-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pep9V1Q2frQh39h3U7/Qt8Q948wjyAdQzSCl9KCKnp/mvRXYmZcH5TJ08SP+gCvn fveYv6DbG2NfqJFjTGlp0A== 0001021890-02-000228.txt : 20020523 0001021890-02-000228.hdr.sgml : 20020523 20020520173226 ACCESSION NUMBER: 0001021890-02-000228 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020520 DATE AS OF CHANGE: 20020523 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEMETRIX INC CENTRAL INDEX KEY: 0000742814 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 593453156 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14724 FILM NUMBER: 02658323 BUSINESS ADDRESS: STREET 1: 1225 SAGE ST CITY: GERING STATE: NE ZIP: 69341 BUSINESS PHONE: 3033837610 MAIL ADDRESS: STREET 1: 1225 SAGE ST CITY: GERING STATE: NE ZIP: 69341 FORMER COMPANY: FORMER CONFORMED NAME: ARNOX CORP DATE OF NAME CHANGE: 19960612 10QSB 1 tlx33110q.htm MARCH 31, 2002 FORM 10-QSB Telemetrix Inc. March 31, 2002

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

FORM 10-QSB

Quarterly Report pursuant to Section 13 of the Securities Exchange Act of 1934
for the quarterly period ended March 31, 2002

TELEMETRIX INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware 0-14724 59-345-3156
(Jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification Number)

Telemetrix Inc.
c/o Paul Zolman, Acting Chief Financial Officer
1225 Sage
Gering, Nebraska 69341
(308) 436-3453
(Address, including zip code, & telephone number, of Registrant's principal executive offices)

Indicate by check mark whether the Registrant has: Yes[X] No [ ]

(1) filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and

(2) been subject to such filing requirements for the past 90 days.

On March 31, 2002, Registrant had 18,476,186 issued and outstanding common shares.

Transitional Small Business Disclosure Format: Yes [ ] No[X]

TELEMETRIX INC.
(Commission File No. 0-14724)

TABLE OF CONTENTS FOR FORM 10-QSB
PART I - FINANCIAL INFORMATION

                                                                                                  Page
                                                                                                  ----
Item 1.    Financial Statements......................................................................3
           Condensed Consolidated Balance Sheets.....................................................3

           Consolidated Statements of Operations and Deficiency......................................4

           Consolidated Statements of Cash flows.....................................................5

           Notes to Consolidated Financial Statements................................................6

Item 2.    Management's Discussion & Analysis of Financial Condition and Results of Operations.......9

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings........................................................................28
Item 2.    Changes in Securities and Use of Proceeds................................................28
Item 3.    Defaults Upon Senior Securities..........................................................28
Item 4.    Submission of Matters to a Vote of Security Holders......................................28
Item 5.    Other Information........................................................................28
Item 6.    Exhibits and Reports on Form 8-K.........................................................28
SIGNATURES .........................................................................................30

NOTE CONCERNING FORWARD-LOOKING INFORMATION. This Quarterly Report on SEC Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties that constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking terms such as “may”, “might”, “will”, “should”, “could”, “expect”, “plans”, “anticipate”, “believe”, “estimate”, “continue” or similar words identify such statements. Investors should read statements that contain these terms carefully because they: (1) discuss our future expectations; (2) project our future results of operations or of its financial condition; or (3) state other “forward-looking” information. Such statements are not historical facts; they merely explain our expectations about the future. We believe that it is important to communicate such future expectations to our investors. However, the accuracy of our expectations and forward-looking statements could be affected by:

•

our limited operating history and commercial experience;

•

market acceptance of T3000;

•

availability of additional capital;

•

protection of our intellectual property rights;

•

evolving technologies and markets;

•

competitive developments;

•

telecommunications regulatory environment; and

•

our ability to manage growth.

These factors might cause actual results to differ materially from the forward-looking statements as well as materially and adversely affecting our business, operating results and financial condition.

