U.S. 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, 2000

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____

                        COMMISSION FILE NUMBER: 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.)

                              101 COURAGEOUS DRIVE
                          LEAGUE CITY TEXAS 77573-3925
          (Address of principal executive offices, including zip code)

                                 (281) 538-6000
              (Registrant's telephone number, including area code)
                                  -------------

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 [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of January 16, 2001, there were 26,394,493 shares of common stock outstanding
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                                     INDEX

PART 1 - FINANCIAL INFORMATION                                              PAGE

       Item 1.   Financial Statements (Unaudited)

                 Balance Sheets at November 30, 2000 and August 31, 2000     3

                 Statements of Income for the three
                 months ended November 30, 2000 and 1999                     4

                 Statements of Changes In Shareholders' Equity for the
                 three months ended November 30, 2000 and 1999               5

                 Statements of Cash Flows for the three months ended
                 November 30, 2000 and 1999                                  6

                 Notes to the financial statements                        7-24

       Item 2.   Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                     24-26

PART 2 - OTHER INFORMATION

       Item 1.   Legal Proceedings                                          26

       Item 2.   Recent Sales of Unregistered Securities or Changes
                 in Securities and Use of Proceeds                          26

       Item 3.   Defaults Upon Senior Securities                            26

       Item 4.   Submission of matters to a vote of Security Holders        26

       Item 5.   Other Information                                          26

       Item 6.   Exhibits and Reports on Form 8-K                           26

SIGNATURES                                                                  27
                                       2
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                 ASSETS
                                                                   NOVEMBER 30,     AUGUST 31,
                                                                       2000           2000
                                                                   ------------    ------------
                                                                    (UNAUDITED)     (AUDITED)
<S>                                                                <C>             <C>
CURRENT ASSETS
   Cash and Cash Equivalents (Note 1)                              $     31,629    $     32,346
   Accounts Receivable (Note 2)                                           3,276           9,902
   Inventories (Note 1)                                                   6,531           5,756
   Marketable Securities (Notes 1 & 9)                                    8,215             971
   Prepaid Expenses                                                         267             331
                                                                   ------------    ------------
      TOTAL CURRENT ASSETS                                               49,918          49,306

PROPERTY AND EQUIPMENT (NOTES 1 & 3):
   Operating Equipment                                                    2,765           2,703
   Less: Accumulated Depreciation                                        (1,112)         (1,023)
                                                                   ------------    ------------
      TOTAL PROPERTY AND EQUIPMENT                                        1,653           1,680

OTHER ASSETS:
   Notes Receivable Clearworks.net (Note 23)                              2,000               0
   Security Deposits                                                         48              32
   Deferred Advertising Costs (Note 1)                                      374             385
   Deferred Syndication (Note 1)                                              0             270
   Goodwill (Notes 1 & 4)                                                 5,638           5,966
   Less: Accumulated Amortization                                          (274)           (194)
   Other Intangible Assets (Note 1)                                         524             171
   Other Assets                                                             742              25
                                                                   ------------    ------------
      TOTAL OTHER ASSETS                                                  9,052           6,655
                                                                   ------------    ------------
TOTAL ASSETS                                                       $     60,623    $     57,641
                                                                   ============    ============
                  LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable                                                $      1,816    $      2,007
   Accrued Expenses                                                         114             308
   Notes Payable (Note 5)                                                   422              42
   Line of Credit (Note 7)                                                    0             266
   Capital Lease Obligations (Note 6)                                        53              59
   Federal Income Taxes Payable (Notes 1 & 10)                              772             736
   Franchise Taxes Payable                                                   42              57
   Sales Taxes Payable                                                       17              17
   Deferred Taxes (Note 10)                                                  15              15
                                                                   ------------    ------------
      TOTAL CURRENT LIABILITIES                                           3,251           3,507

LONG-TERM LIABILITIES:
   Capital Lease Obligations
     (net of current maturities) (Note 6)                                    32              41
     Deferred Taxes (Note 10)                                                32              32
                                                                   ------------    ------------
      TOTAL LONG-TERM LIABILITIES                                            64              73

COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 17)

SHAREHOLDERS' EQUITY:
   Preferred Stock - $.001 par value
      Authorized  5,000,000 shares
      Issued -0- shares                                                       0               0

   Common Stock - $.001 par value
      Authorized  100,000,000 shares
      Issued and Outstanding at November 30, and August 31, 2000
      26,316,993 and 25,609,263, respectively                                26              26
   Paid in Capital                                                       55,337          52,160
   Retained Earnings                                                      1,945           1,875
                                                                   ------------    ------------
      TOTAL SHAREHOLDERS' EQUITY                                         57,308          54,061
                                                                   ------------    ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                         $     60,623    $     57,641
                                                                   ============    ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED
                                                                    NOVEMBER 30,
                                                           ----------------------------
                                                               2000           1999
                                                           ------------    ------------
                                                            (UNAUDITED)    (UNAUDITED)
<S>                                                        <C>             <C>
NET SALES                                                  $      1,866    $        656

COST OF GOODS SOLD:
   Materials and Supplies                                           503             108
   Direct Labor and Related Costs                                   527             119
   Depreciation and Amortization                                     44              17
   Other Manufacturing Costs                                          8               7
                                                           ------------    ------------
      Total Costs of Goods Sold                                   1,082             251
                                                           ------------    ------------
GROSS PROFIT                                                        784             405

OPERATING EXPENSES:
   Selling, General and Administrative
     Salaries and Related Costs                                     498             132
     Advertising and Promotion                                      127               3
     Depreciation and Amortization                                  159              16
     Research & Development                                         498             252
     Other Support Costs                                            167             131
                                                           ------------    ------------
      Total Operating Expenses                                    1,449             534

EARNINGS / LOSS FROM OPERATIONS BEFORE OTHER
   REVENUES/EXPENSES, LOSS FROM MINORITY INTEREST
   IN AFFILIATE, INCOME TAXES AND OTHER
   COMPREHENSIVE INCOME                                            (665)           (129)

OTHER REVENUES / (EXPENSES)
   Interest Income - net                                            760             246
   Other Income                                                                       6
                                                           ------------    ------------
      Total Other Revenues                                          760             252
                                                           ------------    ------------
EARNINGS BEFORE MINORITY INTEREST IN
   AFFILIATE, INCOME TAXES & OTHER
   COMPREHENSIVE INCOME                                              95             123
   Gain / (Loss) from Minority Interest in Affiliate                  0             (38)
                                                           ------------    ------------
EARNINGS BEFORE INCOME TAXES                                         95              85
   Provision for Income Taxes                                       (32)            (17)
                                                           ------------    ------------
NET EARNINGS                                                         63              68

OTHER COMPREHENSIVE INCOME, NET OF TAXES
   Unrealized Holding Loss                                            7               0
                                                           ------------    ------------
   Other Comprehensive Income                              $         70    $         68
                                                           ============    ============
            Net Earnings Per Common Share:
            Primary (Note 1 & 18)                          $       .002    $        .01
            Fully Diluted (Note 1 & 18)                    $       .002    $        .01
            Comprehensive Income (Note 1)                  $       .002    $        .01
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                         COMMON STOCK                     ADDITIONAL                     TOTAL
           AUGUST 31, 1999                           --------------------    PREFERRED     PAID IN       RETAINED     SHAREHOLDER'S
        TO NOVEMBER 30, 2000                          SHARES       VALUE       STOCK       CAPITAL       EARNINGS        EQUITY
                                                     --------    --------    ----------   ----------    ----------    -------------
<S>                                                  <C>         <C>         <C>          <C>           <C>           <C>
Total Shareholders' Equity
   As of August 31, 1999                               13,480          13             0        7,181         1,700            8,894

Net Earnings 2000                                           0           0             0            0           193              193

New Stock Issued to Shareholders
   Issuance of Common Stock
      For Acquisitions                                    869           1             0        3,661             0            3,662
      For Services and Compensation                       981           1             0        1,642             0            1,643
      For Warrant Conversion                            9,411           9             0       38,559             0           38,568
      For Debt Conversion                                 828           1             0        1,612             0            1,613
      For Employee Stock Option Plan                       40           1             0          158             0              158

Syndication Costs                                           0           0             0         (653)            0             (653)

Unrealized Holding Loss                                     0           0             0            0           (18)             (18)
                                                     --------    --------    ----------   ----------    ----------    -------------
Total Shareholders' Equity
   As of August 31, 2000                               25,609          26             0       52,160         1,875           54,060
                                                     --------    --------    ----------   ----------    ----------    -------------
Net Earnings for Three Months
   Ended November 30, 2000                                                                                      63               63
New Stock Issued to Shareholders
   For Services and Compensation                           63           0             0          546                            546
   For Warrant Conversion                                 645           0             0        3,506                          3,506
   For Employee Stock Option Plan                           0           0             0            1                              1

Syndication Costs                                                                               (876)                          (876)

Unrealized Holding Gain                                                                                          7                7
                                                     --------    --------    ----------   ----------    ----------    -------------
Total As of November 30, 2000                        $ 26,317    $     26    $        0   $   55,337    $    1,945    $      57,308
                                                     ========    ========    ==========   ==========    ==========    =============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       5
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                                       NOVEMBER 30,
                                                                ----------------------------
                                                                    2000           1999
                                                                ------------    ------------
                                                                (UNAUDITED)     (UNAUDITED)
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Earnings                                                 $         63    $         68

