SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                 For the fiscal year ended December 31st, 2001

                                       OR

      TRANSITION REPORT PURSUANT TO SECTION 13 R 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the transition period from ____________to__________

Commission File No. 33-5524-01
                    ----------

                                W-WAVES USA, INC.
                                -----------------
                        (formerly Arrow Management, Inc.)
             (Exact name of Registrant as specified in its charter)

         NEVADA                                87-0467339
-------------------------------       ---------------------------------------
(State or other jurisdiction of       (I.R.S. Employer Identification Number)
incorporation or organization)

Les Tours Triomphe
2500, Boulevard Daniel-Johnson Blvd.
Suite 1005
Laval, (Quebec) Canada                           H7T 2P6
----------------------------------------         -----------------
(Address of principal executive offices)         (Postal Code)

Registrant's telephone number, including area code (450) 686-8081
                                                  ---------------

Securities registered pursuant to Section 12 (b) of the Act: NONE
Securities registered pursuant to Section 12 (g) of the Act: NONE

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. (X) Yes ( ) No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. (X)

As of March 6th,  2002 the  aggregate  market  value of the voting stock held by
non-affiliates  of the registrant was $1,077,980,  based on a bid price of $0.10
and 10,779,802 shares.

Indicate the number of shares outstanding of each of the registrant's classes of
Common Stock, as of the latest practicable date.

                  Class                   Outstanding as of December 31st, 2001
------------------------------------      -------------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK               16,600,205 SHARES
Warrant for Class A common stock

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE


                                        1

<PAGE>



                                     PART 1

ITEM 1.  Business.

     W-WAVES  USA,  Inc.  (Nevada).  (formerly  Arrow  Management,  Inc.,)  (the
"Company") was incorporated under the laws of Nevada on January 14th, 1988.

     As a result of the merger of November  19th,  1999 the  Company  became the
owner of audio  technology  developed  by W-Waves  USA,  Inc.  (Delaware).  This
technology  consists  of  a  circuit,   which  allows  the  post-  amplification
conversion  of a  conventional  stereophonic  signal  directed  to  two  speaker
enclosures into an ambiosonic signal directed to five-speaker  enclosures.  This
technology can be directly installed into  manufacturers'  radios,  televisions,
videocassette  recorders,  computers,  and other devices employing  stereophonic
sound signals, and is currently the subject of a pending patent application.

     Presently the corporate structure is as follows:

                                W-WAVES USA, INC.
                            (Incorporated in Nevada)

                                  owns 100% of
                                W-WAVES USA, INC.
                           (Incorporated in Delaware)

           which owns 100% of             and also owns 100 % of
        WHITE WOLF AUDIO VIDEO                XD-LAB R&D INC.
        ELECTRONIC SYSTEMS INC.

             owns 100% of
       RADISON ACOUSTIQUE LTEE

     W-WAVES USA, Inc. (Nevada) is the holding company concerned with matters of
global  concern for the entire company as well as the marketing of the Company's
products.  W-Waves USA, Inc.  (Delaware) and XD-LAB R&D Inc. (Canada) hold title
to the Company's intellectual property assets such as patent, license, trademark
and commercialization rights.

     The Company operates primarily through two wholly owned subsidiaries: White
Wolf Audio Video  Electronics  Systems (W-Waves) Inc. ("White Wolf') and Radison
Acoustique   Ltee,   ("Radison")   itself  a  subsidiary  of  White  Wolf.  Both
subsidiaries are engaged in complementary  areas of audio and video research and
engineering.  Each subsidiary has its own  administrative and reduced laboratory
facilities.  All marketing of the Company's products is effected by W-Waves USA,
Inc. (Nevada).

     The Company through its Radison subsidiary, also offers a full range of its
fine LOTUS (TM) loudspeakers to the retail consumer.

ITEM 2.  Properties

     No entity of the Group owns any kind of real estate. White Wolf Audio Video
Electronic Systems Inc. signed a lease contract on April 14, 2000 for a building
located in Pointe-Claire  (Quebec) with about 30,000 square feet of space.  This
building was obviously too big and not conducive to the needs of the  activities
of the Company.

     On May 16, 2001,  an agreement  was reached  with the  building's  owner to
terminate  the lease early.  As of October 31, 2001 the Company did not have any
further commitment regarding this lease.

     On June 1, 2001 the offices were  transferred to Laval.  The new address is
2500, Daniel-Johnson Blvd., Suite 1005.


                                        2

<PAGE>



     Also, we have refurbished  Radison's  offices to be able to present product
demonstrations for customers at this address.

     Due to the above  mentioned  agreement  regarding  the lease,  the  Company
should  be able to  reduce  its rent  expense  for the  next two  years by about
$500,000, including taxes and other charges.

ITEM 3.  Legal Proceedings

     There  are  pending  legal  proceedings  involving  two  of  the  Company's
subsidiaries.

     1-   White Wolf was successful with its request to the court for seizure of
          equipment and data at the personal address of its researcher.  Radison
          did the same  with  its own  researcher.  The  actions  were  taken to
          protect W-Waves's group against  misappropriation  of its IP assets by
          the research personnel.
     2-   White Wolf is  defending  itself  against the former  owner of Radison
          alleging non-full payment.  Management is confident of its position in
          the matter,  since the former  owner of Radison was fully paid and has
          so far not proven to the Company  that the  transfer  of know-how  has
          been completed and documented as the purchase agreement stipulates.
     3-   As a result of these prior  proceedings,  operations  at Radison  have
          been impaired.  The bank, financing the line of credit at Radison, has
          proceeded with the  establishment  of a lien against all equipment and
          furniture of Radison.  Legal costs are the only reason why  management
          has not yet counter sued for damages.
     4-   A second legal proceeding involving the services of Desjardins-Fortin,
          a head-hunting firm to White Wolf, has been brought-up. The management
          is of the  opinion  that the  presumed  work  billed to White Wolf was
          never authorized.

