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, 1999

[ ]   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 14, 2000 THERE WERE 14,241,854 SHARES OF COMMON STOCK OUTSTANDING
<PAGE>
                EAGLE WIRELESS INTERNATIONAL, INC. AND SUBSIDIARY
                                      INDEX


PART 1 - FINANCIAL INFORMATION                                              PAGE

      Item 1. Financial Statements (Unaudited)

            Balance Sheets at November 30, 1999 and August 31, 1999           3

            Statements of Income for the three
            months ended November 30, 1999 and 1998                           4

            Statements of Changes In Shareholders' Equity for the
            three months ended November 30, 1999 and 1998                     5

            Statements of Cash Flows for the three months ended
            November 30, 1999 and 1998                                        6

            Notes to the financial statements                               7-18

      Item 2. Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                      19

PART 2. - OTHER INFORMATION

      Item 2. Changes in Securities and Use of Proceeds

      Item 6: Exhibits and Reports on Form 8-K


SIGNATURES                                                                   19

                                      -2-
<PAGE>
                EAGLE WIRELESS INTERNATIONAL, INC. AND SUBSIDIARY
                                  BALANCE SHEETS
                                  (IN THOUSANDS)

                                      ASSETS
<TABLE>
<CAPTION>
                                                                 NOVEMBER       AUGUST 31,
                                                                 30, 1999         1999
                                                               -----------     -----------
                                                               (UNAUDITED)      (AUDITED)
<S>                                                            <C>             <C>
CURRENT ASSETS:
   Cash and Cash Equivalents (Note 1) .....................    $     1,105     $       188
   Accounts Receivable (Note 2) ...........................            340             286
   Inventories (Note 1) ...................................          2,335           2,356
   Prepaid Expenses .......................................            434             242
                                                               -----------     -----------
      Total Current Assets ................................          4,214           3,072

PROPERTY AND EQUIPMENT (NOTE 1):
   Operating Equipment ....................................            926             922
   Less: Accumulated Depreciation .........................           (366)           (333)
                                                               -----------     -----------
      Total Property and Equipment ........................            560             589

OTHER ASSETS:
   Security Deposits ......................................             17              17
   Investment In Affiliate (Note 9) .......................          6,605           6,642
                                                               -----------     -----------
      Total Other Assets ..................................          6,622           6,659

   TOTAL ASSETS ...........................................    $    11,397     $    10,320
                                                               ===========     ===========

                       LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable .......................................    $       139     $       208
   Accrued Expenses .......................................            121             106
   Notes Payable (Note 3) .................................          1,505              17
   Capital Lease Obligations (Note 4) .....................             15              15
   Deferred Revenues ......................................             53             533
   Federal Income Taxes Payable (Notes 1 & 5) .............            486             468
   Franchise Taxes Payable ................................             17              13
   Sales Taxes Payable ....................................             48              48
   Deferred Taxes (Note 5) ................................              6               6
                                                               -----------     -----------

      Total Current Liabilities ...........................          2,390           1,414

LONG - TERM LIABILITIES:
   Capital Lease Obligations (net of current
     maturities) (Note 4) .................................           --                 4
   Deferred Taxes (Note 5) ................................              8               8
                                                               -----------     -----------
      Total Long - Term Liabilities .......................              8              12

COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 12)

SHAREHOLDERS' EQUITY:

   Preferred Stock - $.001 par value,
   Authorized 5,000,000 shares
   Issued -0- shares ......................................           --              --
   Common Stock - $.001 par value, Authorized
     100,000,000 shares Issued and Outstanding
     at November 30, and August 31, 1999
     13,541,750 shares and 13,479,833, respectfully .......             14              13
   Paid in Capital ........................................          7,217           7,181
   Retained Earnings ......................................          1,768           1,700
                                                               -----------     -----------
      Total Shareholders' Equity ..........................          8,999           8,894

   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............    $    11,397     $    10,320
                                                               ===========     ===========
</TABLE>

See accompanying notes to the financial statements.

                                      -3-
<PAGE>
                EAGLE WIRELESS INTERNATIONAL, INC. AND SUBSIDIARY
                              STATEMENTS OF EARNINGS
                                  (IN THOUSANDS)

                                                        THREE MONTHS ENDED
                                                   -----------------------------
                                                     NOVEMBER       NOVEMBER
                                                     30, 1999       30, 1998
                                                    (UNAUDITED)    (UNAUDITED)
                                                   ------------     ------------
   NET SALES ..................................    $        656     $        931

   COST OF GOODS SOLD
      Materials and Supplies ..................             107              184
      Direct Labor and Related Costs ..........             118              163
      Depreciation and Amortization ...........              17               18
      Other Manufacturing Costs ...............               7               55
                                                   ------------     ------------
         Total Cost of Goods Sold .............             251              420
                                                   ------------     ------------
   GROSS PROFIT ...............................             405              511

