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

                                   FORM 10-K/A
             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended July 31, 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 0-19404

                          AMERICAN UNITED GLOBAL, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                         95-4359228

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

11108 NE 106th Place
Kirkland, Washington                                         98033
(Address of principal executive offices)                    (Zip Code)

       (425) 869-7410 (Registrant's telephone number, including area code)

      Securities registered pursuant to Section 12 (b) of the Exchange Act

Title of each class                        Name of exchange on which registered

None                                                 None
          Securities registered pursuant to Section 12 (g) of the Act:
                          Common Stock, $.01 par value
                                (Title of Class)

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

         Transitional Small Business Disclosure Format    Yes  |_|  No |X|

     Check if there is no disclosure  of  delinquent  filers in response to item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will 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-K
or any amendment to this Form 10-K. |_|

     The aggregate  market value of the voting stock held by  non-affiliates  of
the issuer as of November 1, 2001 was approximately $860,000.

      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

     Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes |_| No |_|


                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

     The number of shares outstanding of the registrant's Common Stock, $.01 Par
Value, on November 1, 2001 was 12,439,305 shares.

         Documents incorporated by reference: None
<PAGE>

      PART I

        ITEM 1.     DESCRIPTION OF BUSINESS

         Summary

     American  United  Global,  Inc.,  a  Delaware  corporation  ("AUGI"  or the
"Company"),  which owns  minority  equity  positions in five  companies.  AUGI's
primary equity  position is its 36% ownership of Western Power & Equipment Corp.
("Western").  Prior to November  1, 2000,  Western  was a 59.6%  majority  owned
operating  subsidiary,  engaged  primarily  in  the  distribution,   rental  and
servicing of  construction  equipment.  On November 1, 2000,  777,414  shares of
Western  common stock owned by the AUGI were  distributed  pursuant to the final
court  approved   settlement  of  the  shareholder  class  action.  Due  to  the
distribution  of the  Western  shares,  Western  is no longer a  majority  owned
subsidiary of AUGI and AUGI does not have  significant  control over  management
decisions or the operations of Western.  AUGI  therefore no longer  consolidates
the results of Western with its  operations  and  effective as of August 1, 2000
accounts for its investment in Western using the equity method. All other equity
positions  held by AUGI are each less than 5% and are recorded in the  financial
statements  under the captions  Investment  in marketable  securities  and Other
assets.

STRATEGIC GOALS

     AUGI intends to focus its strategy on  acquisitions  of or  investments  in
businesses  in  various  sectors.  In order to do so AUGI  will  have to  obtain
financing.  AUGI has not yet identified any definitive acquisition candidates or
investment  opportunities  and  although  the  Board of  Directors  is  actively
pursuing various forms of financing no such arrangement has yet been finalized.

HISTORY

     AUGI was  initially  organized as a New York  corporation  on June 22, 1988
under the name  Alrom  Corp.,  and  completed  an  initial  public  offering  of
securities in August 1990.  AUGI effected a statutory  merger in December  1991,
pursuant to which the Company was  reincorporated in the State of Delaware under
the name American United Global, Inc.

Western

     Western  commenced  operations in November 1992 with the  acquisition  from
Case of seven retail  distribution  facilities located in Oregon and Washington.
Western became a subsidiary of AUGI  simultaneous  with such  acquisition.  AUGI
held approximately 59.6% of the outstanding shares of Western common stock as of
July 31, 2000.  Pursuant to the final settlement of a shareholder  class action,
777,414  shares of Western  common stock owned by AUGI were  transferred  to the
class on  November  1,  2000 and  since  that  date  AUGI has  continued  to own
approximately 36% of Western's outstanding common stock.

 National O-Ring and Stillman Seal

     In January  1996,  AUGI sold all of the assets of its  National  O-Ring and
Stillman Seal  businesses,  comprising  the  manufacturing  business of AUGI, to
Hutchinson   Corporation   ("Hutchinson")   for  $24,500,000   (the  "Hutchinson
Transaction"),  of  which  $20,825,000  was  paid  in  cash  and  the  aggregate
$3,675,000  balance was paid by delivery of two  24-month  non-interest  bearing
promissory notes due and paid in January 1998.


The Technology Companies

Connectsoft

     Effective  as of July 31,  1996,  AUGI  acquired,  through a merger with an
acquisition  subsidiary  of AUGI  consummated  in August 1996 (the  "Connectsoft
Merger"),  all  of  the  outstanding  capital  stock  of  Connectsoft,   Inc.  a
closely-held  company located in Bellevue,  Washington ("Old Connectsoft") which
provided a variety of computer  products and services.  In  connection  with the
Connectsoft Merger, Old Connectsoft  stockholders received, on a pro rata basis,
an  aggregate  of  976,539  shares of AUGI's  Series  B-1  Preferred  Stock (the
"Preferred Stock"). Such Preferred Stock does not pay a dividend, is not subject
to  redemption,  has a  liquidation  preference  of $3.50 per share over  AUGI's
Common Stock and votes  together with AUGI's Common Stock as a single class on a
one vote for one share basis. Each share of Preferred Stock was convertible into
either one, two or three  shares of Common  Stock of AUGI if certain  benchmarks
for pre-tax income of Old Connectsoft  and its  consolidated  subsidiaries,  and
Exodus Technologies, Inc., a direct subsidiary of the Company, were achieved. As
such  benchmarks  were not achieved,  the  Preferred  Stock has been and is only
convertible into Common Stock on a one-for-one basis. To date, 568,696 shares of
Preferred  Stock have been  converted  into an equal  number of shares of Common
Stock, and 407,843 shares of Preferred Stock remain outstanding.


                                       1
<PAGE>

     On July 10, 1998, AUGI entered into an agreement to sell  substantially all
of  the  assets  of  its  Connectsoft   Communications  Corporation  subsidiary,
including the network  operations  center ("NOC"),  to eGlobe,  Inc. (eGlobe) As
consideration,  eGlobe  issued  approximately  $2,000,000  (as  valued)  of  its
convertible  preferred  stock to AUGI and assumed  approximately  $5,182,000  of
Connectsoft  liabilities  and  leases,  of  which  about  $2,900,000  are  lease
obligations  guaranteed  by the  Company.  Although  eGlobe is  responsible  for
payment of the assumed liabilities,  the assumption of such liabilities will not
relieve the Company from its guarantees  until such  liabilities have been paid.
The sale to eGlobe was consummated in June 1999. Thereafter, in August 1999, the
agreement  with  eGlobe  was  amended to reduce  the  conversion  price of their
preferred in return for AUGI's agreement to cancel the redemption feature of the
preferred.  This  increased  the number of eGlobe  common  shares into which the
preferred could be converted from 1,000,000 to 1,923,000.

Interglobe

     In  September  1996,  AUGI  acquired  InterGlobe  for a  purchase  price of
$400,000,  and  800,000  shares  of  the  Company's  Common  Stock.  The  former
stockholders of Interglobe also received  four-year  employment  agreements with
Interglobe  and AUGI,  pursuant  to which they  received  seven-year  options to
purchase  an  additional  800,000  shares of the  Company's  Common  Stock at an
exercise price of $6.00 per share. All such options have since been canceled. In
August 1998, the Company discontinued the operations of InterGlobe.

 Exodus

     AUGI,  through  its  Exodus  subsidiary,   had  designed  and  developed  a
proprietary software program,  marketed as NTERPRISE,  which allows users to run
WindowsTM  application  server software  programs  designed for the Microsoft TM
Windows NT TM operating  system  developed  by Microsoft on (i) users'  existing
Unix  TM  workstations,  X-terminals  and  other  X-windows  devices,  Macintosh
terminals  and  Java-enabled  network  computers,  which would  otherwise not be
Windows   compatible,   and  (ii)  on  older  versions  of  Windows   compatible
workstations which are otherwise incapable of running the then newer versions of
Microsoft  compatible  software,  such as  Office95  TM or Lotus  Notes TM. AUGI
discontinued  its  Exodus  operations  in  January  1998  following  Microsoft's
decision not to renew its license with Exodus.

 Seattle OnLine

     In  November  1996,  AUGI  acquired  the  assets of  Seattle  OnLine,  Inc.
("Seattle OnLine"), a company engaged in providing a regional  Internet/Intranet
telecommunication  service in the form of high bandwidth  Internet  connectivity
and hosting for businesses in the Pacific Northwest.  AUGI purchased the Seattle
OnLine  assets for the sum of $147,000 and 16,000  shares of AUGI's Common Stock
which  were used to settle  certain  creditor  claims.  AUGI also  issued to the
former  stockholders  of such  corporation  warrants to purchase an aggregate of
333,333  shares of AUGI's Common  Stock.  Seattle  OnLine  ceased  operations in
August 1997 and its remaining  assets were sold to a privately  held company for
$25,000  and  shares  of  preferred  stock of the  acquiring  company  valued at
approximately $50,000 on the closing date.

Other Acquisitions

 TechStar and IDF

     Effective  December 11, 1996, AUGI acquired TechStar  Communications  Corp.
("TechStar").  In  connection  therewith  AUGI  issued  to the  former  TechStar
stockholders an aggregate of 507,246 shares of AUGI Common Stock,  paid $780,000
in cash and delivered three year promissory  notes  aggregating  $600,000.  In a
related transaction, in April 1997 AUGI also acquired Arcadia Consulting,  Inc.,
a company  formed by Solon L.  Kandel for the  purpose of  providing  consulting
services  to  clients in the  wireless  telecommunications  industry.  AUGI paid
$220,000 and issued 192,754 shares of Common Stock to Mr. Kandel.

     In August 1997,  AUGI sold  TechStar to IDF,  pursuant to an agreement  and
plan of merger,  dated July 31, 1997 (the "IDF Merger  Agreement"),  among AUGI,
TechStar,  IDF and an acquisition  subsidiary of IDF. Upon  consummation  of the
transaction,  AUGI received  6,171,553 shares of IDF common stock,  representing
approximately  58% of the fully diluted  outstanding IDF common stock,  and as a
result, for accounting purposes, AUGI was deemed to have acquired IDF.

     Robert M. Rubin,  the Chief Executive  Officer and Chairman of the Board of
AUGI, was also a principal stockholder and a member of the board of directors of
IDF. Prior to  consummation of the  transactions  contemplated by the IDF Merger
Agreement,  Mr. Rubin  converted an $800,000  loan  previously  made to IDF into
preferred stock convertible into 400,000 shares of IDF common stock.

     During Fiscal 1998, additional IDF preferred shares were issued pursuant to
a private placement and  subsequently,  the holders of all IDF prefeerred shares
converted  to IDF common  shares.  As a result,  AUGI's  ownership of IDF common
stock was reduced to approximately 39%. Therefore, effective August 1, 1998, the
results of operations  of IDF were accounted for using the equity method.

                                       2
<PAGE>

     During  Fiscal 2000 and 1999,  AUGI  advanced  IDF a total of $364,000  and
$992,000, respectively. However, IDF throughout all of Fiscal 2000 experienced a
significant decrease in revenue and was unable to obtain further financing.  Due
to these  circumstances  and the  uncertainty of recovery,  AUGI recorded a full
reserve in July 2000 against all advances to and investments in IDF.

     In April 1999, IDF discontinued the operations of TechStar and in September
2000 also discontinued the operations of  Hayden/Wegman,  Inc., its other wholly
owned operating subsidiary, which was based in New York City.


     Forward Looking Statements and Associated Risks.

     This  annual  report  on  Form  10-K/A  contains  certain   forward-looking
statements,  including among others (i) anticipated  trends in AUGI's  financial
condition and results of operations,  and (ii) AUGI's business  strategy.  These
forward-looking   statements   are  based  largely  on  the  Company's   current
expectations  and are  subject  to a number of risks and  uncertainties.  Actual
results  could  differ  materially  from these  forward-looking  statements.  In
addition to other risks described  elsewhere in this "Risk Factors"  discussion,
important  factors to consider in  evaluating  such  forward-looking  statements
include (a) changes in external competitive market factors or in AUGI's internal
budgeting  process  which might impact trends in AUGI's  results of  operations;
(b)unanticipated  working  capital or other cash  requirements;  (c)  changes in
AUGI's  business  strategy  or an  inability  to  execute  its  strategy  due to
unanticipated  changes in the  industries in which it operates;  and (d) various
competitive  factors that may prevent AUGI from  competing  successfully  in the
marketplace.  In  light  of  these  risks  and  uncertainties,  there  can be no
assurance that the events predicted in forward-looking statements will, in fact,
transpire.


ITEM 2.  PROPERTIES

     AUGI  maintains  an  executive  office at 11108 NE 106th  Place,  Kirkland,
Washington 98033.


ITEM 3. LEGAL PROCEEDINGS


     There are no pending material legal proceedings in which AUGI or any of its
subsidiaries is a defendant,  or to which any of their respective properties are
subject,  which  either  individually  or in the  aggregate  may have a material
adverse effect on the results of operations or financial position of AUGI.

     See "Transactions with ERD" as regards the 1998 shareholder  litigation and
settlement thereof.


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

     On August  28,  2001 AUGI held the  Fiscal  Year  2000  Annual  Meeting  of
Stockholders  for which votes were solicited by proxy.  The following is a brief
description  of the matters  voted upon at the  meeting  and a statement  of the
number of votes cast for and against,  and the number of  abstentions as to each
matter.

         1. Election of Directors of AUGI.

                              For                   Against            Abstain

         Robert M. Rubin   10,968,228                27,450            974,160
         C. Dean McLain    10,968,428                27,250            974,160
         David M. Barnes   10,968,428                27,250            974,160
         Howard Katz       10,968,428                27,250            974,160
         Seymour Kessler   10,968,328                27,350            974,160
         Allen Perres      10,968,328                27,350            974,160

     2.  Authorization  and  ratification  of the  adoption of AUGI's 2001 Stock
Option Plan.

               For                      Against                 Abstain

            6,430,653                  1,362,848                 47,200



                                       3
<PAGE>

     3. Authorization and ratification of the sale in January 1996 of all of the
assets of American United Products, Inc. and American United Seal, Inc., engaged
as AUGI's manufacturing business, to subsidiaries of Hutchinson Corporation.

               For                      Against                 Abstain

            6,964,418                   789,468                  86,815

     4.  Authorization  and  ratification  of the issuance of 976,539  shares of
AUGI's Series B-1  Convertible  Preferred  Stock issued in  connection  with the
acquisition  of all  the  capital  stock  of  ConnectSoft,  Inc.,  a  Washington
corporation, effective July 31, 1996.

               For                      Against                 Abstain

             6,849,892                   886,009                104,800


     5.  Authorization  and  ratification  of the issuance of 400,000  shares of
AUGI's  Series B-2  Convertible  Preferred  Stock  issued in  connection  with a
$10,000,000 private placement completed in January 1997.

