<PAGE>


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

                                    FORM 10-Q

(Mark One)

 X  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
---
    1934

       FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                       OR

    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 1-12571

                             FOCUS AFFILIATES, INC.

              Delaware                                     95-4467726
(State of incorporation or organization)       (IRS Employer Identification No.)

9314 Eton Ave., Chatsworth, California                                     91311
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code               (818) 709-2300

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes _X_ No ___

As of November 3, 1999 there were 9,264,893 shares of the registrant's Common
Stock outstanding.


<PAGE>



                             FOCUS AFFILIATES, INC.

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                        September 30,       December 31,
                                                            1999                1998
                                                        -------------       ------------
                                                        (Unaudited)
<S>                                                     <C>                <C>
ASSETS
Current Assets:
Cash                                                    $  1,250,000       $    362,000
Accounts receivable, net of allowance for doubtful
    accounts of $170,000 and $251,000                      5,209,000          2,155,000
Inventories, net of reserves for obsolescence
     of $250,000 and $592,000                              1,345,000            837,000
Notes receivable, net of allowance for doubtful
    notes of $662,000 and $1,521,000                               -                  -
Deposits for purchase of inventory                            49,000            254,000
Prepaid expenses and other current assets                    509,000            211,000
                                                        ------------       ------------

 Total current assets                                      8,362,000          3,819,000

Property and equipment, net of accumulated
 depreciation of $376,000 and $242,000                       417,000            359,000
Other assets                                                 585,000                  -
                                                        ------------       ------------

  Total assets                                          $  9,364,000       $  4,178,000
                                                        ============       ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:

Accounts payable                                           3,927,000          1,150,000
Revolving credit facility                                  2,814,000                  -
Accrued expenses                                             622,000            179,000
                                                        ------------       ------------

  Total current liabilities                                7,363,000          1,329,000
                                                        ------------       ------------

Commitments and contingencies                                      -                 -

Stockholders' equity
Preferred stock -$.01 par value, 1,000,000 shares
  Authorized and none issued
Common stock -$.01 par value, 25,000,000 shares
  Authorized 7,014,893 and 5,915,902 shares                   70,000             59,000
  Issued and outstanding
Additional paid-in capital                                12,986,000         11,379,000
Accumulated deficit                                      (11,055,000)        (8,589,000)
                                                        ------------       ------------

   Total stockholders' equity                              2,001,000          2,849,000
                                                        ------------       ------------

   Total liabilities and stockholders' equity           $  9,364,000       $  4,178,000
                                                        ============       ============
</TABLE>


           See accompanying Notes to Consolidated Financial Statements


                                                                         Page 2
<PAGE>


                             FOCUS AFFILIATES, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                              For the Nine Months Ended
                                                                   September 30,
                                                          -------------------------------
                                                              1999               1998
                                                          ------------       ------------
<S>                                                       <C>                <C>
Net sales                                                 $ 27,656,000       $ 22,758,000

Cost of sales                                               26,030,000         21,613,000
                                                          ------------       ------------

Gross profit                                                 1,626,000          1,145,000

Selling, general and administrative expenses                 2,785,000          3,494,000
Severance expenses                                             668,000                  -
Non-cash severance expenses                                    551,000                  -
                                                          ------------       ------------
                                                             4,004,000          3,494,000

Loss from operations                                        (2,378,000)        (2,349,000)

Other income (expense):
   Interest expense                                           (106,000)          (194,000)
   Other Income (expense)                                       18,000            (34,000)
                                                          ------------       ------------

Loss before income tax benefits                             (2,466,000)        (2,577,000)

Income tax benefits                                                  -                  -
                                                          ------------       ------------

Net loss                                                  $ (2,466,000)      $ (2,577,000)
                                                          ============       ============

Basic loss per share                                      $      (0.37)      $      (0.58)
                                                          ============       ============

Diluted loss per share                                    $      (0.37)      $      (0.58)
                                                          ============       ============

Weighted average number of common shares outstanding         6,703,031          4,415,902
                                                          ============       ============
</TABLE>



           See accompanying Notes to Consolidated Financial Statements


                                                                         Page 3
<PAGE>




                             FOCUS AFFILIATES, INC.
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                             For the Three Months Ended
                                                                   September 30,
                                                          -------------------------------
                                                              1999               1998
                                                          ------------       ------------
<S>                                                       <C>                <C>
Net sales                                                 $ 13,437,000       $  4,142,000

Cost of sales                                               12,633,000          4,020,000
                                                          ------------       ------------

Gross profit                                                   804,000            122,000

Selling, general and administrative expenses                 1,025,000            930,000
                                                          ------------       ------------
                                                             1,025,000            930,000