     The Company has not recorded any potential loss provision  related to these
actions  as no  successful  counterclaims  are  foreseen,  other  than  possible
additional legal fees.

ITEM 4. Submission of Matters to a Vote of Security Holders.

     The first matter  submitted to the  Company's  security  holders for a vote
(Shareholders  Meeting on December 24th,  2001 was the election of the new Board
of Directors).

     The second matter was for the appointment of Smith & Company, as auditor of
the Company.

     The third  matter was to endorse the  decision of the board to have entered
into a private  placement  transaction  providing  for the issuance of 5,569,505
common shares of the Company.

ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.

     A trading market for the Company's  $0.01 par value common stock  commenced
on December 8th, 1999 on NASD Bulletin Board under the symbol AWMG.

         The listing of the common stock resumed on February 15th, 2002, under
the symbol WAVSA. The high and low sales prices of such common stock since
trading commenced and through December 31st, 2001 are set forth below.

Fiscal Year                      High Sales Price      Low Sales Price
1999          Fourth Quarter              2.8124                2.0625
2000          First Quarter               3.75                  2.687
2000          Second Quarter              3.50                  1.50
2000          Third Quarter               3.00                  2.00
2000          Fourth Quarter              2.0625                1.00
2001          First Quarter               1.875                 0.75
2001          Second Quarter              1.05                  0.40
2001          Third Quarter               0.40                  0.35
2001          Fourth Quarter              0.35                  0.12
2002          First Quarter               0.10                  0.07

                                        3

<PAGE>



     As of March 25, 2002 there were 475 record holders of the Company's  common
stock  and  there  were  16,600,205  shares  outstanding.  The  Company  has not
previously  declared  or paid any  dividends  on its  common  stock and does not
anticipate  declaring any  dividends in the  foreseeable  future.  The aggregate
market value held by non-affiliates on December 31st, 2001 was $3,772,931.

ITEM 6. Selected Financial Data.

                          THE COMPANY AND SUBSIDIARIES
                              SUMMARY OF OPERATIONS
                                   DECEMBER 31

<TABLE>
<CAPTION>
                                                                   (**)            (*)            (*)             (*)
                                    2001           2000            1999           1998           1997            1996
                               -------------   -------------  -------------  -------------   -------------  -------------
<S>                                  <C>             <C>            <C>          <C>             <C>              <C>
Total Assets                         221,413         639,212        353,098      2,124,851       2,060,428        617,513
Revenues                              54,836          37,940         14,922          2,335         424,561              0
Operating Expenses                   920,356       1,727,920        901,528          7,118          23,290          8,983
Net Earnings (Loss)                 (948,195)     (1,723,395)      (897,986)        65,620       1,492,918         11,826
Per Share Data Earnings (Loss)          (.08)           (.16)          (.41)           .01             .27            .00
Average Shares Outstanding        11,457,950      11,030,700      2,208,382      5,580,733       5,580,700      5,580,700
</TABLE>

     *    Includes Panorama Industries, Inc. through 12/31/98

     **   Includes  W-WAVES  USA  (Delaware)  and  other  Subsidiaries  but  not
          Panorama as of 12/31/99

ITEM 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operation.

     Prior to the  acquisition of the shares of W-WAVES USA, INC.  (Delaware) on
November 19, 1999 the Company had not engaged in any regular business operations
other than owning real estate and the collection of notes  receivable from third
parties.

     During  2001,  W-Waves  USA,  Inc.  was  focused  on  the  development  and
commercialization of innovative sound enhancement technologies and products. The
company has Patent  Applications  for its HD-AP  technology  and  product  (High
Definition  Audio  Processor)  in over 25 countries at this time.  Further,  the
Company through the efforts of its Patent Agent,  Leger Robic, in Montreal,  has
Patent  Applications  Pending for the  technologies and products known as ESP-3D
(Enhanced  Spatialization  Processor) and VRH (Virtual  Reality  Headset) in the
United  States,  which are made in the name of the inventor and  applicant.  The
management  is  reviewing  some of the  provisional  patent  applications  as to
evaluate their viability.

     The  main  goal  of  management  was  for  2001,  to  complete  most of the
development of the different applications of our core technology HD-AP(TM). That
goal was achieved by closely working with the  engineering  firm Codalex Ltd. It
created a three and five piece kit (TPK) surround  sound package,  developed the
VRH(TM)  to new  performance  and  rationalized  the  production  process of the
HD-AP(TM) for mass production. A manufacturation license for HD-AP was signed in
April 2001 as a result.

     The secondary goals of  commercialization  of the products and financing of
the Company were only partly  achieved.  A  commercialization  and  distribution
contract was signed in April 2001.  This one license has a lot of potential  for
the year 2002,  since the product being promoted (TPK) is just the right fit for
the socio-economic circumstances of that market. Management reached an agreement
with some creditors for a total of  $1,953,155.10  to issue them common stock at
$0.35 per share and warrants at $0.60 per share. More funding is needed in order
to be on store shelves for next Christmas.

     A rationalization  of operations was deemed necessary by the board when the
board came to realize in march 2001 that existing  management and employees were
not committed to the success of all  shareholders.  Many  employees were let go,
facilities  were  reduced,  management  was changed.  Those  changes were mostly
successful: a reduced team working on a tight budget and result driven.