               For                      Against                 Abstain

             6,875,718                   909,733                 55,250

     6.  Authorization and ratification of an amendment to AUGI's Certificate of
Incorporation  reducing  authorized  capital stock from 67,700,000 to 42,700,000
shares,  reducing the  authorized  Common Stock from  65,000,000  to  40,000,000
shares and removing all classifications of the Common Stock.

               For                      Against                 Abstain

             6,892,033                   914,568                 34,100

     7.     Authorization    and    ratification    of    the    selection    of
PricewaterhouseCoopers  as auditors of AUGI for the fiscal years ending July 31,
1999, July 31, 2000 and July 31, 2001.

               For                      Against                 Abstain

             11,835,580                  111,158                 23,100


     8.  Authorization and ratification of an amendment to AUGI's Certificate of
Incorporation effecting a reverse split of the Common Stock to be effected prior
to December 31, 2001, if at all, at the discretion of the Board of Directors, in
one of the  following  ratios:  every 15  issued  and  outstanding  shares to be
exchanged for one share,  every 20 issued and outstanding shares to be exchanged
for one share, or every 25 issued and outstanding shares to be exchanged for one
share.

               For                      Against                 Abstain

               8,047,395               3,905,258                 17,185


                                       4
<PAGE>

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     On February 4, 1998,  The Nasdaq Stock  Market,  Inc.  ("Nasdaq")  delisted
AUGI's common stock and warrants (the "Public Warrants") from Nasdaq. Since such
date,  the  principal  market for  trading  AUGI's  securities  is the  National
Association of Securities Dealers Over-the-Counter Bulletin Board ("OTCBB"). The
following  is a table that lists the high and low  selling  prices for shares of
AUGI's Common Stock on the OTCBB during the periods identified:

                     Common Stock
                     ------------
                     High                Low
                     ----                ---

Fiscal 2000
-----------
First Quarter         0.31               0.25

Second Quarter        0.75               0.19

Third Quarter         1.50               0.41

Fourth Quarter        1.00               0.44


Fiscal 2001
----------

First Quarter         0.75               0.25

Second Quarter        0.625              0.125

Third Quarter         0.21               0.13

Fourth Quarter        0.18               0.09




     Since the Public  Warrants were delisted from the Nasdaq National Market on
February 4, 1998, they have been thinly traded on the Over-The-Counter  Bulletin
Board.  It is AUGI's opinion that since February 4, 1998 price  information  for
the Public  Warrants  is either  unreliable  or  unavailable,  and that  trading
activity since such date has been extremely sporadic,  and that for such reasons
any  such  price  information  may  either  be  misleading,  inaccurate,  or not
indicative  of the true  market  price of the Public  Warrants  since such date.
However,  according to the most recent price  information  provided to AUGI, the
Public  Warrants  had a  bid/ask  price on  November  1, 2001 of $0.02 and $0.68
respectively.

     In July 2001, AUGI extended the exercise period of the Public Warrants from
July 31, 2001 to July 31, 2003 and reduced the  exercise  price to $1.00.  As of
November 1, 2001 the last sale price of the Common Stock was $0.08 per share. As
of November 1, 2001,  AUGI had  approximately  114 record  holders of its Common
Stock and 6 record holders of its Public Warrants.


Dividend Policy

     In the  foreseeable  future,  AUGI intends to retain  earnings,  if any, to
assist in financing the expansion of its business. In the future, the payment of
dividends  by AUGI  on its  Common  Stock  will  also  depend  on its  financial
condition,  results  of  operations  and  such  other  factors  as the  Board of
Directors of AUGI may consider  relevant.  AUGI does not currently intend to pay
dividends on its Common Stock.


                                       5
<PAGE>


         ITEM 6.  SELECTED FINANCIAL DATA

     The  following  summary  financial  information  for the fiscal years 2001,
2000,  1999,  1998, and 1997 have been derived from the financial  statements of
AUGI  which  have  been  audited  by  PricewaterhouseCoopers   LLP,  independent
accountants.



                Income Statement Data (all figures in thousands):

                                            Year ended July 31,
                                           -------------------

                              2001(3)    2000    1999(1,2)  1998(1)    1997
                               ----      ----    -----      ----       ----

Net sales                 $      -     $155,637   $163,650  $163,478  $152,021


Loss from
continuing operations          (6,400)   (7,030)    (5,054)  (5,121)    (7,944)

Net loss                       (6,400)   (7,030)    (3,065)  (9,615)   (27,257)

Basic and Diluted Loss
 Per Share:

Loss from
continuing operations           (0.52)    (0.59)     (0.43)   (0.43)     (1.05)

 Net loss                       (0.52)    (0.59)     (0.26)   (0.85)     (2.75)




                 Balance Sheet Data (all figures in thousands):

                                         Year ended July 31,
                                          -------------------

                                  2001     2000     1999      1998      1997
                                  ----     ----     -----     ----       ----


Total assets                     $1,724  $128,549 $142,409  $146,904   $144,723

Total liabilities                $2,909  $115,413 $121,700  $121,914   $110,742

Working capital (deficit)        (2,137)  (17,579) (18,751)   (5,972)     2,467

Stockholders'(deficiency)equity  (1,185)    7,373   12,797    15,862     24,101



(1)  Includes loss from discontinued operations of the Technology Companies.

(2)  Includes a gain on disposal of $1,989.

(3)  For 2001, Western has been accounted for under the equity method whereas
     in 1997 through 2000 Western was included in the consolidated financial
     statements of the Company.

                                       6
<PAGE>



     ITEM 7.  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS

     You  should  read the  following  discussion  together  with the  financial
statements and related notes included  elsewhere and  incorporated by reference.
The results discussed below are not necessarily  indicative of the results to be
expected in any future periods. To the extent that the information  presented in
this discussion  addresses  financial  projections,  information or expectations
about AUGI or otherwise makes  statements  about future events,  such statements
are  forward-looking and are subject to a number of risks and uncertainties that
could cause actual results to differ  materially  from the statements  made. See
"Special Note  Regarding  Forward-Looking  Statements"  for further  information
about forward-looking statements.

         General Overview

     AUGI owns equity  interests in 5 operating  entities.  The most significant
interest is its 36% interest in Western Power & Equipment Corp. which engages in
the sale, rental and servicing of light,  medium- sized and heavy  construction,
agricultural and industrial  equipment,  parts and related  products.  The major
supplier to Western is Case Corporation and the items sold,  rented and serviced
include backhoes,  excavators,  crawler dozers,  compactors, log loaders, street
sweepers  and  forklifts.  Western  operates 18  facilities  in Nevada,  Oregon,
Washington,  California  and  Alaska  and  sells  to  contractors,  governmental
agencies  and  other  customers   primarily  for  use  in  the  construction  of
residential and commercial  buildings,  roads, levees,  dams,  underground power
projects and municipal construction.


     Prior to November 1, 2000,  AUGI was the  majority  shareholder  of Western
with a 59.6%  ownership.  The results of  operations  of Western were  therefore
consolidated  with those of AUGI in all prior fiscal years.  On November 1, 2000
AUGI  distributed  777,414 shares of Western common stock owned by AUGI pursuant
to the final court approved  settlement of the  shareholder  class action.  As a
result,  AUGI's  ownership in Western became 36% and it's  investment in Western
has been accounted for under the equity method effective August 1, 2000.

     AUGI's  ownership  in each of the  other  four  entities  is less than five
percent and is not material to the financial statements.



     In previous years AUGI was engaged in other  additional  businesses such as
the Technology Business and the Telecommunications and Construction  Businesses,
which have all since been  discontinued.  AUGI was formerly a stockholder of the
majority of the  outstanding  common stock of IDF  International,  Inc.  through
which it engaged in the Telecommunication and Construction Businesses,  however,
since  early  fiscal  1998 has been only a minority  stockholder.  TechStar  and
Hayden-Wegman,  IDF's two operating subsidiaries, ceased operations in June 1999
and  September  2000  respectively.  During  Fiscal  1998 and 1999,  AUGI either
divested itself of all assets of, or otherwise  discontinued  all operations of,
the Technology  Business.  Consequently,  AUGI's  operations  during Fiscal 2000
consisted  entirely of the  Distribution  Business which the Company  engaged in
through Western.  Accordingly,  the following discussion relative to fiscal 2000
and 1999 consists primarily of a discussion of Western.



Results of Operations


Fiscal Year 2001, as compared to fiscal 2000

     AUGI's share of Western's  fiscal 2001 loss was $2,823,000  while in fiscal
2000, AUGI's share of Western's loss was $4,294,000.  Western recorded a loss of
$7,842,000 in fiscal 2001 and a loss of $7,198,000 in Fiscal 2000, however,  the
decrease  in  AUGI's  proportionate  share  is due to the  lower  percentage  of
ownership of Western by the AUGI.

     Selling,   general  and   administrative   expenses  in  fiscal  2001  were
$1,214,000,  an increase of $274,000  over fiscal 2000 which was $940,000 net of
Western.  The  increase  is  primarily  due to a bad debt  reserve  of  $175,000
recorded in the current year for a note receivable from Ego  Magazine.com,  Inc.
The note was issued to AUGI in January 2000 pursuant to a loan agreement and the
borrower  defaulted  upon such note in April 2001.  In addition,  there were two
additional employees during the first half of fiscal 2001.

     Interest  expense in Fiscal  2001 was  $248,000,  slightly  higher than the
$238,000,  net of  Western's  interest,  recorded in fiscal  2000.  Such amounts
consist primarily of interest accrued on short term borrowings.

     Other income of $506,000 in 2001 is comprised  of gains on  settlements  of
$415,000 and an adjustment to the valuation of the final shareholder  litigation
settlement in the amount of $91,000 which was paid by Mr. Rubin during the third
quarter of fiscal  2001.  Other  income in prior  years  consisted  of net gains
related to asset dispositions by Western.

                                       7
<PAGE>

Fiscal Year 2000, as Compared with Fiscal Year 1999

     Western reported net revenue for Fiscal 2000 of $155,637,000  compared with
net revenue of $163,650,000 for Fiscal 1999. Stores opened longer than 12 months
showed an overall  revenue  decrease  of 4.9  percent  from  prior year  revenue
reflecting a general  softening in economic  conditions in the  northwest  along
with  increased  competitive   pressures.   Western  consolidated  five  of  its
facilities  during fiscal 2000 into larger  facilities in the region in order to
reduce costs and leverage existing, larger facilities in the region to cover the
territories previously served by the closed facilities.

     Western  had a net loss for Fiscal  2000 of  $7,198,000  or $2.18 per share
compared  with a net loss of  $1,815,000  or $0.55 per share in Fiscal 1999.  In
Fiscal  2000,   Western   recognized  a  fourth  quarter   inventory  charge  of
approximately  $2,547,000 to provide  allowances to recognize  decreasing market
prices on aged  equipment in the last half of fiscal 2000. In addition,  Western
recorded a valuation  allowance of $2,956,000 related to its deferred tax asset.
Other income  consists  primarily of net gains related to asset  dispositions by
Western.

     AUGI's  share of  Western's  Fiscal  2000 loss was $  4,294,000.  AUGI also
accrued a loss of $1,434,000 on the transfer of 777,414 common shares of Western
pursuant to the settlement of shareholder  litigation (see note 10);  recorded a
full reserve of $364,000 in connection  with  advances to and  investment in IDF
and sold a patent having to do with certain technology  previously  developed by
eXodus for a gain of $240,000. Exclusive of Western, AUGI also incurred $940,000
of selling,  general and administrative expenses (primarily salaries,  taxes and
professional fees) and $238,000 of net interest expense.

     Western's  gross margin was 7.4 percent  during  Fiscal 2000 which is lower
than its 8.9 percent  gross  margin  during  Fiscal 1999.  Margins  decreased in
Fiscal 2000 due mainly to competitive pressures and the fourth quarter equipment
reserve.  Management  continues to place a high  priority on  improving  overall
gross margins by working to increase  higher margin service,  parts,  and rental
revenues,  focusing more sales efforts on specialty and niche product lines, and
by obtaining higher prices for new and used equipment.

     Selling,  general,  and  administrative  expenses  were $ 14,474,000 or 9.3
percent of revenues for Fiscal 2000  compared to $ 15,705,000  or 9.6 percent of
sales  for  Fiscal  1999.  The  decrease  was  primarily  due to a  decrease  of
approximately  $938,000 in expenses  relative to shareholder  litigation and bad
debts in 2000 as well as generally  lower expense levels at AUGI compared to the
amount  incurred in 1999  somewhat  offset by higher  expenses at Western  which
primarily were due to the costs of closing stores during the year.

     Net interest  expense for Fiscal 2000 was $ 6,307,000,  up from $ 5,329,000
in Fiscal 1999  primarily due to an increase in interest  rates at Western and a
decrease in interest income due to lesser principle amounts having been invested
during  fiscal  2000.  In June 1997,  Western  obtained a $75 million  inventory
flooring  and  operating  line of credit  facility  through  Deutsche  Financial
Services ("DFS").  The facility is a three year, floating rate facility at rates
as low as 50 basis  points  under the prime  rate.  Prime  interest  rates  have
increased from those in Fiscal 1999.  Management has used this facility to allow
Western  to take  advantage  of more  purchase  discounts  and to lower  overall
interest expense.

                                       8
<PAGE>

Liquidity and Capital Resources

         General

     During Fiscal 2001 AUGI's cash, cash equivalents and marketable  securities
decreased  by  $3,341,000,  from  $4,086,000  to  $745,000  net of the  decrease
attributable to no longer consolidating Western. This decrease was primarily due
to sales of  marketable  securities,  most of which were at a loss,  in order to
provide  working  capital and a significant  decrease in the market value of the
remaining marketable securities held by the Company.

     AUGI's cash, cash  equivalents and marketable  securities of $745,000 as of
July 31 2001 are not sufficient to fund current levels of operation for the next
twelve  months.  In order to continue to operate  through the end of fiscal 2002
and on into fiscal 2003, AUGI would have to obtain financing or sell some or all
of its share ownership in Western.  AUGI is actively  pursuing various financing
sources but has not obtained a commitment or agreement for any financing

     In  prior  years,  AUGI  had  invested  substantially  all  cash  and  cash
equivalents in money market funds, United States Treasury securities and similar
instruments. AUGI had sought to provide a high current return on its investments
of cash and cash equivalents  while  preserving both liquidity and capital.  The
established policy guidelines for its investment  portfolio included investments
that include United States Treasury securities,  United States government agency
obligations,  deposit-type  obligations of United States  banking  institutions,
repurchase  agreements,  United States  denominated A1 grade  commercial  paper,
United  States money  market funds and  interests in mutual funds that invest in
the above listed instruments.  Concentration of the portfolio was limited to not
more than 20% of the  investment  portfolio in the  securities  of any one bank,
corporation or non-government issuer.




ITEM 7A. QUANTITATIVE AND QUALITATIVE MARKET RISK

         Not Applicable



                                       9
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS




                          AMERICAN UNITED GLOBAL, INC.