   Adjustments to Reconcile Net Earnings to Net Cash
    Used by Operating Activities:
     Depreciation and Amortization                                       169              33
     Unrealized Holding Gain on Marketable Securities                      7               0
     (Increase) / Decrease in Marketable Securities                   (7,244)              0
     (Increase) / Decrease in Accounts Receivable                      6,626             (53)
     (Increase) / Decrease in Inventories                               (775)             21
     (Increase) / Decrease in Prepaid Expenses                            64            (192)
     Increase / (Decrease) in Accounts Payable                          (191)            (54)
     Increase / (Decrease) in Accrued Expenses                          (194)              0
     Increase / (Decrease) in Deferred Revenues                            0            (480)
     Increase / (Decrease) in Federal Income Taxes Payable                36              18
     Increase / (Decrease) in Franchise Taxes Payable                    (15)              4
                                                                ------------    ------------
     Total Adjustments                                                (1,517)           (703)
                                                                ------------    ------------
   Net Cash Used by Operating Activities                              (1,454)           (635)

CASH FLOWS FROM INVESTING ACTIVITIES
     (Purchase) / Disposal of Property and Equipment                     (62)             (3)
     (Increase) / Decrease in Notes Receivable Clearworks.net         (2,000)              0
     (Increase) / Decrease in Security Deposit                           (16)              0
     (Increase) / Decrease in Deferred Advertising Costs                  11               0
     (Increase) / Decrease in Deferred Syndication Costs                 270               0
     (Increase) / Decrease in Other Intangible Assets                    (29)              0
     (Increase) / Decrease in Other Assets                              (713)             37
                                                                ------------    ------------
   Net Cash Used by Investing Activities                              (2,539)             34

CASH FLOWS FROM FINANCING ACTIVITIES
     Increase / (Decrease) in Notes Payable                              380            1483
     Increase / (Decrease) in Capital Leases                             (15)              0
     Increase / (Decrease) in Line of Credit                            (266)              0
     Increase / (Decrease) in Shareholders' Advances                       0               0
     Proceeds from Sale of Common Stock, Net                           3,177              36
                                                                ------------    ------------
   Net Cash Used by Financing Activities                               3,276            1519

   Net Increase / (Decrease) in Cash                                    (717)            917

CASH AT BEGINNING OF THE YEAR                                         32,346             188
                                                                ------------    ------------
CASH AT THE END OF THE YEAR                                     $     31,629    $      1,105
                                                                ============    ============
     Supplemental Disclosures of Cash Flow Information:
     Net cash paid during the year for:
        Interest                                                $     12,777
        Income Taxes                                            $     36,235
</TABLE>
Supplemental Non-Cash Investing Activities - See Note 4.

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       6
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

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 broadband and telecommunications
      equipment with related software, broadband products, and fiber and cable
      as 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 and BroadbandMagic.com, Inc. names.
      These products include transmitters, receivers, controllers, software,
      convergent set-top boxes, fiber, cable, and other equipment used in
      commercial and personal communications systems and radio and telephone
      systems.

A)    Consolidation

      At November 30, 2000, the Company has three wholly owned subsidiaries:
      AtlanticPacific Communications, Inc., eToolz, Inc., and
      BroadbandMagic.com, Inc. The consolidated financial statements include the
      accounts of the Company and its subsidiaries. All significant
      inter-company transactions and balances have been eliminated in
      consolidation.

B)    Cash and Cash Equivalents

      The Company has $31,103,613 and $1,056,768 invested in interest bearing
      accounts at November 30, 2000 and 1999, respectively.

C)    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
                                                   -----
                  Manufacturing Equipment           7
                  Furniture and Fixtures            7
                  Office Equipment                  5
                  Leasehold Improvements      Life of Lease
                  Property and Equipment            5
                  Vehicles                          5

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

D)    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,
                                     ----------------------------
                                        2000              1999
                                     ----------        ----------
                  Raw Materials      $3,670,303        $1,164,463
                  Work in Process     2,860,927         1,170,337
                  Finished Goods              0                 0
                                     ==========        ==========
                                     $6,531,230        $2,334,800

E)    Revenue Recognition

      The Company reports income from long-term contracts by the
      percentage-of-completion method of accounting. This method recognizes
      income and costs with respect to individual contracts on the basis of the
      proportionate value of work completed during the period. Estimated losses
      are recognized in full as soon as they are identifiable. Earnings are
      charged with a provision for doubtful accounts receivable based on
      collection experience and current review of the collectability of
      accounts. Accounts deemed uncollectable are charged against the allowance
      for doubtful accounts. The majority of cabling contracts are completed in
      less than one month.

F)    Research and Development Costs

      For the months ended November 30, 2000, the Company commenced research and
      development activities for internal projects related to its convergent
      set-top boxes as well as its multi-media entertainment centers. Research
      and

                                       7
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      development costs of $498,000 were expensed for the three months ended
      November 30, 2000.

      Prior to Fiscal 2000, the Company's research and development costs
      included obligations to perform contractual services for outside parties.
      These costs were expensed as contract revenues were earned. Research and
      development costs of $252,000 were expensed for the three months ended
      November 30, 1999. Contract revenues earned for the months ended November
      30, 2000 and 1999 were $0. No research and development services were
      performed for outside parties for the months ended November 30, 2000.

G)    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.

H)    Net Earnings Per Common Share

      Net earnings per common share is shown as both basic and diluted. Basic
      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. 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 common stock equivalents. The components
      used for the computations are shown as follows:
<TABLE>
<CAPTION>

                                                               NOVEMBER 30,   NOVEMBER 30,
                                                                   2000          1999
                                                               ------------   ------------
<S>                                                              <C>          <C>
                 Weighted Average Number of Common
                   Shares Outstanding Including:

                  Primary Common Stock Equivalents               26,316,993     13,514,750
                  Fully Dilutive Common Stock Equivalents        26,470,607     13,610,750
</TABLE>
I)    Impairment of Long Lived and Identifiable Intangible Assets

      The Company evaluates the carrying value of long-lived assets and
      identifiable intangible assets for potential impairment on an ongoing
      basis. An impairment loss would be deemed necessary when the estimated
      non-discounted future cash flows are less than the carrying net amount of
      the asset. If an asset were deemed to be impaired, the asset's recorded
      value would be reduced to fair market value. In determining the amount of
      the charge to be recorded, the following methods would be utilized to
      determine fair market value:

            1)    Quoted market prices in active markets.
            2)    Estimate based on prices of similar assets
            3)    Estimate based on valuation techniques

      As of November 30, 2000 and 1999, no impairment existed.

J)    Intangible Assets

      Goodwill represents the excess of the cost of companies acquired over the
      fair value of their net assets at the dates of acquisition and is being
      amortized using the straight-line method over twenty (20) years.

      Other intangible assets consist of patents and the intrinsic value
      trade-show costs. Patents and trade show costs are being amortized using
      the straight-line method over ten (10) years and eighteen (18) months,
      respectively.

K)    Deferred Advertising Costs

      Beginning in fiscal 2000, advertising costs have been capitalized and
      amortized on the basis of contractual agreements entered into by the
      Company. These contracts are amortized over the life of the individual
      contracts. For the three months ended November 30, 2000, the Company has
      expensed $126,721 whereas $374,453 in costs has been deferred. Prior to
      fiscal 2000, the Company had no contractual arrangements, therefore all
      advertising related costs were expensed as incurred.

L)    Deferred Syndication Costs

      Deferred syndication costs consist of those expenditures incurred that are
      directly attributable to fundraising and the collection thereto. Upon
      successful collection of the funds, all expenses incurred will be
      reclassified to additional paid in capital and treated as syndication
      costs; netted against the funds raised.

                                       8
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

M)    Use of Estimates

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent asset and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.

N)    Marketable Securities

      In May 1993, the Financial Accounting Standards Board issued Statements of
      Financial Accounting Standards No. 115, "Accounting for Certain
      Investments in Debt and Equity Securities", effective for fiscal years
      beginning after December 15, 1993. This statements considers debt
      securities that the Company has both the positive intent and ability to
      hold to maturity are carried at amortized cost. Debt securities that the
      company does not have the positive intent and ability to hold to maturity
      and all marketable equity securities are classified as available-for-sale
      or trading securities and are carried at fair market value. Unrealized
      holding gains and losses on securities classified as trading are reported
      in earnings. Unrealized holding gains and losses on securities classified
      as available-for-sale were previously carried as a separate component of
      stockholders' equity. SFAS No. 115 as amended by Financial Accounting
      Standards Board issued Statement of Financial Accounting Standards No.
      130, "Other Comprehensive Income". Management determines the appropriate
      classification of marketable equity and debt securities at the time of
      purchase and re-evaluates such designation as of each balance sheet date.

O)    Other Comprehensive Income

      In 1997, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 130, "Other Comprehensive Income,"
      effective for fiscal years beginning after December 15, 1997. This
      statement considers the presentation of unrealized holding gains and
      losses attributable to debt and equity securities classified as
      available-for-sale. As stated, any unrealized holding gains or losses
      affiliated to these securities are carried below net income under the
      caption "Other Comprehensive Income." For the fiscal year ended August 31,
      2000, no other comprehensive income existed.

P)    Reclassification

      The Company has reclassified certain costs and expenses for the three
      months ended November 30, 2000 to facilitate comparison to the three
      months ended November 30, 1999.