Liquidity and Capital Revenues

     Prior to November 1999,  the Company had no need for additional  capital as
it had more than ample capital available for its limited operations.


                                        4

<PAGE>



     The businesses  acquired by the Company  through the acquisition of W-WAVES
USA, INC.  (Delaware) will require  substantial capital for their future growth.
For  example,  in 1998,  1999 and 2000 the  subsidiaries  required  infusions of
$800,000,  $500,000 and $1,200,000 respectively for expenditures on research and
development.  The year 2001 saw an inflow of capital of  approximately  $600,000
that was used for  expenditures  on  continuing  research  and  development  and
commercialization efforts.

     In March 2001,  the Company  reached  agreements  with various  entities to
convert debt and accrued interest into shares of the Company's Common stock. The
conversion  price was 30% less than the issuing price of the  Company's  planned
secondary  private  offering.  The creditor also  received  warrants to purchase
shares of the Company's common stock at a price 20% higher than the price of the
stock in the secondary private offering.

     This  agreement  was  finalized on June 6th,  2001 by a resolution to issue
5,569,505  shares at a price of $0.35 with two warrants priced at $0.60 attached
to each share, converting $1,949,327 USD of debt into equity.

     Management  anticipates that substantial  additional funds will be required
to bring the Company's  products to market but that the needed capital should be
available on reasonable terms.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.

     The  Company  has  no  market-risk  sensitive  instruments  or  market-risk
exposures.

ITEM 8. Financial Statements and Supplementary Data. (See Item 14).

ITEM 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.  N/A

                                    PART III

ITEM 10. Directors and Executive Officers of the Registrant.

     The following  table shows the position held by the Company's  officers and
directors until December 24th, 2001. Directors are appointed and serve until the
next annual meeting of the Company's  stockholders,  and until their  successors
have been  elected and have  qualified.  The  officers  were  appointed to their
positions, and continue in such positions, at the discretion of the directors.

NAME                  AGE   POSITION
Victor Lacroix        39    President and Director
Armando Ferrucci      39    Treasurer and Director
                            (Secretary as of June 8th, 2001)
Robert L. Veronneau   67    Secretary and Director (Resigned on June 8th, 2001)
Jean-Luc Amez         58    Director (Nominated on March 13th, 2001)

     VICTOR  LACROIX  has for the last six years  been the  principal  executive
officer of Bear Bay Holding Canada,  Inc. Bear Bay is a private  investment firm
that concentrates primarily on early stage (venture capital) investments in high
technology. Mr. Lacroix is a graduate of the University of Montreal.

     ROGER BOILEAU is a graduate of the Haute Etudes  Commercial and is a member
of the Canadian Management Accountants. For the last three years he has been the
managing  director  of Bear Bay  Management  (Caribbean)  INC. in  Barbados.  He
previously  held  several  positions  in finance at Domtar  Inc.  and has been a
consultant in start-ups and  turnarounds.  Mr. Boileau was appointed at the last
shareholders meeting as Director and Secretary of W-Waves. USA. Inc.

     ARMANDO FERRUCCI is a founder of Bear Bay Holding Canada Inc. Since 1999 he
has been acting as president of Bear Bay Management (Caribbean) Inc. in Barbados
a 100 % owned subsidiary of Bear Bay Holding Canada Inc. Bear Bay Holding Canada
Inc. is a private  investment  firm that  concentrates  primarily on early stale
(venture capital) Investments in high technology.

     The  new  Board  of  Directors  elected  on  December  24th,  2001  at  the
Shareholders Meeting is composed of the following members:



                                        5

<PAGE>



           NAME                      AGE               POSITION
           Victor Lacroix            39                President and Director
           Roger Boileau             50                Secretary and Director
           Armando Ferrucci          39                Treasurer and Director

ITEM 11. Executive Compensation.

     The Company has made no arrangements  for the  remuneration of its officers
and directors,  except that they will be entitled to receive  reimbursement  for
actual, demonstrable out-of-pocket expenses,  including travel expenses, if any,
made on the Company's  behalf.  No  remuneration  has been paid to the Company's
officers or directors to date.  There are no agreements or  understandings  with
respect to the amount or remuneration  that officers and directors  listed above
are expected to receive in the future.

ITEM 12. Security Ownership of Certain Beneficial Owners.

     The  following  table  sets  forth,  as of  March  6th,  2002,  information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding  shares, by each of the directors
and by the officers and directors as a group.

<TABLE>
<CAPTION>
Title of class             Name and address                            Amount of                          Percent
                           Of beneficial owner                         beneficial ownership of class
------------------         -------------------                         -----------------------------      ---------
<S>                        <C>                                         <C>                                <C>
Common Stock               Dolphin Financial Services                  3,849,934                          23.19%
                           The Law Building
                           P.O. Box 14
                           The Valley
                           Anguilla

Common Stock               Bear Bay Management (Caribbean) Inc.        1,570,469                           9.46%
                           # 3 Lowland Heights
                           Christ Church
                           Barbados W.I.