Loss from operations                                          (221,000)          (808,000)

Other income (expense):
   Interest expense                                            (83,000)           (31,000)
   Other Income (expense)                                       12,000             (1,000)
                                                          ------------       ------------

Loss before income tax benefits                               (292,000)          (840,000)

Income tax benefits                                                  -                  -
                                                          ------------       ------------

Net loss                                                  $   (292,000)      $   (840,000)
                                                          ============       ============

Basic loss per share                                      $      (0.04)      $      (0.19)
                                                          ============       ============

Diluted loss per share                                    $      (0.04)      $      (0.19)
                                                          ============       ============

Weighted average number of common shares outstanding         7,014,893          4,415,902
                                                          ============       ============
</TABLE>








           See accompanying Notes to Consolidated Financial Statements


                                                                         Page 4
<PAGE>



                             FOCUS AFFILIATES, INC.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                             For the Nine Months Ended
                                                                                  September 30,
                                                                          ------------------------------
                                                                              1999              1998
                                                                          -----------       -----------
<S>                                                                       <C>               <C>
Cash flows from operating activities:
Net loss                                                                  $(2,466,000)      $(2,577,000)
Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities
Depreciation and amortization                                                 134,000           112,000
Non Cash Compensation Expense                                                 550,000           352,000
Provision for (recovery of) doubtful accounts receivable                      (81,000)          713,000
Provision for (recovery of)  inventory reserves                              (342,000)          323,000
Provision for doubtful notes receivable                                             -           864,000
Changes in operating assets and liabilities:
  (Increase) decrease in accounts receivable                               (2,973,000)        4,610,000
  (Increase) decrease in inventories                                         (166,000)        1,860,000
  (Increase) decrease in deposits for purchases of inventory                  205,000           166,000
  (Increase) decrease in other receivables                                          -          (669,000)
  (Increase) decrease  in prepaid  expenses and other current assets         (298,000)          246,000
  (Increase) decrease in other assets                                        (585,000)
  Increase (decrease) in accounts payable and accrued expenses              3,220,000        (2,394,000)
                                                                          -----------       -----------

Net cash provided by (used in) operating activities                        (2,802,000)        3,606,000
                                                                          -----------       -----------

Cash flows from investing activities:
   Acquisition of fixed assets                                               (192,000)         (200,000)
                                                                          -----------       -----------

Net cash used by investing activities                                        (192,000)         (200,000)
                                                                          -----------       -----------

Cash flows from financing activities:
  Bank overdraft (payments)                                                         -          (250,000)
  Deferred financing costs                                                          -           (43,000)
  Advances under credit facility                                            3,941,000        (2,875,000)
  Repayments under credit facility                                         (1,127,000)
  Proceeds from the sale of common stock                                    1,068,000                 -
                                                                          -----------       -----------

Net cash provided by (used in) financing activities                         3,882,000        (3,168,000)
                                                                          -----------       -----------

Net increase in cash                                                          888,000           238,000
Cash - beginning of period                                                    362,000                 -
                                                                          -----------       -----------

Cash - end of period                                                      $ 1,250,000       $   238,000
                                                                          ===========       ===========

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
     Interest                                                             $         -           194,000
     Income taxes                                                         $         -                 -

</TABLE>

           See accompanying Notes to Consolidated Financial Statements


                                                                         Page 5
<PAGE>





                             FOCUS AFFILIATES, INC.
                   Notes to Consolidated Financial Statements

1. COMPANY'S QUARTERLY REPORT UNDER FORM 10-Q
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial statements
and with the instructions set forth in the Securities and Exchange Commission's
("SEC") regulations. In the opinion of Management, the accompanying financial
statements include all adjustments consisting of normal recurring accruals
necessary to present fairly the financial statements of Focus Affiliates, Inc.
for the periods presented. The accompanying financial information should be read
in conjunction with the audited financial statements contained in the Company's
Annual Report on Form 10-K, as amended, for the year ended December 31, 1998.
Footnote disclosures that substantially duplicate those in the Company's Form
10-K, as amended, including significant accounting policies, have been omitted.
The results of operations for the three months and nine months ended September
30, 1999, are not necessarily indicative of the results to be expected for the
full fiscal year.

2. ACQUISITION AND MERGER OF CELLULAR WHOLESALERS, INC.
On October 29, 1999 (the "Closing Date"), Focus Affiliates, Inc. ("Focus")
completed its acquisition of Cellular Wholesalers, Inc. ("CWI"), a privately
held wholesale distributor of wireless phone products. The acquisition was
accomplished through a merger (the "Merger") of CWI into Intellicell Merger Sub,
Inc., a wholly-owned subsidiary of Focus ("Merger Sub"), pursuant to the Amended
and Restated Agreement and Plan of Merger, dated as of July 23, 1999 (the
"Merger Agreement") among Focus, CWI, the principal stockholders of CWI, and
Merger Sub.

