<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                    FORM 10-Q


(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended September 30, 2001

                                       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: 1-13002



                        AQUIS COMMUNICATIONS GROUP, INC.
               --------------------------------------------------
             (Exact name of registrant as specified in its charter)


Delaware                                     22-3281446
-----------------------------------------    -----------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

1719A Route 10, Suite 300, Parsippany, NJ    07054
-----------------------------------------    -----------------------------------
(Address of principal executive offices)     (Zip Code)

       Registrant's telephone number, including area code: (973) 560-8000

                                 Not Applicable

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


   (Former name, former address and former fiscal year, if changed since last
   report)


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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.


                                 Yes |X| No |_|

As of October 31, 2001 there were 18,292,101 shares of the Registrant's Common
Stock outstanding.

<PAGE>



                          INDEX TO FINANCIAL STATEMENTS
                AQUIS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES


Part I   Financial Information:

Item 1 - Financial Statements:

Consolidated Balance Sheets at September 30,
2001 and December 31, 2000..................................................   3
Consolidated Statements of Operations for the Three and Nine Month
Periods ended September 30, 2001 and 2000...................................   4
Consolidated Statements of Cash Flows for the Nine Month Periods
ended September 30, 2001 and 2000...........................................   5
Notes to Consolidated Financial Statements..................................   6

Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................................  13

Item 3 - Quantitative and Qualitative Disclosures About Market Risks........  21


Part II  Other Information:

Item 1 - Legal Proceedings..................................................  22

Item 2 - Changes in Securities and Use of Proceeds..........................  22

Item 3 - Default Upon Senior Securities.....................................  22

Item 4 - Submission of Matters to a Vote of Security Holders................  22

Item 5 - Other Information..................................................  22

Item 6 - Exhibits and Reports on Form 8-K...................................  23

Signatures..................................................................  24


                                       2


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

<PAGE>

AQUIS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)

<TABLE>
<CAPTION>

                                                                                             September 30,    December 31,
                                                                                                 2001            2000
                                                                                            --------------   -------------
ASSETS                                                                                       (unaudited)
------
<S>                                                                                           <C>            <C>
Current assets:

  Cash and cash equivalents................................................................   $    1,600     $      378
  Accounts receivable (net of allowances of $1,483 and $1,929, respectively)...............        2,912          4,912
  Inventory, net...........................................................................          310            228
  Assets held for sale, net................................................................        1,055             --
  Prepaid expenses and other current assets................................................          501            426
                                                                                              ----------     ----------
      Total current assets.................................................................        6,378          5,944
Property and equipment, net................................................................        4,460          9,954
Intangible assets, net.....................................................................        5,112          6,976
Deferred charges and other assets..........................................................          207            264
                                                                                              ----------     ----------
        Total assets.......................................................................   $   16,157     $   23,138
                                                                                              ==========     ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current maturities of long term debt.....................................................   $   28,214     $   27,857
  Notes payable............................................................................        2,000          2,000
  Accounts payable and accrued expenses....................................................        5,503          6,537
  Accrued interest.........................................................................        2,928            491
  Deferred revenue.........................................................................          597            846
  Customer deposits........................................................................          292            380
                                                                                              ----------     ----------
      Total current liabilities............................................................       39,534         38,111

Long term debt.............................................................................           48             --
                                                                                              ----------     ----------
Total liabilities..........................................................................       39,582         38,111
                                                                                              ----------     ----------

Commitments and contingencies

7.5% Redeemable Preferred Stock, $0.01 par value, 100,000 shares authorized, 15,000 shares
  issued at September 30, 2001 and December 31, 2000.......................................        1,688          1,603
                                                                                              ----------     ----------

Stockholders' equity:
  Common stock, $0.01 par value, 75,000,000 shares authorized, 18,292,101 and 17,611,030
  issued and outstanding at September 30, 2001 and December 31, 2000, respectively.........          183            176
  Additional paid-in capital...............................................................       17,994         18,211
  Accumulated deficit......................................................................     (43,290)        (34,913)
  Note receivable from stockholder.........................................................           --            (50)
                                                                                              ----------     ----------
  Net stockholders' equity.................................................................     (25,113)        (16,576)
                                                                                              ----------     ----------


        Total liabilities and stockholders' equity.........................................   $   16,157     $   23,138
                                                                                              ==========     ==========
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                        3


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

<PAGE>


AQUIS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED; IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE INFORMATION)

<TABLE>
<CAPTION>

                                                              Three Months Ended September 30, Nine Months Ended September 30,
                                                              -------------------------------- -------------------------------
                                                                   2001             2000            2001           2000
                                                              -------------- ----------------- --------------  ---------------
<S>                                                              <C>          <C>            <C>            <C>
 Revenues:
   Paging services, rent and maintenance.....................    $   4,569    $     6,819    $    14,373    $    22,353
   Equipment sales...........................................           50            176            386            630
                                                                -----------   ------------   ------------   -----------

        Total revenues.......................................        4,619          6,995         14,759         22,983
                                                                -----------   ------------   ------------   -----------

 Operating expenses:
   Cost of paging services excluding depreciation............        1,932          3,107          6,348         10,586
   Cost of equipment sold excluding depreciation.............           64            167            401            583
   Selling and marketing.....................................          421            863          1,465          2,818
   General and administrative................................        1,383          1,578          4,060          5,531
   Depreciation and amortization.............................        1,379          2,724          5,491          7,798
   Provision for doubtful accounts...........................          225            216            672            820
   Recovery from abandoned acquisition.......................            _           (128)             _          (128)
   Provision for asset impairment............................         (346)             _          2,230              _
                                                                ----------    -----------    -----------    -----------
        Total operating expenses.............................        5,058          8,527         20,667         28,008
                                                                ----------    -----------    -----------    -----------

 Operating loss..............................................         (439)        (1,532)        (5,908)        (5,025)

 Interest expense, net.......................................         (977)        (1,073)        (2,926)        (2,798)
 Gain on sale of assets......................................          457            108            457            127
                                                                ----------    ------------   ------------   -----------

 Net loss....................................................        (959)        (2,497)         (8,377)        (7,695)

 Preferred stock dividends...................................         (29)           (28)            (85)           (75)
                                                                 --------     ----------    ------------    -----------

 Loss attributable to common stockholders....................   $    (988)    $   (2,525)    $    (8,462)   $    (7,770)
                                                                =========     ==========     ===========    ===========

 NET LOSS PER COMMON SHARE:
 Basic and diluted...........................................      $(0.05)        $(0.14)         $(0.47)        $(0.45)
 Weighted average common shares outstanding..................   18,292,000     17,611,000     17,962,000     17,272,000
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       4


--------------------------------------------------------------------------------
<PAGE>


AQUIS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                            Nine Months Ended September
                                                                                                         30,
                                                                                               2001              2000
                                                                                            ------------      ------------
<S>                                                                                          <C>               <C>
Cash flows from operating activities:
  Net loss......................................................................             $   (8,377)       $    (7,695)
  Adjustments to reconcile net loss to net cash provided by (used by)
    operating activities:
  Depreciation and amortization.................................................                  5,491              7,798
  Provision for asset impairment................................................                  2,230                  _
  Cost of beneficial conversion feature of convertible debt.....................                      _                222
  Senior loan costs and amortization of deferred financing costs................                    425                280
  Gain on sale of assets........................................................                   (457)              (127)
  Stock-based compensation......................................................                      6                693
  Provision for doubtful accounts...............................................                    672                820
  Note due for stock subscription forgiven......................................                     50                  _
  Changes in assets and liabilities, net of business acquisitions:
     Accounts receivable........................................................                    882             (2,037)
     Inventory..................................................................                   (823)              (845)
     Prepaid expenses and other current assets..................................                   (239)               339
     Accounts payable and accrued expenses......................................                  1,478                182
     Deferred revenues and customer deposits....................................                   (245)              (368)
                                                                                             ----------        -----------
  Net cash provided by (used by) operating activities...........................                  1,093               (738)
                                                                                             ----------        -----------

Cash flows from investing activities:
  Business acquisitions.........................................................                      _             (2,443)
  Acquisition of property, equipment and licenses...............................                   (447)            (1,086)
  Deferred business acquisition costs...........................................                      _               (117)
  Acquisition escrow deposits refunded..........................................                      _                200
  Sale of property and equipment................................................                    924              1,415
                                                                                             ----------        -----------
  Net cash used by investing activities.........................................                    477             (2,031)
                                                                                             ----------        -----------

Cash flows from financing activities:
  Issuance of long term debt....................................................                      _              4,450
  Proceeds from stock options exercised, net....................................                      _                304
  Repayment of long term debt...................................................                   (163)            (1,500)
  Repayment of capital lease obligation.........................................                    (11)              (173)
  Deferred financing and stock registration costs...............................                   (174)              (819)
                                                                                             ----------        -----------
  Net cash (used by) provided by financing activities...........................                   (348)             2,262
                                                                                             ----------        -----------

Net increase (decrease) in cash and cash equivalents............................                  1,222               (507)
Cash and cash equivalents - beginning of period.................................                    378                973
                                                                                             ----------        -----------

Cash and cash equivalents - end of period.......................................             $    1,600        $       466
                                                                                             ==========        -----------
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       5


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<PAGE>


AQUIS COMMUNICATIONS GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE INFORMATION)

1.  ORGANIZATION AND DESCRIPTION OF THE BUSINESS:

         Aquis Communications Group, Inc. (the "Company") is a holding company,
incorporated in the State of Delaware. Through its operating companies, it
operates three regional paging systems providing one-way wireless alpha and
numeric messaging services in portions of sixteen states principally in the
Northeast and Mid-Atlantic regions of the United States, as well as the District
of Columbia. Subject to FCC approval, the Company entered into an agreement for
the sale of its Midwest paging operations in August 2001. Aquis also resells
nationwide and regional services, offers alpha dispatch, news and other
messaging enhancements, and resells cellular service. Its customers include
individuals, businesses, government agencies, hospitals and resellers.