Common Stock               Bear Bay Europe (Luxembourg) S.A.            400,000                            2.41%
                           12 Rue Leon Thyes
                           L-2636, Luxembourg

Common Stock               Corinne Lewin                               900,000                             5.42%
                           Chateau Perigord
                           6, Lacets St-Leon
                           MC 98000, Monaco
</TABLE>

<TABLE>
<CAPTION>
                                             Security Ownership of Management

Title of class             Name and address                            Amount of                          Percent
                           Of beneficial owner                         beneficial ownership of class
------------------         -------------------                         -----------------------------
<S>                        <C>                                            <C>                              <C>
Common Stock               Victor Lacroix                                 985,234.5                        5.94%
                           President and Director

Common Stock               Armando Ferrucci                            4,935,168.5                        29.73%
                           Treasurer and Director
                                                                       -----------------

                                                                       5,920,403                          35.67%
</TABLE>

          *    Since Mr.  Lacroix  is the Chief  Executive  Officer  of Bear Bay
               Holding  Canada which  controls Bear Bay  Management  (Caribbean)
               Inc. and Bear Bay Europe,  Mr. Lacroix  beneficially owns a total
               of 985,234.5 shares.

          *    Mr. Ferrucci's beneficial ownership derives from his ownership of
               50% of Bear  Bay  Holding  Canada  Inc.  together  with  power of
               attorney   for   Dolphin   Financial   Services   for   a   total
               representation of 5,920,403 shares



                                        6

<PAGE>



ITEM 13. Certain Relationship and Related Transactions.

     No officer,  director,  nominee for election as a director, or associate of
such officer,  director or nominee is or has been indebted to the Company during
the last fiscal year.

                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         Financial Statements and Financial Statement Schedule.

         Financial Statements - December 31, 2001 and 2000 (in U.S. Dollars).

         Reports on Form 8-K.   None


                                        7

<PAGE>




                                      Smith
                                        &
                                     Company

           A Professional Corporation of Certified Public Accountants



                          INDEPENDENT AUDITOR'S REPORT


We have audited the  consolidated  balance  sheet of W-WAVES USA, INC. (a Nevada
corporation) (a development  stage company) AND  SUBSIDIARIES as of December 31,
2001  and  the  related  consolidated  statements  of  operations,   changes  in
stockholders'  deficit and cash flows for the years ended  December 31, 2001 and
2000,  and for the period of March 19, 1999 (date of  inception) to December 31,
2001. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable  assurance about whether the consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining on a test basis,  evidence  supporting the amounts and  disclosures in
the  consolidated   financial  statements.   An  audit  includes  assessing  the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of W-WAVES USA, INC. (a
development  stage  company)  AND  SUBSIDIARIES  as of December 31, 2001 and the
results of their operations,  changes in stockholders'  deficit,  and their cash
flows for the years  ended  December  31,  2001 and 2000,  and for the period of
March 19, 1999 (date of  inception)  to December  31,  2001 in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 12 to
the consolidated financial statements, the Company has cash flow constraints, an
accumulated  deficit,  and has suffered recurring losses from operations.  These
factors,  among others,  raise  substantial doubt about the Company's ability to
continue as a going concern.  Management's  plans in regard to these matters are
also described in Note 12. The consolidated  financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/  Smith & Company
Certified Public Accountants
Salt Lake City, Utah
March 20, 2002


          10 West 100 South, Suite 700o Salt Lake City, Utah 84101-1554
              Telephone: (801) 575-8297o Facsimile: (801) 575-8306
                        E-mail: smithcocpa@earthlink.net
           Members: American Institute of Certified Public Accountants
               o Utah Association of Certified Public Accountants

                                        8

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                           CONSOLIDATED BALANCE SHEET
                                December 31, 2001



<TABLE>
<CAPTION>
CURRENT ASSETS
<S>                                                                             <C>
Cash and cash equivalents                                                       $           1,800
Accounts receivable,(net of allowance of $3,052)                                            1,806
Sales tax receivable                                                                       28,684
Inventory                                                                                  18,793
Prepaid expenses and other current assets                                                   6,808
                                                                                -----------------

                                                       TOTAL CURRENT ASSETS                57,891

CAPITAL ASSETS (Note 3)                                                                    69,170

OTHER ASSETS
Trademarks, patents                                                                        81,464
Other                                                                                       1,050
Goodwill,(net of allowance of $1,300)                                                      11,838
                                                                                -----------------
                                                                                           94,352
                                                                                -----------------

                                                                                $         221,413
                                                                                =================

CURRENT LIABILITIES
Accounts payable and accrued liabilities                                        $         359,649
Payable - related parties (Note 6)                                                        270,009
Income taxes payable                                                                          635
Bank loan (Note 4)                                                                         15,695
Note payable - Acquisition (Note 5)                                                        90,030
Note payable - related corporations (Note 6)                                               44,613
                                                                                -----------------

                                                  TOTAL CURRENT LIABILITIES               780,631

STOCKHOLDERS' DEFICIT
Common Stock (Note 7)
   $.01 par value; authorized 50,000,00 shares
   Issued and outstanding 16,600,205 shares                                                16,601
Additional paid-in capital                                                              2,993,757
Accumulated deficit                                                                    (3,569,576)
                                                                                -----------------
                                                                                         (559,218)
                                                                                -----------------

                                                                                $         221,413
                                                                                =================
</TABLE>



See Notes to Consolidated Financial Statements.