Under the terms of the Merger, CWI's stockholders were entitled to receive
$5,000,000 in cash and 2,250,000 shares of Focus' common stock (the "Base
Consideration") plus an additional amount (the "Additional Consideration") in
the event the total stockholders' equity of CWI as of the Closing Date (the
"Closing Date Equity") exceeds $177,667. The Additional Consideration, if any,
will consist of an additional number of shares of Focus common stock (the
"Additional Shares") as equals the amount by which the Closing Date Equity
exceeds $177,667 divided by $4; provided, that in no event will the number of
Additional Shares exceed 2,250,000 shares. Notwithstanding the foregoing, the
cash portion of the Base Consideration will be reduced by the amount, if any, by
which the Closing Date Equity is less than $1,177,667. Of the $5,000,000 cash
portion of the Base Consideration, $500,000 was reserved in escrow pending the
determination of the Closing Date Equity. The Closing Date Equity will be
determined within 30 days following the Closing Date by Focus' and CWI's
independent certified public accountants. On the date the Merger Agreement was
executed, Focus received a written opinion from its financial advisor that the
consideration to be paid for CWI was fair to Focus from a financial point of
view.


                                                                         Page 6
<PAGE>


To fund the cash payment by Focus to the CWI stockholders and related Merger
closing expenses, Focus sold:

          (1)  $5,152,400 of convertible subordinated notes (the "Notes") in a
               private placement. Each Note is a one-year unsecured and
               subordinated obligation of Focus that bears interest at the rate
               of 4% per annum, which is payable at the maturity of the Notes.
               If, and when, the Focus stockholders approve the conversion of
               the Notes, each $4.00 of Convertible Notes will automatically
               convert into one share of Focus common stock and one redeemable
               warrant to purchase one-half share of Focus common stock. As of
               the Closing Date, a majority of the Company's Shareholders
               submitted their approval of conversion of the Notes into shares
               and warrants, as described. These warrants have an exercise price
               of $4.00 and expire five years from the Closing Date.

          (2)  $1,000,000 of subordinated debt (the "Debt") together with
               150,000 warrants to Critical Capital Growth Fund, L.P. The Debt
               bears interest at 12% per annum, which matures in five years. The
               warrants have an exercise price of $5.55 and expire five years
               from the Closing Date.

In connection with the Merger, Focus and Merger Sub agreed to appoint several
designees of the CWI stockholders as directors of Focus and Merger Sub and
several former CWI officers as officers of Focus and Merger Sub. Upon the
closing of the Merger, Ronald Goldberg, Cary Maimon, and David Segneri, as CWI's
designees, were appointed as directors of Focus and Merger Sub, and the
following former CWI officers were appointed as officers of Focus and Merger Sub
in the capacities specified: Ronald Goldberg (Senior Vice President--U.S.
Operations), Melvyn Cohen (Vice President - Finance and Administration), and
Cary Maimon (Vice President General Manager).

Proforma Analysis of CWI Merger
         The following table sets forth selected unaudited pro forma combined
financial data for the Company for the year ended December 31, 1998, and for the
nine month period ended September 30, 1999, which are presented to reflect the
estimated impact on the historical financial statements of the Merger, which
will be accounted for using the purchase method, and the issuance of
approximately 2,435,833 shares of Focus Affliates, Inc. Common Stock and
approximately $4,743,000 in cash as merger consideration (the total
consideration that would be payable if CWI's total stockholders' equity on the
Closing Date is equal to CWI's total stockholder's equity as of September 30,
1999). The income statement data assume that the Merger had been consummated at
the beginning of the earliest period presented, combining the annual statements
of operations of Focus Affiliates, Inc. for the year ended December 31, 1998 and
CWI for the year ended September 30, 1998, and the interim statements of
operations of the Company for the ninc months ended September 30, 1999 and CWI
for the nine months ended June 30, 1999. The balance sheet data assume that the
Merger had been consummated on Setpember 30, 1999. The unaudited pro forma
combined financial data do not reflect any cost savings and other synergies nor
merger related expenses anticipated by Management as a result of the Merger and
are not necessarily indicative of the results of operations or the financial
position which would have occurred had the Merger been consummated at the
beginning of the earliest period presented, nor are they necessarily indicative
of the Company's future results of operations or financial position. The
unaudited pro forma combined financial data should be read in conjunction with
the historical financial statements, including the notes thereto, of the Company
and CWI and the Unaudited Pro Forma Combined Financial Information, which


                                                                         Page 7
<PAGE>

was included in the Company's proxy statement for its September 29, 1999 Annual
Stockholders Meeting and attached thereto as Appendix D.