         On March 31, 1999, Paging Partners Corporation merged with Aquis
Communications, Inc. ("ACI", incorporated in late 1997 and first capitalized in
January 1998) in a transaction accounted for as a reverse acquisition with ACI
as the accounting acquirer. At that time, Paging Partners changed its name to
Aquis Communications Group, Inc. (the "Company"). Three months prior to that
merger, on December 31, 1998, ACI acquired the net assets of Bell Atlantic
Paging, Inc. ("BAPCO" or the "Predecessor Company"), prior to which it had no
operating activities.

         The accompanying unaudited consolidated financial statements include
the accounts of the Company and its subsidiaries, and reflect the merger with
Paging Partners Corporation ("Paging Partners") for all periods presented. These
statements also include the effects of the acquisition of certain paging
licenses and other assets and certain assumed liabilities of BAPCO on December
31, 1998, the acquisition of SunStar Communications, Inc. in June 1999 and its
sale in August 2000, and the purchase of paging assets of SourceOne Wireless in
January 2000 and Suburban Paging in May 2000. These acquisitions have been
accounted for under the purchase method of accounting and the Company's results
of operations include the related revenues and expenses from the closing dates
of each transaction. These statements also include the effects of Aquis'
determination to sell substantially all of the assets of its Midwest operations
that were acquired from SourceOne Wireless in January 2000. These net assets are
presented as assets held for sale in the accompanying balance sheet at their
estimated net realizable value. The accompanying statements reflect all
adjustments considered necessary by management to present fairly the
consolidated financial position as of September 30, 2001 and December 31, 2000,
and the consolidated results of operations and the related consolidated cash
flows for the nine- and the three-month periods ended September 30, 2001 and
2000. The balance sheet as of the end of the preceding fiscal year has been
derived from the Company's audited balance sheet at December 31, 2000 contained
in the Company's Form 10K and is provided for comparative purposes. All other
financial statements and related disclosures are unaudited. In management's
opinion, all adjustments have been made which include only normal recurring
adjustments necessary to fairly present the financial position, results of
operations and changes in cash flows for all periods presented. All material
intercompany accounts and transactions have been eliminated in consolidation.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year. Certain prior period
amounts have been reclassified to conform to the current period presentation.

         Footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Forms
10K for the most recent fiscal year.

         Aquis is presently unable to pay its obligations to its senior and
junior lenders as those debts become due. Aquis' consolidated financial
statements as of and for the nine months ended September 30, 2001 and as of
December 31, 2000 have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. However, Aquis incurred net losses of about
$8,377 and $7,695 for the nine months ended September 30, 2001 and 2000,
respectively, and $23,738 and $10,879 during each of the years ended December
31, 2000 and 1999, respectively, and these results have caused it to be in
default of its agreement with its senior lender, FINOVA, and its unsecured
lender, AMRO International, SA. In January 2001 the Company failed to make a
required principal repayment of $514 to FINOVA as well as the other scheduled
principal payments due quarterly thereafter. Nor has Aquis made any of the
monthly interest payments due to FINOVA for any period subsequent to December
31, 2000. Accordingly, all debt and accrued interest due to both FINOVA and AMRO
are classified as current obligations in the accompanying balance sheet,
totaling $32,177. However, the Company has executed forbearance agreements with
both lenders, which are discussed in more detail below. The Company is further
obligated to pay minimum lease payments under non-cancelable leases during 2001
in the approximate amount of $7.3 million, and, on January 31, 2002, is required
to redeem its 7.5% Redeemable Preferred Stock under which the total obligation
was $1,688 at September 30, 2001. The Company's principal source of liquidity at
September 30, 2001 included cash and cash equivalents of about $1,600. At that
date, Aquis reported a working capital deficit of $33,156, primarily the result
of the reclassification of its term debt to currently payable. These factors
raise substantial doubt about the Company's ability to continue as a going
concern, and the auditors' opinion on Aquis' financial statements as of and for
the year ended December 31, 2000 is qualified as the result of these conditions.
Such qualification of the auditor's opinion for going concern

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

<PAGE>

issues is typically made when a company's liabilities are unlikely to be
discharged as they become due in the normal course of business, which likelihood
can arise if a company's history of operating losses is expected to continue and
funding of those losses from outside sources is unlikely to be available.

         In October 2000, NASDAQ notified Aquis that its securities would be
de-listed from the NASDAQ SmallCap Market. Aquis common stock subsequently began
trading on the OTC Bulletin Board under the symbol AQIS.OB. The effect of this
change in trading markets may have caused or contributed to the reduction of
trading volume and liquidity, may diminish the Company's ability to restructure
its debt or raise additional equity, and has resulted in the technical and
functional termination of any right or ability of Aquis to obtain any funding
under its Common Stock Purchase Agreement with Coxton Limited.

         Aquis is in default of its original and amended loan agreements and its
forbearance agreements with FINOVA and its original agreement with AMRO
International, although neither lender has yet demanded payment of the amounts
due to them. Aquis does not expect that its current cash and equivalents and the
cash it expects to generate from operations will be sufficient to meet its debt
service obligations, working capital and capital expenditure requirements under
its current capital and operating structure or for the foreseeable future. The
conditions described above indicate that Aquis may not be able to continue as a
going concern. The Company's ability to continue as a going concern is dependent
on the continued forbearance of its lenders from demanding immediate payment of
their outstanding loans. Aquis' ability to continue as a going concern is also
dependent on its ability to generate sufficient cash from operations to meet
operating obligations, aside from those required under its debt agreements,
continuing supplies of goods and services from its key vendors, and an ongoing
ability to limit or reduce operating costs and capital requirements. In the
event that demand is made for payment in full of the existing outstanding debt,
management does not believe that Aquis' resources will be sufficient to meet
such a demand, and the Company would consider appropriate responses which could
include filing a request for protection under the US Bankruptcy Code.

         In response to its defaults and lack of liquidity, the Company executed
forbearance agreements with AMRO and FINOVA. In April, 2001 Aquis and AMRO
agreed that AMRO would refrain from making an immediate demand for payment of
all outstanding amounts due, and would refrain from electing to convert its debt
to common stock, for up to 180 days. In June 2001, that agreement was extended
through December 31, 2001. In exchange for AMRO's forbearance, Aquis is working
with a financial consultant specializing in the management of distressed
businesses. With this arrangement in place, Aquis and FINOVA executed a
forbearance agreement on June 7, 2001 related to Aquis' senior loan. This
agreement is based in part on business plans intended to improve its financial
performance and its ability to pay its lenders. These multi-faceted plans
include staff and salary reductions through targeted cutbacks, normal attrition,
and compensation adjustments. Accordingly, staffing levels have been reduced
approximately 32% since December 31, 2000. Also included in its business plans
are marketing strategies centered around the marketing opportunities in one-way
paging resulting from the refocusing of many of its paging industry competitors
on two-way and other advanced services. Technical operations improvement plans
include financial savings available through strategically targeted network
consolidations involving co-locating some of its low- and high-band
communications equipment, and finalization of reciprocal compensation agreements
currently being negotiated with some of Aquis' communications facilities
providers. Network consolidation and co-location efforts have resulted in
reduction of the number of site leases by more than one-third since the end of
Aquis' most recently completed fiscal year. Aquis has also sold network
equipment that was rendered non-essential as the result of these consolidations,
and has closed targeted non-core remote sales offices, and will continue these
activities as planned. Five such remote offices have been, or are expected to
be, sublet or have the related office lease cancelled. In addition, Aquis has
signed a letter of intent and later an agreement to sell its paging operations
in the Midwest. Finally, the Company has collected $625 in full satisfaction of
the remaining portion of the note receivable that was accepted as partial
consideration for the sale of its internet assets, in accordance with the
discounted payment terms provided in the final modifications to that note in
June 2001. These initiatives, if successful, are expected to allow Aquis to pay
down amounts due to its general creditors, to invest in paging equipment in
sufficient amounts to meet the demands of its target markets, and to resume debt
service payments, on a small scale, to its lenders. These initiatives may also
aid the Company's ongoing efforts to restructure its debt and equity. However,
management can provide no assurance, even with receipt of significant proceeds
from the sale of its Midwest operations or with significant restructuring of its
debt and equity, that these initiatives can be executed as currently planned or
to the degree that may be required by its creditors or to the extent necessary
to ensure its ability to continue as a going concern.

         In June 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations" ("SFAS 141") and SFAS No. 142, "Goodwill and Other
Intangible Assets" (SFAS 142"). SFAS 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001
and prohibits the use of the pooling-of-interests method for such transactions.
SFAS 142 requires that goodwill and intangible assets with indefinite lives,
including those recorded in past business combinations, no longer be amortized
against earnings, but should instead be tested annually for impairment.
Continued amortization is required for intangible assets with finite lives, as
is review for impairment in accordance with SFAS 121, "Accounting for Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
Implementation of SFAS 142 is required on January 1, 2002. Since the Company has
no recorded goodwill or other assets with indefinite lives, no impact on its
consolidated financial position or results of operations is anticipated.