TELEMETRIX INC.
(Commission File No. 0-14724)

CONDENSED CONSOLIDATED BALANCE SHEETS
(Information as of March 31, 2002 is unaudited)


                                                                                         March 31       December 31
                                                                                             2002          2001
                                       Assets
Current assets:
   Cash.................................................................................$         77    $     13
   Accounts receivable, net of allowance for doubtful accounts ..........................         29          26
   Note receivable - related party ......................................................        174         188
   Due from related companies ...........................................................          3          38
   Prepaid expenses .....................................................................          0           0
                                                                                          ----------    --------
      Total current assets ..............................................................        283         265

Construction in Progress ................................................................      1,117       1,117
   Property & equipment .................................................................        519         458
Intangibles .............................................................................      4,573       5,014
                                                                                          ----------    --------
         Total assets...................................................................$      6,492    $  6,854
                                                                                          ==========    ========
                        Liabilities and Shareholders' Deficit
Current liabilities
   Accounts payable .....................................................................      1,914       1,952
   Accrued expenses .....................................................................      3,182       2,327
   Due to related companies .............................................................        226         226
   Current portion - long term debt -related parties ....................................      3,241       2,966
   Current portion of long term debt ....................................................      1,200       1,200
                                                                                          ----------    --------
     Total current liabilities ..........................................................      9,763       8,671

Long term debt -related party ...........................................................          0           0
Long term debt ..........................................................................        829         829
     Total long-term liabilities ........................................................        829         829
                                                                                          ----------    --------
       Total liabilities ................................................................     10,592       9,500
                                                                                          ----------    --------
Shareholders' deficit:
   Common stock, $0.001 par value; 25 million shares authorized;
   18,476,186 and 18,476,186 shares issued and outstanding
   at March 31, 2002 and December 31, 2001 respectively .................................         19          19
Additional paid-in capital ..............................................................     46,837      46,808
Stock warrants ..........................................................................          0           0
Foreign currency translation ............................................................        192         192
Accumulated deficit .....................................................................    (51,148)    (49,494)
Prepaid Consulting Services .............................................................          0        (171)
       Total shareholders' deficit ......................................................     (4,100)     (2,646)
                                                                                          ----------    --------
            Total liabilities and shareholder's deficit.................................$      6,492    $  6,854
                                                                                          ==========   =========

Financial data was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated financial statements

TELEMETRIX INC.
(Commission File No. 0-14724)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Information relating to the three month periods ended March 31, 2001 and 2002 is unaudited)

                                                                               Three Months Ended
                                                                                     March 31,
                                                                                 2002     2001
Revenue:
   Equipment sales & rental...........................................   $        47    $        57
   Service income ....................................................             0              0
                                                                         -----------    -----------
       Total revenue .................................................            47             57
                                                                         -----------    -----------
Expenses:
   Cost of revenue ...................................................           484             12
   Research & development ............................................            25             63
   Selling, general & administrative .................................           324            763
                                                                         -----------    -----------
       Total operating expenses ......................................           833            838
                                                                         -----------    -----------
 Net loss from operations ............................................          (786)          (781)
                                                                         -----------    -----------
Other Expense:
   Interest expense (income) .........................................           671            456
   Other expense (income) ............................................            (4)            (9)
                                                                         -----------    -----------
       Total other expense (income) ..................................           667            447
                                                                         -----------    -----------
Net (loss)............................................................   $    (1,453)   $    (1,228)
                                                                         ===========    ===========

Weighted average shares outstanding during period.....................    18,476,186      16,366,523

Loss per share........................................................   $     (0.08)   $     (0.08)
                                                                         ===========    ===========

Financial data was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated financial statements

TELEMETRIX INC.
(Commission File No. 0-14724)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Information relating to the three month periods ended March 31, 2001 and 2002 is unaudited)

                                                                                               Three Months
                                                                                              Ended March 31,
                                                                                            2002           2001
Cash flow from operating activities
   Net loss for the period..............................................................$    (1,453)   $(1,228)