NOTE 2 - ACCOUNTS RECEIVABLE:

      Accounts receivable consist of the following:

                                                            NOVEMBER 30,
                                                    ----------------------------
                                                       2000              1999
                                                    ----------        ----------
Accounts Receivable                                 $3,362,575        $  340,082
Allowance for Doubtful Account                          86,575                 0
                                                    ----------        ----------
Net Accounts Receivable                             $3,276,000        $  286,269
                                                    ==========        ==========

NOTE 3 - PROPERTY, PLANT & EQUIPMENT:

      Components of property, plant & equipment are as follows:

                                                           NOVEMBER 30,
                                                   ----------------------------
                                                       2000             1999
                                                   -----------      -----------
Automobile                                         $   639,380      $         0
Furniture & Fixtures                                   252,740           32,900
Leasehold Improvements                                  19,582            9,280
Manufacturing Equipment                                586,969          482,359
Office Equipment                                       759,359           82,522
Property & Equipment                                   506,901          319,331
                                                   -----------      -----------

   Total Property, Plant & Equipment                 2,764,931          926,392
     Less:  Accumulated Depreciation                (1,112,346)        (366,537)
                                                   -----------      -----------
   Net Property, Plant & Equipment                 $ 1,652,585      $   559,855
                                                   ===========      ===========

                                       9
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

NOTE 4 - BUSINESS COMBINATIONS:

      On January 1, 2000, the Company acquired AtlanticPacific Communications,
      Inc. (AtlanticPacific) in a business combination accounted for as a
      purchase. AtlanticPacific is primarily engaged in the nationwide sales and
      installation of fiber and cable to commercial enterprises. The results of
      operations for AtlanticPacific are included in the accompanying financial
      statements since the date of acquisition. To culminate this transaction,
      the Company issued 518,919 shares of its common stock and paid no cash to
      AtlanticPacific. However, the Company assumed debt of $1,304,080 and
      immediately paid off $830,000. The total cost of the acquisition was
      $3,131,850, which exceeded the fair value of the net assets of
      AtlanticPacific by $3,662,890. The excess is being amortized using the
      straight-line method over twenty (20) years.

      On January 1, 2000, the Company acquired Comtel Communications, Inc.
      (Comtel) in a business combination accounted for as a purchase. Comtel is
      primarily engaged in the sales and installation of fiber and cable to
      commercial enterprises in Texas and Louisiana. The results of operations
      for Comtel are included in the accompanying financial statements since the
      date of acquisition. The Company issued 300,000 shares of its common stock
      to Comtel in culminating this transaction. The total cost of the
      acquisition was $2,269,856, which exceeded the fair value of the net
      assets of Comtel by $1,878,528. The excess is being amortized as goodwill
      using the straight-line method over twenty (20) years.

      On March 17, 2000, the Company acquired eToolz, Inc. (ETI) in a business
      transaction accounted for as a purchase. ETI specializes in the
      development of leading edge, innovative, commercial, industrial and
      military technologies. The results of operations for ETI are included in
      the accompanying financial statements since the date of acquisition. The
      Company issued 50,000 shares of its common stock to ETI in culminating the
      transaction. The total cost of the transaction was $437,500, which
      exceeded the fair market of the net assets of ETI by $424,019. The excess
      is being amortized as goodwill using the straight-line method over twenty
      (20) years.

      Additionally, on September 18, 2000, the Company entered into a merger
      agreement with ClearWorks.net, Inc. (ClearWorks), a voice, data and video
      integration firm head-quartered in Houston, Texas. The Company will
      acquire 100% of ClearWorks in a transaction anticipated to be accounted
      for as a purchase. The Company will issue 0.8 shares of its common stock
      for each share of ClearWorks. Further, the Company will assume all
      outstanding ClearWorks stock options and warrants based upon the same 0.8
      exchange ratio.

      The Company has filed a registration statements Form S-4 with the
      Securities and Exchange Commission (SEC) through which it will seek
      shareholder approval for the transaction and register the issuance of its
      common stock in connection therewith.

A)    Pro Forma Results

      The following summarized pro forma (unaudited) information assumes the
      transactions related to AtlanticPacific, Comtel, ETI and ClearWorks.net,
      Inc. had occurred on September 1, 1999.
<TABLE>
<CAPTION>
                                                                    2000 PRO FORMA INFORMATION
                                                                            (IN THOUSANDS)
                                                   ---------------------------------------------------------
                                                   EAGLE WIRELESS                     PRO FORMA    COMBINED
                                                   INTERNATIONAL    CLEARWORKS.NET       ADJ.       TOTALS
                                                   --------------   --------------    ---------    ---------
<S>                                                <C>              <C>               <C>          <C>
      Cash                                         $       33,317   $           60    $       0    $  33,377
                Working Capital (Deficit)                  45,870            2,252            0       48,122
                Total Assets                              154,565           61,072      (49,925)     165,712
                Long Term Debt                                 73            1,972            0        2,045
                Stockholder's Equity (Deficit)     $      150,984   $       49,925    $ (49,925)   $ 150,984

      Total Revenues                               $        5,240   $       21,447    $       0    $  26,687
                Cost of Revenues                            2,482           20,293            0       22,775
                                                   --------------   --------------    ---------    ---------
                Gross Profit                                2,758            1,154            0        3,912
                Operating Expenses                          3,985           22,207            0       26,192
                                                   --------------   --------------    ---------    ---------
                Other Income - net                          1,516           (6,304)           0       (4,778)
                                                   --------------   --------------    ---------    ---------
                Income From
                     Continuing Operations         $          289   $      (27,357)   $       0    $ (27,068)
                                                   ==============   ==============    =========    =========
<CAPTION>
                                                          EARNINGS PER SHARE
                                                   -------------------------------
                               Basic               $         0.01   $        (0.71)
                                                   ==============   ==============
                               Diluted             $         0.01   $        (0.65)
                                                   ==============   ==============
</TABLE>
                                       10
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      This pro-forma includes the acquisition by ClearWorks.net, Inc. of Link
      Two Communications, Inc. and LD Connect, Inc. The results of operations
      for these companies are included in the balances of ClearWorks.net, Inc.
      The elimination entries reflect the adjustment of intangible assets
      arising from the acquisition of ClearWorks.net, Inc. by the Company and to
      eliminate the Company's investment in ClearWorks.net, Inc. All items of
      amortization arising from this acquisition are included in the pro-forma
      results above.

B)    Significant Acquisitions

      As stated in the aforementioned, the Company consummated three
      acquisitions and entered into one merger agreement during the Fiscal 2000.
      None of the three acquisitions meets the significance test individually or
      cumulative when compared to the Company for the months ended November 30,
      2000. The anticipated merger with ClearWorks is considered to represent a
      significant acquisition when compared to the Company for the months ended
      November 30, 2000 and has accordingly been included in the above pro forma
      information for that same period.

NOTE 5 - NOTES PAYABLE:

<TABLE>
<CAPTION>
                                                                            NOVEMBER 30,
                                                                      ---------------------------
                                                                          2000           1999
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
      Unsecured note to Central Insurance
      bearing no interest, due $886 monthly
      until March 2001.                                                      1,771          2,326


      Unsecured note to West Coast Life
      Insurance bearing no interest, due
      $2,457 quarterly until May 2001.                                       2,457          2,457

      Secured convertible note to
      Global Capital Advisors, LTD
      bearing interest at 7%, due October 2002
      interest and principal payable in cash or
      common stock based on market value of
      common shares. Security is a $6,000,000
      note receivable from Link II Communications.                    $          0   $  1,500,000

      Secured Note payable to Southwest Bank
      of Texas bearing interest at 24% which is
      monthly with principal payable due September
      2001.                                                           $    417,664   $          0
                                                                      ------------   ------------
                           Total                                      $    421,892   $  1,504,783

                             Less Current Portion of Long-Term Debt        421,892          4,783
                                                                      ------------   ------------
                             Total Long-Term Debt                     $          0   $  1,500,000
                                                                      ------------   ------------
      </TABLE>
NOTE 6 - CAPITAL LEASE OBLIGATIONS:

<TABLE>
<CAPTION>
                                                                                 NOVEMBER 30,
                                                                         ---------------------------
                                                                             2000           1999
                                                                         ------------   ------------
<S>                                                                      <C>            <C>
      Equipment lease with Konica bearing
      interest at 8.9%, payable in monthly
      installments of $445; due Aug. 2001.                               $      4,258   $      8,609

      Equipment lease with Agilent Technologies
      bearing no interest, payable in monthly
      installments of $1,076; due April 2003.                                  31,039              0

      Equipment lease with IKON Office
      Solutions bearing interest at 18%
      payable in monthly installments of
      $105; due March 2000.                                                         0            408
</TABLE>
                                       11
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000
<TABLE>
<CAPTION>
<S>                                                                      <C>            <C>
      Software lease with Manifest Group
      bearing interest at 14%, payable in
      monthly installments of $751; due
      August 2000.                                                                  0          6,453

      Equipment lease with Mellon Leasing
      bearing interest at 11.19%, payable in
      monthly installments of $2,149; due May 2002.                            33,312              0

      Auto lease with GE Capital bearing interest
      at 11.5%, payable in monthly installments
      of $465; due June 2002.                                                   8,051              0

      Equipment lease with Fleet Leasing Corp
      payable in monthly installments of $133;
      due February 2002.                                                        1,562              0

      Equipment lease with Fleet Leasing Corp
      payable in monthly installments of $137;
      due February 2002.                                                        1,605              0

      Equipment lease with Fleet Leasing Corp
      payable in monthly installments of $269;
      due May 2001.                                                             1,394              0

      Equipment lease with Master Lease bearing
      interest at 6.1%, payable in monthly
      installments of $249; due May 2001.                                       3,273              0
                                                                         ------------   ------------
                           Total Obligations                             $     84,494   $     15,470

                             Less Current Portion of Lease Obligations   $     52,443   $     14,994
                                                                         ------------   ------------
                             Total Long-Term Capital Lease Obligations   $     32,051   $        476
                                                                         ============   ============
</TABLE>