                                        9

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                                                                          3/19/1999
                                                                            Year ended                    (Date of
                                                                           December 31,                 Inception) to
                                                                     2001               2000             12/31/2001
                                                              ------------------  -----------------  ------------------
<S>                                                           <C>                 <C>                <C>
Revenue                                                       $           54,836  $          37,940  $          107,198
Cost of sales                                                             33,172             37,791              81,843
                                                              ------------------  -----------------  ------------------
                                                GROSS PROFIT              21,664                149              25,355

OPERATING EXPENSES
       Salaries and consulting                                           (87,136)         1,389,546           2,122,812
       Interest expense                                                  187,844             10,437             216,402
       General and administrative                                        819,648            327,937           1,210,590
                                                              ------------------  -----------------  ------------------
                                                                         920,356          1,727,920           3,549,804
                                                              ------------------  -----------------  ------------------

LOSS FROM OPERATIONS                                                    (898,692)        (1,727,771)         (3,524,449)

GAIN (LOSS) ON DISPOSAL
       OF FIXED ASSET                                                    (49,503)             4,376             (45,127)
                                                              ------------------  -----------------  ------------------

                                                    NET LOSS  $         (948,195) $      (1,723,395) $       (3,569,576)
                                                              ==================  =================  ==================

BASIC AND DILUTED LOSS PER SHARE
       Net loss per weighted average share                    $             (.08) $           (0.16)
                                                              ==================  =================

       Weighted average number of common
           shares used to compute net loss
           per share                                                  11,457,950         11,030,700
                                                              ==================  =================

</TABLE>


See Notes to Consolidated Financial Statements.

                                       10

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                            CONSOLIDATED STATEMENT OF
                 STOCKHOLDERS' DEFICIT For the period March 19,
                  1999 (date of inception) to December 31, 2001



<TABLE>
<CAPTION>
                                                                Additional
                                       Common Stock               Paid-in       Treasury      Accumulated
                                   Shares         Amount          Capital         Stock         Deficit          Total
                               -------------   -------------  -------------  -------------   -------------  -------------
<S>                            <C>             <C>            <C>            <C>             <C>            <C>
BALANCE, March 19, 1999
   (Date of inception)                     0   $           0  $           0  $           0   $           0  $           0
Disposition of subsidiary                                                           (2,885)                        (2,885)
Acquisition of Arrow
   Management, Inc.                5,580,700           5,581              0                                         5,581
Issuance of treasury stock
   upon reorganization                                                               2,885                          2,885
Issuance of 5,450,000 shares
   upon reorganization             5,450,000           5,450                                                        5,450
Net loss                                                                                          (897,986)      (897,986)
                               -------------   -------------  -------------  -------------   -------------  -------------

BALANCE, 12/31/1999               11,030,700          11,031              0              0        (897,986)      (886,955)
Additional paid-in capital                                        1,050,000                                     1,050,000
Net loss                                                                                        (1,723,395)    (1,723,395)
                               -------------   -------------  -------------  -------------   -------------  -------------

BALANCE, 12/31/2000               11,030,700          11,031      1,050,000              0      (2,621,381)    (1,560,350)
Issuance of restricted shares
   at $.35 for debt                5,569,505           5,570      1,943,757                                     1,949,327
Net loss                                                                                          (948,195)      (948,195)
                               -------------   -------------  -------------  -------------   -------------  -------------

BALANCE, 12/31/2001               16,600,205   $      16,601  $   2,993,757  $           0   $  (3,569,576) $    (559,218)
                               =============   =============  =============  =============   =============  ==============
</TABLE>




See Notes to Consolidated Financial Statements.

                                       11

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF CASH FLOW



<TABLE>
<CAPTION>
                                                                                                 3/19/1999
                                                                   Year ended                    (Date of
                                                                  December 31,                 Inception) to
                                                            2001                2000            12/31/2001
                                                     ------------------  -----------------   -----------------
OPERATING ACTIVITIES
<S>                                                  <C>                 <C>                 <C>
Net loss                                             $         (948,195) $      (1,723,395)  $      (3,569,576)
Adjustment to reconcile net loss to net cash
   provided (used) by operating activities
     Depreciation and amortization                              153,379             41,406             203,813
     Disposal of assets                                          49,503                  0              49,503
Changes in assets and liabilities:
     Accounts receivable                                          3,296             14,650              (1,806)
     Inventory                                                    5,114             13,779             (18,793)
     Sales tax receivable                                       130,129           (158,813)            (28,684)
     Prepaid expenses and other current assets                   47,936            (51,654)             (6,808)
     Other assets                                                 8,854            (78,381)            (82,514)
     Accounts payable and other liabilities                     651,056          1,119,328             629,655
     Income taxes payable                                           (66)              (860)                635
                                                     ------------------  -----------------   -----------------
                           NET CASH PROVIDED (USED)
                            BY OPERATING ACTIVITIES             101,006           (823,940)         (2,824,575)

INVESTING ACTIVITIES
Acquisition of equipment and leaseholds                            (122)          (123,917)           (215,341)
Disposition of assets                                            12,189             40,417              52,606
Goodwill on acquisition of subsidiaries                               0             (1,476)           (162,087)
                                                     ------------------  -----------------   -----------------
                           NET CASH PROVIDED (USED)
                            BY INVESTING ACTIVITIES              12,067            (84,976)           (324,822)

FINANCING ACTIVITIES
Issuance - preferred shares - minority interest                (159,258)                44                   0
Cash of subsidiary                                                    0                  0               1,152
Additional paid-in capital                                            0          1,050,000           1,050,000
Bank loan                                                        15,695                  0              15,695
Long-term debt                                                  (21,644)           (30,871)                  0
Note payable - Acquisition                                            0            (41,212)             90,030
Note payable - related corporations                              44,613            (86,921)          1,994,320
                                                     ------------------  -----------------   -----------------
                           NET CASH PROVIDED (USED)
                            BY FINANCING ACTIVITIES            (120,594)           891,040           3,151,197
                                                     ------------------  -----------------   -----------------

                        INCREASE (DECREASE) IN CASH
                               AND CASH EQUIVALENTS              (7,521)           (17,876)              1,800

Cash and cash equivalents at beginning
   of period                                                      9,321             27,197                   0
                                                     ------------------  -----------------   -----------------

                            CASH & CASH EQUIVALENTS
                                   AT END OF PERIOD  $            1,800  $           9,321   $           1,800
                                                     ==================  =================   =================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
   for:
     Interest                                        $          123,074  $               0   $         123,074
     Income taxes                                                   858                  0                 858

NON-CASH INVESTING AND FINANCING
   ACTIVITIES
     Issuance of 5,450,000 shares
       upon reorganization                           $                0  $               0   $           5,450
     Issuance of 5,569,505 shares
       to retire debt                                         1,949,327                  0           1,949,327
</TABLE>

See Notes to Consolidated Financial Statements.