<TABLE>
<CAPTION>

                                           Focus Affiliates,           Cellular
                                                 Inc.              Wholesalers, Inc.
                                              Year Ended              Year Ended
                                             December 31,            September 30,             Pro Forma              Pro Forma
                                                 1998                    1998                 Adjustments               Totals
                                             ------------             ------------            -----------            ------------
<S>                                          <C>                      <C>                     <C>                    <C>
NET SALES                                    $ 27,787,000             $ 81,031,000                                   $108,818,000
COST OF SALES                                  26,152,000               73,138,000                                     99,290,000
                                             ------------             ------------                                   ------------

GROSS PROFIT                                    1,635,000                7,893,000                                      9,528,000

         TOTAL OPERATING EXPENSES               4,167,000                5,842,000              1,356,600              11,365,600
                                             ------------             ------------                                   ------------

INCOME (LOSS) FROM OPERATIONS                  (2,532,000)               2,051,000                                     (1,837,600)

OTHER INCOME (EXPENSE)                           (237,000)                (892,000)                                    (1,129,000)
                                             ------------             ------------                                   ------------

INCOME (LOSS) BEFORE INCOME TAXES              (2,769,000)               1,159,000                                     (2,966,600)

INCOME TAXES                                            -                   15,000                                         15,000
                                             ------------             ------------                                   ------------

NET INCOME (LOSS)                            $ (2,769,000)            $  1,144,000             (1,356,600)           $ (2,981,600)
                                             ------------             ------------                                   ------------
                                             ------------             ------------                                   ------------

PRO FORMA:
BASIC AND DILUTED LOSS PER SHARE                                                                                     $      (0.44)
                                                                                                                     ------------
                                                                                                                     ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                                                                                               6,851,735

</TABLE>

<TABLE>
<CAPTION>
                                                                        Cellular
                                         Focus Affiliates, Inc.     Wholesalers, Inc.
                                              Nine Months              Nine Months
                                            Ended Sept. 30,           Ended June 30,           Pro Forma              Pro Forma
                                                 1999                     1999                Adjustments               Totals
                                         ----------------------     -----------------         -----------            ------------
<S>                                          <C>                      <C>                     <C>                    <C>
NET SALES                                    $ 27,656,000             $ 58,310,000                                   $ 85,966,000
COST OF SALES                                  26,030,000               52,530,000                                     78,560,000
                                             ------------             ------------                                   ------------

GROSS PROFIT                                    1,626,000                5,780,000                                      7,406,000

                                             ------------             ------------                                   ------------
         TOTAL OPERATING EXPENSES               4,004,000                5,015,000              1,017,450              10,036,450
                                             ------------             ------------                                   ------------

INCOME (LOSS) FROM OPERATIONS                  (2,378,000)                 765,000                                     (2,630,450)

OTHER INCOME (EXPENSE)                            (88,000)                (115,000)                                      (203,000)
                                             ------------             ------------                                   ------------

INCOME (LOSS) BEFORE INCOME TAXES              (2,466,000)                 650,000                                     (2,833,450)

INCOME TAXES                                            -                        -                                              -
                                             ------------             ------------                                   ------------

NET INCOME (LOSS)                            $ (2,466,000)            $    650,000             (1,017,450)           $ (2,833,450)
                                             ------------             ------------                                   ------------
                                             ------------             ------------                                   ------------

</TABLE>


                                                                         Page 8
<PAGE>


<TABLE>

<S>                                                                                                                  <C>
PRO FORMA:
BASIC AND DILUTED LOSS PER SHARE                                                                                     $      (0.31)
                                                                                                                     ------------
                                                                                                                     ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                                                                                               9,138,865

</TABLE>

         The following table sets forth certain condensed earnings and balance
sheet data including per share data for Focus Affiliates, Inc (the "Company")
and CWI on historical and pro forma bases. The pro forma combined earnings per
share data are derived from the Unaudited Consolidated Statements of Operations
giving effect to the Merger using the purchase accounting method as if the
Merger had been consummated at the beginning of the earliest period presented.
There were no cash dividends declared in the periods indicated. Book value data
for all pro forma presentations is based upon the weighted average number of
outstanding shares of the Company's Common Stock, adjusted to include the
estimated number of shares of the Company's Common Stock to be issued in the
Merger prior to the conversion of the Notes. The information set forth below
should be read in conjunction with the historical financial statements of the
Company and of CWI and the Unaudited Pro Forma Combined Financial Information,
including the Company's proxy statement for its September 29, 1999 Annual
Stockholders Meeting.