      The capitalized lease obligations are collateralized by the related
      equipment acquired with a net book value of approximately $ 116,494 and $
      27,135 at November 30, 2000 and 1999, respectively. The future minimum
      lease payments under the capital leases and the net present value of the
      future lease payments at November 30, 2000 and 1999 are as follows:

                                                               NOVEMBER 30,
                                                         -----------------------
                                                            2000         1999
                                                         ----------   ----------

      Total minimum lease payments                       $   87,903   $   16,128

      Less:  Amount representing interest                     3,409        1,134
                                                         ----------   ----------

      Present value of net minimum lease payments        $   84,494   $   14,994
                                                         ==========   ==========

      Future obligations under the lease terms are as follows:

                               NOVEMBER 30,                    AMOUNT
                               -----------                   ---------
                                  2001                       $  52,443
                                  2002                          27,744
                                  2003                           4,307
                                                             ---------
                                  Total                      $  84,494
                                                             =========

                                       12
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

NOTE 7 - LINE OF CREDIT:

      On September 29, 2000, AtlanticPacific Communications, Inc. (a wholly
      owned subsidiary of the Company) signed a loan agreement with Southwest
      Bank of Texas (SWBT) whereby it will borrow $900,000. This 364-day note
      bears interest at SWBT's prime rate plus .25% which is payable monthly
      with principal due September 28, 2001. In addition to AtlanticPacific's
      accounts receivable being put forth as collateral, Eagle Wireless has
      signed the document as guarantor. These monies are to be used as working
      capital whereby it has been partially used to repay the outstanding line
      of credits to both Wells Fargo and Compass Banks.

NOTE 8 - CONVERTIBLE DEBENTURES:

      The Company entered into a convertible debenture arrangement with Global
      Capital Advisors, LTD (GCA) to fund up to $4,500,000 over a two-year
      period. On October 7, 1999 the Company borrowed $1,500,000 under this
      agreement which was repaid in fiscal 2000.

      In conjunction with the $1,500,000 borrowed, the Company issued warrants
      to purchase 100,000 shares of common stock at $1.54 per share to GCA which
      warrants were exercised during fiscal 2000. In addition to the note being
      converted into common stock, GCA exercised the 100,000 warrants during the
      fiscal 2000. Although additional funds are available, management does not
      intend to draw further funds from this agreement.

NOTE 9 - MARKETABLE SECURITIES:

      As discussed in Note 1, the Company adopted the provisions of SFAS No.
      115, "Accounting for Certain Investments in Debt and Equity Securities"
      and SFAS No. 130, "Accounting for Other Comprehensive Income." At November
      30, 2000, all of the Company's marketable equity securities are classified
      as available-for-sale; they were acquired with the intent to dispose of
      them within the next year. For the months ended November 30, 1999, no
      marketable securities were held.

      At November 30, 2000, the securities had an original basis of $1,044,782;
      determined by multiplying the number of shares being acquired by the fair
      market value of those shares. At the November 30, 2000 balance sheet date,
      the fair market value of these securities was $1,028,666; determined by
      multiplying the number of shares held by the fair market value of those
      shares at the balance sheet date. The difference between the cost and fair
      market value represents an unrealized holding loss and is included below
      current earnings in "Other Comprehensive Income". This unrealized holding
      loss of $16,116 is reported on the balance sheet netted against marketable
      securities.

NOTE 10 - 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,
                                                          ----------------
                                                           2000      1999
                                                          ------    ------
                                                             %         %
            U.S. Federal Statutory Tax Rate                   34        34
            U.S. Valuation Difference                         (1)        1
                                                          ------    ------
            Effective U.S. Tax Rate                           33        35
            Foreign Tax Valuation                              0         0
                                                          ------    ------
            Effective Tax Rate                                34        35
                                                          ======    ======

                                       13
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      Items giving rise to deferred tax assets / liabilities are as follows:

                                                           AUGUST 31,
                                                     -----------------------
                                                        2000         1999
                                                     ----------   ----------
      Deferred Tax Assets:
           Tax Loss Carry-forward                    $        0   $        0
                                                     ----------   ----------
      Deferred Tax Liability:
           Depreciation                                  47,480       13,852
                                                     ----------   ----------
      Valuation Allowance                                     0            0
                                                     ----------   ----------
           Net Deferred Tax Asset / Liability        $   47,480   $   13,852
                                                     ==========   ==========

NOTE 11 - ISSUANCE OF COMMON STOCK:

      During the months ended November 30, 2000, the Company issued shares of
      common stock. The following table summarizes the shares of common stock
      issued.

      Shares Outstanding August 31, 2000                  25,609,263
                                                          ----------
           Shares issued for services and compensation        62,500
           Shares issued for warrant conversion              644,730
           Shares issued for Employee Stock Option Plan          500
                                                          ----------
      Shares Outstanding November 30, 2000                26,316,993


      The Company issued 62,500 shares of common stock for compensation and
      services performed on the Company's behalf.

      The Company issued 644,730 shares of common stock associated with the
      conversion of various outstanding warrants.

      The Company issued 500 shares of common stock to the members of its
      Employee Stock Option Plan.

NOTE 12 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS:

      In July 1996, the Board of Directors and majority shareholders adopted an
      employee stock option plan under which 400,000 shares of Common Stock have
      been reserved for issuance. The options granted for under this plan are to
      purchase fully paid and non-assessable shares of the Common Stock, par
      value $.001 per share at a price equal to the underlying common stock's
      market price at the date of issuance. These options may be redeemed six
      months after issuance, expire five years from the date of issuance and
      contain a cash-less exercise feature. The underlying shares of common
      stock were registered for resale under the Securities Act of 1933 on
      February 19, 1999. As of November 30, 2000, 279,907 options have been
      granted pursuant to such plan with 72,499 being exercised and 10,350 being
      cancelled.

      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.

      The Company has issued the following warrants that have since been
      exercised or expired:

            1,050,000 stock purchase 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 $.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. During April 1999, the Company's Board of
            Directors removed the requirement that the Company's common stock
            trade at a price of no less than $5.50 per share for twenty
            consecutive trading days provided that the holders of the warrants
            exercise the warrants prior to the expiration date and remit to the
            Company a fee of $.70 per underlying share upon exercise of the
            warrants. Prior to expiration, 1,037,500 warrants had been exercised
            whereas 12,500 warrants expired.

                                       14
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

            1,375,000 stock purchase 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 $.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. During April 1999, the Company's Board of
            Directors removed the requirement that the Company's common stock
            trade at a price of no less than $5.50 per share for twenty
            consecutive trading days provided that the holders of the warrants
            exercise the warrants prior to the expiration date and remit to the
            Company a fee of $.25 per underlying share upon exercise of the
            warrants. Prior to expiration, 1,325,000 warrants had been exercised
            whereas 50,000 warrants expired.

            425,000 stock purchases warrants that 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. Prior to expiration, no warrants had been exercised whereas
            425,000 warrants expired.

            100,000 stock purchase warrants issued to Global Capital Advisors,
            LTD expiring October 7, 2002. The warrants are to purchase fully
            paid and non-assessable shares of common stock, par value $.001 per
            share, at a purchase price of $1.54 per share. The shares of common
            stock underlying these warrants were registered for resale on
            January 10, 2000, under the Securities Act of 1933. Prior to
            expiration, all 100,000 warrants were exercised resulting in cash
            proceeds of $154,000.

            43,641 stock purchase warrants issued to Midori Capital Corp.
            expiring October 7, 2002. The warrants are to purchase fully paid
            and non-assessable shares of common stock, par value $.001 per
            share, at a purchase price of $1.75 per share. The shares of common
            stock underlying these warrants were registered for resale on
            January 10, 2000, under the Securities Act of 1933. Prior to
            expiration, all 43,641 warrants were exercised resulting in cash
            proceeds of $76,372.

            50,000 stock purchase warrants that expire August 31 2000. 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
            $2.00 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 warrants by paying holders $.05 per warrant. As of August 31,
            2000, the underlying shares of common stock have not yet been
            registered for resale under the Securities Act of 1933. Prior to
            expiration, no warrants had been exercised whereas 50,000 warrants
            expired.

            1,050,000 Class C stock purchase warrants that expire August 31
            2000. 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 $2.00 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 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. Prior
            to expiration, all 1,050,000 warrants were exercised resulting in
            cash proceeds of $2,100,000.

            100,000 stock purchase warrants issued to National Financial
            Communications Corp. expiring July 1, 2003. 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 $1.92 per share.
            The shares of common stock underlying these warrants were registered
            for resale on August 3, 2000, under the Securities Act of 1933.
            Prior to expiration, all 100,000 warrants were exercised resulting
            in cash proceeds of $192,000.

                                       15
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

            5,033,334 Class A stock purchase warrants which expire August 31,
            2000. 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.
            Management decided to extend the expiration date by two weeks to
            allow further exercise. As of November 30, 2000, 4,756,833 warrants
            were exercised resulting in cash proceeds of $19,027,332.


            5,033,334 Class B stock purchase warrants which expire August 31,
            2000. 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 $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. These warrants trade under the symbol "EGLWZ".
            Management decided to extend the expiration date by two weeks to
            allow further exercise. As of November 30, 2000, 3,400,406 warrants
            were exercised resulting in cash proceeds of $20,402,436.

      The Company had issued the following warrants to Mega Holding Corp for
      services rendered. During 2000, upon mutual agreement, these warrants were
      cancelled in exchange for 450,000 shares of the Company's common stock.