Adjustments to reconcile net loss to cash used in operations
     Stock issued in-lieu of wages ......................................................         0          0
     Amortization & depreciation ........................................................       441        461
     Accretion of interest on debt issue costs ..........................................       631        379
     Accrued interest on notes payable ..................................................         0          5
     Changes in assets and liabilities
       In accounts receivable ...........................................................         3          6
       In other assets ..................................................................      (171)         2
       In accounts payable ..............................................................        38         79
       In accrued liabilities ...........................................................       855          4
                                                                                            -------    -------
         Total adjustments ..............................................................      1797        936
              Net cash used in operating activities .....................................       344       (292)
                                                                                            -------    -------
Cash flow from investing activities
   Increase in capital assets ...........................................................      (105)         0
                                                                                            -------    -------
            Net cash from (used) in investing activities ................................      (105)         0
                                                                                            -------    -------
Cash flow from financing activities
   Payments on line-of-credit ...........................................................         0          0
   Proceeds (payments) from long-term debt ..............................................         0          0
   Advances on notes receivable .........................................................         0         (5)
   Proceeds from issuance of share capital ..............................................         0          0
   Proceeds from related companies ......................................................      (436)         6
   Proceeds from notes payable  related party ...........................................       261        146
   Change in deferred rent liability ....................................................         0          0
                                                                                            -------    -------
            Net cash from financing activities ..........................................      (175)       147
                                                                                            -------    -------
Effect of foreign currency translation on cash ..........................................         0          0
                                                                                            -------    -------
Net increase (decrease) in cash & cash equivalents ......................................        64        145
                                                                                            -------    -------
Cash, beginning of period ...............................................................        13        145
                                                                                            -------    -------
Cash, end of period .....................................................................   $    77    $     0
                                                                                            =======    =======

Non-Cash Disclosure: In the current period $421,000 in prepaid consulting and $776,000 in debt issue costs were recorded related to the issuance of shares of stock and stock warrants.

Financial data was rounded to the nearest thousand dollars.
The accompanying notes are an integral part of these consolidated financial statements

TELEMETRIX INC.
(Commission File No. 0-14724)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information as of and relating to the three month periods ended
March 31, 2001 and 2002, is unaudited)

1. Description of Business
TELEMETRIX IS AN EARLY STAGE COMPANY WITH REVENUES LIMITED TO THOSE THAT ARE GENERATED THROUGH THE SALE OF MONTHLY PAGING
SERVICE AND RENTAL OF TOWER SPACE ON OWNED TOWERS. TELEMETRIX HAS SIGNIFICANT ONGOING EXPENSES RELATED TO THE DEVELOPMENT OF THE
FOLLOWING PRODUCTS AND SERVICES AND THE COMPANY HAS SUBSTANTIAL DEBT AS REFLECTED ON THE ACCOMPANYING FINANCIAL INFORMATION.
TELEMETRIX TECHNOLOGIES HAS CUSTOMERS FOR THE PAGING SERVICES PROVIDED, BUT AT THIS TIME DOES NOT HAVE ANY CUSTOMERS FOR THE T3000
TELEMETRY DATA SYSTEM.

Telemetrix Inc. through its subsidiary, Telemetrix Technologies has developed and patented a universal solution for
wireless telemetry. This system will be sold both to and through telecommunications companies and digital telecommunications
carriers, which would be companies such as VoiceStream, and AT&T, as a complete end-to-end solution for telemetry data customers.
The system will also be sold direct to end users through Telemetrix Technologies. Telemetry is the transmission of data that
represents status information on a remote process, function or device. Telemetry enables businesses to monitor activity, detect
situations requiring intervention and promptly respond to such situations. Examples of businesses currently using telemetry include
electric utilities, alarm companies and vending machine operations and as the technology advances, the potential applications
multiply. Telemetry has been significantly advanced by Telemetrix' development of the T3000 e-Telemetry Data SystemTM that collects
and transfers telemetry data using the Short Message Service of digital communications systems worldwide and delivers that data to
the user (customer) via the internet. The T3000 wireless telemetry system includes hardware (e.g., the CommCenter and Optical
Reader), network monitoring services software, and other support services. Telemetrix provides each of the T3000 components.

Telemetrix owns and operates a wireless GSM Personal Communications System (PCS) telecommunications network and a paging network.
The total coverage of the paging and PCS coverage areas encompass portions of western Nebraska, southeastern Wyoming and northeastern
Colorado. Our operations consequently consist of operating the paging system and doing T3000 research & development, product design,
manufacturing, development of telecommunications services and carrier support services.
Telemetrix Technologies
Telemetrix Technologies developed the T3000 e-Telemetry Data SystemTM wireless telemetry hardware and software. The T3000
system can be used in an unlimited number of ways, i.e., automatic utility meter reading, home security, home health alarms,
monitoring vending machines and numerous other specialty applications.