                              FINANCIAL STATEMENTS


                                      INDEX



                                                                   Page

Report of Independent Accountants .......................           F-2

Consolidated Balance Sheets .............................           F-3

Consolidated Statements of Operations and
 Comprehensive Income (Loss).............................           F-4

Consolidated Statements of Shareholders' (Deficit)Equity.           F-5

Consolidated Statements of Cash Flows ...................           F-6

Notes to Consolidated Financial Statements ..............           F-7



                                      F-1
<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and
Stockholders of American United Global, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of  operations  and  comprehensive  income  (loss),  of
shareholders' equity (deficit) and of cash flows present fairly, in all material
respects,  the  financial  position  of American  United  Global,  Inc.  and its
subsidiaries at July 31, 2001 and 2000, and the results of their  operations and
their cash flows for each of the three years in the period  ended July 31, 2001,
in conformity with accounting principles generally accepted in the United States
of America.  These 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 of these statements in
accordance with auditing  standards  generally  accepted in the United States of
America  which  require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company has incurred  losses from
operations  and has had a working  capital  deficit for each of the years ending
July 31, 1999, 2000 and 2001.  Further,  as discussed in Note 1 to the financial
statements,  the Company  requires  additional funds to continue its operations.
Such  factors  raise  doubt about the  Company's  ability to continue as a going
concern. Management's plans in regards to these matters are discussed in Note 1.
The financial  statements do not reflect any adjustments  that might result from
the outcome of this uncertainty.


PricewaterhouseCoopers LLP





Portland, Oregon
November 5, 2001






                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                                                                                      JULY 31,
                                                                                                      --------
                                                                                                2001           2000
                                                                                                ----           ----
                                         ASSETS
<S>                                                                                     <C>             <C>

Current assets:
   Cash and cash equivalents............................................................  $      519,000  $   1,281,000
   Investment in marketable securities..................................................         226,000      3,629,000
   Trade accounts receivable, less allowance for doubtful accounts of $724,000..........            -        17,347,000
   Inventories (Note 4).................................................................            -        58,297,000
   Prepaid expenses and other receivables...............................................          27,000        478,000
   Deferred tax asset (Note 7)..........................................................            -         2,273,000
   Receivable from Chairman (Note 10)...................................................            -           299,000
   Notes receivable (Note 10)...........................................................            -         1,161,000
                                                                                               ---------      ---------

       Total current assets.............................................................         772,000     84,765,000

   Property and equipment, net (Note 5).................................................            -         9,450,000
   Rental equipment fleet, net (Note 5).................................................            -        26,076,000
   Leased equipment fleet, net (Note 5).................................................            -         4,975,000
   Intangibles and other assets, net of accumulated amortization of $683,000............            -         2,858,000
   Other assets.........................................................................         250,000        425,000
   Investment in Western Power & Equipment Co...........................................         702,000           -
                                                                                          --------------  -------------

                                                                                          $    1,724,000  $ 128,549,000
                                                                                          ==============  =============
                          LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

Current liabilities:
   Borrowings under floor financing lines (Note 6)......................................  $         -     $  14,768,000
   Short-term borrowings (Note 6).......................................................       1,500,000     69,171,000
   Current portion of capital lease obligations (Note 10)...............................            -            17,000
   Accounts payable.....................................................................          39,000     10,810,000
   Accrued liabilities..................................................................       1,370,000      5,097,000
   Income taxes payable (Note 7)........................................................            -           581,000
   Due to shareholders (Note 10)........................................................            -         1,900,000
                                                                                             -----------    -----------
       Total current liabilities........................................................       2,909,000    102,344,000

Long-term borrowings (Note 6)...........................................................            -            28,000
Capital lease obligations, net of current portion (Note 10).............................            -         4,786,000
Deferred taxes (Note 7).................................................................            -         2,273,000
Deferred gain...........................................................................            -              -
Deferred lease income...................................................................            -         5,982,000
                                                                                               ---------      ---------
       Total liabilities                                                                       2,909,000    115,413,000

Minority interest.......................................................................            -         5,763,000

Commitments and contingencies (Note 10)

Shareholders' (deficit) equity (Notes 8 and 11):

   Series B-1  preferred stock, convertible to common, $3.50 per share
     liquidation value, $.01 par value; 1,000,000 shares authorized; 407,843 and
     416,263 shares issued and outstanding, respectively................................           4,000          4,000
   Common stock, $.01 par value; 40,000,000 shares authorized; 12,439,305 and 12,143,385
     shares issued and outstanding, respectively........................................         124,000        121,000
   Common stock, Class B, non-voting, .01 par value, 25,000,000
     shares authorized, no shares issued and outstanding ...............................           -              -
   Additional contributed capital.......................................................      50,271,000     50,274,000
   Accumulated deficit..................................................................     (50,710,000)   (44,310,000)
   Accumulated other comprehensive (loss) income........................................        (874,000)     1,284,000
                                                                                          --------------   ------------
       Total shareholders's (deficit) equity...........................................      (1,185,000)     7,373,000
                                                                                          --------------   ------------
                                                                                          $    1,724,000   $128,549,000
                                                                                          ==============   ============

</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-3
<PAGE>



<TABLE>
<CAPTION>


                             AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES


                                 CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
<S>                                                                       <C>            <C>            <C>

Net sales................................................................  $        -     $  155,637,000 $  163,650,000
Cost of goods sold.......................................................           -        144,099,000    149,056,000
                                                                             -----------     -----------    -----------

       Gross profit......................................................           -         11,538,000     14,594,000

Selling, general and administrative expenses.............................      1,214,000      14,474,000     15,705,000
                                                                              ----------      ----------     ----------

       Operating loss....................................................     (1,214,000)     (2,936,000)    (1,111,000)


Gain on sale of patent...................................................           -            240,000           -
Loss on transfer of Western shares.......................................           -         (1,434,000)          -
Impairment of Investment of Western Power & Equipment Co.................     (1,771,000)           -              -
Loss on sale of marketable securities....................................     (1,395,000)           -              -
Other income.............................................................        506,000       1,646,000        530,000
Interest expense, net....................................................       (248,000)     (6,307,000)    (5,329,000)
                                                                               ---------       ---------      ---------

Loss from continuing operations before income taxes, equity
       in loss of unconsolidated subsidiary and minority interest........     (4,122,000)     (8,791,000)    (5,910,000)

(Provision) benefit for income taxes (Note 7)............................        545,000        (779,000)     1,101,000
Equity in loss of unconsolidated subsidiary (Note 3).....................     (2,823,000)       (364,000)      (961,000)
Minority interest in loss of consolidated subsidiaries...................           -          2,904,000        716,000
                                                                                 -------        --------       --------

       Loss from continuing operations ..................................     (6,400,000)     (7,030,000)    (5,054,000)


Discontinued operations, net of taxes (Note 9):

   Gain on disposal......................................................          -                -         1,989,000
                                                                           -------------  --------------  --------------

Net loss ................................................................     (6,400,000)     (7,030,000)    (3,065,000)
                                                                           =============  ============== ==============

Basic and diluted loss per share:
   Loss from continuing operations.......................................  $       (0.52) $       (0.59)  $      (0.43)
   Gain from discontinued operations.....................................           -               -             0.17
                                                                           -------------  -------------   -------------

Basic and diluted loss per share.........................................  $       (0.52) $       (0.59)  $      (0.26)
                                                                           =============  =============    ============


Weighted average number of shares........................................     12,285,330      11,948,368     11,748,210
                                                                              ==========      ==========     ==========


Comprehensive loss:

     Net loss............................................................  $  (6,400,000) $  (7,030,000)  $  (3,065,000)

     Unrealized (loss) gain on marketable securities.....................       (874,000)     1,284,000          -
                                                                              -----------  -------------  --------------

     Comprehensive loss..................................................  $  (7,274,000) $  (5,746,000) $   (3,065,000)
                                                                            =============  ============== ==============


</TABLE>


             The accompanying notes are an integral part of this statement.


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                                       AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY

                                                                   PREFERRED STOCK                 COMMON STOCK
                                                                   ---------------                 ------------

                                                              NUMBER OF                      NUMBER OF
                                                               SHARES          AMOUNT         SHARES         AMOUNT
                                                               ------          ------         ------         ------
<S>                                                       <C>             <C>            <C>          <C>

Balance at July 31, 1998.................................      724,000        $ 7,000      11,617,000       $116,000
Net loss ................................................
Conversion of preferred stock to common..................     (298,000)        (3,000)        304,000          3,000
                                                              --------         ------      ----------       --------

Balance at July 31, 1999.................................      426,000          4,000      11,921,000        119,000
Net loss ................................................
Issuance of common stock.................................                                     213,000          2,000
Stock option compensation................................
Accumulated unrealized gains, net........................
Conversion of preferred stock to common..................       (9,000)                         9,000
                                                                ------        --------    -----------    -----------

Balance at July 31, 2000.................................      417,000          4,000      12,143,000        121,000
Net loss ................................................
Accumulated unrealized gains, net........................
Additional shares issued in private placement............                                     287,000          3,000
Conversion of preferred stock to common..................       (9,000)                         9,000
                                                                ------        --------    -----------    -----------

Balance at July 31, 2001................................       408,000        $ 4,000      12,439,000    $   124,000
                                                               =======          =====      ==========    ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                           ACCUMULATED
                                            ADDITIONAL                        OTHER                            TOTAL
                                            CONTRIBUTED                   COMPREHENSIVE   ACCUMULATED      SHAREHOLDERS'
                                              CAPITAL          OTHER      INCOME (LOSS)     DEFICIT       (DEFICIT) EQUITY
                                              -------          -----      -------------    ---------       --------------
<S>                                         <C>             <C>          <C>            <C>                 <C>

Balance at July 31, 1998..................   $49,954,000     $   -        $       -       $(34,215,000)        $15,862,000
Net loss .................................                                                  (3,065,000)         (3,065,000)
                                             -----------     ---------    ------------    -- ----------          ----------

Balance at July 31, 1999..................    49,954,000          -                        (37,280,000)         12,797,000
Net loss .................................                                                  (7,030,000)         (7,030,000)
Issuance of common stock..................        83,000                                                            85,000
Stock option compensation.................       237,000                                                           237,000
Accumulated unrealized gains, net.........        -              -            1,284,000                          1,284,000
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------

Balance at July 31, 2000..................    50,274,000  $     -             1,284,000    (44,310,000)          7,373,000

Net loss .................................                                                  (6,400,000)         (6,400,000)
Accumulated unrealized gains, net.........        -              -           (2,158,000)                        (2,158,000)
Additional shares issued
 in private placement.....................        (3,000)
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------
Balance at July 31, 2001.................. $  50,271,000  $     -              (874,000) $ (50,710,000)       $ (1,185,000)
                                           =============  =============     ===========  =============        ============
</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                       AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
<S>                                                                       <C>            <C>             <C>
Cash flows from operating activities:
   Net loss from continuing operations...................................  $ (6,400,000)    $ (7,030,000)  $ (5,054,000)
   Net gain (loss) from discontinued operations .........................          -                -         1,989,000
Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization.......................................          -          11,712,000     11,779,000
     Loss on settlement..................................................          -                -           310,000
     Gain on disposal of business........................................          -                 -       (1,989,000)
     Gain on sale of fixed assets........................................          -             (59,000)       (45,000)
     (Loss) income applicable to minority interest.......................          -          (2,904,000)      (716,000)
     Undistributed loss of affiliate.....................................      2,823,000         364,000      1,553,000
     Stock option compensation...........................................           -            236,000          -
     Gain on sale of patent..............................................           -           (240,000)         -
     (Loss) gain on sale investments.....................................      1,395,000         (52,000)         -
     Impairment of investments...........................................      1,946,000            -             -
       Change in assets and liabilities, net of effects of acquisition
       and dispositions:
       Trade accounts receivable.........................................           -         (1,847,000)     8,208,000
       Inventories.......................................................           -          2,903,000      1,299,000
       Notes receivable..................................................           -            500,000       (500,000)
       Prepaid expenses and other receivable.............................        240,000        (192,000)         1,000
       Lease equipment, net..............................................           -            289,000     (2,504,000)
       Accounts payable..................................................         53,000      (2,416,000)    (5,295,000)
       Accrued liabilities...............................................     (1,213,000)      1,051,000     (1,290,000)
       Income taxes payable..............................................           -            817,000       (164,000)
       Change in deferred revenue........................................           -           (339,000)     2,707,000
                                                                              ----------    ------------   ------------

       Net cash provided by (used in) operating activities...............     (1,156,000)      2,793,000     10,289,000
                                                                               ---------      ----------    -----------
Cash flows from investing activities:
   Purchase of property and equipment....................................           -         (1,254,000)    (2,711,000)
   Purchase of rental equipment, ........................................           -         (9,531,000)   (27,984,000)
   Sales of rental equipment.............................................           -         10,574,000     14,669,000
   Sale of marketable securities.........................................      1,217,000       1,268,000      4,078,000
   Purchase of other assets..............................................           -            (18,000)         -
   Purchase of equity and debt investments...............................           -           (425,000)         -
   Net effect on cash from distribution of Western shares................       (823,000)           -             -
   Proceeds on sales of fixed assets.....................................           -            189,000      2,235,000
                                                                                 -------       ---------      ----------

       Net cash provided by (used in) investing activities...............        394,000         803,000     (9,713,000)
                                                                                 -------      ----------       ---------
Cash flows from financing activities
   Long term debt repayments.............................................           -            (20,000)    (1,068,000)
   Borrowings under term loans...........................................           -         (2,390,000)    (4,286,000)
    Inventory floor financing............................................           -         (3,192,000)     6,090,000
   Principal payments under capitalized lease obligations................           -             32,000        (60,000)
   Proceeds from sale of stock...........................................           -             85,000           -
   Subsidiary sale/purchase of treasury stock............................           -            256,000           -
   Collections (increase) of receivable from shareholder, net............           -              -         (1,700,000)
                                                                              -----------     ----------     ----------

       Net cash used in financing activities.............................           -         (5,229,000)    (1,024,000)
                                                                              ----------      ----------     ----------
Net decrease in cash and cash equivalents................................       (762,000)     (1,633,000)      (448,000)
Cash and cash equivalents beginning of year..............................      1,281,000       2,914,000      3,362,000
                                                                               ---------       ---------     ----------
Cash and cash equivalents end of year....................................  $     519,000  $    1,281,000  $   2,914,000
                                                                           =============  ==============  =============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                      F-6
<PAGE>

                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       DESCRIPTION OF BUSINESS

     American United Global,  Inc., a Delaware  corporation (the "Company") owns
minority equity  positions in five entities.  The Company's  primary interest is
it's 36%  minority  ownership  of Western  Power &  Equipment  Corp.  (Western).
Western previously was a 59.6% majority owned subsidiary and on November 1, 2001
the Company  distributed  777,414  shares of Western  common  stock owned by the
Company pursuant to the final court approved settlement of the shareholder class
action.  Such  distribution  decreased  the  Company's  percentage  ownership of
Western to 36%.  All other  equity  positions  held by the Company are each less
than five percent.