            150,000 stock purchase warrants. 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 $1.50 per share. These warrants,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a minimum of $4.00 per share for sixty-one
            consecutive trading days. The underlying shares of common stock were
            registered for resale under the Securities Act of 1933 on March 19,
            1999. These warrants will expire on March 19, 2000. These warrants
            were cancelled during 2000.

            150,000 stock purchase warrants. 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 $2.00 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 sixty-one
            consecutive trading days. The underlying shares of common stock were
            registered for resale under the Securities Act of 1933 on March 19,
            1999. These warrants will expire on March 19, 2000. These warrants
            were cancelled during 2000.

            200,000 stock purchase warrants. 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 $3.00 per share. These warrants,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a minimum of $7.50 per share for sixty-one
            consecutive trading days. The underlying shares of common stock were
            registered for resale under the Securities Act of 1933 on March 19,
            1999. These warrants will expire on March 19, 2000. These warrants
            were cancelled during 2000.

            200,000 stock purchase warrants. 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,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a minimum of $10.00 per share for thirty-one
            consecutive trading days. These warrants will expire three years
            from the date of effective registration of the underlying shares of
            common stock. As of August 31, 2000, the underlying shares of common
            stock have not yet been registered for resale under the Securities
            Act of 1933 and thus have no set expiration date. These warrants
            were cancelled during 2000.

            200,000 stock purchase warrants. 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 $7.00 per share. These warrants,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a minimum of $12.00 per share for thirty-one
            consecutive trading days. These warrants will expire three years
            from the date of effective registration of the underlying shares of
            common stock. As of August 31, 2000, the underlying shares of common
            stock have not yet been registered for resale under the Securities
            Act of 1933 and thus have no set expiration date. These warrants
            were cancelled during 2000.

            200,000 stock purchase warrants. 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 $9.00 per share. These warrants,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a minimum of $14.00 per share for thirty-one
            consecutive trading days. These warrants will expire five years from
            the date of effective registration of the underlying shares of
            common stock. As of August 31, 2000, the underlying shares of common
            stock have not yet been registered for resale under the Securities
            Act of 1933 and thus have no set expiration date. These warrants
            were cancelled during 2000.

            200,000 stock purchase warrants. 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 $11.00 per share. These warrants,
            however, are not exercisable until and unless the shares of Common
            Stock trade at a

                                       16
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

            minimum of $16.00 per share for thirty-one consecutive trading days.
            These warrants will expire five years from the date of effective
            registration of the underlying shares of common stock. As of August
            31, 2000, the underlying shares of common stock have not yet been
            registered for resale under the Securities Act of 1933 and thus have
            no set expiration date. These warrants were cancelled during 2000.

      The Company has issued and outstanding the following warrants which have
      not yet been exercised at November 30, 2000:

            600,000 stock purchase warrants issued to Paladin Associates
            expiring September 1, 2001. 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 $1.50 per share. 166,667 warrants are
            not exercisable until and unless the shares of Common Stock trade at
            a minimum of $4.00 per share for twenty-one consecutive trading
            days. 166,667 warrants are not exercisable until and unless the
            shares of Common Stock trade at a minimum of $6.00 per share for
            twenty-one consecutive trading days. 166,666 warrants are not
            exercisable until and unless the shares of Common Stock trade at a
            minimum of $8.00 per share for twenty-one consecutive trading days.
            The shares of common stock underlying 350,000 warrants were
            registered for resale on August 3, 2000, under the Securities Act of
            1933. 100,000 incentive warrants will be made available and will
            vest at the end of October 2000 if the first objective of $4.00 is
            achieved before the end of October. As of November 30, 2000, 250,000
            of the underlying shares of common stock have not yet been
            registered for resale under the Securities Act of 1933.

            50,000 stock purchase warrants issued to Weed & Co. L.P. expiring
            December 10, 2002. 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 $1.55 per share. The shares of common stock
            underlying the se warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            25,000 warrants have been exercised resulting in cash proceeds of
            $38,750.

            20,000 stock purchase warrants issued to Kason, Inc. expiring
            October 7, 2002. 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 $1.75 per share. The shares of common stock
            underlying these warrants were registered for resale on November 30,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            6,234 warrants have been exercised resulting cash proceeds of
            $10,910.

            50,000 stock purchase warrants issued to Weed & Co. L.P. expiring
            June 10, 2002. 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 $3.00 per share. The shares of common stock
            underlying these warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            none of these warrants have been exercised.

            25,000 stock purchase warrants issued to Synchton, Inc. expiring
            October 1, 2003. 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 $4.50 per share. The shares of common stock
            underlying these warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            none of these warrants have been exercised.

            100,000 stock purchase warrants issued to National Financial
            Communications Corp. expiring June 2003. 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 $7.00 per share. As
            of November 30, 2000, the underlying shares of common stock have not
            yet been registered for resale under the Securities Act of 1933.

            250,000 stock purchase warrants issued to Sands Brothers & Co., LTD.
            expiring July 13, 2003. 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 $7.49 per share. As of November 30, 2000, the
            underlying shares of common stock have not yet been registered for
            resale under the Securities Act of 1933.

            25,000 stock purchase warrants issued to Synchton, Inc. expiring
            July 1, 2003. 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 $7.50 per share. The shares of common stock
            underlying these warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            none of these warrants have been exercised.

                                       17
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

            50,000 stock purchase warrants issued to Weed & Co. L.P. expiring
            June 10, 2003. 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 $9.68 per share. The shares of common stock
            underlying these warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            none of these warrants have been exercised.

            25,000 stock purchase warrants issued to Synchton, Inc. expiring
            April 1, 2003. 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 $10.00 per share. The shares of common stock
            underlying these warrants were registered for resale on August 3,
            2000, under the Securities Act of 1933. As of November 30, 2000,
            none of these warrants have been exercised .

            250,000 stock purchase warrants issued to Sands Brothers & Co., LTD.
            expiring July 13, 2003. 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 $10.00 per share. These warrants, however are
            not exercisable until and unless the closing price of Common Stock
            at any time during the exercise period reaches $10.00 per share. As
            of November 30, 2000, the underlying shares of common stock have not
            yet been registered for resale under the Securities Act of 1933.

            250,000 stock purchase warrants issued to Hampton-Porter Investment
            Bankers LLC expiring June 27, 2003. 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 $12.00 per share. The shares
            of common stock underlying these warrants were registered for resale
            on August 3, 2000, under the Securities Act of 1933. As of November
            30, 2000, none of these warrants have been exercised.

            350,000 stock purchase warrants issued to Sands Brothers & Co., LTD.
            expiring July 13, 2003. 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 $14.00 per share. These warrants, however,
            are not exercisable until and unless the closing price of the Common
            Stock at any time during the exercise period reaches $14.00 per
            share. As of November 30, 2000, the underlying shares of common
            stock have not yet been registered for resale under the Securities
            Act of 1933.

            250,000 stock purchase warrants issued to Hampton-Porter Investment
            Bankers LLC expiring June 27, 2003. 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 $18.00 per share. The shares
            of common stock underlying these warrants were registered for resale
            on August 3, 2000, under the Securities Act of 1933. As of November
            30, 2000, none of these warrants have been exercised.

            150,000 stock purchase warrants issued to Sands Brothers & Co., LTD.
            expiring July 13, 2003. 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 $25.00 per share. These warrants, however,
            are not exercisable until and unless the closing price of the Common
            Stock at any time during the exercise period reaches $25.00 per
            share. As of November 30, 2000, the underlying shares of common
            stock have not yet been registered for resale under the Securities
            Act of 1933.

                                       18
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      The warrants outstanding are segregated into four categories (exercisable,
      non-exercisable, non-registered, and expired). They are summarized as
      follows:

<TABLE>
<CAPTION>
                WARRANTS ISSUED            WARRANTS EXERCISABLE                WARRANTS             WARRANTS EXPIRED
                  NOVEMBER 30,                 NOVEMBER 30,          -------------------------        NOVEMBER 30,
CLASS OF   -------------------------    -------------------------       NON-           NON-       -------------------
WARRANTS      2000           1999          2000          1999        EXERCISABLE    REGISTERED     2000        1999
--------   ----------    -----------    ----------    -----------    -----------    ----------    -------    --------
<S>        <C>           <C>            <C>           <C>            <C>            <C>           <C>        <C>
0.01        Exercised      Exercised             0              0              0             0                      0
0.05        Exercised      Exercised             0              0              0             0          0      12,500
0.50        Exercised      Exercised             0              0              0             0          0      50,000
5.00          Expired        Expired *           0              0              0             0          0     425,000
4.00        Exercised      5,033,334 *           0      5,033,334              0             0          0           0
6.00        Exercised      5,033,334 *           0      5,033,334              0             0          0           0
2.00        Exercised      1,050,000 *           0      1,050,000              0             0          0           0

1.50         Canceled        150,000             0        150,000              0             0          0           0
1.77        Exercised        100,000             0        100,000
2.00         Canceled        150,000             0        150,000              0             0          0           0
2.01        Exercised         49,875             0         49,875
3.00         Canceled        200,000             0        200,000              0             0          0           0
5.00         Canceled        200,000             0              0              0       200,000          0           0
7.00         Canceled        200,000             0              0              0       200,000          0           0
9.00         Canceled        200,000             0              0              0       200,000          0           0
11.00        Canceled        200,000             0              0              0       200,000          0           0