         The pro forma data do not reflect any cost savings and other synergies
or merger related expenses anticipated by Intellicell management as a result of
the CWI Merger.

<TABLE>
<CAPTION>

                                                Focus Affiliates,       Cellular
                                                       Inc.          Wholesalers, Inc.      Pro Forma            Pro Forma
                                                  Sept. 30, 1999      Sept. 30, 1999       Adjustments             Totals
                                                -----------------    -----------------     ------------          ----------
<S>                                                <C>                 <C>                 <C>                  <C>
BALANCE SHEET DATA:
Total Stockholders' Equity                         $  2,001,000        $  1,102,000        $  8,823,000         $ 11,926,000
Less:  Goodwill                                               -                   -          13,566,000           13,566,000
Net tangible book value (deficit)                     2,001,000           1,102,000          (4,743,000)          (1,640,000)
Number of issued and outstanding shares of
common stock                                          7,014,893                 800           2,435,833            9,450,726
Net tangible book value (deficit) per share        $       0.29        $   1,377.50        $      (1.95)        $      (0.17)

</TABLE>


3.  CREDIT FACILITY
As a condition of the Merger, in October 1999, the Company entered into a new
agreement that, in effect, increased its existing revolving line of credit
agreement with Banc of America Commercial Finance Corporation through its
Commercial Funding Division, which is a subsidiary of BankAmerica that was
previously known as NationsCredit Commercial Finance. The line of credit
facility expires in October 2001, and provides for borrowings of up to a maximum
of $20,000,000 based on a maximum of 82% of eligible receivables and the lesser
of $7,500,000 or 50% of eligible inventory, as defined. Borrowings under the
agreement accrue interest at the prime rate plus 1/2% per annum. The credit
facility is collateralized by substantially all of the assets of the Company.
The agreement prohibits the Company from paying dividends or incurring
additional indebtedness except for trade indebtedness and, initially, required
the Company to have a tangible net worth of no less than $2,000,000 at the
closing of the merger with CWI.


                                                                         Page 9
<PAGE>

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

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: THE STATEMENTS CONTAINED IN THIS REPORT WHICH ARE NOT HISTORICAL FACTS
ARE FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES,
INCLUDING BUT NOT LIMITED TO, POSSIBLE DELAYS IN THE COMPANY'S EXPANSION
EFFORTS, CHANGES IN WIRELESS COMMUNICATIONS MARKETS AND TECHNOLOGIES, THE
NATURE OF POSSIBLE SUPPLIER OR CUSTOMER ARRANGEMENTS WHICH MAY BECOME
AVAILABLE TO THE COMPANY IN THE FUTURE, POSSIBLE PRODUCT OBSOLESCENCE,
UNCOLLECTIBLE ACCOUNTS RECEIVABLE, SLOW MOVING INVENTORY, LACK OF ADEQUATE
FINANCING, INCREASED COMPETITION AND UNFAVORABLE GENERAL ECONOMIC CONDITIONS.
THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED
IN ANY FORWARD LOOKING STATEMENT.

CHANGES IN FINANCIAL CONDITION

For the nine months and three months ending September 30, 1999, the Company
incurred significant losses, and the Company anticipates that it may incur
further (although reduced) losses for the balance of 1999. The Company
believes that these losses were attributable to its efforts to hire new
management, the costs of severance for former management during the first
half of the year and an insufficient level of sales while it re-establishes a
customer base that purchases wireless phones based on digital technology, as
opposed to the former analog technology. The Company has also dedicated
resources to the development and implementation of web site capable of
e-commerce and to the legal, accounting, finance and travel costs associated
with the due diligence and consummation of the Merger. New management is
seeking to position the company to develop multiple business opportunities
using its web site as a platform for e-commerce with carriers (network
operators), resellers, e-retailers, dealers, and manufacturers while
supporting its current business foundation of traditional distribution via
telemarketing. Since late 1998 most leading manufacturers have sold directly
to carriers using traditional distributors, like the Company and CWI as a
secondary method of distribution to market rather than as a primary method.
Many distributors including the Company did not position itself to be of
value to either the carrier or the manufacture in this distribution paradigm
and therefore were not given direct access to the in-demand products. However
CWI, was able to position itself to be of value to some leading manufactures,
allowing them to develop and maintain direct these relationships, providing
them access to the in-demand products. There can be no assurance that these
relationships will remain after the Merger.