     Western  is engaged in the sale,  rental and  service of light,  medium and
heavy  construction,  industrial and  agricultural  equipment and related parts.
These sales are  conducted  from 18 regional  distribution  operations  owned by
Western  located in the states of  Washington,  Oregon,  California,  Alaska and
Nevada.  A  majority  of this  equipment  is  manufactured  by Case  Corporation
("Case").

     The Company was also  previously  involved in the  engineering,  design and
construction  business through a minority owned subsidiary,  IDF  International,
Inc. ("IDF"). IDF ceased business operations in September 2000.

     Connectsoft  Communications  Corp.  ("CCC"),  a wholly owned subsidiary had
been  developing  a  telephony  server  product  that reads email and select web
content over the telephone which was marketed under the name "Vogo Server".  The
assets  of CCC  were  sold to an  unrelated  third  party  on June  15,  1999 as
discussed in Note 9. CCC has been accounted for as  discontinued  operations for
the year ending July 31, 1999.

     The Company has had a working  capital  deficit for each of the three years
ending July 31, 1999, 2000 and 2001. In addition, the cash, cash equivalents and
marketable securities of $745,000 as at July 31, 2001 are not sufficient to fund
current  levels of  operations  through the end of fiscal  2002.  The Company is
therefore actively pursuing various sources of financing.  Should such financing
not be obtained, the Company may not be able to continue in business.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  its  wholly  owned  and   majority-owned   subsidiaries.   All  significant
intercompany  balances and transactions  have been eliminated in  consolidation.
Due to a  distribution  of 777,414  shares of Western owned by the Company as at
November 1, 2000 the percentage  ownership of Western  decreased to 36% and thus
the  operations  of Western have been  accounted for using the equity method for
fiscal 2001.  Western was,  however,  included as a  consolidated  subsidiary in
fiscal  2000 and 1999 and  minority  interest  in  those  years  represents  the
minority  shareholders'  proportionate share of the equity of Western, which was
40.4% at July 31, 2000 and 39.4% in 1999.


                                      F-7
<PAGE>


         Cash Equivalents

     For financial reporting  purposes,  the Company considers all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents. Cash and cash equivalents consist of bank demand deposits with
three  financial  institutions.  At times,  demand  deposits may exceed  amounts
insured by the Federal Deposit Insurance Corporation.

         Restricted Cash

     In accordance with Western's  borrowing  agreement with Deutsche  Financial
Services ("DFS"),  Western has a cash account  restricted by DFS for the purpose
of paying down the line of credit. Restricted cash included in the cash balances
totaled $543,000 at July 31, 2000. (See note 6.)

         Inventory Valuation

     Inventories  are stated at the lower of cost or market.  Cost is determined
based upon the first-in,  first-out  method for parts inventory and the specific
identification for equipment inventories.

         Investment Securities

     Investments in marketable  securities  represent primarily common shares of
publicly  traded  companies and are carried at market value.  These  investments
have been classified as available for sale securities at July 31, 2001 and 2000.
Unrealized  gains and losses are  excluded  from  earnings and are included as a
component of  accumulated  other  comprehensive  (loss)income  in  shareholders'
(deficit) equity, net of applicable taxes, until realized.

         Property and Equipment

     Property,  plant, and equipment are owned by Western and are stated at cost
less accumulated depreciation.  Depreciation and amortization are computed using
the straight-line method over the estimated useful lives of the assets,  ranging
from 5 to 20 years.  Expenditures for  replacements  and major  improvements are
capitalized. Repairs and maintenance costs are expensed as incurred. The cost of
assets retired or otherwise disposed of and the related accumulated depreciation
are  eliminated  from the accounts;  any gain or loss thereon is included in the
results of operations.


         INTANGIBLE ASSETS

     Intangible assets include items with an indeterminate  useful life, such as
name recognition,  geographical location and market presence acquired by Western
in business  acquisitions.  Western  uses  estimates of the useful life of these
intangible  assets  ranging  from 20 to 40  years.  Such  lives are based on the
factors influencing the acquisition decision and on industry practice.

     The  carrying  value of  intangible  assets is  assessed by Western for any
permanent  impairment  by  evaluating  the  operating   performance  and  future
undiscounted  cash flows of the underlying  assets.  Adjustments are made if the
sum of the expected future net cash flows is less than book value.

         Income Taxes

     The Company accounts for income taxes using an asset and liability approach
which requires the  recognition of deferred tax  liabilities  and assets for the
expected  future  consequences  of  temporary  differences  between the carrying
amounts  for  financial  reporting  purposes  and the tax  bases of  assets  and
liabilities.

     Revenue Recognition

     Revenue on equipment and parts sales of Western is recognized upon shipment
of  products  and  passage of title.  Equipment  rental and  service  revenue is
generally recognized over the period such services are provided.

         Advertising Expense

     Western  expenses  all  advertising  costs as incurred.  Total  advertising
expense  for the years ended July 31, 2000 and 1999 was  $320,000  and  $311,000
respectively.


                                      F-8
<PAGE>
         Fair Value of Financial Instruments

     The recorded  amounts of cash and cash  equivalents,  accounts  receivable,
short term borrowings,  accounts payable and accrued liabilities as presented in
the  consolidated  financial  statements  approximate  fair  value  based on the
short-term  nature of these  instruments.  The recorded amount of long-term debt
approximates  fair  value  as the  actual  interest  rates  approximate  current
competitive rates. The recorded value of marketable  securities held at July 31,
2001 and 2000 is the market value as quoted on the respective  exchange on which
each security trades.

         Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions  that affect the reported amount of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses during the fiscal periods  presented.  Actual results could differ from
those estimates.

         Employee Stock Options

     The Company accounts for stock based employee  compensation plans under the
provisions of Statement of Financial  Accounting  Standards No. 123, "Accounting
for Stock-Based  Compensation."  This standard defines a fair value-based method
of accounting for these equity  instruments.  This method measures  compensation
cost based on the value of the award and  recognizes  that cost over the service
period.  The Company has elected to continue  using the rules of APB Opinion No.
25 and provides pro forma  disclosures of net income (loss) and earnings  (loss)
per share as if Statement No. 123 had been applied.

         Loss Per Share

     The following table sets forth the  computations of basic and fully diluted
loss per share for the years ended July 31, 2001, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED JULY 31,
                                                                          2001               2000            1999
                                                                          ----               ----            ----
<S>                                                                 <C>              <C>              <C>
Numerators:
  Net loss from continuing operations.............................   $    (6,400,000) $    (7,030,000)  $    (5,054,000)
  Discontinued operations.........................................            -                  -            1,989,000
                                                                          -----------       ---------        ----------
  Net loss .......................................................        (6,400,000)      (7,030,000)       (3,065,000)
                                                                          ==========       ==========        ==========
Denominator:
 Denominator for basic and diluted earnings per share -
  Weighted average outstanding shares.............................        12,285,330       11,948,368        11,748,210
                                                                          ==========       ==========        ==========
Basic and diluted earnings (loss) per share:

Loss from continuing operations...................................             (0.52)          (0.59)            (0.43)
Income from discontinued operations...............................              -                 -               0.17
                                                                          -----------      -----------       ----------
Basic and diluted net loss per share..............................   $         (0.52) $        (0.59)   $        (0.26)
                                                                          ===========      ===========       ===========
</TABLE>

     Diluted  and basic  loss per share are the  same,  since the  inclusion  of
common stock equivalents in the computation would be antidilutive.

3.       EQUITY IN LOSS OF UNCONSOLIDATED SUBSIDIARY

     Equity in loss of unconsolidated  subsidiary represents the Company's share
of Western's loss in fiscal 2001 and represents the Company's  share of the loss
of IDF International in fiscal 2000 and 1999.


4.       INVENTORIES

         Inventories consist of the following:
                                                              JULY 31,
                                                                2000
                                                             -----------
Equipment (net of allowances of $4,770,000):
New equipment..........................................  $    40,148,000
Used equipment.........................................        7,442,000
Parts  (net of allowances of $22,000)..................       10,707,000
                                                              ----------
                                                           $  58,297,000
                                                           =============
                                      F-9
<PAGE>

5.       FIXED ASSETS

         Fixed assets consist of the following:
                                                                 July 31
                                                                   2000
                                                             --------------
Machinery and equipment...................................  $     4,030,000
Furniture and office equipment............................        2,360,000
Computer hardware and software............................        1,869,000
Land     .................................................          500,000
Building and leasehold improvements.......................        5,334,000
Leasehold improvements....................................          550,000
Vehicles .................................................        1,428,000
                                                                  ---------
                                                                 16,071,000
Less:  Accumulated depreciation...........................       (6,621,000)
                                                                 ----------
Property plant & equipment, net ..........................  $     9,450,000
                                                               ============

Rental equipment fleet....................................       32,493,000
Less:  Accumulated depreciation...........................       (6,417,000)
                                                                 ----------
 Rental equipment fleet, net...............................  $    26,076,000
                                                               ============

Leased equipment fleet....................................        5,481,000
Less:  Accumulated depreciation...........................         (506,000)
                                                                   --------
Leased equipment fleet, net...............................  $     4,975,000
                                                               ============

6.       BORROWINGS

     The Company is in default on an  uncollaterized  note payable in the amount
of $1,500,000 to an unrelated third party.  The note bore interest at 8% through
its  original  due date of April 30,  1999.  While in  default,  the note  bears
interest at 10%.

     Western has inventory  floor plan financing  arrangements  with Case Credit
Corporation,  an affiliate of Case,  for Case  inventory  and with other finance
companies  affiliated  with other  equipment  manufacturers.  The terms of these
agreements  generally  include  a  one-month  to  six-month  interest  free term
followed by a term during  which  interest is charged.  Principal  payments  are
generally due at the earlier of sale of the  equipment or twelve to  forty-eight
months from the invoice date.

     All floor plan debt is  classified  as current since the inventory to which
it relates is generally sold within twelve months of the invoice date.

     The following table  summarizes the debt and inventory floor plan financing
arrangements:

<TABLE>
<CAPTION>
                                                                 Maturity               July 31,
                                          Interest Rate          Date            2001            2000
                                          -------------          ----            ----            ----
<S>                                    <C>                     <C>          <C>                <C>

       Note Payable                     8%(10% default           4/30/99     $1,500,000         $1,500,000
                                            rate)


       Case Credit Corporation              Prime + 2%           8 - 48            -            14,768,000
                                              (10.00%)            months


       Deutsche Financial Services         Prime - 0.5%         12 - 36            -            67,671,000
                                              (7.50%)             months

                                                                            -----------        -----------
                                                                            $ 1,500,000        $83,939,000
                                                                            ===========        ===========
</TABLE>

                                      F-10
<PAGE>

     At July 31, 2000, Western was in technical default of the leverage covenant
and the minimum tangible net worth covenant in the Deutsche  Financial  Services
Loan Agreement.  Western asked for but did not obtain a waiver letter as of July
31, 2000.  The loan  agreement was amended in October,  2000 and such  amendment
included waivers of all prior defaults,  established revised financial covenants
and created mandatory periodic reductions in the permitted credit limit. At July
31, 2001,  Western was in technical default of the leverage and minimum tangible
net worth covenants and had requested a waiver letter from DFS.  Western has not
obtained the waiver  letter and there is no assurance  that  Deutsche  Financial
Services will not call this debt at any time after July 31, 2001. If DFS were to
call the debt, it would become  immediately  due and payable in full and Western
would not be able to  continue  operations.  Such  event  would  have a material
adverse impact on the financial statements of the Company.


7.       INCOME TAXES

          The provision  (benefit) for income taxes from  continuing  operations
     comprises the following:
<TABLE>
<CAPTION>

                                                          YEAR ENDED JULY 31,
                                                          -------------------

                                                2001              2000               1999
                                                ----              ----               ----
<S>                                     <C>              <C>               <C>
Current:

   Federal............................   $      (545,000) $       179,000   $      (978,000)
   State .............................              -              26,000          (156,000)
                                                --------          -------           -------

                                                (545,000)         205,000        (1,134,000)
Deferred:
   Federal............................              -             500,000            29,000
   State .............................              -              74,000             4,000
                                              ----------       ----------       -----------

                                                    -             574,000            33,000
                                              ----------       ----------       -----------

                                         $      (545,000) $       779,000   $    (1,101,000)
                                              ==========       ==========       ===========
</TABLE>

          The   principal   reasons  for  the   variation   from  the  customary
     relationship  between  income taxes at the statutory  federal rate and that
     shown in the consolidated statement of operations are as follows:
<TABLE>
<CAPTION>
                                                                              YEAR ENDED JULY 31,
                                                                              -------------------

                                                                  2001               2000            1999
                                                                  ----               ----            ----

<S>                                                         <C>              <C>               <C>
Statutory federal income tax rate..........................     $ (2,304,000)  $   (2,989,000)   $  (2,009,000)
Valuation allowance........................................        2,603,000        4,101,000        1,011,000
State income taxes, net of federal income tax benefit......         (299,000)        (334,000)        (152,000)
Other, primarily adjustments to prior year accruals........         (545,000)           1,000           49,000
                                                                  ----------      -----------    --------------

                                                                 $  (545,000) $       779,000     $  1,101,000
                                                                   ==========     ===========     =============
</TABLE>

                                      F-11
<PAGE>
          Temporary   differences  and  carryforwards   which  give  rise  to  a
     significant portion of deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                                             JULY 31,
                                                       2001            2000
                                                      ----            ----
<S>                                           <C>               <C>
Depreciation and amortization................  $          -      $    (2,273,000)
                                                    ----------        ----------

Gross deferred tax liabilities...............             -           (2,273,000)
                                                    ----------        ----------
Inventory reserve............................             -            1,739,000
Bad debt reserve.............................             -              219,000
Accrued vacation and bonuses.................             -              127,000
Other    ....................................             -              444,000
Loss carryforwards...........................        8,224,000         8,227,000
Loss on Western initial public offering......             -              131,000
Stock options................................             -              874,000
                                                       -------           -------

Gross Deferred Tax Assets....................        8,224,000        11,761,000
Less valuation allowance.....................       (8,224,000)       (9,488,000)
                                                     ---------         ---------
Net deferred tax asset                                    -            2,273,000
                                                     ---------         ---------
                                               $          -      $          -
                                                     =========         =========
</TABLE>

     At July 31, 2001 the Company had federal income tax loss  carryforwards  of
approximately  $22,900,000  which will begin to expire in 2011.  Utilization  of
such net operating losses will be subject to annual  limitations in the event of
a change in  ownership  of the Company of more than 50%.  As the Company  cannot
anticipate  future income with reasonable  certainty,  a valuation  allowance of
$8,224,000 has been recorded.