   OPERATING  EXPENSES
      Selling, General and Administrative
         Salaries and Related Costs ...........             132              131
         Advertising and Promotion ............               3               68
         Depreciation and Amortization ........              16                9
         Research & Development ...............             253              154
         Other Support Costs ..................             131              173
                                                   ------------     ------------
            Total Operating Expenses ..........             534              535
                                                   ------------     ------------

   EARNINGS (LOSSES) FROM OPERATIONS BEFORE OTHER
   REVENUES / (EXPENSES) AND INCOME TAXES .....            (129)            (24)

   OTHER REVENUES / (EXPENSES)
      Interest Income (net) ...................             245              176
      Other Income ............................               6             --
                                                   ------------     ------------
         Total Other Revenues .................             251              176
                                                   ------------     ------------

   EARNINGS BEFORE INCOME TAXES & LOSS FROM ...             123              152
   MINORITY INTEREST IN AFFILIATE

      Gain / (Loss) From Minority Interest in
        Affiliate .............................             (37)            --
                                                   ------------     ------------

   EARNINGS BEFORE INCOME  TAXES ..............              85              152


      Provision For Income Taxes ..............              17               56
                                                   ------------     ------------

   NET EARNINGS ...............................    $         68     $         96
                                                   ============     ============

   Net Earnings Per Common Share:
         Primary ..............................    $        .01     $        .01
         Diluted ..............................    $        .01     $        .01

   Weighted Average Common Shares Outstanding:
         Primary ..............................      13,541,750       11,670,155
         Diluted ..............................      13,610,750       11,750,530


See accompanying notes to the financial statements.

                                      -4-
<PAGE>
                   EAGLE WIRELESS INTERNATIONAL, INC. AND SUBSIDIARY
                     STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                       UNAUDITED
                                     (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                    ADDITIONAL                    TOTAL
AUGUST 31, 1998                           COMMON      PREFERRED      PAID IN       RETAINED    SHAREHOLDERS'
TO NOVEMBER 30, 1999                      STOCK         STOCK        CAPITAL       EARNINGS       EQUITY
------------------------------------    ----------    ----------    ----------    ----------    ----------
<S>                                     <C>           <C>           <C>           <C>           <C>
Total As of August 31, 1998 ........            12          --           5,973         1,532         7,516

Net Earnings 1999 ..................                                                     168           168
New Stock Issued to Shareholders
   For Services Rendered ...........          --                           163          --             163
   For Exercise of Warrants ........             2                       1,045          --           1,047
                                        ----------    ----------    ----------    ----------    ----------
Total As Of August 31, 1999 ........            14          --           7,181         1,700         8,894

Net Earnings For The Three Months
   Ended November 30, 1999 .........                                                      68            68
New Stock Issued to Shareholders
   J.  Nagel (Sept. 1999) ..........          --                            22                          22
   P. Barton (Sept. 1999) ..........          --                            14                          14
                                        ----------    ----------    ----------    ----------    ----------
Total As Of November 30, 1999 ......            14          --           7,217         1,768         8,999
</TABLE>

See accompanying notes to the financial statements.

                                      -5-
<PAGE>
                EAGLE WIRELESS INTERNATIONAL, INC. AND SUBSIDIARY
                            STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                                                      ----------------------
                                                                       NOVEMBER    NOVEMBER
                                                                       30, 1999    30, 1998
                                                                      ----------  ----------
                                                                     (UNAUDITED)    (UNAUDITED)
<S>                                                                   <C>         <C>
Cash Flows From Operating Activities
   Net Earnings ..................................................    $       68  $       96

   Adjustments To Reconcile Net Earnings To Net Cash
      Used By Operating Activities:
      Depreciation and Amortization ..............................            33          27
      (Increase) / Decrease in Accounts Receivable ...............           (54)       (692)
      (Increase) / Decrease in Inventories .......................            21         (32)
      (Increase) / Decrease in Prepaid Expenses ..................          (192)         55
      Increase / (Decrease) in Accounts Payable and Accrued Exp ..           (54)        (33)
      Increase / (Decrease) in Deferred Taxes ....................          --          --
      Increase / (Decrease) in Deferred Revenues .................          (480)         (3)
      Increase / (Decrease) in Sales Tax Payable .................          --             6
      Increase / (Decrease) in Fed Inc Taxes Payable .............            18          56
      Increase / (Decrease) in Franchise Taxes Payable ...........             4           7
                                                                      ----------  ----------

      Total Adjustments ..........................................          (704)       (609)
                                                                      ----------  ----------

   Net Cash Used By Operating Activities .........................          (635)       (513)

Cash Flows From InvestingActivities
   Purchase of Property and Equipment ............................            (4)        (24)
   (Increase) / Decrease in Other Assets .........................            37          (2)
                                                                      ----------  ----------