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


<PAGE>

2.   MERGERS, ACQUISITIONS AND DISPOSITIONS:

 SunStar Communications, Inc.:

         On June 15, 1999, a wholly-owned subsidiary of Aquis entered into a
Stock Purchase Agreement (the "Agreement") with SunStar Communications, Inc.
("SunStar"), an Arizona corporation and SunStar One, LLC, an Arizona limited
liability company. SunStar provides secure Internet services over an intelligent
private network, provides dial-up Internet access services to corporate and
individual subscribers and can provide enhanced security standards for user
authentication. Total consideration paid for all of the outstanding stock of
SunStar was $275 cash and 1,150,000 shares of the Company's common stock valued
at their fair market value based on the average daily closing prices a few days
before and a few days after the terms of the acquisition were agreed upon and
announced. Based on the purchase method of accounting, the aggregate purchase
price totaled approximately $2,130 including transaction costs and assumed
liabilities and has been allocated to the net assets acquired based on their
estimated fair market values on the closing date of this transaction, June 30,
1999, from which date the revenues and expenses were included in Aquis'
consolidated financial statements. Intangible assets of approximately $2,066
were amortized on a straight-line basis over three to 10 years until August 31,
2000, at which time Aquis sold these operations. Revenues and expenses realized
from Internet operations totaled $513 and $1,395, respectively, during the nine
months ended September 30, 2000, and those losses contributed to the decision to
sell this operation.

         Effective on August 31, 2000 Aquis sold the assets of its Internet
operations to a private group headed by the CEO and a Director of Aquis, along
with the President of that operating subsidiary. At that time, the net assets
totaled $1,400 net of $650 of current liabilities and included licenses, other
intangibles and customer receivables. Including those assumed current
liabilities, the purchase price was $2,966. Cash of $987 was received along with
a 10% note maturing on December 31, 2000 in the face amount of $1,329 in
consideration of the non-cash portion of the purchase price. The note principal
was paid down to $830 by December 31, 2000, the maturity date of this note was
extended by the parties to March 31, 2001, and extended again to December 31,
2001. A payment of $25 was received on May 8, 2001 and another payment of $50
was received on July 2, 2001 in connection with this note. Gain on the sale of
these assets was recorded only as collections against the note receivable were
made. In late September 2001, the note was fully satisfied upon receipt of the
$625 payment required under the discount provisions provided in the modification
to the note negotiated in June 2001.

 SourceOne Wireless:

         On January 31, 2000, the Company completed the acquisition of certain
assets of SouceOne Wireless, a facilities-based provider of one-way paging
services to subscribers in several Midwestern states. Previously, on August 2,
1999, the Company entered into an Asset Purchase Agreement (the "Purchase
Agreement") and Agreement Pending Purchase Closing (the "Agreement") with
SourceOne Wireless, Inc. and two of its affiliates ("SOWI"). SOWI and its
affiliates filed voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Court in the Northern District of Illinois between April 29
and July 2, 1999. Pursuant to the Agreement, the Company managed the day-to-day
operations of certain SOWI businesses pending the closing of the associated
Purchase Agreement. This closing was subject to various approvals, including
that of the Bankruptcy Court and the FCC. During the management period, a
reduction of the purchase price to $3,750 was negotiated, and resulted in a
reduced price of $2,250 in cash and 15,000 shares of the Company's 7.5%
cumulative preferred stock valued at $1,500 as agreed among the parties.
Acquisition costs totaling about $502 were deferred at December 31, 1999, and
was treated as a cost of the assets acquired on January 31, 2000, from which
date the revenues and expenses realized from the operations of these net assets
were included in the Company's results of operations. The aggregate purchase
price, including transaction costs, totaled approximately $4,500, and this
purchase was accounted for under the purchase method of accounting. Costs to
acquire the assets of SourceOne Wireless were capitalized at December 31, 1999,
including an escrow deposit of $200, since this transaction was closed on
January 31, 2000.

         If the acquisition of SourceOne assets had occurred on January 1, 2000,
the pro-forma results for the nine months ended September 30, 2000 would have
included total revenue approximating $23,401, a net loss attributable to common
shareholders of $7,854 and a net loss per common share of $0.45. These pro-forma
results are based on various assumptions and are not necessarily indicative of
what would have occurred had these transactions been consummated on January 1,
2000.

         As part of the business plan developed in consideration of its lack of
liquidity and the requirements of its lenders, Aquis signed a letter of intent
dated June 7, 2001 for the sale of its Midwest paging operations. On August 31,
2001, a related Asset Purchase Agreement was executed which provided for a
purchase price of $1.1 million in cash to be paid in exchange for the customer
receivables, the customer lists, all equipment and FCC licenses used in that
operation and specified contract rights under leases and other operating
agreements. Also effective on that date the parties executed an Agreement
Pending Purchase Consummation under which the buyer, on the closing date, would
assume operational management of the business while Aquis would continue to
maintain the licensed communications facilities. A related Escrow Agreement was
funded on October 18, 2001. Payment of the proceeds to Aquis is held pending the
FCC's approval of the transfer of the related communications licenses, which,
in the normal course of events is expected to be granted before the end of 2001.
FINOVA has agreed to release the liens it holds on these assets and allow Aquis
to retain the proceeds for use in accordance with its business plan.

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


<PAGE>

         In accordance with Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of", Aquis evaluates the recoverability of the carrying value of its
long-lived real and intangible assets based on related estimated undiscounted
cash flows. In connection with these negotiations, Aquis has written down the
related net assets by $2,230 during the nine months ended September 30, 2001 to
their estimated realizable value of $1,055, net of estimated transaction costs.
During the three and nine months ended September 30, 2001, respectively, results
of operations of these assets included revenues of about $311 and $1,107 and net
losses of $78 and $406 after depreciation and amortization charges of
approximately $147 and $457.


3. INTANGIBLE ASSETS

         Aquis reviews its assets for impairment when events or changes in
circumstances indicate that such costs may not be recoverable in the normal
course of business. Accordingly, as a result of the Company's ongoing losses,
its forecast for continuing losses, and its default under its loan agreements as
described in more detail elsewhere herein, Aquis recognized a charge for
impairment of the carrying value of its FCC licenses and State certificates in
the amount of $9,500 at December 31, 2000. The amount of the loss was based on
the amount of the estimated annual cash flows through December 31, 2008
discounted to net present value using a discount rate of 20%. The resulting
adjusted carrying value is believed by management to approximate the realizable
value of these assets. Amortization expenses for the nine months ended September
30, 2001, as a result of this write down, have declined accordingly.

4.  DEFERRED CHARGES:

         Deferred financing costs of $1,648 were written off during the quarter
ended December 31, 2000 as the result of the Company's default under its loan
agreements and its lenders' rights to make demand for payment of outstanding
balances due to them. As the result, amortization of such charges during the
current periods has declined.

5.  LONG-TERM DEBT:

         On October 23, 1998, ACI entered into a five-year term loan agreement
(the "Senior Loan Agreement") with FINOVA Capital Corporation ("FINOVA")
structured to provide a $30,000 credit facility. That agreement specified a term
of five years, and required graduated increasing quarterly principal repayments
ranging from .5% to 3.5% of outstanding principal beginning on July 1, 2000,
with the balance due on December 31, 2003. Loan interest was set at a rate based
on Citibank, N.A.'s corporate base rate plus 175 basis points. The Company was
also able to elect to have interest on a part of the FINOVA loan based on a
London Inter-Bank Official Overnight Rate plus 450 basis points. This term loan
is collateralized by all of the Company's assets, presently owned and acquired
subsequently, and all issued and outstanding equity interests in the Company's
operating subsidiaries. The loan agreement also contains various covenants,
including restrictions on capital expenditures and compliance with certain
financial ratios. At December 31, 2000 and 1999 and currently, the Company was
not in compliance with certain ratios under this loan agreement.

         In November 1999, in connection with the termination of negotiations
related to various potential mergers, costs that were previously capitalized
were written off in 1999. During the third quarter of 1999, FINOVA modified
certain financial covenants contained in the loan agreement to exclude the costs
written off in connection with these abandoned business acquisitions and other
specified charges when computing "Net Income" as defined in the amended loan
agreement.

         On January 26, 2000, the FINOVA loan was amended in connection with the
SourceOne Wireless acquisition. The Company borrowed an additional $2,450 from
FINOVA on January 31, 2000 to consummate the acquisition (the "SourceOne
Portion"). The effect of the amendment was to limit the facility to the amount
outstanding after the SourceOne transaction, or a total of $27,765, to modify
certain financial ratios and to set the interest rate on the SourceOne Portion
to Citibank, N.A.'s corporate base rate plus 400 basis points. Aquis and FINOVA
further amended this agreement on April 12, 2000 in order to waive the Company's
covenant non-compliance at December 31, 1999, to reduce the financial ratio
requirements through the third quarter of 2001, and to encourage Aquis to make a
Special Prepayment of principal. That "Special Prepayment" in the amount of
$1,250 was defined and directed to be specifically applied to the SourceOne
Portion. In order to avoid an interest rate increase that was to take effect if
the Special Prepayment was not made, Aquis made this prepayment in April 2000,
using some of the proceeds of the convertible debenture acquired by AMRO
International.