8.       SHAREHOLDERS' (DEFICIT) EQUITY

     On February 25, 1994,  the Company  completed a public  offering of 920,000
units at $5.25 per unit, each unit consisting of one share of common stock, $.01
par value,  and one  redeemable  common  stock  purchase  warrant.  Each warrant
entitled  the holder to purchase  one share of common stock until July 31, 1998,
at an exercise price of $7.50.  The exercise period for the 920,000 warrants was
subsequently  extended to July 31, 2001 and on July 13,  2001,  was  extended to
July 31, 2003 and the  exercise  price was reduced to $1.00.  The  warrants  are
subject to redemption  by the Company at a redemption  price of $.10 per warrant
under certain circumstances.

     A total of 976,539 shares of the Company's Series B-1 convertible preferred
stock were  issued in  September  1996 in  connection  with the  acquisition  of
ConnectSoft,  Inc. Such shares have a $3.50 per share  liquidation value and are
convertible  into shares of the Company's  common stock at a conversion ratio of
one for one.  Through  the five  fiscal  years  ended  July 31,  2001 a total of
568,696  shares  were  converted  to  common  stock at the ratio of one for one,
leaving 407,843 shares outstanding at July 31, 2001.

     During the fourth  quarter of fiscal 2000,  the Company sold 212,500 shares
of common stock at $0.40 per share pursuant to a private  placement  memorandum.
During fiscal 2001,  additional  shares were issued  pursuant to an amendment to
the private placement  resulting in the issuance of an additional 287,000 shares
of Company common stock.

9.       DISCONTINUED OPERATIONS

     On  July  10,  1998,  the  Company   entered  into  an  agreement  to  sell
substantially  all of the assets of its Connectsoft  Communications  subsidiary,
including the network operations center ("NOC") to eGlobe,  Inc., formerly known
as Executive TeleCard,  Ltd. ("eGlobe").  The agreement,  as amended June 17 and
September 1999 provided  consideration  for the assets  acquired to be paid with
eGlobe   Convertible   Preferred  Stock  initially  valued  by  the  Company  at
approximately  $2,000,000.  Such  Preferred  Stock was converted  into 1,923,077
shares of eGlobe  common  stock in Fiscal  2000.  In  addition,  eGlobe  assumed
approximately  $5,182,000  of  Connectsoft  liabilities  and  leases,  of  which
approximately  $2,900,000  of  lease  obligations  guaranteed  by  the  Company.
Although  eGlobe is responsible  for payment of those assumed  liabilities,  the
assumption of such  liabilities will not relieve the Company from its guarantees
until such  liabilities  have been paid in full.  The final gain on  disposal of
$1,989,000  was  recognized  in  the  accompanying   consolidated  statement  of
operations as discontinued operations for the year ended July 31, 1999.

                                      F-12
<PAGE>
10.      COMMITMENTS AND CONTINGENCIES

         LEASE COMMITMENTS

     Western leases certain  facilities under  non-cancelable  lease agreements.
The building portion of five of the Western's facility leases qualify under SFAS
13 as "capital  leases"  (i.e.,  an  acquisition of an asset and incurrence of a
liability).  The remaining  facility  lease  agreements  have terms ranging from
month-to-month to nine years.  Certain of the facility lease agreements  provide
for options to renew and  generally  require the Company to pay property  taxes,
insurance,  and  maintenance  and repair  costs.  Total rent  expense  under all
operating  leases  aggregated $0,  $2,129,000 and $2,000,000 for the years ended
July 31, 2001, 2000 and 1999, respectively.

Assets recorded under capital leases included in fixed assets are as follows:

                                                     July 31,
                                                       2000
                                                    ----------
Capitalized asset value....................   $     4,553,000
Less:  Accumulated amortization............          (667,000)
                                                    ---------
                                              $     3,886,000
                                                    =========

         Other Contingencies

     The Company is guarantor on the capital lease obligations assumed by eGlobe
as described in Note 9.

         Legal Proceedings

     There are no pending material legal proceedings in which the Company or any
of  its  subsidiaries  is a  defendant,  or to  which  any of  their  respective
properties are subject, which either individually or in the aggregate,  may have
a material adverse effect on the results of operations or financial  position of
the Company.

     In May 1998,  a lawsuit  was filed on behalf of the  Company in a purported
shareholder  derivative  action against Mr. Rubin and certain other directors of
the Company. In June 1998, a shareholder class action was filed against the same
directors.

     On June 1, 1999 an agreement  was entered  into by all parties  whereby the
class  action was settled for  $2,500,000  which is  payable,  net of costs,  to
approved  claimant  shareholders.  The settlement  consisted of $600,000 in cash
from insurance proceeds and $1,900,000 by 777,414 shares of Western common stock
owned by the Company.  The $600,000 was paid to the claims administrator for the
benefit of claimants  during  fiscal 2000 and the common  shares of Western were
distributed to the claimant  stockholders on November 1, 2000. As a result,  the
Company no longer  owns  greater  than 50% of  Western,  and has  accounted  for
Western using the equity method  effective  August 1, 2000. A loss of $1,434,000
was accrued at July 31, 2000 representing the difference  between the book value
of the  Western  shares  transferred  and their  market  value  pursuant  to the
settlement  agreement.  In addition,  on June 1, 1999 the derivative  action was
settled for $2,800,000 which amount was  subsequently  amended to $2,891,000 and
was paid in full by Mr. Rubin to the Company during fiscal 2000 and 2001.

11.      STOCK OPTION PLANS

     The 1991 and 1996 Stock Option Plans

     The 1991 Plan was approved by the Board of Directors  and  shareholders  in
June 1991 and the 1996 Plan was  approved  by the  Board of  Directors  in April
1996.  Both of these plans were  cancelled  in  December  1999 when the Board of
Directors  approved  the 2000  Employee  Incentive  Stock  Option Plan (The 2000
Plan).  All  outstanding  stock  options  under  the 1991 and  1996  Plans  were
cancelled  and  replaced  with the same number of stock  options  under the 2000
Plan.

     The 2000 Plan

     The 2000 Plan was  approved by the Board of  Directors  on December 7, 1999
and  1,375,000  stock  options  were  simultaneously  granted to  replace  those
cancelled from the 1991 and 1996 Plans.  The Company granted 415,000  additional
stock options to certain Board members as well as 250,000 options to each of two
nominees  for  election  to the Board and  10,000  options to a  consultant  for
services rendered. The exercise price of all 2,300,000 options granted under the
2000 Plan on December  7, 1999 was $0.21 per share (110% of the market  value on
such date).

     On April 27, 2000 the Company  granted  1,650,000  stock options to a newly
elected director,  500,000,  100,000 and 50,000  respectively to certain special
consultants to the Company, 250,000 to a third nominee for election to the Board
and 300,000 and 250,000  respectively to two law firms for services rendered and
to be rendered. The exercise price of all 3,100,000 options granted on April 27,
2000 was  $0.3485  per  share  (85% of the  fair  market  value  on such  date).
Compensation  in connection  with these option grants has been  accounted for by
the Black-Scholes method where applicable.

                                      F-13
<PAGE>

The 2001 Plan

     On October  3, 2000,  the Board of  Directors  cancelled  the 2000 Plan and
approved the 2001 Stock Option Plan. All 5,400,000  options  previously  granted
under the 2000 Plan were cancelled and replaced by the same number of options in
the 2001 Plan. The Company also granted 100,000 options to a each of two special
special consultants,  50,000 additional options to a law firm, 10,000 options to
a  financial  consultant  and  500,000  to a  management  employee.  A total  of
3,050,000 of the 2001 grants were subsequently cancelled.

     On April 3, 2000 the FASB issued FASB  Interpretation  No. 44,  "Accounting
for Certain  Transactions  Involving Stock  Compensation - an  Interpretation of
Accounting  Principles  Board  Opinion No. 25" (FIN 44).  FIN 44  clarifies  the
application  of  Opinion  25  for  certain   issues   including  the  accounting
consequences of various  modifications  to the terms of a previously fixed stock
option or award.  In accordance  with FIN 44,  effective  July 31, 2000,  any of
these  options  which are not  exercised or  cancelled,  will be  accounted  for
pursuant to a variable stock option plan. Accordingly, compensation expense will
be recorded to the extent that the quoted market price of the  Company's  common
stock exceeds the revised exercise price of the repriced options.

    Summary Information

     The following table includes option information for the Company's plans:

<TABLE>
<CAPTION>
                                                                                WEIGHTED AVERAGE
                                                                                  FAIR VALUE OF
                                           NUMBER OF          WEIGHTED              OPTION
         STOCK OPTION ACTIVITY               SHARES        EXERCISE PRICE           GRANTED
         ---------------------               ------        --------------           -------
<S>                                       <C>               <C>                   <C>
         July 31, 1998                       1,872,000          4.55
           Options granted                        -              -                    -
           Options exercised                      -              -
           Options canceled                   (190,000)         5.50
                                           -----------
           July 31, 1999                     1,682,000          4.48
           Options granted                   5,350,000          0.29                 0.29
           Options exercised                     -               -
           Options canceled                 (1,412,000)         4.25
                                           -----------
           July 31, 2000                     5,620,000          0.76
           Options granted                   6,160,000          0.28                 0.28
           Options exercised                     -
           Options canceled                 (8,450,000)         0.30
                                           ------------
           July 31, 2001                     3,330,000          0.73
                                           ============
</TABLE>

     The following table  summarizes  stock options  outstanding and exercisable
for the Company at July 31, 2001:

<TABLE>
<CAPTION>
                                              OUTSTANDING                    EXERCISABLE
                                              -----------                    -----------
                             Weighted          Weighted                Weighted
                              Average           Average                 Average
                             Remaining         Exercise                Exercise
Exercise Price Range          Shares             Life       Price       Shares           Price
--------------------          ------             ----       -----       ------           -----
<S>                         <C>                <C>        <C>       <C>               <C>
$0.28 to 0.28                3,110,000          4.2         $0.28     2,913,000         $0.28
$3.20 to 3.20                   20,000          0.6          3.20        20,000          3.20
$6.13 to 6.50                  200,000          0.8          6.41       200,000          6.41
                               -------                                  -------
$0.28 to 6.50                3,330,000          4.0          0.66     3,133,000         $0.70
                             =========                                =========


</TABLE>
                                      F-14
<PAGE>

     The Company has adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123.   "Accounting   for   Stock-Based
Compensation."  If  compensation  cost for the Company's  stock option plans had
been  determined  based on the fair value at the grant date for awards in fiscal
2001 and fiscal 2000 in  accordance  with the  provisions  of SFAS No. 123,  the
Company's  net loss per  share  would  have  changed  to the pro  forma  amounts
indicated below:

<TABLE>
<CAPTION>
                                                                      YEAR ENDED JULY 31,
                                                                     2001            2000
                                                                    ----            ----
<S>                                                         <C>               <C>

Net loss, as reported......................................  $    (6,400,000)  $    (7,030,000)
Net loss, pro forma........................................  $    (7,160,000)  $    (8,041,000)
Net basic and diluted loss per share, as reported..........  $         (0.52)  $         (0.59)
Net basic and diluted loss per share, pro forma............  $         (0.58)  $         (0.67)

</TABLE>


    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:

<TABLE>
<CAPTION>

                                                     YEAR ENDED JULY 31,

                                                   2001            2000
                                                   ----            ----
<S>                                               <C>            <C>
Expected volatility........................        1.54            3.82
Risk-free interest rate....................        4.50%           5.25%
Expected life of options in years..........         5.0             5.0
Expected dividend yield....................        0.00%           0.00%

</TABLE>

12.      INTERTECH TRANSACTION

     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among the Company,  Intertech  Capital,  Inc.  ("Intertech"),
Jeffrey  M.  Berman  ("Berman"),  Eric  Staffin  ("Staffin")  and Peter  Gregory
Saridakis ("Saridakas") (Berman, Staffin and Saridakas are collectively referred
to as the  "Purchasers"),  the Company sold an  aggregate  of 500,000  shares of
common stock of Intertech,  par value $.0001 per share (the "Intertech  Shares")
to the  Purchasers,  which  Intertech  Shares  constituted all of the issued and
outstanding  capital stock of Intertech.  In connection  therewith,  the Company
issued to: (i) Berman  825,000  warrants  to  purchase  shares of the  Company's
common  stock  (the  "Warrants");  (ii)  Staffin  166,667  Warrants;  and  (iii)
Saridakis 83,333 Warrants, all which are immediately vested, expire on March 19,
2006,  and are  exercisable  at  $0.275  per  share.  In  consideration  for the
Intertech  Shares and the  Warrants,  each of the  Purchasers  terminated  their
respective employment agreements with the Company, released the Company from any
obligations  with respect to the employment  agreements,  including past due and
accrued  salaries,  and  terminated  and waived  all right to any stock  options
granted by the  Company.  In addition,  Berman and Staffin  resigned as officers
and/or directors of the Company.

     Simultaneous  with the  closing of the  Intertech  transaction  the Company
purchased  approximately 5.4% of Intertech's then issued and outstanding capital
stock in consideration  for the transfer of 79,895 shares of common stock of New
Media Technology, Inc. owned by the Company.

     13.  SUPPLEMENTAL  DISCLOSURES  OF CASH FLOW  INFORMATION  AND  SCHEDULE OF
NON-CASH INVESTING AND FINANCING ACTIVITIES

     The Company paid interest of $116,000, $5,922,000 and $5,482,000 during the
fiscal years 2001, 2000 and 1999  respectively.  The Company  received an income
tax refund of $834,000  during  fiscal 1999,  and paid $219,000 in income taxes,
net of refunds, during fiscal 2000.


                                      F-15
<PAGE>

14.      RELATED PARTIES

     Pursuant to an Agreement,  dated May 30, 1996 (the "ERD Agreement") between
the Company and ERD Waste Corp.  ("ERD"),  the Company agreed to provide certain
financial accommodation to ERD by making available a $4.4 million standby letter
of credit  expiring May 31, 1998 issued by  Citibank,  N.A. in favor of Chemical
Bank (the "Letter of Credit") on behalf of ERD.  Chemical Bank was the principal
lender to ERD and its  subsidiaries,  and upon  issuance  of the Letter of Chase
Bank (formerly  Chemical Bank) made available $4.4 million of additional funding
to ERD under ERD's existing lending facility.  The funding was used to refinance
certain  outstanding  indebtedness of  Environmental  Services of America,  Inc.
("ENSA"),  a wholly owned  subsidiary of ERD. Robert M. Rubin,  the Chairman and
Chief Executive Officer, and a principal stockholder of the Company was also the
Chairman,  Chief Executive  Officer,  a director and a principal  stockholder of
ERD, owning approximately 23.0% of the outstanding ERD Common Stock.