Net Cash Used By Investing Activities ............................            34         (26)

Cash Flows From Financing Activities
   Increase / (Decrease) in Notes Payable and Capital Leases .....         1,483           5
   Increase / (Decrease) in Shareholders' Advances ...............          --           (24)
   Increase / (Decrease) in Syndication Costs ....................          --          --
   Proceeds From Sale of Common Stock, Net .......................            36        --
                                                                      ----------  ----------

Net Cash Provided / (Used) By Financing Activities ...............         1,519         (19)

Net Decrease in Cash .............................................           917        (558)

Cash at the Beginning of the Year ................................           188       1,097
                                                                      ----------  ----------

Cash at the End of the Year ......................................    $    1,105  $      539
                                                                      ==========  ==========
</TABLE>

See accompanying notes to the financial statements.

                                      -6-
<PAGE>
NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:

      Eagle Wireless International, Inc., and Subsidiary (the Company), was
      incorporated as a Texas corporation on May 24, 1993 and commenced business
      in April of 1996. The Company and its subsidiary, BroadbandMagic.com, are
      suppliers of multi-media set top devices, telecommunications equipment and
      related software used by service providers in the paging and other
      wireless personal communications markets. The Company designs,
      manufactures, markets and services its products under the Eagle and
      BroadbandMagic.com names. These products include multi-media set top
      devices, transmitters, receivers, controllers, software and other
      equipment used in personal communications systems (including paging, voice
      messaging, cellular and message management and mobile data systems) and
      radio and telephone systems.

A)    Cash and Cash Equivalents

      The Company has $1,056,768 and $29,059 invested in interest bearing
      accounts at November 30, 1999 and August 31, 1999, respectively.

B)    Property and Equipment

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

                                                  YEARS
            Machinery and equipment                 7
            Furniture and Fixtures                  7

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

C)    Inventories

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

                                  NOVEMBER 30, 1999   AUGUST 31, 1999
                                    -------------     -------------
            Raw Materials           $   1,164,463     $   1,215,003
            Work in Process             1,170,337         1,119,672
            Finished Goods                    -0-            21,186
                                    -------------     -------------
                                    $   2,334,800     $   2,355,861
                                    =============     =============

D)    Research and Development Costs

      The Company's research and development costs include obligations to
      perform contractual services for outside parties. These costs are expensed
      as contract revenues are earned. Research and development costs of
      $130,726 and $153,529 were expensed for the periods ended November 30,
      1999 and 1998, respectively. Contract revenues earned for the periods
      ended November 30, 1999 and 1998 were approximately $-0- and $225,000
      respectively.

E)    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.

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

F)    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:

                                             NOVEMBER 30, 1999 NOVEMBER 30, 1998
                                             ----------------- -----------------
      Weighted Average Number of Common
          Shares Outstanding Including:

      Primary Common Stock Equivalents              13,541,750       11,670,155
      Fully Dilutive Common Stock Equivalents       13,610,750       11,750,530

G)    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, 1999 and August 31, 1999, no impairment existed.

H)    Warrants for Funding Activities

      To date, the Company has issued the following warrants: 5,033,334 Class A;
      5,033,334 Class B; 1,050,000 Class C; 1,050,000 $.05; 1,375,000 $.50;
      425,000 $5.00;150,000 $1.50; 150,000 $2.00; 200,000 $3.00; 200,000 $5.00;
      200,000 $7.00; 200,000 $9.00; 200,000 $11.00; and 50,000 $2.00. Certain of
      these warrants were issued to individuals and trusts for their assistance
      in the fundraising activities. The Company has assigned a value of
      $280,343 as compensation for these fund raising activities.

I)    Advertising and Promotion

      All advertising related costs are expensed as incurred. The Company does
      not incur any cost for direct-response advertising. For the periods ended
      November 30, 1999 and 1998, the Company had expensed $3,000 and $68,000,
      respectively.

J)    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.

                                      -8-
<PAGE>
NOTE 1 -BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: (continued)

K)    Comprehensive Income

      There were no items of other comprehensive income in 1999 and 1998, and,
      thus, net income is equal to comprehensive income for each of those years.

L)    Reclassification

      The Company has reclassified certain costs and expenses for the three
      months ended November 30, 1999 to facilitate comparison to the three
      months ended November 30, 1998.