         On April 10, 2000, Aquis entered into an agreement to obtain a $2
million bridge loan with AMRO International as interim funding pending
completion of additional prospective financing. The debt is subordinate to the
Company's senior debt and is unsecured. This agreement provides for an interest
rate of 11%, a scheduled maturity date on October 12, 2001 and also provides
for quarterly interest accruals and payments until the earlier of its maturity
date or conversion. At the lender's election not earlier than 120 days from the
date of funding, this loan is convertible into the Company's common stock at 90%
of the then-current market value. The cost of this beneficial conversion feature
or discount to market price, estimated at $222, was charged against results of
operations for the year ended December 31, 2000. At the Company's election,
after the initial 118 days subsequent to funding, the loan is redeemable at 115%
of face value. Proceeds from this loan were used during April 2000 to make the
Special Prepayment of $1,250 to FINOVA. The balance was used to pay certain fees
incurred in connection with the FINOVA loan modifications arranged during 2000,
to pay certain costs incurred in connection with this bridge loan, and for
general corporate purposes.

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<PAGE>

         On September 27, 2000, the Company and FINOVA agreed to modify the
terms of its Senior Loan Agreement, as amended. These modifications enabled
Aquis to retain all proceeds from the sale of its Internet operations and gave
Aquis an option to reduce the scheduled principal payment due on July 1, 2001
from $514 to $200 in exchange for payment of a fee of $75. Financial ratio
covenants related to the amount of senior and total debt outstanding and to its
debt service coverage were also relaxed from original levels through September
30, 2001. The maximum permitted leverage ratios were increased by amounts
ranging from 33% to 75% of original limits. Minimum required coverage ratios
were relaxed by 34% to 54% of original requirements. In exchange, Aquis has
agreed to pay quarterly fees of $75 if original financial ratios are not
maintained. Further, additional contingent fees of up to $250 per quarter were
to be added to the principal balance due at final maturity if Aquis is unable to
meet the financial ratios as amended in April, 2000. The Company paid a fee of
$100 in order to secure these modifications. Finally, a principal payment of
$2,000 was required on or before December 31, 2000 in order to avoid the
assessment of a $500 fee and an interest rate increase of 2%. The Company did
not make that specified principal repayment of $2,000 and the related fee of
$500 was added to the principal balance otherwise payable at the maturity date
of this loan. In addition, Aquis did not make the scheduled quarterly principal
payment due on January 2, 2001 of $514, nor any subsequently required principal
payments, nor did it make any interest payments for any period subsequent to
December 31, 2000. As the result of the defaults under the FINOVA and AMRO
agreements, all debt has been classified as currently payable.

         On April 18, 2001 and June 7, 2001, Aquis executed forbearance
agreements with AMRO International and FINOVA Capital, respectively, in response
to its defaults under its agreements with those lenders as of December 31, 2000.
Pursuant to these forbearance agreements, FINOVA and AMRO have agreed not to
demand payment of outstanding amounts due until December 31, 2001, or if
earlier, until re-established financial targets are not met. In April 2001 as
part of its forbearance agreement, AMRO also agreed to refrain from converting
its debenture into shares of Aquis common stock, and subsequently extended that
term of forbearance to December 31, 2001. Under certain circumstances specified
in that agreement with AMRO, such as the enforcement of any other party's rights
against Aquis in the event of default under another material contract, and
certain other circumstances, the termination date of that forbearance agreement
may be accelerated. In connection with that agreement with AMRO, Aquis is
working with a financial consultant specializing in the management of distressed
businesses. In May 2001, AMRO revoked its April 2, 2001 written election to
waive the provisions contained in the debenture that limited its right to
acquire a number of Aquis shares that might cause its beneficial ownership of
Aquis common stock to exceed 9.9%. With an agreement in place with AMRO, Aquis
and FINOVA executed a forbearance agreement on June 7, 2001 related to Aquis'
senior loan which is also set to expire on December 31, 2001. This agreement is
based in part on business plans intended to improve its financial performance
and its ability to pay its lenders. These goals are expected to be achieved
through salary reductions, targeted cutbacks and normal attrition, along with
consolidation of its communications networks, sales of non-core paging
properties and equipment and marketing strategies intended to exploit the
marketing opportunities in one-way paging resulting from the refocusing of many
of its paging industry competitors on two-way and other advanced services. These
plans are discussed in further detail in Note 1. In this regard, Aquis has
signed an Asset Purchase Agreement related to the sale of its paging operations
in the Midwest and, to date, has reduced its workforce by about 32% since
December 31, 2000. It has also collected the remaining $625 balance due for the
sale of its Internet assets per the discounted payment terms provided in the
June 2001 modifications negotiated with respect to the related note. These
initiatives were planned to allow Aquis pay down amounts due to its general
creditors, to invest in paging equipment in sufficient amounts to meet the
demands of its target markets, and to resume debt service payments, on a small
scale, to its lenders. However, management can provide no assurance, even with
receipt of significant proceeds from the sale of its Midwest operations or with
significant restructuring of its debt and equity, that these initiatives can be
executed as currently planned or to the degree that may be required by its
creditors or to the extent necessary to ensure its ability to continue as a
going concern. Aquis is discussing various alternatives with these lenders,
including restructuring its debt and equity structure. In the event that demand
is made for payment in full of the existing outstanding debt, management does
not believe that Aquis' resources will be sufficient to meet such a demand, and
the Company would consider appropriate responses which could include filing a
request for protection under the US Bankruptcy Code

   At September 30, 2001 the balance of the Senior Loan outstanding, including
accrued interest and fees, was $29,853 and is subject to interest rates set at
Citibank, N.A.'s published base rate plus 6% as amended by the June 7, 2001
Forbearance Agreement. At September 30, 2001, that rate approximated 12.5%. The
remaining balance of Aquis' outstanding debt consisted principally of borrowings
made pursuant to the bridge loan of April 2000 and to the Installment Loan,
discussed below.

         During the second quarter of 1999, the Company refinanced the capital
lease obligations that were assumed as a result of the merger with Paging
Partners. Terms of the new obligation (the "Installment Loan") included a
principal amount of $1,300, a 60-month repayment schedule, an interest rate
indexed to the yield for five year Treasury Notes, and is collateralized by the
underlying equipment. As the result of its default under its senior term loan,
Aquis is also in default of this debt agreement.


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<PAGE>

6.       COMMON STOCK ISSUED

         During the nine months ended September 30, 2001, Aquis issued 36,000
shares of its common stock, valued at about $.16 per share in connection with
consulting services related to its business planning efforts that were provided
by an independent business consultant. In addition, in connection with the price
adjustment requirements of the agreement under which the paging assets of
Suburban Connect were purchased, 645,071 shares have been reflected as issued in
the accompanying financial statements during this period.

7.   NET LOSS PER COMMON SHARE:

         The Company has adopted Statement of Financial Accounting Standards No.
128, "Earnings per Share", which requires a dual presentation of basic and
diluted earnings per share ("EPS"). Basic EPS is based on the weighted average
number of shares outstanding during the periods presented. Diluted EPS reflects
the potential dilution that could occur if options, warrants, convertible
securities or other contracts requiring the issuance of common stock were
converted into common stock during the periods presented. The Company has not
presented diluted EPS because the effect would be anti-dilutive.

8.  SUPPLEMENTAL CASH FLOW DATA:

         The tables below provides supplemental information to the consolidated
statements of cash flows:

                                                        September 30,
                                                     2001             2000
                                               ---------------   --------------

     Cash paid for interest................         $  285          $ 2,355
     Cash paid for taxes...................             $_              $_

Business Acquisitions

         During the nine months ended September 30, 2001, Aquis completed no
additional business combinations. During the nine months ended September 30,
2000, Aquis purchased targeted paging assets of SourceOne Wireless and Suburban
Connect and expended cash as depicted below:

                                                                September 30,
                                                                    2000
                                                              -----------------

          Fair value of assets acquired.................             $8,083
          Liabilities assumed...........................             (1,801)
          Exchange of common stock......................             (1,598)
          Exchange of preferred stock...................             (1,500)
          Accrued or deferred transaction costs.........               (501)
          Less: cash acquired ..........................               (240)
                                                               ------------
          Net cash paid ................................             $2,443
                                                               ============

9.   COMMITMENTS AND CONTINGENCIES:

         In October 2001, the Company settled claims and counterclaims involving
a former President of the Company, Mr. John Adiletta. As part of the settlement,
Mr. Adiletta has agreed to return 133,334 shares of Aquis common stock and
options to purchase 55,000 additional shares and to refrain from acquiring or
holding any voting interests in the Company. In return, Aquis will provide to
Mr. Adiletta a cash payment of $118 and has agreed to forgive the outstanding
$50 balance of the note due from him.

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<PAGE>


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

Organization and Basis of Presentation

         Aquis Communications Group, Inc. is a holding company, incorporated in
the State of Delaware. Through our operating companies, we operate three
regional paging systems providing one-way wireless alpha and numeric messaging
services in portions of sixteen states principally in the Northeast, the Midwest
and the Mid-Atlantic regions of the United States, as well as the District of
Columbia. Subject to FCC approval, we entered into a contract to sell the assets
of our Midwest paging operations. We also resell nationwide and regional
services, offer alpha dispatch, news and other messaging enhancements, and
resell cellular service. Our customers include individuals, businesses,
government agencies, hospitals and resellers.