1.50          600,000              0             0        150,000        350,000       250,000          0           0
1.54          100,000              0             0              0              0             0          0           0
1.55           50,000              0        25,000              0              0             0          0           0
1.75           43,641              0             0              0              0             0          0           0
1.75           20,000              0        13,766              0              0             0          0           0
1.92          100,000              0             0              0              0             0          0           0
3.00           50,000              0        50,000              0              0             0          0           0
4.50           50,000              0             0              0              0             0          0           0
7.00          100,000              0             0              0              0       100,000          0           0
7.49          250,000              0             0              0              0       250,000          0           0
7.50           25,000              0        25,000              0              0             0          0           0
9.68           50,000              0        50,000              0              0             0          0           0
10.00          25,000              0        25,000              0              0             0          0           0
10.00         250,000              0             0              0              0       250,000          0           0
12.00         250,000              0       250,000              0              0             0          0           0
14.00         350,000              0             0              0              0       350,000          0           0
18.00         250,000              0       250,000              0              0             0          0           0
25.00         150,000              0       250,000              0              0       150,000          0           0

2.00          Expired         50,000 *           0         50,000              0             0     50,000           0
ESOP           51,700 *       47,375 *      35,700         14,625         16,000             0          0      10,250
ESOP          228,207        104,000       114,908         69,000         56,800             0     10,350           0
           ----------    -----------    ----------    -----------    -----------    ----------    -------    --------
            2,993,548     12,767,918     1,089,374     12,050,168        422,800     2,150,000     60,350     497,750
           ==========    ===========    ==========    ===========    ===========    ==========    =======    ========
</TABLE>
AN ASTERISK (*) DEMOTES WARRANTS WHICH WOULD HAVE AN ANTI-DILUTIVE EFFECT IF
CURRENTLY USED TO CALCULATE EARNINGS PER SHARE FOR THE MONTHS ENDED NOVEMBER 30,
2000 AND 1999, RESPECTIVELY.

                                       19
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

NOTE 13 - CAPITALIZATION ACTIVITIES:

      On July 10, 2000, AtlanticPacific Communications, Inc. (a wholly-owned
      subsidiary) initiated a stock offering in accordance with Regulation D
      promulgated under the Securities Act of 1933. AtlanticPacific is offering
      units at $25,000 per unit. Each unit consists of 10,000 shares of common
      stock and 10,000 Class A warrants to purchase AtlanticPacific common stock
      at a price of $6.00 per share with one warrant being issued as a unit with
      each common share sold. AtlanticPacific will sell up to 4,000,000 shares
      of common stock and up to 4,000,000 Class A warrants; 400 units. As of
      November 30, 2000, 1325 units have been sold totaling 132,500 shares and
      resulting in proceeds of $331,250.

NOTE 14 - 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 August 31, 2000 the Company had
      earned a 5.0% 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 August 31, 2000, the Company has recorded its share of losses in this
      unconsolidated affiliate. The loss as a minority shareholder totaled
      $91,678. The Company has reclassified its balances due from Link II as
      other receivables.

      Link II is in the process of being acquired by Clearworks.net, Inc. It is
      anticipated that the closing of 100% of this acquisition will occur after
      regulatory approvals is received. These regulatory approvals are
      anticipated to be received subsequent to the merger of Eagle Wireless
      International, Inc. and Cleaworks.net, Inc. On receipt of approval, Eagle
      will issue to the shareholders of Link II the appropriate shares based on
      the combined exchange ratio in the merger agreements.

      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.

      In October and November 2000, Link II repaid its debt of $8,655,126 to
      Eagle Wireless International through the issuance of 4,160,000 shares of
      ClearWorks.net, Inc. common stock in satisfaction of the Link II
      indebtedness.

NOTE 15 - RISK FACTORS:

      For the months ended November 30, 2000 and 1999, substantially all of the
      Company's business activities have remained within the United States and
      have been extended to the wireless infrastructure industry. Approximately
      seventy percent of the Company's revenues and receivables have been
      created solely in the state of Texas, two percent have been created in the
      international market, and the approximate twenty-eight percent remainder
      have been created relatively evenly over the rest of the nation during the
      year ended November 30, 2000 whereas approximately ninety-one percent of
      the Company's revenues and receivables have been created solely in the
      state of Texas, two percent have been created in the international market,
      and the approximate seven percent remainder has been created relatively
      evenly over the rest of the nation for the months ended August 31, 2000.

      Through the normal course of business, the Company generally does not
      require its customers to post any collateral.

      Although the Company concentrated its efforts in the wireless
      infrastructure industry for the months ended August 31, 2000 and has since
      expanded into the fiber, cable and broadband markets for the months ended
      November 30, 2000, it is management's belief that the Company faces little
      credit or economic risk due to the continuous growth the market is
      experiencing.

NOTE 16 - FOREIGN OPERATIONS:

      Although the Company is based in the United States, its product is sold on
      the international market. Presently, international sales total
      approximately 2% and 2% at November 30, 2000 and 1999, respectively.

NOTE 17 - COMMITMENTS AND CONTINGENT LIABILITIES:

      The Company leases its primary office space in League City, Texas for
      $10,000 per month with Space Industries, Inc. ("Space"). This
      non-cancelable lease commenced on July 1, 1999 and expires on March 29,
      2001. In addition to the monthly rental, the Company will issue 100,000
      shares of its common stock to Space. Space will have the right to sell no
      more than 10,000 shares per month until all shares have been sold.
      Additionally, Space will have the right to put to the Company all unsold
      shares held by Space in exchange for a payment calculated using the
      following formula:

            $173,000 - (gross proceeds from stock sales above $1.70 per share)
            minus ($1.73 x quantity of

                                       20
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

            shares sold below $1.70 per share)

      For the periods ending November 30, 2000 and 1999, rental expenses of
      approximately $64,548 and $64,548, respectively, were incurred.

      The Company also leases office space in Oxnard, California with Tiger
      Ventura County, L.P. This three-year non-cancelable lease commenced August
      1, 2000 and expires July 31, 2003. Under the terms of the lease, monthly
      payments will be $2,130 for the first twelve months whereat the monthly
      payments will increase by 3.5% at the beginning of both the second and
      third years. For the periods ended November 30, 2000 and 1999, rental
      expense of $6,390 and $0, respectively were incurred.

      The Company's wholly owned subsidiary, AtlanticPacific, leases office
      space in Houston, Texas with Houston Industrial Partners, Ltd. This
      non-cancelable lease expires October 2001. The monthly payments through
      October 2000 are $1,420 whereat they will increase to $1,498 for the
      remaining twelve months. Additionally, AtlanticPacific is responsible for
      monthly CAM fees of approximately $450. For the periods ended November 30,
      2000 and 1999, rental expense of $4,338 and $0, respectively were
      incurred.

      AtlanticPacific also leases office space in Chicago, Illinois with Lasalle
      Bank National Association. This twenty-nine month lease commenced on
      October 1, 2000 and expires February 28, 2003. Under the terms of the
      lease, monthly payments will be $2,220 for the first twelve months whereat
      they will increase by 3.2% at the thirteenth and twenty-fifth months.

      AtlanticPacific also leases office space in Houston, Texas with WL and
      Deborah Miller in the amount of $4,500 per month. This non-cancelable
      lease expiring September 2002 maintains a five-year renewal option. Rental
      expense for the period ended November 30, 2000 of $13,500 was incurred.

                  Future obligations under the non-cancelable lease terms are:

                              PERIOD ENDING
                               NOVEMBER 30,              AMOUNT
                              --------------          -----------
                                  2000                $    20,348
                                  2000                    151,766
                                  2002                     95,059
                                  2003                $    20,750
                                                      ===========


      On July 13, 2000, the Company entered into an agreement with Sands
      Brothers & Co., LTD. (Sands) whereby Sands will perform financial advisory
      services and assist the Company with mergers and acquisitions, corporate
      finances and other related matters for a period of two years. As
      compensation for these services, the Company will immediately pay Sands
      $50,000 and issue them 10,000 shares of the Company's common stock. As an
      additional inducement, the Company has issued Sands 1,000,000 stock
      purchase warrants to be exercisable for a three year period expiring July
      13, 2003. These warrants shall vest and be exercisable as follows: 25% of
      such warrants shall vest upon execution of this agreement and shall have
      an exercise price per share of $7.49; an additional 25% shall vest when
      and if the closing price of the common stock at any time during the
      exercise period reaches $10.00 per share and shall be exercisable at
      $10.00 per share; an additional 35% shall vest when and if the closing
      price of the common stock at any time during the exercise period reaches
      $14.00 per share and shall be exercisable at $14.00 per share; an
      additional 15% shall vest at any time during the exercise period when the
      closing price of the common stock at any time reaches $25.00 per share and
      shall be exercisable at $25.00 per share. Additionally, Sands shall
      receive further compensation for other activities such as fund raising
      based upon a percent of all monies raised.

      On May 25, 2000, the Company entered into an agreement with Hampton-Porter
      Investment Bankers LLC.(Hampton) whereby Hampton will provide a variety of
      professional services. As compensation for this agreement, the Company
      will issue 100,000 restricted shares of the Company's common stock and
      500,000 stock purchase warrants of which 250,000 are exercisable at $12.00
      per share and 250,000 are exercisable at $18.00 per share. Additionally,
      these warrants expire three years from the signing of this contract.
      Hampton shall receive further compensation for other activities such as
      fund raising based upon an escalating percentage of all monies raised.
      This agreement is terminable by either party upon giving five days written
      notice to the other party.

      On April 1, 2000, the Company entered a one-year agreement with Synchton,
      Inc. whereby Synchton, Inc. will provide professional business services.
      As compensation for these services, the Company will pay $10,000 per month
      as well as issue 100,000 stock purchase warrants. These warrants shall be
      issued in 25,000 increments on the first day of each quarter of the
      agreement with an exercise price equal to the closing price of the
      Company's common stock of the prior day to issuance. Additionally, these
      warrants are not exercisable until six months after issuance and expire
      three years after said issuance. Although this agreement shall
      automatically renew on an annual basis, it is terminable by the Company
      prior to the annual renewal by providing Synchton, Inc. with ninety days
      advance written notice.