NOTE 2 - ACCOUNTS RECEIVABLE:

      Accounts receivable consist of the following:

                                         NOVEMBER 30, 1999     AUGUST 31, 1999
                                         -----------------     ---------------

      Accounts Receivable                $         340,082     $       286,269
      Allowance for Doubtful Accounts                - 0 -               - 0 -
                                         -----------------     ---------------
      Net Accounts Receivable            $         340,082     $       286,269
                                         =================     ===============

NOTE 3 -  NOTES PAYABLE:

                                                       NOVEMBER 30,   AUGUST 31,
                                                          1999           1999
                                                       ----------     ----------
Unsecured note to Imperial Premium
Finance bearing interest at 14.9%,
due $1,795 monthly until February 2000  ..........     $     --       $    5,386

Unsecured note to Central Insurance
bearing no interest, due $1,031
monthly until March 2000  ........................          2,326          5,220

Unsecured note to Paula Insurance
bearing no interest, due $373 monthly
until March 2000  ................................           --            1,124

Unsecured note to West Coast Life
Insurance bearing no interest, due
$2,457 quarterly until May 2000  .................          2,457          4,913

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 ......     $1,500,000     $     --

      Total ......................................     $1,504,783         16,643
      Less Current Portion of
         Long - Term Debt ........................          4,783         16,643
                                                       ----------     ----------

      Total Long - Term Debt .....................     $1,500,000          $ -0-
                                                       ==========     ==========

                                      -9-
<PAGE>
NOTE 4 - CAPITAL LEASE OBLIGATIONS:

                                                   NOVEMBER 30,    AUGUST 31,
                                                       1999           1999
                                                    ----------     ----------
Equipment lease with Konica bearing
interest at 8.9%, payable in monthly
installments of $445; due Aug. 2001 ..............  $    8,609     $    9,720

Equipment lease with IKON Office
Solutions bearing interest at 18%
payable in monthly installments of
$105; due March 2000 .............................         408            695

Software lease with Manifest Group
bearing interest at 14%, payable in
monthly installments of $751; due
August 2000 ......................................  $    6,453     $    8,487
                                                    ----------     ----------

        Total Obligations ........................      15,470         18,902
        Less Current Portion of
           Lease Obligations .....................      14,994         15,047
                                                    ----------     ----------
        Total Long - Term Capital
       Lease Obligations .........................  $      476     $    3,855
                                                    ==========     ==========

      The capitalized lease obligations are collateralized by the related
      equipment acquired with a net book value of approximately $27,135 and $
      29,600 at November 30, 1999 and August 31, 1999, respectively. The future
      minimum lease payments under the capital leases and the net present value
      of the future lease payments at November 30, 1999 and August 31, 1999 are
      as follows:

                                          NOVEMBER 30, 1999     AUGUST 31, 1999
                                          -----------------     ---------------

      Total minimum lease payments        $          16,128     $        20,405
      Less:  Amount representing interest             1,134               1,503
                                          -----------------     ---------------
      Present value of net minimum
          lease payments                  $          14,994     $        18,902
                                          =================     ===============

            Future obligations under the lease terms are:

                    Period Ending
                    NOVEMBER 30,                       AMOUNT
                    -----------                       -------
                        2000                          $10,614
                        2001                            4,380
                                                      -------
                           Total                      $14,994
                                                      =======

NOTE 5 - 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,
                                                1999     1998
                                                ----     ----
                                                   %        %
            U.S. Federal Statutory Tax Rate       34       34
            U.S. Valuation Difference              1       (1)
                                                ----     ----
            Effective U.S. Tax Rate               35       33
            Foreign Tax Valuation                -0-      -0-
                                                ----     ----
            Effective Tax Rate                    35       33
                                                ====     ====

                                      -10-
<PAGE>
NOTE 5 - INCOME TAXES: (continued)

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

                                                             AUGUST 31,
                                                         -------------------
                                                           1999       1998
                                                         -------     -------
            Deferred Tax Assets:

                 Tax Loss Carry-forward                  $ - 0 -     $ - 0 -
                                                         -------     -------

            Deferred Tax Liability:

                 Depreciation                             13,852      11,070
                                                         -------     -------

            Valuation Allowance                            - 0 -       - 0 -
                                                         -------     -------

                 Net Deferred Tax Asset / Liability      $13,852     $11,070
                                                         =======     =======


NOTE 6 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS:

      In July 1996, the Board of Directors and majority shareholders authorized
      5,000,000 shares of Preferred Stock with a par value of $0.001. As of
      November 30, 1999, no Preferred Stock has been issued.

      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 31, 1999, 151,375 options have been
      granted pursuant to such plan with 29,000 being exercised.

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

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

            700,000 stock purchase warrants which expire July 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 $.01 per
            share. These warrants were exercised as of August 31, 1997.

            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.

                                      -11-
<PAGE>
      NOTE 6 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS: (continued)

            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.

      The Company has issued and outstanding the following warrants which have
      not yet been exercised at November 30, 1999:

            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.

            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.

            50,000 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
            $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,
            1999, the underlying shares of common stock have not yet been
            registered for resale under the Securities Act of 1933.

            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.

                                      -12-
<PAGE>
      NOTE 6 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS: (continued)

            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, 1999, 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.

            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, 1999, 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.

            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, 1999, 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.

            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 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, 1999, 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.

            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.

            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".