     In September  1996, a subsidiary of ERD which  operated a waste facility in
Nassau  County,  New  York  was  cited  by the  New  York  State  Department  of
Environmental  Conservation ("DEC") for violating certain DEC regulations.  Such
waste  facility  had  accounted  for  approximately  13% of  ERD's  consolidated
revenues.  The Company  was advised by ERD that under the terms of a  Settlement
Agreement  reached with the State of New York in November  1996,  all violations
alleged by the DEC had been resolved in  consideration  for, among other things,
ERD's  agreement  to  voluntarily  cease  incineration  operations  at the waste
facility on or before March 31, 1997.  Such  incineration  operations  ceased on
April 15, 1997.

     In February of 1997,  the Company  loaned  $500,000 to ERD Waste Corp.  The
loan was  collateralized  by a short term note bearing  interest at 2% above the
prime lending rate of the Company's commercial bank (8.5% at April 30, 1997) and
a second  collateral  and security  position on all accounts  receivable  of ERD
subject to the primary collateral position held by Chase Bank and was personally
guaranteed  by Mr.  Rubin.  Principal  together  with  accrued  interest was due
October 5, 1997.

     In September 1997 ERD filed for protection  from creditors under Chapter 11
of federal bankruptcy laws. In October, 1997 Chemical bank drew the $4.4 million
available on the standby letter of credit.  As a result,  the Company recorded a
loss of  approximately  $5.0  million,  related  to the  February  Note  and the
September letter of credit.  Mr. Rubin had personally  guaranteed  approximately
$1.6 million of the ERD loss. This amount was repaid to the Company  pursuant to
the shareholder litigation settlement as described in Note 10.

     On June 28, 1996 the Company entered into a collateralized credit agreement
with Mr.Rubin pursuant to which Mr. Rubin delivered a demand promissory note for
up to  $1,200,000  and payment in full was due no later than July 31, 1998.  The
due date was  subsequently  extended to July 31, 1999 and then to September  30,
2000 as part of the shareholder  litigation  settlement.  Mr. Rubin's payment of
$2,891,000 as described in Note 10 included amounts due under the note.


15. EMPLOYEE SAVINGS PLAN

     The Company has a voluntary  savings plan pursuant to Section 401(k) of the
Internal Revenue Code, whereby eligible participants may contribute a percentage
of compensation  subject to certain  limitations.  The Company has the option to
make  discretionary  qualified  contributions to the plan,  however,  no Company
contributions were made for fiscal 2001, 2000 or 1999.


                                      F-16
<PAGE>
16.      SEGMENT INFORMATION

     In fiscal 1999,  the Company  adopted  Statement  of  Financial  Accounting
Standards No. 131 (SFAS 131),  "Disclosures  about Segments of an Enterprise and
Related   Information,"  which  requires  the  reporting  of  certain  financial
information by business segment.  All such information  relates only to Western.
For the purpose of providing segment  information,  Western believes that all of
its operations consist of one segment.  However,  Western evaluates  performance
based on revenue and gross margin of three distinct business components. Revenue
and gross margin by component are summarized as follows:

    Business Component          Year Ended        Year Ended       Year Ended
       Net Revenues           July 31, 2001     July 31, 2000     July 31, 1999
---------------------------- ----------------- ----------------- --------------
Equipment Sales                      -0-       $   92,513        $     98,450
Equipment Rental                     -0-           26,334              25,771
Product Support                      -0-           36,790              39,429
                             ----------------- ----------------- -------------
    Totals                           -0-       $  155,637        $    163,650
                             ================= ================= =============

     Business Component         Year Ended        Year Ended       Year Ended
       Gross Margins           July 31, 2001    July 31, 2000     July 31, 1999
----------------------------- ---------------- ----------------- --------------
Equipment Sales                      -0-       $     (    66)   $       2,591
Equipment Rental                     -0-               5,556            5,017
Product Support                      -0-               6,048            6,986
                              ---------------- ----------------- --------------
    Totals                           -0-       $   11,538        $     14,594
                              ================ ================= ==============

17.  UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                  Quarter                                Total
                                            First         Second           Third         Fourth           Year
Fiscal 2001:                                -----         ------           -----         ------           ----
-----------
<S>                                      <C>            <C>            <C>            <C>           <C>
Net sales                                 $  -           $  -            $  -           $  -          $   -
Gross Profit                                 -              -               -              -              -
Net loss                                    (725)           (388)        (2,567)         (2,720)        (6,400)
Basic loss per share                       (0.06)          (0.03)         (0.21)          (0.22)         (0.52)
Diluted loss per share                     (0.06)          (0.03)         (0.21)          (0.22)         (0.52)

                                                                  Quarter                                Total
                                            First         Second           Third         Fourth           Year
                                            -----         ------           -----         ------           ----
Fiscal 2000:
------------
Net sales                                 $42,063        $33,988         $35,340        $44,246       $155,637
Gross Profit                                4,920          3,865           3,236           (483)        11,538
Net loss                                    (333)          (281)           (799)        (5,617)        (7,030)
Basic loss per share                       (0.03)          (0.02)         (0.07)          (0.47)         (0.59)
Diluted loss per share                     (0.03)          (0.02)         (0.07)          (0.47)         (0.59)

</TABLE>

18.      SUBSEQUENT EVENT

     On  September  18, 2001  Western  entered  into a Purchase  agreement  with
e*machinery.net,  Inc.  (OTCBB:EMAC) whereby EMAC would acquire the business and
substantially  all of the assets  and  liabilities  of  Western's  wholly  owned
operating  subsidiary,  Western Power & Equipment Corp. (Oregon) for $500,000 in
cash, a seven year interest  bearing  promissory note for $700,000 and 1,200,000
shares of EMAC common stock  valued at  approximately  $600,000.  The closing is
subject to a number of conditions,  including, but not limited to, due diligence
and approval by both Case Corporation and Deutsche Financial Services. There can
be no assurance that this transaction will be consummated.

     Pursuant  to  this  proposed   transaction,   management  has  recorded  an
impairment  loss in the amount of  $1,771,000  at July 31,  2001 to reflect  the
Company's investment in Western at its approximate fair value.

                                      F-17
<PAGE>


     SCHEDULE II


                          AMERICAN UNITED GLOBAL INC.

                       VALUATION AND QUALIFYING ACCOUNTS
             For the Fiscal Years Ended July 31, 2001, 2000 and 1999

<TABLE>
<CAPTION>



                                              Balance at      Charged to    Charged to                  Balance at
                                              Beginning       Costs and        Other                      End of
               Description                    of Period        Expenses      Accounts     Deductions      Period
               -----------                    ---------        --------      --------     ----------      ------

Income Tax Valuation Allowance:
<S>                                         <C>             <C>           <C>          <C>              <C>

  Fiscal year ended July 31, 1999          $4,377,000                                   $(276,000)      $4,101,000

  Fiscal year ended July 31, 2000          $4,401,000        $5,387,000      ---             -          $9,488,000

  Fiscal year ended July 31, 2001          $9,488,000                        ---       $1,264,000       $8,224,000


Accounts Receivable Reserve:

  Fiscal year ended July 31, 1999            $670,000        $732,000        ---        $(678,000)        $724,000

  Fiscal year ended July 31, 2000            $724,000        $690,000        ---        $(851,000)        $563,000

  Fiscal year ended July 31, 2001                -               -           ---             -                -


Inventory Reserve:

  Fiscal year ended July 31, 1999           $2,833,000     $  884,000        ---      $(1,204,000)      $2,513,000

  Fiscal year ended July 31, 2000           $2,513,000     $2,188,000        ---        $(591,000)      $5,292,000

  Fiscal year ended July 31, 2001                 -              -           ---             -                -

</TABLE>



                                      F-18
<PAGE>


                      Report of Independant Accountants on
                          Financial Statement Schedules


To the Board of Directors
of American United Global, Inc.

Our audits of the financial  statements referred to in our report dated November
5, 2001  appearing  on page F-2 in the 2001  Annual  Report to  Shareholders  of
American  United  Global,  Inc.  (which  report  and  financial  statements  are
incorporated  by reference on the annual  report on Form 10-K) also  included an
audit of the financial statement schedules listed in Item 14(a)(2) of Form 10-K.
In our opinion,  these financial  statement  schedules  present  fairly,  in all
material  respects,  the  information set forth therein when read in conjunction
with the related financial statements.



PricewaterhouseCoopers LLP
Portland, Oregon

November 5, 2001




                                      F-19
<PAGE>

     ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

                  None.

     PART III

     ITEM 10.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS AND CONTROL  PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Officers, Directors and Key Employees

     The  following  table sets forth  information  with  respect to  directors,
executive  officers  and key  employees  of the  Company as of November 1, 2001.
Except for  matters  discussed  in Item 3 of this  Annual  Report,  there are no
pending  legal  proceedings  to which any  director,  nominee  for  director  or
executive officer of the Company is a party adverse to the Company.

       Name            Age   Position

Robert M. Rubin         61   Chairman of the Board of Directors, President and
                             Chief Executive Officer

C. Dean McLain          48   Director and Executive Vice President and Chief
                             Executive Officer of Western

David M. Barnes         58   Vice President of Finance, Chief Financial Officer
                             and Director

Howard Katz             59   Director

Seymour Kessler         69   Director

Allen Perres            49   Director

     ROBERT  M.  RUBIN.  Mr.Rubin  has  served as the  Chairman  of the Board of
Directors of the Company  since May 1991,  and was its Chief  Executive  Officer
from May 1991 to January 1, 1994.  Between October 1990 and January 1, 1994, Mr.
Rubin  served as the  Chairman of the Board and Chief  Executive  Officer of the
Company  and its  subsidiaries;  from  January 1, 1994 to January 19,  1996,  he
served only as Chairman of the Board of the Company and its  subsidiaries.  From
January 19, 1996 to the present,  Mr. Rubin has served as Chairman of the Board,
President and Chief Executive Officer of the Company. Mr. Rubin was the founder,
President, Chief Executive Officer and a Director of Superior Care, Inc. ("SCI")
from its inception in 1976 until May 1986. Mr. Rubin  continued as a director of
SCI (now known as Olsten  Corporation  ("Olsten") until the latter part of 1987.
Olsten,  a New York Stock Exchange listed Company,  is engaged in providing home
care and institutional  staffing  services and health care management  services.
Mr.  Rubin  was  Chairman  of the Board and  Chief  Executive  Officer  and is a
stockholder of ERD Waste Technology, Inc., a diversified waste management public
Company  specializing  in the management and disposal of municipal  solid waste,
industrial and commercial  non-hazardous waste and hazardous waste. In September
1997, ERD filed for protection under the provisions of Chapter 11 of the federal
bankruptcy  act.  Mr.  Rubin is also a Director  of Western.  The  Company  owns
approximately 36% of the outstanding common stock of Western.  Mr. Rubin is also
a director of Med-Emerg,  Inc., a publicly-held  Canadian management Company for
hospital  emergency  rooms  and  out-patient  facilities.  Mr.  Rubin was also a
director of  StyleSite  Marketing,  Inc.,  which  liquidated  its assets for the
benefit of secured creditors in January 2000. Mr. Rubin devotes approximately 35
hours per week to the business of the Company.

     C. DEAN MCLAIN. Mr. McLain has served as an Executive Vice President of the
Company  since March 1, 1993,  as a director of the Company  since March 7, 1994
and  President  of Western  since June 1, 1993.  From 1989 to 1993,  Mr.  McLain
served as Manager of Privatization of Case  Corporation.  From 1985 to 1989, Mr.
McLain served as General Manager of Lake State Equipment,  a distributor of John
Deere  construction  equipment.  Mr. McLain holds a B.S.  degree in Business and
Economics,  and a Master's  of  Business  Administration  from West Texas  State
University.  Mr.  McLain  devotes  his full  professional  time to  Western  and
included in such time is time spent on the Company's business.

     DAVID M. BARNES.  Mr. Barnes has served as the Chief  Financial  Officer of
the Company since May 15, 1996,  and has been a director since November 8, 1996.
Mr.  Barnes is also  presently  a member of the  Advisory  Board of  Interactive
Imagination,  Inc., a privately-held  video game developer based in Seattle, WA.
Mr. Barnes devotes the majority of his professional  time to the business of the
Company.

     HOWARD  KATZ.  Mr. Katz was  Executive  Vice  President of the Company from
April 15, 1996  through  July 31,  1998 and has been a director  since April 15,
1996.  Since  August 1998 to the  present Mr. Katz has been the Chief  Executive
Officer of Imagine Networks,  LLC., a New York City based privately held company
which engages in advanced technology and software development.

                                       10
<PAGE>

     SEYMOUR KESSLER.  Dr. Kessler has served as a Director of the Company since
August 28, 2001 and has been a Director of Western since February 2, 2000.  From
January  1999 to the present Dr.  Kessler has been  co-Managing  Director of RKP
Capital Partners,  a holding Company for publicly and privately-held  companies.
Between 1996 and the present Dr. Kessler has been an active  investor in various
publicly and privately-held  companies. From 1992 through 1996 Dr. Kessler was a
founder,  Chief Executive  Officer and a director of Princeton Dental Management
Corporation.  Between 1982 and 1997 Dr.  Kessler served on the Board of Trustees
of University of Health Science Center, in Des Moines,  IA. Dr. Kessler also has
been a director of four  nationally-chartered  banks,  including serving as Vice
Chairman of the Board of Directors  of Peterson  Bank.  Dr.  Kessler is a former
podiatric  surgeon who since 1975 has held  majority and minority  interests and
actively  served  in over 85  partnerships,  privately-held  and  publicly-owned
companies and institutions.


     ALLEN  PERRES.  Mr.  Perres has served as a Director of the  Company  since
August 28, 2001 and has been a director of Western since February 2, 2000.  From
January  1999 to the present  Mr.  Perres has been  co-Managing  Director of RKP
Capital Partners,  a holding Company for publicly and privately-held  companies.
Mr. Perres is a partner in RB Partners,  Inc.,  an  investment  banking firm for
homebuilders,  and has served in such  capacity  from 1994 to the  present.  Mr.
Perres  co-founded and managed that firm's  commercial and residential  mortgage
unit, First Dearborn Mortgage Company, Inc., during such period.


Committees of the Board

     At present,  the Board of Directors has three committees,  the Compensation
Committee, the Audit Committee, and the Corporate Governance Committee.

     The Compensation  Committee's duties include the review of the compensation
for all  employees  and the  granting  of  options  under  all of the  Company's
employee  stock  option plans that may exist and be in effect from time to time.
The Compensation  Committee  presently consists of Messrs.  McLain,  Kessler and
Perres

     The Audit  Committee's  duties  include  the  review  of  AUGI's  financial
statements,  budget,  and its'  financing  arrangements  as well a review of its
internal financial  controls.  The Audit Committee presently consists of Messrs.
Kessler and Perres.