         On December 31, 1998, we began business operations with the purchase of
certain paging assets, licenses and other assets and the assumption of certain
liabilities of Bell Atlantic Paging and affiliated entities, our predecessor
company. On March 31, 1999, Paging Partners Corporation (incorporated in 1994),
merged with our operating company, Aquis Communications, Inc. ("ACI",
incorporated in late 1997 and first capitalized in January 1998) in a
transaction accounted for as a reverse acquisition with ACI as the accounting
acquirer. At that time, Paging Partners changed its name to Aquis Communications
Group, Inc. On June 30, 1999, a wholly owned subsidiary of Aquis acquired
SunStar Communications, Inc. On January 31, 2000, we completed the acquisition
of selected paging assets of SourceOne, a Chicago-based radio common carrier. In
May 2000 we acquired certain paging assets of Suburban Paging, a regional paging
services reseller headquartered in Pennsylvania. On August 31, 2000, we sold the
net assets of our Internet services operations in order to focus our resources
on our paging operations. In June 2001, we signed a letter of intent and
executed a contract on August 31, 2001 for the sale of certain paging assets and
the assumption of certain liabilities of our Midwest operations. This
transaction closed in escrow on October 18, 2001 pending FCC approval of the
transfer of the communications licenses utilized in these Midwest operations.
These matters are also discussed in our consolidated financial statements and
the notes thereto.

         As noted above, the Bell Atlantic paging business was acquired on
December 31, 1998, for approximately $29,200,000, including transaction costs.
The business acquired in this transaction included Bell Atlantic Paging's sales
and marketing operation and the paging network operating infrastructure owned
and operated by the Bell Atlantic Operating Telephone Companies. The acquisition
was accounted for as a purchase in accordance with Accounting Principles Board
Opinion No. 16, "Business Combinations." This transaction was financed primarily
through a $20,000,000 loan from FINOVA Capital Corporation, a $4,150,000 note
retained by the seller, and cash proceeds of $5,661,000 from a sale of preferred
stock. Aquis satisfied all its obligations under the note received by the seller
on June 30, 1999.

         Aquis' consolidated financial statements as of and for the nine months
ended September 30, 2001 and for the year ended December 31, 2000 have been
prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. We
incurred a losses of about $8.4 million for the nine month period ended
September 30, 2001 and $23.7 million during the year ended December 31, 2000.
Our history of losses have caused us to be in default of our agreements with our
senior lender, and in January 2001 and later periods we were unable to make
required quarterly principal repayments, each in the amount of $514,000, under
that loan. Further, we have not made any required interest payments on this debt
since January 11, 2001. We are also in default of our debt obligation due to our
unsecured lender, AMRO International, S.A. A $2,000,000 note payable to AMRO
International was scheduled to mature in October 2001, unless sooner converted
to common stock, or demand made for payment due to Aquis' default, at AMRO's
election. Aquis is further obligated to pay minimum lease payments under
non-cancelable leases during 2001 in the approximate amount of $7,262,000. Our
principal source of liquidity at September 30, 2001 included cash and cash
equivalents of about $1,600,000 and our working capital deficit totaled more
than $33 million, primarily the result of the classification of our term debt to
currently payable as a consequence of our defaults. These factors raise
substantial doubt about Aquis' ability to continue as a going concern, and the
auditors' opinion on Aquis' financial statements as of and for the year ended
December 31, 2000 is qualified as the result of these conditions. Such
qualification of the auditor's opinion for going concern issues is typically
made when a company's history of operating losses is expected to continue and
funding of those losses from outside sources is unlikely to be available. In
such circumstances, a company's liabilities are unlikely to be discharged as
they become due in the normal course of business.

         In October 2000, NASDAQ notified us that our securities would be
de-listed from the NASDAQ SmallCap Market. Aquis common stock subsequently began
trading on the OTC Bulletin Board under the symbol AQIS.OB. The effect of this
change in trading markets may have caused or contributed to the reduction in
trading volume and liquidity of our shares, may diminish our ability to
restructure our debt or raise additional equity, and has resulted in the
technical and functional termination of the right or ability of Aquis to obtain
any funding under the Common Stock Purchase Agreement with Coxton.

         We are in default of our original and amended loan agreements and our
forbearance agreements with FINOVA and our original agreement with AMRO, our
senior secured lender and an unsecured creditor, respectively. Those forbearance
agreements, executed during the second quarter of 2001, specified that no
payments of interest or principal are required until December 31, 2001, that all
amounts outstanding are due and payable on December 31, 2001, and further
provide that demand for payment of their loans to us will not be made before
December 31, 2001 unless we fail to meet conditions and covenants specified in
those forbearance agreements. AMRO has also agreed to refrain from electing to
convert its debenture into common stock during the same time period, subject to
the same conditions. The defaults under these loan agreements also cause
violations of the terms of some of our operating agreements for services
provided by others to our customers. Further, Aquis does not expect that its
current cash and equivalents and the cash it expects to generate from operations
will be sufficient to meet our anticipated debt service, working capital and
capital expenditure requirements under our existing debt, equity and operating
structure for the foreseeable future. We will be unable to pay the loans due to
FINOVA and AMRO on December 31, 2001 with our current financial and other
resources. The conditions described above indicate that Aquis may not be able to
continue as a going concern. Our ability to continue as a going concern is
dependent on the continued forbearance of FINOVA and AMRO from demanding
immediate payment of their outstanding loans, our ability to generate sufficient
cash to meet operating requirements, continuing supplies of goods and services
from our key vendors, and an ongoing ability to limit or reduce operating costs
and capital requirements. In the event that we are unable to restructure our
debt or either FINOVA or AMRO does not agree to further extend the maturity date
of substantially all of the balances due to them beyond December 31, 2001, we
would consider appropriate responses, including the filing of a request for
protection under the US Bankruptcy Code.


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<PAGE>

         In connection with these forbearance agreements, we developed business
plans intended to improve our financial performance and our ability to pay our
lenders. We are also working with a financial consultant specializing in the
management of distressed businesses. Our multi-faceted business plans include
staff and salary reductions through targeted cutbacks, normal attrition, and
compensation adjustments. Also included are marketing strategies centered on the
marketing opportunities in one-way paging resulting from the refocusing of many
of our paging industry competitors on two-way and other advanced services.
Technical operations improvement plans include financial savings available
through strategically targeted network consolidations involving co-locating some
of our low- and high-band communications equipment, and finalization of
reciprocal compensation agreements currently being negotiated with some of
Aquis' communications facilities providers. We are also selling network
equipment that becomes non-essential as the result of these consolidations, and
closing targeted non-core remote sales offices. In addition, we have signed a
letter of intent and later, on August 31, 2001, executed an agreement for the
sale of our paging operations in the Midwest. This transaction is subject to
certain contingencies that are beyond the Company's control, most significantly
including the FCC's approval of the transfer of the underlying communications
licenses. If these initiatives can be successfully completed, it is expected
that we will be enabled to pay down amounts due to our general creditors, to
invest in paging equipment in sufficient amounts to meet the demands of our
target markets, and to resume debt service payments, on a small scale, to our
lenders. The cash raised in these efforts may also aid our attempt to
restructure our outstanding debt. However, it is not likely, without receipt of
significant proceeds from sale of our Midwest operations, that these initiatives
can be executed as currently planned. Even with completion of the sale of our
Midwest operating assets and with a significant restructuring of our debt and
equity, management can offer no assurance that these plans will be successful to
the degree that may be required by our creditors or to the extent necessary to
ensure our ability to continue as a going concern.

General

         Aquis is a leading provider of paging and other wireless messaging
services and markets one-way paging service and equipment to customers directly
and through resellers. We offer our customers both customer owned and maintained
equipment or lease options for equipment.

         We generate a substantial majority of our revenue from fixed periodic
fees for paging services that are not generally dependent on usage. Usage
sensitive charges consist primarily of charges for messages exceeding the number
included in a customer's fixed monthly rate plan, fees charged to resellers for
messages sent to the resellers' subscribers over Aquis' communication network on
a per-character basis under a Telocator Networking Paging Protocol ("TNPP"), and
fees charged to a party sending a message to an Aquis-enabled pager, primarily
on a flat fee-per-message basis (referred to as "Calling Party Pays" or ("CPP").

         Our ability to recover initial operating, selling and marketing costs
and to achieve profitability is dependent on the average duration of each
customer's subscription period. For as long as a subscriber continues to utilize
the service, operating results benefit from the recurring fixed fee payments
without the requirement of any incremental selling expenses. Conversely,
customer disconnections adversely affect operating results. Each month a
percentage of existing customers have their service terminated for reasons
including failure to pay, dissatisfaction with service or coverage limitations,
or switching to competing service providers.

         This discussion should be read in conjunction with Aquis' consolidated
financial statements and the notes thereto.


RESULTS OF OPERATIONS FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000

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<PAGE>

         Some of the following financial data is presented on a per subscriber
or unit basis. Management believes that such a presentation is useful in
understanding comparative results by providing a meaningful basis for
comparison, given the differences in business management and in the number of
subscribers of other paging companies.

Units in Service

         Units in service totaled 290,000 at September 30, 2001 and 357,000 at
September 30, 2000. Including approximately 70,000 units added through the
acquisitions of SourceOne and Suburban Paging, we added a total of about 130,000
units during the nine months ended September 30, 2000. We made no bulk
acquisitions of paging customers during the nine months ended September 30,
2001. Our average monthly churn rates during the nine months ended September 30,
2001 and 2000, were 5.4% and 3.8%, respectively. The increase in these rates are
influenced by industry trends in the shrinking nationwide paging market and our
own limited ability to procure paging units to replace those for our customers
who have lost or damaged their paging units. Also impacting the increased churn
rate was the increase in disconnections that typically accompanies acquisitions
of customer bases in bulk, such as those acquired from SourceOne and Suburban in
2000. Our sale of the paging assets of our Midwest operations previously
acquired from SourceOne will include approximately 44,000 of our total units in
service as of September 30, 2001.