                                       12

<PAGE>


                                W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2001 and 2000


1.  ORGANIZATION AND BUSINESS ACTIVITIES

Arrow Management,  Inc. (Arrow) was incorporated  under the laws of the State of
Nevada on January 14, 1988. On September 30, 1993, Arrow issued 5,250,700 shares
of its common stock to acquire 99.45% of the outstanding  stock of Panorama,  an
affiliated   company.    The   transaction   was   accounted   for   under   the
pooling-of-interests  method of accounting,  thus, the financial statements were
restated as if the Companies had been consolidated for all periods presented. In
December  1996,  Arrow  canceled  350,000  shares of its  common  stock held for
issuance to a shareholder of Panorama. As a result of this transaction,  Arrow's
ownership of Panorama  was reduced from 99.45% to 90.73%.  On November 19, 1999,
Arrow  exchanged its interest in Panorama for 3,094,700  shares held as treasury
stock.  At   approximately   the  same  time,  Arrow  entered  into  a  plan  of
reorganization  with W-Waves USA,  Inc.  (W-Waves) (a Delaware  corporation)  to
issue  the  3,094,700  shares of  treasury  stock  and an  additional  5,450,000
previously  unissued shares to acquire 100% of the outstanding stock of W-Waves.
The transaction was accounted for as a reverse acquisition. On October 21, 1999,
Arrow filed a Certificate  of Name Change with the State of Nevada  changing its
name to W-Waves USA, Inc. (the Company). The Company and its subsidiaries market
technologies and products in the audio industry,  however, they are currently in
the development stage.

The Company may pursue interests in various other business  opportunities  that,
in the opinion of  management,  may provide a profit to the Company.  Additional
external financing or other capital may be required to proceed with any business
plan that may be developed by the Company.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
The  consolidated  financial  statements  include the  accounts of the  Company,
W-Waves USA Inc.,  (Delaware),  White Wolf Audio Video Electronics Systems Inc.,
Radison  Acoustique  Ltee.  and X-D LAB R&D Inc.  All  significant  intercompany
transactions and balances have been eliminated.

Revenue Recognition
The  Company  recognizes  revenue  equal  to the  cash to be  received  from the
assembly and repair of acoustic systems when the buyer has made an unconditional
commitment  to  pay  and  the  earnings   process  has  been  completed  by  the
finalization of a transaction.

Cash and Cash Equivalents
The Company  considers all highly  liquid  instruments  purchased  with original
maturities of less than three months to be cash equivalents.

Inventories
Inventories  consist  of  acoustic  systems  and are stated at the lower of cost
(first-in first-out basis) or market.

Comprehensive Income
Since 1999,  the Company  adopted  Statement  of Financial  Accounting  Standard
("SFAS") No. 130, "Reporting  Comprehensive  Income". This statement establishes
rules for the reporting of comprehensive income and its components. The adoption
of SFAS No.130 had no significant  impact on total  stockholders'  deficit as of
December 31, 2001.



                                       13

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                           December 31, 2001 and 2000



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
Income  taxes are  computed  using the asset and  liability  method.  Under this
method,  deferred income tax assets and liabilities are determined  based on the
differences  between the financial and tax bases of assets and  liabilities  and
are  measured  using the  currently  enacted  tax rates and laws.  Statement  of
Financial  Accounting  Standards No.109,  requires a valuation allowance against
deferred  tax assets if based on the weight of  available  evidence,  it is more
likely  than  not  that  some or all of its  deferred  tax  assets  will  not be
realized.

Depreciation and Amortization
Property and  equipment  are stated at cost.  Depreciation  is  calculated  on a
diminishing  balance  basis  over the  estimated  useful  lives  of the  assets,
generally  five to seven  years.  Trademarks  and patents are  depreciated  on a
straight-line  basis over a period of twenty years.  Maintenance and repairs are
charged to operations when incurred. Betterments and renewals are capitalized.

Estimates and Assumptions
Management uses estimates and assumptions in preparing  financial  statements in
accordance with generally accepted  accounting  principles.  Those estimates and
assumptions  affect  the  reported  amounts  of  assets  and  liabilities,   the
disclosure of contingent  assets and liabilities,  and the reported revenues and
expenses.  Actual  results  could vary from the  estimates  that were assumed in
preparing the financial statements.

Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing net loss  available to
common  stockholders by the weighted average number of shares outstanding during
the period.  Diluted net income (loss) per share is computed  using the weighted
average number of common shares and common equivalent shares  outstanding during
the  period.  Common  equivalent  shares  consist  of shares  issuable  upon the
exercise of stock  warrants.  At December  31,  2001,  11,139,010  warrants  are
outstanding. They have not been included in basic or diluted calculations as the
effect is antidilutive.

Allowance for Doubtful  Accounts
The Company provides an allowance for uncollectible  accounts which are doubtful
of collection.  The allowance is based upon  management's  periodic  analysis of
receivables,  evaluation  of current  economic  conditions  and other  pertinent
factors.  Ultimate  losses may vary from current  estimates and, as additions to
the allowance become necessary,  they are charged against earnings in the period
they  become  known.  Losses are  charged  and  recoveries  are  credited to the
allowance.