In an effort to procure the state-of-the-art product, the Company has been
required to purchase a significant portion of its inventory on a prepaid
basis. However, CWI has been able to establish credit terms with most of its
vendors. See "Liquidity and Capital Resources." There can be no assurance
that the Company will be able to obtain sufficient credit amounts from CWI's
vendors to effect the large inventory purchases that will be needed for the
Company to generate significantly higher sales revenues, which, in turn is
required to achieve profitability.

Total assets at September 30, 1999 increased by $5,186,000 (or 124.1%) from
December 31, 1998, primarily as a result of a $888,000 (or 245.3%) increase in
cash and a $3,054,000 (or 141.7%) increase in accounts receivables, a $508,000
(or 60.7%) increase in inventory and a

                                                                  Page 10

<PAGE>

$585,000 increase in other assets. The increase in cash is the result of
funding from a line of credit in May 1999. The increase in accounts
receivables is the result of increased sales within 30 days of September 30,
1999 versus December 31, 1998. The increase in inventory is the result of
supporting an increased level of sales and, the increase in other assets is
mostly due to deferred acquisition costs and the design and programming of
the Company's web-site and e-commerce portal.

Net assets (assets less liabilities) of the Company as of September 30, 1999
decreased by $848,000 (or 29.8%) from December 31, 1998, reflecting the net
loss for the nine months ended September 30, 1999, net of proceeds from the
sale of common stock and charges to earnings that do not affect net equity,
such as non-cash severance expenses.

The Company's inventory reserve was $250,000 at September 30, 1999, or 15.2%
of inventories at that date. The Company believes this reserve is currently
adequate for obsolescence and net realizable value, given the size and nature
of its inventories. Management has made a concerted effort to reduce its
level of obsolete inventory. Management believes the Company will not realize
any further amounts from, and has fully reserved for its obsolete and
slow-moving inventory.

At September 30, 1999 the Company has a deferred tax asset of approximately
$4,422,000, representing the future benefit of net operating losses and
timing differences and has established a valuation allowance of an equal
amount reflecting current assessment of realizability.

Total liabilities increased by $6,034,000 (or 454.0%) from December 31, 1998
to September 30, 1999. This increase is primarily composed of a $2,777,000
(or 241.5%) increase in accounts payable and a $2,814,000 increase in
borrowings under the new revolving credit facility. This increase in
liabilities is associated with increased levels of business activity,
including purchases and inventory levels during the nine months ending
September 30, 1999.

         COMPARISON OF OPERATIONS

Net sales for the nine months and three months ended September 30, 1999
increased $4,898,000 (or 21.5%), and $9,295,000 (or 224.4%) from the
comparable periods of the prior year. The Company believes this increase in
sales is primarily attributable to more sales personnel versus the comparable
period in 1998, as a result of the May 1998 layoffs, and the Company's
recently improved ability to procure in-demand product, which, in turn, was
funded from the recently established line of credit.

Gross profit increased by $481,000 (or 42.0%) for the nine months and
$682,000 (or 559.0%) for the three months ended September 30, 1999, from the
prior comparable periods. As a percentage of sales, gross profit for the nine
months and three months ended September 30, 1999 was 5.9% and 5.0%, compared
to 6.0% and 2.9% for the nine months and three months ended September 30,
1998, respectively. The increase in gross profit as a percentage of sales for
the three months was primarily the result of a lower gross profits realized
in the three months ending September 30, 1998, a result of the deterioration
in demand for the Company's then available analog product.

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Selling, general and administrative expenses increased by $510,000 (or 14.6%)
from the nine months ended September 30, 1998 to the nine months ended
September 30, 1999. Selling, general and administrative expenses increased by
$95,000 (or 10.2%) from the three months ended September 30, 1998 to the
three months ended September 30, 1999. The increase in selling, general and
administrative expenses for the nine-month period ending September 30, 1999
over the prior fiscal year is due primarily to the 1999 severance expenses of
former management, which was partially offset by a decrease in other selling,
eneral and administrative expenses. For the three month period ending
September 30, 1999, the increase was primarily due to increased levels of
personnel in an effort to increase business opportunities, develop the
Company's e-commerce strategy and generate more sales.

In the nine months ended September 30, 1999, the Company incurred severance
costs of $1,219,000. These costs were the result of the non-cash, accrued and
cash payments for severance costs to Ben Neman and Stephen Jarrett which
included the non-cash costs associated with warrants issued to participants
in a private sale of 146,764 shares of common stock of the Company owned by
Mr. Neman. Completion of this private sale was an obligation of the Company
under Mr. Neman's termination agreement.