Revenues

         Service revenues for the nine months ended September 30, 2001 and 2000,
were $14,373,000 and $22,353,000, respectively, a decrease of approximately
$7,980,000 or about 35.7%. Service revenues for the three months ended September
30, 2001 and 2000, respectively, declined $2,250,000, or about 33.0%. The
declines continued to be attributable to three factors: the churn described
above, continuing industry-wide pricing pressures, and a change in the mix of
direct subscriber and reseller units. Average monthly revenue per unit during
the three month periods ended September 30 was about $4.98 in 2001 and $5.93 in
2000. During the current three month period as compared to the corresponding
period in 2000, the portion of our subscriber base represented by reseller units
increased from about 57% to nearly 64%. Resellers purchase Aquis' services in
bulk and are therefore provided rates lower than those made available to Aquis'
direct subscribers.

         Revenues from Internet operations were $513,000 and $178,000 during the
nine and three month periods ended September 30, 2000, respectively. Due to the
sale of those operations in August 2000, no such revenues were booked during the
current periods. We sold this business due to ongoing losses from Internet
operations that reached about $665,000 for our period of ownership in 2000.

         Revenues from sales of paging equipment declined to $386,000 from
$630,000 for the nine months ended September 30, 2001 and 2000, respectively.
For the respective three month periods sales revenues also declined, from
$176,000 to $50,000. Demand for paging services declined as a result of
competing technologies and continued price competition. September 2001 selling
activities were also effected by the national economic slowdown and influenced
negatively by the international incidents in New York and Washington DC, two of
our largest market areas. We also continued to market lower-cost units at
reduced sales prices in 2001 in response to competition from other paging
providers and competing communications services.

Cost of Equipment Sales

         The cost of equipment sold during the nine months ended September 30,
2001 and 2000, respectively, was $401,000 and $583,000. During those respective
three month periods, such costs totaled $64,000 and $167,000. The
previously-described move toward lower-cost pagers and sales of fewer units
during the current periods presented as compared to the corresponding periods in
2000 combined to cause these cost reductions.

Cost of Paging Services

         Cost of service consists principally of fees paid to third party
carriers, and, to a lesser extent, to message dispatch companies. Also included
are Aquis' technical operating expenses. For the nine months ended September 30,
2001 and 2000, respectively, total services costs decreased to $6,348,000 from
$10,586,000. For the corresponding three month periods, such costs declined to
$1,932,000 from $3,107,000. Contributing to these cost reductions during the
nine month periods were declines in units serviced by third party carriers,
including a majority of the units returned to Bell Atlantic Mobile, now Verizon
Wireless, in April 2000. Also contributing to the cost reductions during all
periods were costs incurred to provide Internet services during 2000, which
totaled $521,000 and $233,000 during the nine and three month periods in 2000,
respectively. We also lowered our total costs of providing paging services in
2001 by eliminating and consolidating some paging communications facilities that
were considered to be outside our more profitable core paging areas,
particularly those related to our Midwest operations.

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<PAGE>

         Third party carriers are utilized when a customer requires service
outside of Aquis' service area, and are most commonly used to provide nationwide
coverage. During the nine and three month periods ended September 30, 2001 and
2000, respectively, the costs of such paging services decreased from $4,325,000
to $1,967,000 and from $1,087,000 to $571,000. The decreases are primarily
attributable to the decline of the subscriber base and a refocusing of our sales
efforts on higher utilization of our own paging infrastructure through
commission plan incentives.

         Technical operating expenses include transmission site rentals,
telephone interconnect services and the costs of network maintenance and
engineering. These expenses totaled $4,381,000 and $5,740,000 during the nine
month periods ended September 30, 2001 and 2000 respectively. During the three
month periods ended September 30, 2001 and 2000, respectively, these costs were
reduced to $1,361,000 from $1,787,000. The aforementioned elimination and
consolidation of communications facilities, including trunking and other
communications facilities provided by third party suppliers, was the primary
contributor to these cost reductions. Also contributing were lower salary costs
and elimination of targeted non-core leased communications tower sites.

Sales and Marketing

         Selling and marketing expenses include the cost to acquire and retain
subscribers, operating costs associated with the sales and marketing
organization, and other advertising and marketing expenses. These year-to-date
costs decreased from $2,818,000 in 2000 to $1,465,000 in 2001, or approximately
48.0%. Similar reductions on a percentage basis were effected for the three
months periods ended September 30, 2001 and 2000. These cost reductions resulted
from staffing cutbacks in the sales organization, from elimination of yellow
page and other non-core advertising media and from rent reductions effected
through the closure of certain sales offices. Reduced commissions resulting from
fewer new end-user units placed in service through sales channels during 2001
also lowered overall selling expenses.

 General and Administrative

         General and administrative expenses include costs associated with
customer service, field administration and corporate headquarters. These costs
decreased to approximately $4,060,000 during the nine months ended September 30,
2001 from about $5,531,000 for the corresponding period in 2000. For the three
month periods ended September 30, 2001 and 2000, respectively, such costs were
reduced to $1,383,000 from $1,578,000. Total costs for the nine months ended
September 30, 2000 included $693,000 resulting from the issuance of options
pursuant an employment agreement with a former President of Aquis. During the
nine months in 2001, the settlement of a dispute with one of Aquis' founders and
a former officer was reflected in the amount of $168,000. Other cost reductions
during the current year nine month period were realized through elimination of
outside customer call center activities and lower billing and data processing
expenses, which were enabled upon completion of the integration of the SourceOne
and Suburban customer bases. Also contributing to the expense reductions were
lower costs of employment arising from staffing cutbacks and attrition.
Partially offsetting these savings were fees incurred with a consultant who
assisted in development and negotiation of our forbearance agreements, and
another consultant who assisted with development of our business plans.

Depreciation and Amortization

         Depreciation and amortization decreased to $5,491,000 for the nine
months ended September 30, 2001 from $7,798,000 in the prior year nine month
period. Amortization of intangible assets decreased significantly as a result of
the asset impairment write down recorded at December 31, 2000. This write down
was made as the result of our ongoing losses, our forecast for continuing
losses, and our defaults under our loan agreements. Accordingly, we recognized a
provision for impairment of the carrying value of our FCC licenses and State
certificates in the amount of $9,500,000 at December 31, 2000. Also contributing
was amortization charges associated with our Internet assets, which were sold in
August 2000, and depreciation of certain excess paging infrastructure that was
sold as part of our ongoing efforts to consolidate our communications networks
and focus on our core paging markets.

Provision for Asset Impairment

         In accordance with Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of", Aquis evaluates the recoverability of the carrying value of its
long-lived real and intangible assets based on related estimated undiscounted
cash flows. As a result of our need to raise cash and our business plans
formulated in connection with the forbearance agreements with our senior and
junior lenders, we determined to sell the operating assets of our Midwest paging
operations. The marketing of those operations to interested and qualified
potential buyers produced offers to purchase those assets, and a letter of
intent to purchase those assets was executed in June 2001 with an agreement for
the sale executed on August 31, 2001. The terms of that agreement specify a
purchase price of $1,100,000 and the assumption of specified obligations to
provide future paging services to specific subscribers. The transaction is
subject to FCC approval, the buyer's financing and other contingencies.
Accordingly, the assets of our Midwest operations were written down and adjusted
to their estimated net realizable value of $1,055,000, net of estimated
transaction costs.


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<PAGE>

Interest Expense

         Net interest expense totaled $2,926,000 and $2,798,000 for the nine
months ended September 30, 2001 and 2000, respectively. For the respective three
month periods, net interest expense totaled $977,000 and $1,073,000. Gross
interest expenses increased as the result of the costs of funds borrowed to
complete the SourceOne purchase on January 31, 2000 and due to higher interest
rates on our floating rate loans attributable to higher rates resulting from our
defaults. In addition, nearly $500,000 was accrued as the result of the
inability to meet specified debt leverage and coverage ratios required in our
agreements with FINOVA. Those increased costs were partially offset by
additional financial income derived from the imposition during mid-2000 of late
fees and interest assessments on non-current billings due from our subscribers.

Income Taxes

         No provision for income taxes is reflected in any period as a result of
the Company's net losses in all periods presented.


Liquidity and Capital Resources

         Our auditors' opinion on our financial statements as of and for the
year ended December 31, 2000 is qualified and states that there is substantial
doubt about our ability to continue as a going concern. This qualified opinion
results from our defaults under our loan and agreements with FINOVA and AMRO,
our history of operating losses and our illiquid financial condition. These
defaults result in violations of the terms of several of our other operating
agreements. In addition, we are in default of our forbearance agreement with
FINOVA. If FINOVA elects to enforce its rights for payment, AMRO would
consequently be able to make demand for payment or convert its debenture into
shares of Aquis common stock, resulting in a change in control of Aquis. If
either of our lenders elected to demand repayment of their loans, we would be
unable to meet those requirements with the financial resources currently
available to us. Accordingly, we would then consider appropriate responses,
including the filing of a voluntary petition for protection under the U.S
Bankruptcy Code.