                                      -13-
<PAGE>
      NOTE 6 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS: (continued)

            1,050,000 Class C 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 $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.

            100,000 stock purchase warrants which expire 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
            $1.77 per share. As of November 30, 1999, the underlying shares of
            common stock have not yet been registered for resale under the
            Securities Act of 1933; however, these shares are subject to a
            registration agreement which has not been effected.

            43,641 stock purchase warrants which expire 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
            $2.01 per share. As of November 30, 1999, the underlying shares of
            common stock have not yet been registered for resale under the
            Securities Act of 1933; however, these shares are subject to a
            registration agreement, which has not been effected.

            6,234 stock purchase warrants which expire 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
            $2.01 per share. As of November 30, 1999, the underlying shares of
            common stock have not yet been registered for resale under the
            Securities Act of 1933; however, these shares are subject to a
            registration agreement which has not been effected.

      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
CLASS  OF            NOVEMBER 30,                  NOVEMBER 30,                NON            NON               NOVEMBER 30,
WARRANTS        1999            1998          1999              1998        EXERCISED     REGISTERED        1999             1998
-------    -------------    ------------- -------------     ------------  -------------  -------------  -----------       ---------
<S>        <C>              <C>           <C>               <C>           <C>            <C>            <C>               <C>
  0.01        Exercised         Exercised           --               --             --             --           --              --
  0.05        Exercised         1,050,000           --               --             --             --        12.500             --
  0.50        Exercised         1,375,000           --               --             --             --        50,000             --
  5.00          Expired   *       425,000           --           425,000            --             --       425,000             --
  4.00        5,033,334   *     5,033,334     5,033,334        5,033,334            --             --           --              --
  6.00        5,033,334   *     5,033,334     5,033,334        5,033,334            --             --           --              --
  2.00        1,050,000   *     1,050,000     1,050,000        1,050,000            --             --           --              --
  1.77          100,000                --       100,000              --             --             --           --              --
  2.01           49,875                --        49,875              --             --             --           --              --

  1.50          150,000           150,000       150,000              --             --             --           --              --
  2.00          150,000           150,000       150,000              --             --             --           --              --
  3.00          200,000           200,000       200,000              --             --             --           --              --
  5.00          200,000           200,000           --               --             --         200,000          --              --
  7.00          200,000           200,000           --               --             --         200,000          --              --
  9.00          200,000           200,000           --               --             --         200,000          --              --
 11.00          200,000           200,000           --               --             --         200,000          --              --

  2.00           50,000   *        50,000        50,000           50.000            --             --           --              --
  ESOP           47,375   *       319,625        14,625          332.000          3,500            --        10,250             --
  ESOP          104,000            80,375        69,000           68,000         50,000            --           --              --
</TABLE>

                                      -14-
<PAGE>
NOTE 6 - PREFERRED STOCK, STOCK OPTIONS AND WARRANTS: (continued)

      An asterisk (*) denotes warrants which would have an anti-dilutive effect
      if currently used to calculate earnings per share for the year ended
      August 31, 1999.


NOTE 7 - SEGMENT INFORMATION:

      The Company had gross revenues of $656,369 and $930,897 for the three
      months ended November 30, 1999 and 1998, respectively. The following
      parties individually represent a greater than ten percent of these
      revenues.

<TABLE>
<CAPTION>
                                   NOVEMBER 30,1999                     NOVEMBER 30, 1998
           CUSTOMER           AMOUNT             PERCENTAGE        AMOUNT           PERCENTAGE
           ------------    --------------- ------------------   -------------  ------------------
           <S>             <C>             <C>                  <C>            <C>
           Link - Two      $       39,215                 6 %         249,616                27 %
           RFTL            $          --                 -- %         550,937                59 %
</TABLE>

NOTE 8 - INVESTMENT IN LINK - TWO COMMUNICATIONS, INC.:

      The Company and Link - Two Communications, Inc. (Link II) have executed an
      agreement, whereby the Company would receive up to an eight percent equity
      interest in Link II in lieu of accruing finance charges on the outstanding
      balance owed by Link II to the Company. Under the agreement, equity in
      Link II was earned at a rate of 0.2% per month per $100,000 payable and
      outstanding for more than thirty days. At November 30, 1999 and 1998, the
      Company had earned a 5.0% and 5.0%, respectively, minority equity interest
      in Link II. This is evidenced by the issuance of 240,000 shares of Link II
      common stock to the Company. As of August 31, 1999 and 1998, the Company
      has recorded it share of losses in this unconsolidated affiliate. The loss
      as a minority shareholder totaled $91,678 and $28,663, respectively. The
      Company has reclassified its balances due from Link II as additional
      advances to affiliates.

      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. Subsequent to August 31, 1999, Link II has entered
      into negotiations to acquire existing paging operations in Dallas, San
      Antonio and Houston. Additionally the company is currently negotiating
      with a utility company to install wireless meter reading equipment which
      will utilize the Link II radio frequency licenses and equipment.