     The Corporate Governance Committee's duties include the review of corporate
governance  matters  including   proposed   amendments  to  the  Certificate  of
Incorporation and bylaws and the conduct of meetings of directors, committees of
the Board of Directors and of stockholders.  The Corporate  Governance Committee
consists of Messrs. Barnes and Rubin.

     During  Fiscal  2001 the Board of  Directors  met on three  occasions;  The
Compensation  Committee and The Audit  Committee  each met on one occasion.  The
Corporate Governance Committee was formed in December 1999 and has met twice.



     ITEM 11. EXECUTIVE COMPENSATION

     SUMMARY COMPENSATION TABLE

          The following table sets forth the amount of all compensation  paid by
     AUGI for  services  rendered  during each of the three fiscal years of AUGI
     ended  July  31,  2001,  2000,  and  1999  to each of  AUGI's  most  highly
     compensated  executive  officers and key employees whose total compensation
     exceeded $100,000,  and to all executive officers and key employees of AUGI
     as a group.


                                       11
<PAGE>

<TABLE>
<CAPTION>
                             ANNUAL COMPENSATION              LONG-TERM COMPENSATION
                             -------------------              ----------------------
                                                              AWARDS
                                                              ------       NUMBER OF
NAME AND           FISCAL    SALARY     BONUS    OTHER        RESTRICTED   SECURITIES     LTIP          ALL OTHER
PRINCIPAL          YEAR        ($)               ANNUAL       STOCK        UNDERLYING     PAYOUTS       COMPENSATION
POSITION                                         COMPENSATION AWARD(S)   OPTIONS/SARS#    ($)               ($)
--------          -----     -------   -------    ---------------------     --------       ---           ----------
<S>               <C>       <C>         <C>     <C>          <C>          <C>            <C>           <C>
                                                 ($)          ($)          SARS(#)
Robert M. Rubin    2001      425,000    -0-      -0-          -0-          -0-            -0-           -0-
Chairman,          2000      400,000    -0-      -0-          -0-          250,000        -0-           -0-
President and      1999      375,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Executive
Officer(1)

David M. Barnes    2001      150,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Financial    2000      140,000    -0-      -0-          -0-          100,000        -0-           -0-
Officer and        1999      125,000    -0-      2,000        -0-          -0-            -0-           -0-
Director

C. Dean McLain (2) 2001      390,000    -0-      -0-          -0-          -0-            -0-           -0-
Executive Vice     2000      200,000    -0-      -0-          -0-           56,500        -0-           -0-
President and      1999      290,000    -0-      -0-          -0-          -0-            -0-           -0-
Director;
President of
Western
</TABLE>

     (1) Includes  $150,000 paid under Mr.  Rubin's  Consulting  Agreement  with
Western during Fiscal 1999 and Fiscal 2000 and $200,000 in fiscal 2001.

     (2)  All compensation paid by Western.

                                       12
<PAGE>


STOCK OPTION PLANS

OPTION GRANTS IN FISCAL 2001

     On October  3, 2000,  the Board of  Directors  cancelled  the 2000 Plan and
approved the 2001 Stock Option Plan. All 5,400,000  options  previously  granted
under the 2000 Plan were cancelled and replaced by the same number of options in
the 2001 Plan. The Company also granted 100,000 options to a each of two special
consultants,  50,000  additional  options  to a law firm,  10,000  options  to a
financial  consultant and 500,000 to a management employee. A total of 3,050,000
of the 2001 grants were subsequently cancelled.

     AUGI, on October 3, 2000,  granted 500,000  non-qualified  stock options to
Michael Sweeney,  250,000 non-qualified stock options to each of Seymour Kessler
and Allen  Perres (each then a nominee for  Director,  and elected on August 28,
2001),  250,000  non-qualified  stock  options  to  Stephen  Byers  and  100,000
non-qualified stock options to Michael Metter, all in consideration for services
rendered  and to be  rendered  by such  persons who have agreed to be engaged as
consultants to the Company, and 300,000  non-qualified stock options to Gersten,
Savage & Kaplowitz,  LLP ("GSK"), and 50,000 non-qualified stock options to Bert
Gusrae in consideration of corporate finance  consulting  services,  and 250,000
non-qualified  stock  options  to  Stephen  Berger  in  consideration  for legal
services. The options granted vested fully upon their grant and are exerciseable
for five years after  issuance for $0.275 per share (125% of the market value on
the date of grant) and the options granted to Messrs. Kessler, Perres and Berger
vest in twenty  percent (20%)  increments at granting and each of the four years
thereafter. 400,000 of the options granted to Mr. Sweeney and all of the options
granted to Mr. Byers have since been cancelled.

     AUGI also issued 1,650,000 incentive stock options to Jeffrey Berman, which
options vested one-half at granting and the remaining  one-half on May 27, 2001,
and 500,000  incentive  stock options to Eric Staffin which vested  one-third at
granting and at each of the two years thereafter.  On March 19, 2001, all of the
options  granted to Mr. Berman and Mr. Staffin were cancelled in connection with
the Intertech  Transaction,  and Mr. Berman and Mr. Staffin were issued warrants
to purchase  825,000  and 166,667  shares of Common  Stock,  respectively.  Such
number of shares  represented the number of vested and exercisable  options held
by each of Mr. Berman and Mr.  Staffin on such date. The exercise price of these
warrants  is 0.275 per share  which is the same as the  exercise  price of their
cancelled vested options.

     AUGI also issued a total of  1,790,000  incentive  stock  options,  vesting
immediately  upon granting,  to Messrs.  Rubin (840,000) Katz (350,000),  McLain
(300,000)  and Barnes  (300,000) to replace an equal number of options under the
2000 Plan that were  cancelled,  and such options are exercisable for five years
after  issuance  for $0.275 per share (110% of the fair market value on the date
of the grant).

                                       13
<PAGE>


       Option Grants to Named Executive Officers in Last Fiscal Year

     The  following  table sets forth  certain  information  with respect to all
outstanding stock options issued during 2001 to AUGI's named Executive Officers.


<TABLE>
<CAPTION>

                                   Individual Grants


                                              Percent
                                              of Total
                                              Options                                             Potential
                           Number of          Granted                                         Realizable Value
                          Securities             to                                           At Assumed annual
                          Underlying         Employees                                         Rates of Price
                            Options          In Fiscal        Exercise    Expiration          Appreciation for
Name                        Granted             Year           Price         Date                Option Term
----                        -------             ----           -----         ----                -----------

                                                                                              5%            10%
<S>                        <C>              <C>              <C>          <C>            <C>         <C>

Robert M. Rubin              840,000           58.3%           $0.275       10/03/05        $67,536     $141,120

C. Dean McLain               300,000           20.8%           $0.275       10/03/05        $24,120      $50,400

David M. Barnes              300,000           20.8%           $0.275       10/03/05        $24,120      $50,400
</TABLE>

     The following table provides  information  concerning the exercise of stock
options during the last completed  fiscal year by each Named Executive  Officer,
and the fiscal year-end value (as of July 31, 2001) of unexercised  options held
by each such person.  None of these options has been exercised as of November 1,
2001.

                          Aggregated Options Exercised
                         in Last Fiscal Year and Fiscal
                             Year-End Option Values
                                                                  Value of
                                                Number of        Unexercised
                                               Unexercised      In-the-Money
                       Shares                  Options/SARs     Options/SARs
                     Acquired on    Value       at FY-End        at FY-End
Name                 Exercise (#)  Realized    Exercisable      Exercisable


Robert Rubin              -0-        -0-        840,000            $0

David Barnes               -0-       -0-        300,000            $0

C. Dean McLain             -0-       -0-        300,000            $0

THE 2001 STOCK OPTION PLAN

     The 2001 Plan was adopted on October 3, 2000 and as of such date  5,910,000
options  were  granted and on such date all  previously  issued and  outstanding
options  granted  under the 2000 Plan were  cancelled.  2,800,000 of the options
granted on October 3, 2000 were  subsequently  cancelled by AUGI. Please see the
discussion under "Option Grants in Fiscal 2001" above.

     AUGI's  Board of  Directors  cancelled  as of  December  7,1999 all options
outstanding under the Company's 1991 and 1996 Stock Option Plans and adopted the
2000 Plan. On October 3, 2000, the Board cancelled the 2000 Plan and all options
granted  thereunder and adopted the 2001 Plan. The 3,110,000  options  currently
outstanding  under the 2001 Plan  replaced  options for an  identical  number of
shares of Common Stock as were issuable upon exercise of the 2000 Plan cancelled
options.  In addition,  2,800,000 other options granted under the 2001 plan were
cancelled during the third and fourth quarter of fiscal 2001.


                                       14
<PAGE>

Employment, Incentive Compensation and Termination Agreements

     ROBERT M. RUBIN. Mr. Rubin is employed by AUGI as the Chairman of the Board
of Directors of the Company. Mr. Rubin is so employed pursuant to an amended and
restated  employment  agreement,  dated as of June 3, 1998 and as most  recently
amended as of December 7, 1999 (the  "Restated  Agreement")  for a term expiring
December 7, 2004.  The  Restated  Agreement  provides  for a minimum base salary
payable to Mr. Rubin of $225,000,  incentive  bonuses  consisting  of 10% of the
sale  price in excess  of  AUGI's  basis,  up to a  maximum  aggregate  bonus of
$3,000,000, to be paid to Mr. Rubin contingent upon AUGI's ability to dispose of
its common  stock of either  eGlobe,  Inc. or Western and receive net  aggregate
proceeds in excess of $3,000,000 from the sale of the shares of either eGlobe or
Western  shares,  and 250,000  incentive  stock options.  No incentive bonus was
earned in fiscal 2001 or 2000.

     Mr. Rubin is also engaged by Western, AUGI's 36% minority owned subsidiary,
pursuant  to a two-  year  Consulting  Agreement,  effective  August 1, 1998 and
extended for seven years from August 1, 2000 under which starting in Fiscal 2001
he is paid $200,000 annually plus reimbursement for his business expenses.

     C. DEAN MCLAIN.  C. Dean McLain serves as the President and Chief Executive
Officer of Western pursuant to a ten-year employment agreement expiring July 31,
2005.  Pursuant to such  agreement,  Mr. McLain  received an annual base salary,
payable monthly,  of $290,000 per annum in Fiscal 1999 and $300,000 per annum in
Fiscal 2000. For each of the fiscal years ending 2001 through 2005, Mr. McLain's
base salary shall be $390,000 plus a cost of living adjustment. In addition, Mr.
McLain is entitled to receive certain  incentive bonus payments equal to one and
one half percent (1 1/2 %) of each fiscal years  adjusted  consolidated  pre-tax
income of Western in excess of $1,750,000  provided,  that the maximum amount of
the Incentive  Bonus payable by Western to Mr. McLain shall not exceed  $150,000
in any such fiscal year.  Mr. McLain was also granted  300,000  incentive  stock
options on October 3, 2000 under the 2001 Plan,  which  options are  immediately
exercisable for five years at $0.275 per share.

     HOWARD KATZ.  Howard Katz is a director of AUGI.  Mr. Katz received  salary
severance of $32,500 in Fiscal 2001 and $78,000 in Fiscal  2000,  and $91,738 in
salary  severance and other  compensation  during Fiscal 1999. Prior to July 31,
1998, Mr. Katz served as AUGI's  Executive  Vice President  since April 15, 1996
and received an annual base salary of $185,000 for Fiscal 1998. In addition,  on
October 3, 2000 Mr. Katz  received  350,000  stock  options under the 2001 Plan,
which are immediately exercisable for five years at $0.275 per share.

     DAVID M. BARNES.  David M. Barnes is a director and Chief Financial Officer
of AUGI. In Fiscal 2001 Mr. Barnes received total  compensation of $150,000.  In
Fiscal 2000 Mr. Barnes received total  compensation of $140,000.  In Fiscal 1999
Mr.  Barnes  received a base salary of $125,000 and certain  executive  benefits
which brought his total Fiscal 1999 compensation to $127,000. In Fiscal 2002 Mr.
Barnes will  continue in these  capacities  with a base salary of $160,000  plus
certain  executive  benefits.  Between May 15, 1996 and July 31, 1998 Mr. Barnes
received an annual salary of $150,000. In addition on October 3, 2000 Mr. Barnes
received 300,000  incentive stock options under the 2001 Plan, which options are
immediately exercisable for five years at $0.275 per share.


               COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During  Fiscal 2001 the Board of  Directors'  Compensation  Committee  (the
"Compensation Committee") met once.

     Mr. Rubin's  annual  compensation,  identified in the Summary  Compensation
Table,  was  determined  by his  employment  agreements  with  AUGI,  which were
approved by the Board of Directors. Mr. Rubin's employment agreement was amended
in December 1999 and is now for a five year term expiring  December 7, 2004. For
information   concerning  Mr.  Rubin's  Restated  Agreement,   see  "Employment,
Incentive Compensation and Termination  Agreements." Mr. Rubin also entered into
a consulting agreement with Western. Mr. McLain's annual compensation was set by
his amended  employment  agreement  with  Western.  See  "Employment,  Incentive
Compensation and Termination Agreements."

     No director of AUGI is paid to attend  Board  meetings,  although  they are
reimbursed  for their  actual  expenses.  During  Fiscal  2001  AUGI held  three
meetings  of the  Board  of  Directors  at  which  all  directors  were  present
telephonically.  While Mr. Rubin serves on the  Compensation  Committees  of the
Boards of Directors of other publicly held  corporations,  no executive officers
or directors of such companies  serve on the Company's  Compensation  Committee.
The  Compensation  Committee  reviews the compensation for all employees and the
granting of options  under all of AUGI's  employee  stock  option plans that may
exist and be in effect  from time to time,  and  presently  consists  of Messrs.
McLain, Kessler and Perres.

                                       15
<PAGE>
         Transactions with ERD Waste Corp.

     AUGI  incurred a loss of  approximately  $5,000,000  as a result of certain
transactions  it entered into with ERD Waste Corp.  ("ERD") in Fiscal  1997.  On
September 30, 1997, ERD filed for reorganization under Chapter 11 of the federal
bankruptcy  laws.  The Company has recorded a $5,000,000  net loss in connection
with these  transactions,  which included  making  available for ERD's benefit a
$4,400,000  letter of credit and making an additional  $500,000 loan, for Fiscal
1997.

     In June 1998 a  stockholder  class  action (the "Class  Action")  was filed
against AUGI's directors alleging breaches of fiduciary duty and loyalty to AUGI
and its stockholders in connection with a letter of credit guarantee by AUGI for
ERD  Waste  Corp.   ("ERD")  and  the  delisting  of  AUGI's  Common  Stock  and
publicly-traded  warrants from NASDAQ in February 1998.  During Fiscal 1997 AUGI
paid $4,400,000  pursuant to its guarantee for ERD, which sought protection from
creditors under Chapter 11 of the federal bankruptcy laws on September 30, 1997.
Final judicial approval of a settlement was received in August 1999, pursuant to
which  AUGI  has  paid  $2,500,000  (the  "Class  Payment")  to  members  of the
stockholder class.