         Aquis' business plan and financial requirements call for capital to be
available to service our debt, to purchase paging equipment for new and existing
subscribers, and to operate, maintain and optimize the use of our communications
networks. However, at September 30, 2001, we had a working capital deficit
totaling more than $33 million, resulting primarily from the reclassification of
our term debt to currently payable status, and our principle source of liquidity
was $1,600,000 of cash and cash equivalents. We have experienced operating
losses since our inception, although we have steadily been producing EBITDA
since then. Our audit opinion as of and for the year ended December 31, 2000
included a going concern qualification that is indicative of an expected
inability to meet obligations as they become due during the ensuing 12 months.
We are currently operating under limited-duration forbearance agreements with
both lenders, but if either lender made demand for repayment of all amounts due
to them, we would be unable to meet that demand with existing resources. We are
in default of the revenue and non-operating cash targets contained in our
forbearance agreement with FINOVA at September 30, 2001. If FINOVA makes such an
election, AMRO would also would be able to exercise its right to demand
repayment of its loan or alternatively to convert its debenture into common
stock, which at current market values could result in a change in control of
Aquis. FINOVA has not, at this time, elected to exercise its rights to collect
the debt due to them pursuant to the forbearance agreement. Regardless of
FINOVA's existing right to demand payment, our forbearance agreements with both
lenders expire on December 31, 2001, at which time either lender may demand
payment in full of all amounts due. We are required to redeem all of the
outstanding 7.5% Redeemable Preferred Stock by January 31, 2002; at September
30, 2001, the balance required for such redemption was approximately $1,688,000.
If we are unable to redeem this preferred stock in January 2002, two seats on
our Board of Directors may be appointed by the holders of these shares. Our
resources are insufficient at this time to enable us to meet our obligation to
pay FINOVA, AMRO or to make this redemption for benefit of the preferred
stockholders. Our common stock was de-listed from the NASDAQ SmallCap Market in
October 2000, at which time our stock began to trade on the OTC Bulletin Board.
This de-listing technically and functionally terminated our equity line of
credit provided under a Common Stock Purchase Agreement with Coxton Limited,
eliminating this as a potential source of capital. These factors have prevented
us from obtaining any additional significant funding that would enable us to
meet our debt service requirements, to acquire sufficient pagers to fully meet
demand for either new business or retention of existing subscribers who require
replacement units from time to time, or to invest in marketing initiatives for
paging or other communications services.

         In response to these conditions, Aquis is discussing debt restructuring
alternatives with its lenders, but no assurance can be given that these efforts
will be successful to the extent required in order to obtain a waiver of its
defaults under any existing, or future revised, debt or forbearance agreements.
In order to conserve cash and devote that resource to support our existing and
potential customer base, we had previously executed forbearance agreements with
our lenders providing that the AMRO debenture would not be converted into Aquis
common stock and that no further debt service payments will be required until
the forbearance agreements expire on December 31, 2001 or until an event of
default occurs, if earlier. As of September 30, 2001 we are in default of the
terms of the agreement with FINOVA. FINOVA has not elected to demand repayment
at this time as is their right as a result of our default. We continue to
operate under business plans that were formulated to allow us to service our
debt on a small scale and to increase the value of our business over time, and
we continue discussions of restructuring alternatives with FINOVA and others.
Our forbearance agreements with FINOVA and AMRO, our senior secured and our
junior unsecured lenders, respectively, were based on this business plan. Events
of default under the AMRO forbearance agreement include the enforcement of any
other party's rights against Aquis in the event of default under another
material contract and Aquis' failure to continue to work and cooperate with its
recently-contracted financial and business restructuring consultant. Events of
default under the FINOVA forbearance agreement include, but are not limited to,
(1) failure to maintain a cash balance of $300,000 or more, (2) failure to
realize minimum monthly operating revenue of $1.615 million through September
30, 2001 and $1.71 million thereafter, (3) failure to raise at least $750,000 of
funding from sources other than operations before September 30, 2001, and (4)
the payment of any value to stockholders in the form of dividends, stock
redemptions or any other distributions. In connection with its forbearance
agreement, FINOVA has re-established the applicable interest rate at the base
rate plus 6%, and in the event of default, a default rate of the base rate plus
8% would apply.

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<PAGE>

         Our business plans upon which the forbearance agreements were based
include staff and salary reductions through targeted cutbacks, normal attrition,
and compensation adjustments. Accordingly, staff levels have been reduced by
approximately 32% since December 31, 2000. Also included in that plan are
marketing strategies centered around marketing opportunities in one-way paging
resulting from the refocusing of many of its paging industry competitors on
two-way and other advanced services. Technical operations improvement plans
include financial savings available through strategically targeted network
consolidations involving co-locating some of our low- and high-band
communications equipment, and finalization of reciprocal compensation agreements
currently being negotiated with some of Aquis' communications facilities
providers. Network consolidation and co-location efforts have brought about a
one-third reduction in the number of communications sites leased since December
31, 2000. With these consolidations, we have sold some network equipment that
was taken out of service, and we have closed or are in the process of closing
five targeted non-core remote sales offices. These offices have been or will be
sublet or their leases terminated. Another milestone contained in this plan is
the sale of Aquis' Midwest operations, and management executed a letter of
intent and a subsequent agreement for such sale on August 31, 2001, specifying a
cash purchase price of $1.1 million and the assumption of certain limited
liabilities. This transaction closed in escrow on October 18, 2001 but continues
to be subject to certain contingencies that are beyond our control, including
FCC approval. Finally, collection of the proceeds of the note due to Aquis for
the sale of its Internet assets was completed as contemplated in that business
plan through the collection of a payment of $625,000 at the end of September
2001 in accordance with the discounted payment terms of the modified note due
from the buyers. Although Aquis has earmarked a significant portion of the
proceeds from the sale of its Midwest assets and its note receivable for
payments to our creditors, there can be no assurance that the proceeds expected
from the former will be collected within timeframes acceptable to Aquis'
creditors. These initiatives, if successful, are expected to allow Aquis to pay
down amounts due to its general creditors, to invest in paging equipment in
sufficient amounts to meet the demands of its target markets, and to resume debt
service payments, on a small scale, to its lenders. However, it is not likely,
without receipt of significant proceeds from the sale of the Midwest assets or
without a suitable restructuring of our debt and equity structure, that these
initiatives can be executed as currently planned and facilitate continued
operations as a going concern. We believe that our business plan as a niche
one-way paging carrier in an industry that is moving toward other communications
services while seeking business opportunities in other related communications
services is sound, yet our ability to execute this plan is heavily dependent on
the factors noted above which are largely beyond our unilateral control.

         On April 9, 2000, we signed a Common Stock Purchase Agreement with
Coxton Limited, a British Virgin Islands corporation, establishing an equity
line of credit or drawdown facility intended to enable us to sell our common
stock for cash at a discount to market pricing. In order for us to drawdown any
of these funds, several key conditions were required: (1) a registration
statement for any shares sold under this agreement must be effective, (2) there
were to be no material adverse changes in our business, financial condition or
prospects, (3) no business combinations or asset disposals would occur without
the consent of Coxton, and (4) our shares must continue to trade on the NASDAQ
SmallCap Market, which does not include the OTC market. Subject to our
compliance with our covenants, this facility was negotiated to provide us with a
funding mechanism under which we could drawdown up to $20 million from Coxton at
share prices reflecting a discount to average market prices measured over a
22-day trading range. The agreement also imposed some limitations on us, most
notably one which limits our ability to sell our securities to any other parties
at a discount to market prices for the shorter of a term that was to expire two
years after the effective date of the registration statement registering shares
under the Coxton agreement or 60 days after the full $20 million was drawn down.
This equity line of credit agreement has been technically and functionally
terminated due to our de-listing and due to the material adverse changes in our
business since the date that agreement was singed, and Coxton can formally
terminate the agreement with proper notice, but has not yet elected to do so. We
are continuing our relationship with Coxton in an effort to secure terms
suitable to both parties under which this agreement might operate. However, even
if we were able to reach an agreement with Coxton and could thereby draw down
funds, just two or three draws could result in a change in control based on the
share price and number of shares outstanding currently. Due to the constraints
described above, we do not expect funding to be available from this source for
the foreseeable future.

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<PAGE>

         Our debt service requirements for the foreseeable future are
significant. Substantially all of our term debt and accrued interest at
September 30, 2001 totaling about $32.2 million, including $29,853,000 due to
FINOVA under our senior loan agreement, including accrued interest of about $2.6
million, is classified as currently payable as a result of the defaults under
our loan agreements. That reclassification includes the $17.6 million balloon
payment due to FINOVA, originally scheduled for payment on December 31, 2003,
fees added to that loan principal and the other principal installments due
quarterly until that date. Under our existing forbearance agreement, we are
required to pay FINOVA all outstanding principal, accrued interest and any fees
that may be due on December 31, 2001. Similarly, our forbearance agreement with
AMRO requires that we be prepared to pay AMRO in full on that date, unless AMRO
elects to convert its debt into Aquis common stock. Interest costs associated
with our senior debt and our bridge loan alone reached almost $3,200,000 during
the year ended December 31, 2000 and such costs are expected to exceed that
total in 2001. We are also obligated to pay aggregate future minimum rental
commitments under non-cancelable leases in an amount of about $7.3 million
during 2001. We must redeem all of the outstanding 7.5% Redeemable Preferred
Stock on January 31, 2002 at 100% of its stated value plus accrued cumulative
unpaid dividends; those totaled $1,688,000 at September 30, 2001. Cash provided
by operations during 2001 will not be sufficient to satisfy these creditors as
we are currently structured.

         Aquis' operations provided about $1,093,000 of net cash during the nine
months ended September 30, 2001, while operating activities used net cash of
$738,000 for the same period of 2000. This was largely the result of the need in
2000 to fund the growth of accounts receivable in connection with the purchases
of the paging businesses of SourceOne Wireless and Suburban paging. Cash
generated by operations during both periods was used to fund pager purchases of
$823,000 in 2001 and $845,000 in 2000.