                                       21
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      On February 7, 2000, the Company entered into an agreement with StockNorth
      Associates (SNA) whereby SNA will assist the Company with various aspects
      of investor relations. As compensation for these services, the Company
      will pay $3,500 per month and issue 5,000 shares of the Company's
      restricted common stock quarterly. These shares are to be issued the first
      day of each quarter and are dependent upon the ability of SNA to introduce
      a minimum of four broker-dealers to the Company each month. This agreement
      is a semi-annual agreement for the term of one year and shall terminate
      automatically on February 7, 2001. Either party may, however, terminate
      the balance of the agreement at any time provided written notice is given
      to the other party of the agreement.

      On January 26, 2000, the Company entered into an agreement with Kason,
      Inc. (Kason), a public relations firm, whereby Kason will assist the
      Company in developing relationships with internet e-commerce companies and
      electronics retail outlets in the United States and Internationally. As
      compensation for these services, the Company will pay $5,000 monthly in
      addition to 100,000 shares of common stock. Of this stock to be issued,
      50,000 shares will be issued immediately in the form of 144 stock with the
      balance of 50,000 to be held in escrow and be released in twelve equal
      monthly installments of 4,166.

      On September 1, 1999, the Company entered into an agreement with Paladin
      Associates (Paladin) whereby Paladin will assist the Company with general
      financial related services. These services shall include, but not be
      limited to, assistance in writing news releases, stockholder
      communications, communications with retail brokers and brokerage firms,
      consulting to large shareholders and general image and public relations
      issues. As compensation for the services to be rendered under this
      twelve-month contract, the Company will pay $3,500 and issue 2,000 free
      trading shares of the Company's common stock per month. This agreement
      also contains incentive based bonuses tied to the consecutive twenty-one
      day average closing bid price of the Company's common stock. This
      incentive will consist of 500,000 two-year options for the purchase of the
      Company's common stock at $1.50. These options will be vested in three
      equal portions based upon the Company's performance in the stock market.
      One-third will vest when the closing bid price reaches $4.00 and remains
      above this level for a minimum of twenty-one consecutive trading days. The
      second one-third will vest when the closing bid price reaches $6.00 and
      remains above this level for a minimum of twenty-one consecutive trading
      days. The remaining one-third shall vest when the closing bid price
      reaches $8.00 and remains above this level for a minimum of twenty-one
      consecutive trading days. This agreement is cancelable by either party
      without cause given ten days written notice.

      The Company has entered into an employment contract with Mr. Anthony
      Cordaro, the president of AtlanticPacific, terminating on December 31,
      2002. The agreement provides that Mr. Cordaro will be compensated with a
      gross annual salary of $98,800. Additionally, Mr. Cordaro maintains the
      right to participate in all employee benefit plans as established by the
      Board of Directors of the Company.

      In connection with the anticipated merger between the Company and
      ClearWorks.net, Inc., the Company has been added as defendant to the
      lawsuit invoked by Sherman, Gerald Mason d/b/a Castle Developments, Ltd.
      (Castle) against ClearWorks.net, Inc. The suit alleges that
      ClearWorks.net, Inc. breached a contract whereby it failed to pay certain
      consulting fees. Castle is seeking from the Company a temporary injunction
      preventing the merger between the Company and ClearWorks.net, Inc. The
      Company intends to vigorously defend this matter.


NOTE 18 - EARNINGS PER SHARE:

      The following table sets forth the computation of basic and diluted
      earnings per share:

<TABLE>
<CAPTION>
                                                   FOR THE MONTHS ENDED NOVEMBER, 2000
                                                  ---------------------------------------
                                                     INCOME        SHARES       PER-SHARE
                                                  (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                                  -----------   -------------   ---------
<S>                                               <C>           <C>             <C>
      Net Income                                  $    70,339

      Basic EPS:
       Income available to common stockholders         70,339      26,316,993   $   0.002
                                                                                =========
      Effect of Dilutive Securities
        Warrants                                            0         153,614
                                                  -----------   -------------
      Diluted EPS:
        Income available to common stockholders
          and assumed conversions                 $    70,339      26,470,607   $   0.002
                                                  ===========   =============   =========
</TABLE>
                                       22
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000
<TABLE>
<CAPTION>
                                                    FOR THE MONTHS ENDED AUGUST, 2000
                                                  ---------------------------------------
                                                     INCOME        SHARES       PER-SHARE
                                                  (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                                  -----------   -------------   ---------
<S>                                               <C>           <C>             <C>
      Net Income                                  $   193,041

      Basic EPS:
       Income available to common stockholders        193,041      19,073,071   $    0.01
                                                                                =========
      Effect of Dilutive Securities
        Warrants                                            0       3,306,183
                                                  -----------   -------------
      Diluted EPS:
        Income available to common stockholders
          and assumed conversions                 $   193,041       22,379,35   $    0.01
                                                  ===========   =============   =========
</TABLE>
      For the Months ended November 30, 2000 and August 31, 1999, anti-dilutive
      securities existed. (see Note 12)

NOTE 19 - EMPLOYEE STOCK OPTION PLAN:

      In July 1996, the Board of Directors and majority stockholders adopted a
      stock option plan under which 400,000 shares of the Company's common stock
      have been reserved for issuance. Under this plan, as of November 30, 2000
      and 1999, 279,907 and 151,375 warrants have been issued to various
      employees. Of these outstanding warrants, 500 and 29,000 were exercised
      for the three months ended November 30, 2000 and 1999, respectively.
      Additionally, 10,350 warrants have expired as of November 30, 2000.

      Subsequent to November 30, 2000, the Company's board of directors has
      authorized a stock repurchase program whereby the Company may repurchase
      up to 500,000 shares of its outstanding common stock. These shares will be
      repurchased periodically in the open market or in negotiated transactions
      and be held for issuance in connection with the Company's ESOP and other
      employee plans. As of November 30, 2000, 193,200 shares of the Company's
      common stock have been repurchased for a total price of $712,968.

NOTE 20 - RETIREMENT PLANS:

      During October 1997, the Company initiated a 401(k) plan for its employees
      which is funded through the contributions of its participants. This plan
      maintains that the Company will match up to 3% of each participant's
      contribution. For the months ended November 30, 2000 and 1999, employee
      contributions were approximately $323,449 and $120,045, respectively. The
      Company matched approximately $85,648and $22,765, respectively for those
      same periods.

      Subsequent to November 30, 2000, the Board of Directors approved a stock
      repurchase program for up to 500,000 shares of the Company's common stock
      whereby these shares may be used for issuance under this plan. (see Note
      23)

NOTE 21 - MAJOR CUSTOMER:

      The Company had gross revenues of $5,239,670 and $2,359,184 For the months
      ended November 30, 2000 and 1999, respectively. The following parties
      individually represent a greater than ten percent of these revenues.
<TABLE>
<CAPTION>
                                               NOVEMBER 30, 2000          NOVEMBER 30, 2000
                                            -----------------------    -----------------------
      CUSTOMER                                AMOUNT     PERCENTAGE      AMOUNT     PERCENTAGE
      --------                              ----------   ----------    ----------   ----------
<S>                                         <C>               <C>      <C>              <C>
      Chevron Phillips Chemical Company     $  205,975        11.02%   $   - 0 -         0.00%
      Sprint PC                             $  387,601        20.75%   $   - 0 -         0.00%
                                            ==========   ==========    ==========   ==========
</TABLE>
NOTE 22 - INDUSTRY SEGMENTS:

      The Company has adopted the provisions of SFAS No. 131, "Disclosures about
      Segments of an Enterprise and Related Information". At November 30, 2000,
      the Company's two business units have separate management teams and
      infrastructures that offer different products and services. The business
      units have been aggregated into two reportable segments (as described
      below) since the long-term financial performance of these reportable
      segments is affected by similar economic conditions.

      Eagle Wireless International, Inc. (Eagle) is a worldwide supplier of
      broadband and telecommunications equipment with related software and
      broadband products.

                                       23
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      AtlanticPacific Communications, Inc. specializes in providing professional
      data and voice cable and fiber optic installations through project
      management services on a nationwide basis for multiple site-cabling
      installations for end users and re-sellers.

<TABLE>
<CAPTION>
                                                               ATLANTIC
                                                 EAGLE          PACIFIC     ELIMINATIONS   CONSOLIDATED
                                             ------------    ------------   ------------   ------------
<S>                                          <C>             <C>            <C>            <C>
      Revenues from Unaffiliated Customers      1,826,463       3,413,207              0      5,239,670
      Segment Profit / (Loss)                    (412,632)        605,673              0        193,041
      Total Assets                             53,470,895       1,820,155        696,745     55,987,795
      Capital Expenditures                        770,978       1,009,766              0      1,780,744
      Depreciation and Amortization               406,824         169,859              0        576,683
</TABLE>
NOTE 23 - LOANS AND TRANSACTIONS WITH CLEARWORKS.NET, INC.:

      In October 2000, the Company loaned $1,000,000 to ClearWorks.net, Inc.
      This one-year note accrues interest at ten percent (10%) which is to be
      paid monthly with the principal due September 2001. In addition to
      secondary liens on all assets, ClearWorks.net, Inc. has issued 750,000
      shares of its common stock as collateral.