     The Class Payment was paid in the form of $600,000 in cash  (consisting  of
proceeds from AUGI's  directors' and officers'  liability  insurance policy) and
$1,900,000   in  the  form  of  777,414   shares  of  common  stock  (valued  at
approximately  $2.44 per share) of Western Power & Equipment  Corp.  ("Western")
owned by AUGI.  These shares were  distributed  on or about November 1, 2000 and
thereupon  AUGI  recognized  a loss  (accrued  at July 31,  2000) of  $1,434,000
representing the difference between the book value of the transferred shares and
their market value as  calculated  pursuant to the  settlement  agreement.  AUGI
presently owns approximately 36% of the outstanding Western common stock.

TRANSACTIONS WITH OTHER AFFILIATES

     During  Fiscal  1999 and  Fiscal  2000 AUGI  provided  financing  to IDF, a
minority-owned subsidiary in the amounts of $992,000 and $364,000, respectively.
These funds were used for  working  capital,  the payment of certain  delinquent
taxes and other liabilities of Hayden/Wegman, Inc., an IDF subsidiary, and costs
related to the  discontinuation of operations of the TechStar  subsidiary.  AUGI
took a full  reserve  against  these  advances  at July  31,  2000  due to IDF's
significant  decrease in revenue and its inability to obtain further  financing.
In September 2000, IDF discontinued the operations of Hayden / Wegman.

     Mr. Rubin was a director of IDF until August 1999 and owned 874,659  shares
of IDF common stock, representing approximately 9.0% of the then outstanding IDF
common stock after giving effect to the IDF Merger,  and  including Mr.  Rubin's
conversion  of an $800,000  loan  previously  made to IDF into  preferred  stock
convertible into an additional  400,000 shares of IDF common stock, prior to his
transfer of such shares to the Rubin Family Irrevocable Stock Trust.  Subsequent
the IDF Merger,  Mr.  Rubin  served as Chairman of the Board of Directors of IDF
until August 1999.

INTERTECH TRANSACTION

     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among AUGI, Intertech Capital, Inc. ("Intertech"), Jeffrey M.
Berman  ("Berman"),   Eric  Staffin  ("Staffin")  and  Peter  Gregory  Saridakis
("Saridakas") (Berman, Staffin and Saridakas are collectively referred to as the
"Purchasers"),  AUGI sold an  aggregate  of  500,000  shares of common  stock of
Intertech,   par  value  $.0001  per  share  (the  "Intertech  Shares")  to  the
Purchasers, which Intertech Shares constituted all of the issued and outstanding
capital stock of Intertech. In connection therewith,  AUGI issued to: (i) Berman
825,000  warrants to purchase  shares of AUGI's  common stock (the  "Warrants");
(ii) Staffin 166,667  Warrants;  and (iii) Saridakis 83,333 Warrants,  all which
are immediately vested,  expire on March 19, 2006, and are exercisable at $0.275
per share. In consideration  for the Intertech Shares and the Warrants,  each of
the Purchasers  terminated  their  respective  employment  agreements with AUGI,
released AUGI from any  obligations  with respect to the employment  agreements,
including past due and accrued salaries,  and terminated and waived all right to
any stock options granted by AUGI. In addition,  Berman and Staffin  resigned as
officers and/or directors of the Company.

     Simultaneous  with the  closing of the  Intertech  transaction  the Company
purchased  approximately 5.4% of Intertech's then issued and outstanding capital
stock in consideration  for the transfer of 79,895 shares of common stock of New
Media Technology, Inc. owned by the AUGI.

RECENT DEVELOPMENTS REGARDING WESTERN

     On  September  18, 2001  Western  entered  into a Purchase  Agreement  with
e*machinery.net,  Inc.  (OTCBB:EMAC) whereby EMAC would acquire the business and
substantially  all of the assets  and  liabilities  of  Western's  wholly  owned
operating  subsidiary,  Western Power & Equipment Corp. (Oregon) for $500,000 in
cash, a seven year interest  bearing  promissory note for $700,000 and 1,200,000
shares of EMAC common stock  valued at  approximately  $600,000.  The closing is
subject to a number of conditions  including,  but not limited to, due diligence
and approval by both Case Corporation and Deutsche Financial Services.  There is
no assurance that this transaction will be consummated.

                                       16
<PAGE>
Compensation Committee Report On Executive Compensation

     The Board of Directors has been largely  responsible  for AUGI's  executive
compensation  policy in prior  years  and the  Compensation  Committee  met once
during  Fiscal 2001.  The Board  believes  that  offering  its senior  executive
officers  employment  agreements  is the best way to attract  and retain  highly
capable  employees on a basis that will  encourage them to perform at increasing
levels of effectiveness  and to use their best efforts to promote the growth and
profitability of AUGI and its  subsidiaries.  The Board believes this enabled it
to  concentrate  on  negotiating  particular  employment  contracts  rather than
establishing  more general  compensation  policies for all  management and other
personnel. AUGI believes that its compensation levels as to all of its employees
were  comparable  to industry  standards.  Currently,  Mr.  Rubin is AUGI's only
senior executive officer employed under a contract approved by the full Board of
Directors.  See "Executive  Compensation-Employment,  Incentive Compensation and
Termination Agreements."

     In setting levels of compensation  under such  employment  contracts and in
approving management's compensation of all other Company employees, the Board of
Directors  evaluates AUGI's overall  operations,  the contribution of particular
individuals  to  AUGI's  performance  and  industry  compensation  standards.  A
significant percentage of the compensation that could be paid to each of Messrs.
Rubin and McLain under their  respective  employment  agreements  is tied to the
achievement  of  prescribed  levels of pre-tax  income or  specific  performance
goals. See  "Employment,  Incentive  Compensation  and Termination  Agreements,"
above.

Compliance with Section 16(a) of the Exchange Act.

     To the  knowledge of the  Company,  with the  exception  of Messrs.  Rubin,
McLain,  Barnes,  and Katz,  who did not  timely  file a Form 4  reflecting  the
cancellation  of their 2000 Plan options and granting of their options under the
2001 Plan, and Messrs.  Kessler and Perres who did not timely file a Form 3 upon
their election to the Board, no officers,  directors,  beneficial  owner of more
than 1 percent  of any  class of equity  securities  of the  Company  registered
pursuant to Section 12 of the  Securities  Exchange Act of 1934, as amended (the
"Exchange  Act"),  or any other person subject to Section 16 of the Exchange Act
with  respect to AUGI,  failed to file on a timely  basis  reports  required  by
Section 16(a) of the Exchange Act during Fiscal 2001.

     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following  table sets forth certain  information as of November 1, 2001
with  respect to the  beneficial  ownership  of the Common Stock of AUGI by each
beneficial  owner  of more  than  five  percent  (5%)  of the  total  number  of
outstanding  shares of the Common Stock of AUGI, each director and all executive
officers  and  directors of AUGI as a group.  Unless  otherwise  indicated,  the
owners have sole voting and  investment  power with respect to their  respective
shares.  The table does not include  options or SARs that have not yet vested or
are not exercisable within 60 days of the date hereof.
<TABLE>
<CAPTION>

Name and Address*                                              Number of Shares                Percentage of
of Beneficial Owner               Office(s)                    Beneficially Owned(1)           Common Stock (1)
-------------------               ---------                    ---------------------           ----------------
<S>                              <C>                                <C>                           <C>

Robert M. Rubin                   Director, President, Chief            842,000(2)(6)                6.2
                                  Executive Officer and
                                  Chairman of the Board

C. Dean McLain                    Director, Executive                   300,000(3)                   2.3
4601 N.E. 77th Avenue             Vice-President and
Suite 200                         President of Western
Vancouver, WA 98662               Power and Equipment Corp.
                                  ("Western")

Howard Katz                       Director                              350,000 (4)                  2.7

David M. Barnes                   Chief Financial Officer               300,000 (5)                  2.3
                                  Vice President of Finance
                                  and Director

Rubin Family Irrevocable                                              1,245,798 (6)                 10.0
Stock Trust
25 Highland Blvd.
Dix Hills, NY 11746

Jeffrey Berman                                                          825,000 (7)                  6.1

Seymour Kessler                   Director                              250,000 (8)                  2.0

Allen Perres                      Director                              250,000 (9)                  2.0

All Directors and Executive                                           2,292,000                     15.5
Officers as a Group (5 persons)

</TABLE>
                                       17
<PAGE>


     * Unless otherwise indicated,  the address of each such beneficial owner is
11108 N.E. 106th Place, Kirkland, Washington 98033.

     1) Pursuant to the rules and  regulations  of the  Securities  and Exchange
Commission,  shares of Common Stock that an  individual  or group has a right to
acquire  within 60 days  pursuant to the  exercise  of options or  warrants  are
deemed to be outstanding for the purposes of computing the percentage  ownership
of such  individual  or  group,  but are not  deemed to be  outstanding  for the
purposes of computing the percentage  ownership of any other person shown in the
table.  All stock  options and  warrants  mentioned in (2) through (9) below are
immediately exercisable.

     (2)  Includes  (a) 2,000  shares of Common Stock owned by Mr. Rubin and (b)
incentive  stock  options  issued to Mr. Rubin under the 2001 Plan on October 3,
2000 to acquire  840,000  shares for five years  after  issuance  at an exercise
price of $0.275 per share,  or  approximately  110% of the closing sale price of
the Common Stock on such date.

     (3) Includes  incentive  stock options to acquire  300,000 shares of Common
Stock  granted  to Mr.  McLain  under the 2001 Plan on  October 3, 2000 for five
years after issuance at an exercise price of $0.275 per share, or  approximately
110% of the closing  sale price of the Common Stock on such date.  Mr.  McLain's
continuing  employment is governed by the terms of his employment agreement with
Western.

     (4) Includes  incentive  stock  options  granted to Mr. Katz under the 2001
Plan on  October 3, 2000 to  purchase  350,000  shares of Common  Stock for five
years after issuance at an exercise price of $0.275 per share, or  approximately
110% of the closing sale price of the Common Stock on such date.

     (5) Includes  incentive  stock options granted to Mr. Barnes under the 2001
Plan on  October 3, 2000 to  purchase  300,000  shares of Common  Stock for five
years after issuance at an exercise price of $0.275 per share, or  approximately
110% of the closing sale price of the Common Stock on such date.

     (6) Robert M. Rubin, a grantor of the Rubin Family  Irrevocable Stock Trust
(the  "Trust"),  does not have any voting power over,  and disclaims  beneficial
ownership of, the shares of Common Stock held by the Trust.

     (7)  Includes a warrant to  purchase up to 825,000  shares of Common  Stock
issued to Mr. Berman pursuant to the Share Purchase  Agreement  between AUGI and
Intertech  Capital,  Inc  dated  March  19,  2001.  The  warrant  was  issued in
consideration  for the  cancellation  of all options granted to Mr. Berman under
the 2001 Plan on October 3, 2000. The warrant is  exercisable  for five years at
$0.275 per share.

     (8) Includes  250,000  non-qualified  stock options,  which vested upon Dr.
Kessler's  election to the Board of Directors  on August 28, 2001.  Such options
are exercisable for five years after issuance for $0.275 per share.

     (9) Includes  250,000  non-qualified  stock options,  which vested upon Mr.
Perres'  election to the Board of Directors on August 28, 2001. Such options are
exercisable for five years after issuance for $0.275 per share



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     See "Executive  Compensation-Compensation  Committee Interlocks and Insider
Participation" and "Executive  Compensation-Employment,  Incentive  Compensation
and  Termination  Agreements",  and  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations."

                                       18
<PAGE>


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  1.  Financial  Statements  are included in Part II Item 8 beginning at
         page F-1.

     2. Financial Statement Schedule

          Schedule II Valuation and Qualifying Accounts



(b) Reports on Form 8-K.

                  None.


(c) Exhibits.


Exhibit
Number                  Description

3.1  Certificate of Incorporation of Registrant.(1)

3.2  By-laws of Registrant. (2)

4.1  Specimen Certificate of Common Stock. (3)

4.2  1991 Employee Stock Option Plan. (1)

21   Subsidiaries of AUGI*.



(1)  Included  with the filing of AUGI's  Registration  Statement on Form S-1 on
October 18,  1991,  as amended by  Amendment  No. 1, dated  December  18,  1991,
Amendment No. 2, dated January 9, 1990,  Amendment No. 3, dated January 24, 1992
and Amendment No. 4, dated January 28, 1992.

(2) Filed as an Exhibit to the Definitive  Proxy Materials of Alrom Corp., a New
York corporation (the Company's predecision), as filed on December 10, 1991.

(3) Filed as an Exhibit to the  Company's  Registration  Statement  on Form S-18
(Registration No. 3303330 81-NY) and incorporated herein by reference thereto.

*        Filed herewith

                                       19
<PAGE>


     SIGNATURES


     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

         Dated: November 12, 2001

     AMERICAN UNITED GLOBAL, INC.



                 By:./s/ Robert M. Rubin
                 -----------------------
                  Robert M. Rubin, Chairman

     In accordance with the Securities and Exchange Commission,  this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.



Signature               Title                              Date


/s/ Robert M. Rubin     Chairman of the Board, Chief        November 12, 2001
--------------------    Executive Officer and Director
Robert M. Rubin




/s/ C. Dean McLain      Executive Vice President and        November 12, 2001
------------------      Director
C. Dean McLain



/s/ David M. Barnes     Vice President--Finance and Chief   November 12, 2001
--------------------    Financial and Chief Accounting
David M. Barnes         Officer



/s/ Howard Katz         Director                            November 12, 2001
-------------------
Howard Katz


/s/ Seymour Kessler     Director                            November 12, 2001
-------------------
Seymour Kessler

/s/ Allen Perres        Director                            November 12, 2001
-------------------
Allen Perres


<PAGE>


  EXHIBIT LIST


3.1  Certificate of Incorporation of Registrant.(1)

3.2  By-laws of Registrant. (2)

4.1  Specimen Certificate of Common Stock. (3)

4.2  1991 Employee Stock Option Plan. (1)

21   Subsidiaries of AUGI*.





          (1) Included with the filing of the Company's  Registration  Statement
     on Form S-1 on October  18,  1991,  as amended  by  Amendment  No. 1, dated
     December 18, 1991, Amendment No. 2, dated January 9, 1990, Amendment No. 3,
     dated January 24, 1992 and Amendment No. 4, dated January 28, 1992.

(2)  Filed as an Exhibit to the Definitive Proxy Materials of Alrom Corp., a New
     York corporation, as filed on December 10, 1991.

(3)  Filed as an Exhibit to AUGI's  Registration  Statement on Form S-18
     (Registration  No.  3303330  81-NY) and  incorporated  herein by  reference
     thereto.

*          Filed herewith