         During the nine months ended September 30, 2001, the proceeds realized
from the sale of non-core assets and including collection of the note due from
the buyers of our Internet assets was used to fund communications and paging
systems capital needs, resulting in a net source of cash of $477,000. No
business combinations were effected in 2001. During the nine month period of the
prior year, we used net cash of $2,031,000 primarily in connection with the
acquisition of assets from SourceOne. An additional $1,086,000 of expenditures
were made for the purchase of network, data processing and paging equipment.

         During the nine months ended September 30, 2001, cash totaling $348,000
was used for financing activities, primarily to pay down certain installment
debt and notes and to register equity securities. During the year-earlier
period, $2,262,000 of net cash was provided by financing activities. We borrowed
$2,450,000 to complete the SourceOne transaction and $2,000,000 was borrowed
from AMRO that was used primarily to pay down the FINVOA senior debt by
$1,250,000.

         We do not expect that our current cash and equivalents and the cash we
expect to generate from operations will be sufficient to meet our debt service,
working capital or capital expenditure requirements under our existing debt and
forbearance agreements or our current capital and operating structure. The
conditions described above indicate that Aquis may not be able to continue as a
going concern. Our ability to continue as a going concern and successfully
execute our one-way paging business plan and transition into other related
service businesses is dependent on the continued forbearance of our lenders from
demanding immediate payment of their outstanding loans, our continuing ability
to generate sufficient cash from operations to meet operating costs and
obligations in a timely manner, continuing supplies of goods and services from
our key vendors, and an ongoing ability to limit or reduce operating costs and
capital requirements. It also is dependent on restructuring our debt and equity
positions. Our ability to succeed in our efforts will also be largely dependent
upon our pending sale for cash of the assets of our Midwest paging operations.
Even if we complete the key elements of our plans, in the event that demand is
made for payment of our outstanding debt our resources will be insufficient to
fully meet such a demand, and we would consider appropriate responses, including
the filing a request for protection under the U.S. Bankruptcy Code. Accordingly,
we are continuing discussions with our lenders for the purpose of improving our
existing debt and equity structure. However, no assurance can be provided that
our efforts to execute the transactions that may be required in order to affect
our plans can be successfully completed.


Seasonality

         Retail sales were subject to seasonal fluctuations that affect retail
sales generally. Otherwise, the results were generally not significantly
affected by seasonal factors.


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<PAGE>
Forward-Looking Statements

Future revenues, costs, product mix and new product acceptance are all
influenced by a number of factors that are inherently uncertain and difficult to
predict. Therefore, no assurance can be given that financing for such
investments will be available. In addition, no assurance can be given that the
Company's operations will generate positive cash flows.

This Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward-looking statements made by the Company's management
that are based on current expectations, estimates and projections about the
industries in which the Company operates and management's beliefs and
assumptions. In addition, other written or oral statements that constitute
forward-looking statements may be made by or on behalf of the Company. Words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," or variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.

























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<PAGE>


Item 3 - Quantitative and Qualitative Disclosures about Market Risk

         As of September 30, 2001, substantially all of our debt carried
floating interest rates. At that date, we had approximately $30,772,000 of
floating-rate debt outstanding, including fees and interest due to FINOVA that
have been added to principal as required under the Forbearance Agreement with
them. As of December 31, 2000, total floating-rate debt was $27,668,000. An
interest rate increase or decrease of 2% on this floating rate debt would result
in a change in annual interest expenses of about $615,000, or about $0.034 per
share. Aquis has not, and does not plan to, enter into any derivative financial
instruments for trading or speculative purposes. As of September 30, 2001, Aquis
had no other significant material exposure to market risk.
























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<PAGE>


Part II Other Information


Item 1   Legal Proceedings.


The Company is a party to legal proceedings that were reported in its Annual
Report on Form 10-K for the year ended December 31, 2000. There were no other
significant developments related to legal proceedings involving the Company at
November 13, 2001 except that all previously pending matters involving a founder
of the Company and a former officer, Mr. John Adiletta, were fully settled on
October 16, 2001. This required the payment of cash of $117,500 to him,
forgiveness of a $50,000 note due from Mr. Adiletta and the return to the
Company of all his holdings of Aquis common stock and termination of his
existing options to acquire 55,000 shares of such stock and other consideration.


Item 2   Changes in Securities and Use of Proceeds.


In February 2001, Aquis issued 36,000 shares of its common stock to Michael
Branson in exchange for consulting services rendered to Aquis in connection with
development of its business plans and ongoing business development strategies.
Similarly, in May 2001 as provided under the terms of the asset purchase
agreement with Suburban Connect, 645,071 shares of Aquis common stock were
determined to be issued to Suburban Connect LP. This issuance was required as a
result of a purchase price adjustment related to the change in the market price
of Aquis common stock from the time of closing to a date about a year later. The
foregoing shares were offered without registration under the Securities Act of
1933 under the exemption provided by Section 4(2) of the Securities Act on the
basis that no public offering was involved. In addition, no brokerage
commissions were incurred as the result of either issuance.


Item 3   Defaults Upon Senior Securities.


Aquis is in default of the provisions of its Amended and Restated Loan Agreement
with FINOVA Capital Corporation dated as of January 31, 2000 as amended by a
First Amendment to Loan Instruments dated as of April 10, 2000, as further
amended by a Second Amendment to Loan Instruments dated as of September 27, 2000
and as amended by a Forbearance Agreement dated June 7, 2001. Principal payments
of approximately $514,000 each were due quarterly in 2001, and interest payments
were due monthly and were not paid. Aquis has also not met two financial
covenants related to debt service coverage and debt leverage ratios. Aquis is
indebted to FINOVA under its senior loan agreement and an installment obligation
in amounts approximating $27,249,000 and $919,000, respectively. Related unpaid
interest due under these obligations totaled approximately $2,604,000. Under the
terms of the aforementioned Forbearance Agreement dated June 7, 2001, FINOVA had
agreed not to require payment of these debts until December 31, 2001 unless a
further event of default were to occur. As of September 30, 2001 as the result
of Aquis' inability to reach specified revenue and non-operating cash targets,
such an event of default did occur. FINOVA has not exercised its rights to
enforce repayment at this time.


Aquis is also in default of a Loan Agreement dated as of March 31, 2000 with
AMRO International, S.A. as a result of its failure to make interest payments
when due. The balance outstanding under the debt to AMRO at September 30, 2001
was approximately $2,324,000 including accrued interest of about $324,000.
Principal and accrued but unpaid interest was payable to AMRO in October 2001
unless demand for payment is accelerated or conversion into Aquis' common stock
is sooner elected by AMRO. Under the terms of a Forbearance Agreement dated
April 13, 2001 that was subsequently amended, the debt due to AMRO will not be
called due or converted into Aquis common stock until December 31, 2001 unless a
further event of default occurs. If FINOVA exercises its rights under the terms
of Aquis' forbearance agreement with its senior lender, AMRO will consequently
be able to exercise its rights for payment immediately.


Item 4   Submission of Matters to a Vote of Security Holders.  None


Item 5   Other Information.


The Company has postponed its annual meeting, originally expected to be held in
July, 2001. That meeting has been postponed until such time as many of the
contingencies related to its defaults can be resolved.

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<PAGE>

Item 6 Exhibits and Reports on Form 8-K.

         (a) Exhibits

Exhibit No.:

10.61       Settlement Agreement, Mutual Release and Waiver of Claims by and
            between Aquis Communications Group, Inc. and named related parties
            and John X. Adiletta and named related parties dated October 16,
            2001 (1)

10.62       Asset Purchase Agreement by and between Alert Communications, L.L.C.
            and Aquis Wireless Communications, Inc. dated August 31, 2001 (2)

10.63       Agreement Pending Purchase Consummation by and among Aquis Wireless
            Communications, Inc. and Alert Communications, L.L.C. dated as of
            August 31, 2001 (2)

10.64       Escrow Agreement dated as of September 7, 2001 by and among Aquis
            Wireless Communications, Inc., Alert Communications, L.L.C. and
            Harris Bank Barrington, N.A. (2)

(1) Incorporated by reference to Aquis' Registration Statement on Form S-1
    Amendment Number 4 dated November 13, 2001, Commission File #333-46892
(2) Filed herewith

            (b) Reports on Form 8-K

            No reports on Form 8-K were required to be filed by Aquis during the
            current quarter.

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<PAGE>


                                   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:




            Name                          Title                      Date
            ----                          -----                      ----

    /s/ John B. Frieling
---------------------------
      John B. Frieling          Chief Executive Officer,       November 14, 2001
                                Director

   /s/ D. Brian Plunkett
---------------------------
     D. Brian Plunkett          Chief Financial Officer        November 14, 2001













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<PAGE>


                              Exhibit Index

Exhibit Number
(Referenced to                                           Page Number in Rule
 Item 601 of                                             0-3(b) Sequential
Regulation S-K)         Description                      Numbering System
                       -------------                     Where Exhibit can be
                                                                  Found

10.62    Asset Purchase Agreement by and between Alert Communications, L.L.C.
         and Aquis Wireless Communications, Inc. dated August 31, 2001
10.63    Agreement Pending Purchase Consummation by and among Aquis Wireless
         Communications, Inc. and Alert Communications, L.L.C. dated as of
         August 31, 2001
10.64    Escrow Agreement dated as of September 7, 2001 by and among Aquis
         Wireless Communications, Inc., Alert Communications, L.L.C. and Harris
         Bank Barrington, N.A.


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