      On October 1, 1999, Link II refinanced its existing accounts payable to
      Eagle Wireless International through the issuance of a $733,571 ten
      percent (10%) note secured by all lease station licenses and a $6,000,000
      ten percent (10%) note secured by all assets (excluding licenses). These
      notes are due September 1, 2000. During October 1999, the Company pledged
      as collateral on a $4,500,000 convertible note, the $6,000,000 note
      receivable and its underlying collateral.

NOTE 9 - RISK FACTORS:

      For the months ended November 30, 1999 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
      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 during the three
      months ended November 30, 1999 whereas Approximately eighty-seven percent
      of the Company's revenues and receivables have been created solely in the
      state of Texas, one percent have been created in the international market,
      and the approximate twelve percent remainder has been created relatively
      evenly over the rest of the nation during the three months ended November
      30, 1998

                                      -15-
<PAGE>
NOTE 9 - RISK FACTORS: (continued)

      Through the normal course of business, the Company generally does not
      require its customers to post any collateral. However, because Link II
      constitutes 43% and 60% of the Company's gross revenues and 64% and 60% of
      its gross assets for the years ended August 31, 1999 and 1998,
      respectively, the two companies have reached an agreement whereby the
      Company has received a minority interest in Link II based upon accounts
      receivable and has fully collateralized the debt. (See Note 9)

      Although the Company has concentrated its efforts in the wireless
      infrastructure industry and convergent set top market during the years
      ended August 31, 1999 and for the three months ended November 30, 1999, it
      is management's belief that the Company faces little credit or economic
      risk due to the continuous growth the market is experiencing.

NOTE 10 - FOREIGN OPERATIONS:

      Although the Company is based in the United States, its product is sold on
      the international market. Presently, international sales total
      approximately 2% and 1% at November 30, 1999 and 1998, respectfully.

NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES:

      The Company leases its primary office space 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 shares sold below $1.70 per share)

      It is understood and agreed, and it is the intention of both parties, that
      this put right will provide Space with a guarantee that, so long as (a)
      Space does not sell or otherwise dispose of the common stock for less than
      $1.70 per share, and (b) Space exercises its put right between August 15,
      2000 and August 31, 2000, Space will receive a minimum economic benefit of
      at least $170,000 from the common stock issued by the Company to Space.
      For the periods ending November 30, 1999 and 1998, rental expenses of
      $64,548 and $23,793 respectively, were incurred.

            Future obligations under the non-cancelable lease terms are:

                  Period Ending
                   NOVEMBER 30,                       AMOUNT
                   -----------                      ----------
                         2000                       $  187,140
                         2001                       $  126,665
                                                    ==========

      During the year ended August 31, 1998, the Company entered into an
      agreement with a public relations consultant whereby the consultant will
      develop, implement, and maintain an ongoing program to increase the
      investment community's awareness of the Company's activities and to
      stimulate the investment community's interest in the Company. As
      compensation for these services, the consultant will be paid $5,000 per
      month. Additionally, the consultant will receive options to purchase
      100,000 shares of the Company's common stock for $1.00 per share. The
      delivery of the options to purchase the 100,000 shares of common stock is
      contingent upon the attainment of certain objective criteria as outlined
      in the July 16, 1998 agreement between the Company and the public
      relations consulting firm. At August 31, 1999, these options have been
      issued and exercised.


                                      -16-
<PAGE>

NOTE 11 - COMMITMENTS AND CONTINGENT LIABILITIES: (continued)

      The Company has been named as defendant in a lawsuit involving the
      Company's previous landlord with regard to breach of the lease. The
      Company has counter-claimed, also alleging breach of the lease. The
      Company intends to vigorously defend this matter as well as prosecute its
      counter-claim.

      The Company has provided a finance company a limited manufacturer's
      guarantee for an amount not to exceed $910,845 for equipment and services
      sold to a customer of the Company. In the event of default by the
      customer, after a minimum period of ninety days from the date default is
      declared and after having exhausted all available remedies against the
      customer, the finance company may seek payment directly from the Company.
      Under this guarantee, the Company may elect to assume the lease from the
      finance company under the original terms and conditions or may elect to
      pay all amounts due in arrears under the original agreement and pay-off
      the lease through a one-time payment of the unamortized balance.