Impairment of Long-Lived Assets
The Company evaluates the recoverability of long-lived assets in accordance with
"SFAS" No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets to be
Disposed  of".  SFAS No.121  requires  recognition  of  impairment of long-lived
assets  in the  event  the net book  value of such  assets  exceeds  the  future
undiscounted cash flows attributable to such assets.

Advertising Costs
The Company  recognizes  advertising  expenses in accordance  with  Statement of
Position 93-7,  "Reporting on Advertising  Costs". As such, the Company expenses
the cost of  communicating  advertising  in the period in which the  advertising
space or airtime is used. Advertising was about $14,000 in 2001.

                                       14

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                           December 31, 2001 and 2000



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk
Financial  instruments  that  potentially  subject  the  Company to  significant
concentration of credit risk consist primarily of cash and accounts  receivable.
Cash is deposited with high credit,  quality  financial  institutions.  Accounts
receivable  are typically  unsecured  and are drived from  revenues  earned from
customers  located  throughout the United States.  The Company  performs ongoing
credit  evaluations of its customers and maintains reserves for potential credit
losses; historically, such losses have been within management's expectations.

Fair Value of Financial Instruments
The  Company's  financial  instruments,  including  cash,  accounts  receivable,
accounts payable,  notes payable and long-term  obligations are carried at cost,
which approximates their fair value because of the short-term  maturity of these
instruments.

Goodwill
Goodwill  resulting  from  acquisition  of  subsidiaries  is being  amortized on
straight-line basis over the estimated life of the benefit of five years. During
2001 $96,144 was recorded as goodwill impairment related to Radisson and charged
to operations.

Recent Accounting Pronouncements
In March 1998, the American  Institute of Certified  Public  Accountants  issued
Statement  of Position  98-1 (SOP 98-1),  "Accounting  for the Costs of Computer
Software  Developed  or Obtained  for  Internal  Use".  This  standard  requires
companies to capitalize  qualifying  computer  software costs which are incurred
during the application  development  stage and amortize them over the software's
estimated  useful time. SOP 98-1 is effective for fiscal years  beginning  after
December  15,  1998.  The Company  does not expect that the adoption of SOP 98-1
will have a material impact on its consolidated financial statements.

In April 1998, the American Institute of Certified Public Accountants issued SOP
98-5, "Reporting on the Cost of Start-Up Activities".  SOP 98-5 is effective for
the Company's  fiscal year ending June 30, 2000.  SOP requires costs of start-up
activities and  organization  costs to be expensed as incurred.  Adoption is not
expected  to have a  material  effect on the  Company's  consolidated  financial
statements.

In  June  1998,  the  FASB  issued  SFAS  No.133,   "Accounting  for  Derivative
Instruments and Hedging  Activities".  SFAS No.133 is effective for fiscal years
beginning  after  June 15,  1999.  SFAS  No.133  requires  that  all  derivative
instruments  be recorded on the  balance  sheet at their fair value.  Changes in
their fair value of derivatives are recorded each period in current  earnings or
other  comprehensive  income,  depending on whether a derivative  is designed as
part of a hedge  transaction and, if it is, the type of hedge  transaction.  The
Company  does not expect that the  adoption of SFAS No. 133 will have a material
impact on its  consolidated  financial  statements  because the Company does not
currently hold any derivative instruments.



                                       15

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                           December 31, 2001 and 2000



3.  CAPITAL ASSETS

                                                          2001
                                                     -------------
                  Office equipment                   $       4,157
                  Laboratory equipment                      77,308
                  Leasehold improvements                     9,279
                  Web site                                   3,435
                  Furniture & equipment                     20,855
                                                     -------------
                                                           115,034
                  Less:
                    Accumulated amortization                45,864
                                                     -------------

                                                     $      69,170
                                                     =============

Depreciation  expense for the year ended  December  31, 2001 was $27,557 and for
2000 it was $41,406.

4.  BANK LOAN

At December 31, 2001, bank loan consisted of the following:

                  Payable to bank at 6.5%            $      15,695
                                                     =============

This line of credit is secured by  receivables  and  inventory of Radison and is
due on demand.

5.  NOTE PAYABLE-ACQUISITION

On November 1, 1999,  100% of the common  stock of Radison  Acoustique  Ltee was
acquired by White Wolf Audio Video  Electronics  Systems,  Inc. (a  wholly-owned
subsidiary  of the Company) for the purchase  price of $181,719.  As of December
31, 2001, the outstanding balance on the transaction was $90,030.

6.  NOTE PAYABLE - RELATED CORPORATIONS

At December 31, 2001,  advances  totaling $44,613 made to the Company by related
parties are outstanding.  Such advances include imputed interest at 6% per annum
and are due upon demand.

Also at December 31, 2001, the Company owes $270,009 to various  related parties
for accounts payable and accrued expenses.

7.  COMMON STOCK

The Company is authorized to issue  50,000,000  shares of $.001 par value common
stock.  As of  December  31,  2001 and 2000,  the  Company  has  16,600,205  and
11,030,700 shares of common stock outstanding, respectively.

During 2001, the Company issued 5,569,505 shares of restricted stock at $.35 per
share to cancel debt of $1,949,327.

The Company has  11,139,010  warrants  outstanding  at December  31,  2001.  The
warrants are convertible  into shares of the Company's  common stock at $.60 per
share and expire in December  2005.  The  Company's  stock price was $.35 on the
date the warrants were issued.