For the nine months ending September 30, 1999, the Company incurred a loss
from operations of $2,378,000 and a net loss of $2,466,000 compared to a loss
from operations and net loss of $2,349,000 and $2,577,000, respectively, for
the comparable period in 1998. The loss from operations for the nine months
ending September 30, 1999 included a non-recurring charge of $1,219,000 for
severance costs of former management. Excluding this non-recurring charge,
the operating results for the nine months ending September 30, 1999 would
have been a loss of $1,130,000. For the three months ended September 30,
1999, the Company incurred a loss from operations of $221,000 and a net loss
of $292,000 compared to a loss from operations and net loss of $808,000 and
$840,000, respectively for the comparable period in 1998.

         LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's primary cash requirements have been to fund
operating losses and increased levels of inventories and accounts receivable.
The Company has satisfied its working capital requirements principally
through cash flow from operations, the issuance of equity securities and
borrowings. Working capital at September 30, 1999 was $999,000 compared to
working capital of $2,490,000 at December 31, 1998. This decrease in working
capital reflects the losses sustained by the Company during 1999.

Net cash used by operating activities was $(2,802,000) for the nine months
ended September 30, 1999 as compared to net cash provided by operating
activities of $3,606,000 for the nine months ended September 30, 1998. The
cash used by operating activities for the nine months ended September 30,
1999 was primarily the result of an increase in accounts payable, net of an
increase in accounts receivables. Net cash used by investing activities for
the nine months ended September 30, 1999 was $(192,000) as compared to
$(200,000) for the nine months ended September 30, 1998. For the nine months
ended September 30, 1999, net cash provided by financing activities was
$3,882,000, which was the result of increased borrowings under the Company's
credit facility and proceeds from the exercise of warrants in March 1999.

The Company has incurred significant losses, the continuation of which could
have a materially
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adverse impact on its cash flow and liquidity. Although the Company's losses
recently have been decreasing and the Company currently has borrowing
availability under its existing credit facility, as amended, and through many
of its vendors, there is no assurance that credit or borrowings available to
the Company will be sufficient to maintain or expand the current level of its
operation. Under the Company's line of credit, the Company is prohibited from
incurring additional indebtedness, except for trade indebtedness. The Company
is pursuing certain business opportunities that may be available to it,
including the relationships with carriers and manufacturers that would
require significant amounts of borrowing capacity under a credit facility or
other working capital and the development of a proprietary web site to
service these relationships that would require other additional fundings. If
the Company is not successful in obtaining additional financing, it will be
unable to consummate these potential business opportunities and its ability
to maintain or expand its current level of operations will be adversely
impacted.

         YEAR 2000 UPDATE

OVERVIEW AND BACKGROUND

The Company has completed a project (the Project) that addressed the Year
2000 readiness of its information technology as well as its non-information
technology systems (e.g., alarm systems, office machines, etc.) which have
embedded technology (collectively referred to as Systems). Additionally, the
Project included assessment of the Year 2000 readiness of the Company's
significant suppliers and customers.

STATUS OF THE PROJECT

The Project was divided into four separate phases - Planning and Awareness,
Inventory, Assessment and Renovation. The Planning and Awareness phase began
in November 1998 and was completed in March 1999. This phase included: (I)
development and approval of the Project charter, (ii) formation of a Project
management team to carry out the Project charter, (iii) identification and
assessment of overall Project risks and (iv) development of a Project budget.

In February 1999, the Company implemented the Inventory phase of the Project,
which involved: (i) identification of significant Systems to be assessed and
(ii) identification of all significant suppliers and customers. Because the
Company does not believe that its customers' Year 2000 compliance issues will
have a significant impact on the Company, the Company conducted informal
conversations about Year 2000 issues with its customers. This phase was
completed in September 1999.

The Assessment phase began in March 1999 and was completed in September 1999.
This phase involved (i) contacting vendors of significant Systems to assess
the Year 2000 readiness of those Systems, (ii) testing of the assertions made
by significant Systems vendors, (iii) contacting significant suppliers,
customers and wireless network operators in order to ascertain their state of
Year 2000 readiness, (iv) assessment of assertions made by significant
suppliers and customers, (v) determination of the extent to which renovation
would have been required to insure Year 2000 readiness and (vi) development
of contingency plans to the extent considered necessary.

Once the Assessment phase was completed for each System, the Renovation phase
commenced for those Systems identified as not Year 2000 compliant. The
Renovation phase was completed

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in September 1999. The activities that have been performed during Renovation
included (i) repairing, replacing or reprogramming all significant Systems
that did not comply with Year 2000 readiness, (ii) testing and validation of
renovated Systems and (iii) establishment and completion of action plans to
address any Year 2000 issues with significant customers and suppliers.