NOTE 12 - EARNINGS PER SHARE:

      The following table sets forth the computation of basic and diluted
      earnings per share:
<TABLE>
<CAPTION>
                                                  FOR THE 3 MONTHS ENDED NOVEMBER, 1999
                                                 --------------------------------------
                                                   INCOME       SHARES       PER-SHARE
                                                 (NUMERATOR) (DENOMINATOR)     AMOUNT
                                                 ----------    ----------    ----------
<S>                                              <C>           <C>           <C>
Net Income ..................................    $   86,021

Basic EPS:
  Income available to common stockholder ....    $   86,021    13,541,750    $     0.01

Effect of Dilutive Securities:
  Warrants ..................................         - 0 -        69,000
                                                 ----------    ----------

Diluted EPS:
  Income available to common stockholders
    and assumed conversions .................    $   86,021    13,610,750    $     0.01
                                                 ==========    ==========    ==========

<CAPTION>
                                                     FOR THE YEAR ENDED AUGUST , 1999
                                                 --------------------------------------
                                                   INCOME       SHARES       PER-SHARE
                                                 (NUMERATOR) (DENOMINATOR)     AMOUNT
                                                 ----------    ----------    ----------
Net Income ..................................    $  168,272

Basic EPS:
  Income available to common stockholder ....    $  168,272    11,980,911    $     0.01

Effect of Dilutive Securities:
  Warrants ..................................         - 0 -        69,000
                                                 ----------    ----------

Diluted EPS:
  Income available to common stockholders
    and assumed conversions .................    $  168,272    12,049,911    $     0.01
                                                 ==========    ==========    ==========
</TABLE>

     For the November 30, 1999 and August 31, 1999, anti-dilutive securities
     existed. (see Note 6)

                                      -17-
<PAGE>
NOTE 13- 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, 1999
      and 1998, 151,375 and 85,375 warrants have been issued to various
      employees. Of these outstanding warrants, 29,000 were exercised for the
      year ended August 31, 1999 and none for the year ended August 31, 1998.
      Additionally, 10,250 warrants have expired as of August 31, 1999.

NOTE 14 - 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, 1999 and 1998, employee
      contributions were approximately $120,045 and $74,654, respectively. The
      Company matched approximately $39,385.23 and $22,765 respectively for
      those same periods.

NOTE 15 - MAJOR CUSTOMER:

      As of November 30, 1999, the Company had a receivable due from Link - Two
      Communications (Link II) in the amount of $6,641,892. This account
      receivable has been converted to a note receivable (see Note 9). As of
      August 31, 1999, Link II is continuing to sell equity securities, assets,
      and products that are being used to retire this note receivable. This
      receivable is secured by substantially all assets of Link II including
      radio frequency licenses that have been valued by outside appraisal firms
      to in excess of twenty million dollars. In August 1999, Link II commenced
      operations of its nationwide two-way messaging system. Based upon the
      aforementioned, management believes the risks involved with this
      receivable are minimal.

NOTE 16 - SUBSEQUENT EVENTS:

      During January 2000, the Company signed a letter of intent with Atlantic
      Pacific Communications, Inc. to acquire Atlantic Pacific Communications
      (AtlanticPacific) for 519,000 restrictive shares of common stock.
      Additionally, the principal shareholders of Atlantic Pacific can earn an
      additional 3,000,000 restricted common shares over a over a four-year
      period of time upon attainment of stipulated sales levels between
      $10,000,000 and $60,000,000.

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

      During the three months ended November 30, 1999, the Company's primary
      operations were concentrated in the on-going development, marketing and
      beta testing of multi-media set top devices. 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, 2000.

      Revenues for the three months ended November 30, 1999 and 1998 totaled
      $656,000 and $931,000, respectively. The decrease in revenues is
      principally due a decrease in sales to infrastructure customers and
      discontinuance of a research and development contract with a computer
      manufacturer. During this current quarter, the Company's marketing
      resources were directed to identifying product demand for the set top
      devices and development new wireless application customers. The Company
      anticipates that these sales efforts will provide new customers in the
      wireless, internet and convergent set top device markets and constitute
      the majority of sales in the ensuing fiscal year. Concurrent with this
      marketing effort, the Company is currently negotiating with domestic and
      international manufacturing concerns to support significant production
      activity for the multi-media set top devices.

                                      -18-
<PAGE>
      Operating expenses for the three months ended November 30, 1999 and 1998
      totaled $534,000 and $535,000, respectively. For the current quarter, the
      research and development expenses increased $99,000 over the 1998 amount
      of $154,000. This increase is attributable to additional personnel
      employed to support the development necessary to market the multi-media
      set top devices and other wireless applications.

      Current assets as of November 30, 1999 and August 31, 1998 totaled
      $4,214,000 and $3,072,000, respectively. The principal increase in working
      capital was due to the $4,500,000 convertible debenture funding. Current
      liabilities as of November 30, 1999 and August 31, 1998 totaled $2,390,000
      and $1,414,000, respectively. This increase is attributable to the
      increase in notes payable of $1,500,000. The $1,500,000 credit facility
      allows the Company to repay this note through the issuance of common
      stock, and as of January 14, 2000, the company had issued 53,601 shares of
      its common shares to pay $100,000 of principal and accrued interest.