On March 31, 2000,  W-Waves USA Inc. received  additional paid-in capital in the
amount of $1,050,000 in connection with 3,000,000 shares issued in 1999.


                                       16

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                           December 31, 2001 and 2000



8.  INCOME TAXES

The  components  of the  provision  for income taxes at December 31, 2001 are as
follows:

                  Current- Federal                   $           0
                  Deferred- Federal                              0
                                                     -------------
                  Income tax provision               $           0
                                                     =============

A reconciliation of the consolidated income tax provision to the amount expected
using the U.S. Federal statutory rate follows:

                  Expected amount using
                    U.S. Federal statutory rate      $           0
                  Non-deductible expenses                        0
                  Depreciation and bad
                    debts allowance                              0
                                                     -------------
                  Effective tax                      $           0
                                                     =============

Deferred  tax  assets(liabilities)  consisted  of the  following at December 31,
2000.

                  Deferred tax assets
                    Net operating loss
                    carryforwards                    $     999,000

                  Deferred tax liability                         0
                                                     -------------
                                                           999,000
                  Valuation allowance                     (999,000)
                                                     -------------

                                                     $           0
                                                     =============

At December  31, 2001,  the Company has net  operating  loss(NOL)  carryforwards
totaling approximately  $2,939,000.  The carryforwards begin to expire in fiscal
year 2014.  Deferred  tax assets  have been  reduced  by a  valuation  allowance
because of  uncertainties  as to future  recognition of taxable income to assure
realization.  The net  change  in the  valuation  allowance  for the year  ended
December 31, 2001 was $138,000.

9.  COMMITMENTS

White Wolf leases office space in Quebec, Canada for about $2,132 per month. The
leases expire on October 30, 2002 and May 2003.  Future  expected lease payments
are as follows:

                  Year ending December 31, 2002     $      26,320
                  Year ending December 31, 2003             8,284
                                                    -------------

                                                    $      34,604
                                                    =============

Radison  leases  office  space in Quebec,  Canada for about $969 per month.  The
lease is sixty  months in length and expires on June 30, 2005.  Future  expected
lease payments are as follows:

                  Year ending December 31, 2002     $      11,112
                  Year ending December 31, 2003            11,677
                  Year ending December 31, 2004            11,865
                  Year ending December 31, 2005             6,027
                                                    -------------

                                                    $      40,681
                                                    =============

Rent expense was $196,272 in 2001 and $86,149 in 2000.



                                       17

<PAGE>


                       W-WAVES USA, INC. AND SUBSIDIARIES
                          (A Development Stage Company)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                           December 31, 2001 and 2000



9.  COMMITMENTS (continued)

White Wolf has a commitment  to pay a 3% royalty on future sales of its product.
Future  payments are not  determinable  until future sales can be estimated.  To
date White Wolf has paid $31,295 as advance  royalties to the patent  developer.
White Wolf was paying about $16,000 per year to the individual.

10.  LOSS PER SHARE

Following is a reconciliation  of the numerators of the basic and diluted income
(loss) per share for the years ended December 31, 2001 and 2000:

                                           2001                2000
                                    ------------------  -----------------
   Net loss available to
     common stockholder             $         (948,195) $      (1,723,395)

   Weighted average shares:
     Outstanding all year                   11,030,700         11,030,700
     Outstanding 7.6% of year                  427,250                  0
                                    ------------------  -----------------
                                            11,457,950         11,030,700

   Basic income (loss) per share
     (based on weighted
     average shares)                $             (.08) $           (0.16)
                                    ==================  =================

11. CONTINGENCIES

During the year, the former owner of Radison continued proceedings in the amount
of  $108,860  against the Company  for  damages  allegedly  incurred  during the
carrying  out of a purchase  contract.  The claim  consists  of a balance due of
$90,030 as per the  contract  and a balance of advance  payable of $18,830 as of
December  31,  2001.  These two amounts are already  recorded as payables in the
financial statements as of December 31, 2001.

12. GOING-CONCERN

As of December 31, 2001,  the Company has an  accumulated  deficit of $3,569,576
and its current  liabilities  exceeded  its current  assets by  $722,740.  Those
factors could create an uncertainty about the Company's ability to continue as a
going concern.

Continuation  of the  Company as a going  concern is  dependent  upon  obtaining
additional  capital and  ultimately,  upon the  Company's  attaining  profitable
operations.  The management of the Company  intends to seek  additional  funding
which will be utilized  to fund  additional  product  development  and  continue
operations.  The Company  recognizes  that, if it is unable to raise  additional
capital, it may find it necessary to substantially reduce or cease operations.

The Company is in the process of undertaking a secondary private offering of its
common stock to raise working capital.

13.  RESEARCH AND DEVELOPMENT

Research and  development  expenses were about  $600,000 for the year 2001.  The
costs are included as salaries and consulting on the statements of operations.

14.  RELATED PARTY TRANSACTIONS

During 2001,  $242,598  was paid or accrued to related  parties for interest and
professional fees.

                                       18

<PAGE>


                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

                           W-WAVES USA, INC.


Date: March 28, 2002       by:      /s/ Victor Lacroix
                              ---------------------------------
                           Victor Lacroix, President and Director


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


Date: March 28, 2002       by:      /s/ Victor Lacroix
                               --------------------------------
                           Victor Lacroix, President and Director


Date: March 28, 2002       by:      /s/ Roger Boileau
                               --------------------------------
                           Roger Boileau, Secretary and Director


Date: March 28, 2002       by:      /s/ Armando Ferruci
                               --------------------------------
                           Armando Ferruci, Treasurer and Director



                                       19