871 and $290,000,
         respectively. The shareholder advances are non-interest bearing and
         payable upon demand.


NOTE 10 - FOREIGN OPERATIONS:

         Although the Company is based in the United States, its product is sold
         on the international market. Presently, international sales total 1.0 %
         and 1.9% for the three months ended November 30, 1997 and 1996,
         respectively.

NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES:

         The Company now leases its primary office space for $8,963 per month
         under a non-cancelable lease expiring on March 31, 1999. For the period
         ending November 30, 1997, rental expense of $28,088 was incurred.

         Future obligations under the non-cancelable lease terms are:

        PERIOD ENDING
         NOVEMBER 30,                                          AMOUNT
         ------------                                          ------
               1998                                           $ 107,556
               1999                                              35,852
                                                             -----------
                   Total                                      $ 143,408
                                                             ==========

NOTE 12 - SUBSEQUENT EVENTS:

         During the quarter ended November 30, 1997, the Company acquired all of
         the assets, net of liabilities, of W & H Development, Inc. for 40,000
         shares of common stock. W & H is involved in the business of wireless
         communications for oil and gas concerns. Subsequent to November 30,
         1997, these shares of stock were issued.

         Additionally, the Company has entered into an agreement with Houston
         Research Consulting, Inc. to issue 55,000 shares of common stock as
         full payment in lieu of an $82,500 debt. Subsequent to November 30,
         1997, these shares of stock were issued.

                                     - 13 -

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

         During the quarter ended November 30, 1997, the Company completed its
         plan to take the Company public and shifted its primary focus to the
         completion of certain research and development projects and the
         augmentation of its sales and marketing efforts. Concurrent with these
         activities, the Company acquired the assets of W & H Resources, a
         company specializing in oil and gas well remote data acquisition and
         control, in an effort to expand the sale of the Company's wireless
         control products into the oil and gas industries.

         The Company's sales for this quarter were $557,898 as compared to the
         sales for the quarter ended November 30, 1996 of $1,138,852. This
         decrease is attributed to a reduction in sales to the Company's largest
         customer and the implementation of the Company's decision to use
         established distributor networks to market its products in addition to
         its primary direct sales avenues. The Company has recruited a new
         Vice-President of sales, Mr. Rice, to direct these sales activities.

         For the quarter ended November 30, 1997, net income was $16,688 as
         compared to $172,659 for the quarter ended November 30, 1996. Current
         assets for the quarter ended November 30, 1997 totaled $6,709,695 as
         compared to $3,921,657 reported in the quarter ended November 30, 1996.
         The Company's shareholders' equity for the quarter ended November 30,
         1997 totaled $6,701,826 as compared to $3,693,225 reported in the
         quarter ended November 30, 1996. Cash flows invested in operations
         totaled $240,892 and financing activities provided cash flows of
         $121,313 during the quarter ended November 30, 1997. For the comparable
         period ended November 30, 1996, cash flows invested in operations
         totaled $761,118 and financing activities provided cash flows of
         $986,653.

                                     - 14 -

                       EAGLE WIRELESS INTERNATIONAL, INC.

                                   SIGNATURES

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

                                        EAGLE WIRELESS INTERNATIONAL, INC.
                                                  (Registrant)

Date: 1-14-97                           By: /s/ H. DEAN CUBLEY
                                            Dr. H. Dean Cubley
                                            President

                                            /s/ RICHARD R. ROYALL
                                            Richard R. Royall
                                            Chief Financial Officer

                                     - 15 -