      The Company's shareholders' equity as of November 30, 1999 and August 31,
      1998 totaled $8,999,000 and $8,894,000, respectively. Cash flows used by
      operating activities for the three months ended November 30, 1999 and 1998
      totaled $635,000 and $513,000, respectively. Cash flows provided (used) by
      investing activities for the three months ended November 30, 1999 and 1998
      totaled $33,000 and $(26,000), respectively. Cash flows provided(used) by
      financing activities for the three months ended November 30, 1999 and 1998
      totaled $1,519,000 and $(19,000), respectively.

      A substantial portion of the Company's other assets is concentrated in
      notes receivable due from Link-Two Communications, Inc. The collection of
      this amount is contingent upon the successful sale of equity by Link-Two
      and the generation of operating revenues from their two-way messaging
      system The Company has established a credit committee to assist Link-Two
      in its securing of financing. Additionally, Link-Two's receivable is
      secured by substantially all assets of Link-Two including radio frequency
      licenses which management believes to be valued in excess of the amounts
      due the Company.

We entered into a $4,500,000 convertible note credit facility, of which we have
drawn down $1,500,000 and the balance is available subject to certain terms and
conditions. We believe that our current cash position will provide sufficient
working capital through August 2000. Thereafter, we will need additional working
capital, either by drawing down on our credit facility or through equity
financing. Additionally, the Company is negotiating with lenders to obtain
acquisition and production financing, although there is no assurance that such
financing can be obtained.

IMPACT OF YEAR 2000

      Even though the date is now past January 1, 2000, and we have not
experienced any immediate adverse impact from the transition to the year 2000,
we cannot provide any assurance that our suppliers and customers have not been
affected in a manner that is not yet apparent. In addition, some computer
programs which were date sensitive to the year 2000 may not have been programmed
to process the year 2000 as a leap year, and any negative consequential effects
remain unknown. As a result, we will continue to monitor our year 2000
compliance and the year 2000 compliance of our suppliers and customers.

      The year 2000 posed issues for business and consumer computing,
particularly the functionality of software for two-digit storage of dates and
special meanings for dates such as 9/9/99. The problem exists for many kinds of
software, including software for mainframes, PCs, and embedded systems.

          In assessing the effect of the Year 2000 problem, we determined that
there existed two general areas that needed to be evaluated:

o     Internal infrastructure; and

o     Supplier/third-party relationships.

          A discussion of the various activities related to assessment and
actions resulting from those evaluations is below.


          INTERNAL INFRASTRUCTURE. - During the fiscal year 1999, we undertook
and completed a project to replace our accounting and manufacturing information
systems that we found to not be Year 2000 compliant. We presently believe that,
with modifications to existing software and conversions to new software, the
Year 2000 issue will not pose significant operational problems for our business,
our products or installed systems. As of January 14, we have not suffered any
problems or interruptions due to the Year 2000 problem.

          SUPPLIERS/THIRD-PARTY RELATIONSHIPS. - We rely on outside vendors for
water, electrical, and telecommunications services as well as climate control,
and other infrastructure services. We did independently evaluate the year 2000
compliance of the systems utilized to supply these services. We have not
received any assurance of compliance from the providers of these services. Any
failure of these third-parties to resolve year 2000 problems with their systems
could have a material adverse effect on our business.

          CONTINGENCY PLANS. - Based on the above actions, we have not developed
a formal contingency plan to be implemented as part of our efforts to identify
and correct year 2000 problems affecting our internal systems. However, if we
believe it is necessary, we may take the following actions:

      o  Short to medium-term use of backup equipment and software;

      o  Increased work hours for our personnel; and

      o  Other similar approaches.

          If we are required to implement any of these contingency plans, such
plans could have a material adverse effect on our business. Based on the actions
taken to date, and the lack of any problems to date, we are reasonably certain
that we have identified and resolved all year 2000 problems that could hurt our
business.

PART 2. - OTHER INFORMATION

      ITEM 2 - RECENT SALES OF UNREGISTERED SECURITIES

      In September 1999, the company issued 61,667 shares of common stock to two
      individuals for $36,317. The company believes that these issuances were
      exempt from registration pursuant to Section 4(2) of the Act as
      transactions by an issuer not involving any public offering.


      In October 1999, the company issued a convertible note in the amount of
      $1,500,000. The company believes that this issuance was exempt from
      registration pursuant to Section 4(2) of the Act as a transaction by an
      issuer not involving any public offering.


      ITEM 6 - EXHIBITS OF REPORT ON FORM 8-K

           (a) Exhibit 27 - Financial Data Schedule
           (b) Reports on Form 8-K
              none


                                    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 14, 2000                          By: /s/ H. DEAN CUBLEY
                                                      Dr. H. Dean Cubley
                                                      President

                                                      /s/ RICHARD R. ROYALL
                                                      Richard R. Royall
                                                      Chief Financial Officer
                                      -19-