COSTS

The Company relied entirely on internal resources to implement and fund the
Project. Costs incurred to insure the Company's systems are Year 2000
compliant were not material to the Company's results of operations, financial
position or cash flows since the Company had already been in the process of
upgrading certain Systems to keep pace with new computer and software
technologies. Project costs (which totaled less $25,000) were expensed as
incurred.

RISKS AND CONTINGENCIES

The Company believes that the Project will meet its Year 2000 objectives. The
ability of suppliers and customers with which the Company transacts to timely
convert their systems to be Year 2000 compliant is uncertain. Lastly,
disruptions in the economy generally resulting from Year 2000 issues could
also have an adverse affect on the Company's operations. Such failures could
materially and adversely affect the Company's results of operations,
liquidity and financial position.

The Company is dependent on wireless equipment manufacturers for supply of
wireless handsets and accessories. Additionally, demand for the Company's
products (wireless handsets and accessories) by the Company's customers is
dependent on the ability of network operators to provide wireless network
services to the end-users of those products. Failure in the products and/or
systems of the wireless equipment manufacturers or network operators,
including those resulting from a lack of Year 2000 compliance, could have a
material adverse effect on the Company.

There can be no assurance that third parties which the Company significantly
relies upon will succeed in their Year 2000 compliance efforts or that
failure by third parties would not have a material adverse effect on the
Company's results of operations or financial condition.

The Company plans on converting its information technology systems to those
used by CWI. CWI recently assessed it Year 2000 compliance and completed its
remediation in November 1999. However, many of CWI's accounting systems were
developed internally and therefore may not be tested as thoroughly as those
systems obtained by third parties. In an effort to mitigate the risk of Year
2000 readiness, the Company will maintain both accounting systems though
either January 2000 or until the CWI system is adequately tested.

PART II - OTHER INFORMATION

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

         On September 29, 1999, the Company held its Annual Meeting of
Stockholders. At the meeting, the stockholders elected as directors Michael
Hedge (with 6,854,453 affirmative votes

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and 35,400 withheld), John Swinehart (with 6,854,453 affirmative votes and
35,400 withheld), J. Sherman Henderson (with 6,854,453 affirmative votes and
35,400 withheld), Mark M. Laisure (with 6,854,453 affirmative votes and
35,400 withheld) and Vinay Sharma (with 6,854,453 affirmative votes and
35,400 withheld).

         The stockholders approved the issuance of shares to the stockholders
of Cellular Wholesalers, Inc. ("CWI"), in accordance with the Amended and
Restated Agreement and Plan of Merger dated as of July 23, 1999, among the
Company, CWI, the principal stockholders of CWI, and a wholly owned
subsidiary of the Company called Intellicell Merger Sub, Inc.. The vote on
this proposal was: 5,295,653 For; 13,078 Against; 5,935 Abstaining; 1,575,187
broker non-votes.

The  stockholders  approved the change of the Company's name from
Intellicell  Corp. to Focus  Affiliates,  Inc with the  stockholders  vote
5,269,553 For;  27,428 Against; 21,035 Abstaining and 1,571,837 broker
non-votes.

         The stockholders approved an amendment to the Company's Certificate
of Incorporation to increase the authorized number of shares of common stock
from 15,000,000 to 25,000,000. The vote on this proposal was: 5,239,773 For;
67,108 Against; 11,135 Abstaining; 1,571,837 broker non-votes.

         The stockholders approved the increase in the number of shares of
common stock the Company can issue from 540,000 to 1,040,000 shares upon the
exercise of options granted under its 1998 Stock Option plan. The vote on
this proposal was: 5,178,713 For; 122,218 Against; 13,735 Abstaining;
1,575,187 broker non-votes.

         The stockholders also ratified the appointment of Hollander, Lumer &
Co. LLP as the independent auditors for the Company for the fiscal year
ending December 31, 1999 (with 6,865,708 shares voting For; 13,600 Against;
10,545 Abstaining).

ITEM 6. EXHIBITS AND REPORTS ON FORM  8-K.

(a)Exhibits

       10.1   Agreement to merge with Cellular Wholesalers, Inc (incorporated by
              reference to Report 8-K dated July 23, 1999)

       10.2   Amended and Restated Agreement to merge with Cellular Wholesalers,
              Inc (incorporated by reference to Report 8-K dated August 23,
              1999)

       27     Financial Data Schedule

(b)    Reports on Form 8-K

       (1)  Report on Form 8-K, dated July 23, 1999 (Items 5 and 7)
       (2)  Report on Form 8-K dated August 23, 1999 (Items 5 and 7)


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

Focus Affiliates, Inc.




BY: /S/ DAVID M. KANE                               Dated:  November 10, 1999
-----------------------------------
David M. Kane
Chief Financial Officer















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