      On November 10, 2000, the Company loaned an additional $1,000,000 to
      ClearWorks.net, Inc. This one-year note accrues interest at ten percent
      (10%) which is to be paid monthly with the principal due September 2001.
      In addition to the secondary liens on all assets, ClearWorks.net, Inc. has
      again issued 750,000 shares of its common stock as collateral.

      Subsequent to November 30, 2000, the company loaned an additional
      1,000,000 to ClearWorks.net,Inc. This one-year note accrues interest at
      ten percent (10%) which is to be paid monthly with the principal due
      September 2001. In addition to the secondary liens on all assets,
      ClearWorks.net, Inc. has again issued 750,000 shares of its common stock
      as collateral

      Subsequent to November 30, 2000, the receivable due from Link-Two
      Communications, Inc. has been satisfied through the issuance of 4,106,000
      shares of ClearWorks.net, Inc. common stock.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

      The following discussion should be read in conjunction with Eagle's
      financial statements and accompanying notes to the financial statements.

      OVERVIEW

      During the three months ended November 30, 2000, the Company's primary
      operations were concentrated in the on-going set-top box development and
      related beta testing, marketing of wireless infrastructure, cabling,
      multi-media devices and high definition television products at major trade
      and convention shows. These new products are currently being tested by
      multinational distribution companies, internet service providers, national
      retail distribution companies and multiple international hotel companies.
      The Company expects to complete most beta testing during the second
      quarter ending February 28, 2001. During this period, we commenced
      significant joint sales, financing and integration planning activities
      with Clearworks.net, Inc, our merger partner. These activities included,
      but were not limited to, joint sales of commercial and residential bundle
      digital services, cabling to various educational institutions, financing
      of the expansion of Clearworks.net broadband infrastructure in Texas and
      joint product presentation at COMDEX, a national trade and conference
      show. In accordance with this strategy, Eagle entered into an acquisition
      agreement with ClearWorks.net that, if closed, Eagle believes will
      integrate their wireless and broadband products and services to a wide
      range of customers and applications.

      REVENUE RECOGNITION

      Eagle reports income from long-term contracts by the
      percentage-of-completion method of accounting. This method recognizes
      income and costs with respect to individual contracts on the basis of the
      proportionate value of work completed during the period. Estimated losses
      are recognized in full as soon as they are identifiable. Earnings are
      charged with a provision for doubtful accounts receivable based on
      collection experience and current review of the collectability of
      accounts. The majority of cabling contracts are completed in less than one
      month.

      RECEIVABLES

      For the three months ended November 30, 2000, Eagle accounts receivables
      increased to $3,276,000 from $340,000 for the three months ended November
      30, 1999. This $1,071,000 increase is primarily due to increased sales
      from Atlanticpacific and Comtel.

                                       24
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      RECENT ACQUISITIONS; GOODWILL

      During the year ended November 30, 2000, Eagle recognized goodwill of
      $5,965,437 due primarily to the acquisitions of Atlanticpacific, Comtel,
      and eToolz. Goodwill represented the excess of the cost of the acquired
      companies over the fair value of their net assets on the date of
      acquisition. Eagle amortizes goodwill over a twenty-year period.

      In September 2000, Eagle entered into a merger agreement with
      ClearWorks.net, whereby it agreed to acquire 100% of the outstanding
      common stock of ClearWorks.net in exchange for 0.8 shares of Eagle common
      stock for each share of ClearWorks.net common stock at the closing. In
      addition to the share issuance, Eagle will assume all outstanding
      ClearWorks.net stock options and warrants based upon the same 0.8 exchange
      ratio. Eagle has set the date of its meeting to vote on the merger for
      January 31, 2001. The merger requires the vote of a majority of Eagle
      shareholders voting at the meeting, and a majority of the ClearWorks.net
      shareholders entitled to vote at the meeting. Eagle can provide no
      assurance that the merger will be completed.

      MARKETABLE SECURITIES

      Eagle has adopted the provisions of SFA No. 115, as amended by SFAS 130,
      which provides that all marketable equity securities be classified as
      available-for-sale or trading securities, and be carried on the balance
      sheet at fair market value. Any unrealized holding gains or losses
      affiliated to these securities are carried below net income under the
      caption "Other Comprehensive Income," net of tax.

      INVENTORY

      Inventories are valued at the lower of cost or market. The cost is
      determined by using the first-in first-out method. At November 30, 2000,
      Eagle's inventory consisted of $6,531,000 as compared to $2,355,861 at
      November 30, 2000. The additional inventory is primarily attributable to
      Eagle's set top devices and cabling held for sale.

      RESULTS OF OPERATIONS

      THREE MONTHS ENDED NOVEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
      NOVEMBER 30, 1999

      NET SALES. For the three months ended November 30, 2000, net sales
      increased to $1,866,000 from $656,000 during the three months ended
      November 30, 1999. The increase of 284% was primarily attributable to
      added sales from Atlanticpacific and Comtel.

      COST OF GOODS SOLD. For the three months ended November 30, 2000, cost of
      goods sold on Eagle's product sales increased to $1,082,193 from $405,424
      during the three months ended November 30, 1999. The increase of 266% is
      primarily associated with the cable and fiber products. Although Eagle's
      cost of sales increased, Eagle's gross profit percentage for products sold
      increased to 53% from 40% during the three months ended November 30, 2000.

      OPERATING EXPENSES. For the three months ended November 30, 2000,
      operating expenses increased to $1,449,000 from $535,000 during the three
      months ended November 30, 1999, an increase of 270%. The primary portions
      of the increase are discussed below:

      A $365,802 increase in salaries, or 277%, as a result of its acquisitions
      and expanded business.

      A $123,175 increase in advertising and promotion, or 4,100%, due primarily
      to increased attendance at conventions and trade shows on a worldwide
      basis.

      A $142,810 increase in depreciation and amortization, or 890%, due to an
      increase in amortization of goodwill and purchase of additional assets.

      A $36,523 increase in other support costs, or 27%.

      NET EARNINGS. For the three months ended November 30, 2000, Eagle's net
      earnings increased to $70,339 from $68,531 during the three months ended
      November 20, 1999.

      CHANGES IN CASH FLOW. Eagle's operating activities used net cash of
      $1,454,000 in the three months ended November 30, 2000, compared to
      $635,000 in the three months ended November 30, 1999. The increase in net
      cash used by operating activities was primarily attributable to an
      increase in receivables and inventory. Eagle's investing activities used
      net cash of $2,539,000 in the three months ended November 30, 2000,
      compared to $34,000 in the three months ended November 30, 1999. The
      increase was due primarily to investment in acquisitions and purchase of
      equipment. Eagle's financing activities provided cash of $3,276,000, in
      the three months ended November 30, 2000, compared to $1,519,000 in the
      three months ended November 30, 1999. The increase was primarily the
      result the exercise of outstanding warrants during the three months ended
      November 30, 2000.

                                       25
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000

      LIQUIDITY AND CAPITAL RESOURCES.

      Current assets for the three months ended November 30, 2000 totaled
      $49,918,000 as compared to $11,397,000 reported for the three months ended
      November 30, 1999. Of this amount, $31,629,000 consisted of cash. Eagle's
      increase in current assets is primarily due to its substantial increase in
      cash received from the exercise of outstanding warrants during the three
      months ended November 30, 2000. Eagle believes that its working capital of
      $46,667,000 as of November 30, 2000 should be sufficient to fund
      operations through the end of the fiscal year 2001. Historically, Eagle
      has financed its operations through the sale of debt and equity
      securities. As such, if its current cash is insufficient to fund its
      long-term capital needs, Eagle will rely on future best-efforts financings
      for capital. As of November 30, 2000, Eagle had no material capital
      commitments other than its federal income and state franchise tax
      liabilities.

PART 2. - OTHER INFORMATION

ITEM 1  - LEGAL PROCEEDINGS
          none

ITEM 2  - RECENT SALES OF UNREGISTERED SECURITIES OR CHANGES IN SECURITIES AND
          USE OF PROCEEDS

          In September 2000, holders of Class A and Class B stock purchase
          warrants exercised warrants to purchase an aggregate 834,331 shares of
          common stock. The exercise of these warrants resulted in cash proceeds
          of $ 3,506,980. Eagle believes the transactions were exempt from
          registration pursuant to Section 4(2) of the Securities Act, as the
          issuances were to accredited investors and since the transactions were
          non-recurring and privately negotiated.

          In October 2000, holders of options issued under Eagle's employee
          stock option, exercised options to purchase an aggregate of 500 shares
          of common. The exercise of these options resulted in cash proceeds of
          $750. Eagle believes the transactions were exempt from registration
          pursuant to Section 4(2) of the Securities Act, as the issuances were
          to accredited investors and since the transactions were non-recurring
          and privately negotiated.

          In October 2000, in exchange for consulting services, Eagle issued an
          aggregate of 62,500 shares on common stock. Eagle believes the
          transactions were exempt from registration pursuant to Section 4(2) of
          the Securities Act, as the issuances were to accredited investors and
          since the transactions were non-recurring and privately negotiated.

ITEM 3  - DEFAULTS UPON SENIOR SECURITIES
          none

ITEM 4  - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          none

ITEM 5  - OTHER INFORMATION
          none

ITEM 6  - EXHIBITS AND REPORTS ON FORM 8-K

           (a) Exhibit
               none
           (b) Reports on Form 8-K
               none
                                       26
<PAGE>
              EAGLE WIRELESS INTERNATIONAL, INC., AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2000


SIGNATURES

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


                             EAGLE WIRELESS INTERNATIONAL, INC.


      Date: January 22, 2001                          By: /s/ H. Dean Cubley
                                                      Dr. H. Dean Cubley
                                                      President

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

                                       27