The Telemetrix Model T3101 CommCenter is a proprietary hardware and software communications gateway. The CommCenter hardware has the
ability to function as a wireless local loop interface which will replace, bypass or supplement existing wireline telephone service
equipment or provide primary or additional telephone service. Using this Telemetrix hardware and software, PCS operators in any
size market can offer additional services and increase their revenue. The T3000 system and components have been developed and tested
on the Telemetrix GSM PCS network.

The Telemetrix Model T3170 and T3171 Optical Meter Readers allow utility companies to retain legacy-metering equipment in their
Automatic Meter Reading and telemetry systems. The Optical Meter Reader is simply attached to the outside of an existing
electro-mechanical utility meter. This eliminates the need for an electric utility to replace existing meters which significantly
lowers the installation cost of a telemetry system.

Telemetrix Technologies holds two PCS licenses and 34 paging and mobile telephone licenses serving 27 locations in the service area.
The licensed PCS service areas encompass approximately 138,000 persons. We intend to expand these wireless services to include PCS
Wireless Local Loop services (i.e., local exchange services), wireless telemetry and mobile PCS. Our wireless network also serves as
a showcase for new products and services, where potential carrier customers can watch the T3000 system and CommCenter in operation.

T3000 E-TELEMETRY DATA SYSTEM TM
Telemetrix began the manufacture of the T3000 Modular Hardware for the T3000 e-Telemetry Data System TM. Testing of
Alpha-design products was conducted and the product design and the imbedded firmware were finalized and released to beta-production.
Deliveries of the beta-T3101 CommCenter, InterfaceBoards and Interfaces to the CENTRON electric meter were received. These products
were scheduled for deployment to a major Iowa utility for early Second Quarter.

In 2002, it is planned that the T3000 e-Telemetry Data System TM will be designed to operate using other wireless technologies
including TDMA, which will expand the available coverage and increase the number of available markets in North America and around the
world.

e-Telemetry Data System TM and e-Telemetry Data TM are Registered Trademarks of Telemetrix Inc.

SHORT MESSAGE SERVICE. The T3000 uses the Short Message Service capability of existing PCS networks: this wireless transmission
technology eliminates any need for a wireline telephone connection, offers widespread coverage and permits easy mobility. SHORT
MESSAGE SERVICE is available from licensed PCS operators; therefore, T3000 System users need not obtain Federal Communications C
commission licenses. The Company's technology patents prevent competitors from using the Company's proprietary technology for
collecting and transmitting telemetry data using the standard Short Message Service. The technology patents give the T3000 system a
competitive advantage.

The primary focus of the Company in first quarter 2002 was the evaluation of the alpha-T3000 Modular System hardware design,
and finalizing the firmware prior to release for beta-Product manufacture and field testing and evaluation by customers. The other
major focus was the integration and modification of the Network Operation Center ("NOC") Software with the new Modular Hardware in
the Gering NOC.

The Company finalized a Test & Evaluation Agreement with a major electric utility who which will be the first extended
deployment of the beta-hardware of the new T3000 Modular Design Product. Other testing and evaluation agreements will be deployed
during 2Q, 2002. The agreements are for testing of our T3000 System under each company's specific environment, prior to a complete
commercial installation. Many other T&E agreements are being negotiated.

The Telemetrix e-Telemetry Data System TM will support services to telemetry users and carriers, including telemetry network
management, billing support, system design, consulting and service bureau capabilities.

The T3000 system:

-- Acquires data from remote devices.

-- Controls, polls and activates remote devices.

-- Manages the entire wireless telemetry data system.

-- Offers real-time access to telemetry data.

-- Provides Wireless Local Loop type telephony services.

The company will move to the full marketing and commercialization phase in second quarter of 2002. Numerous meetings are
set, field trials are scheduled and convention exhibits are booked.

The Company entered development licenses with Schlumberger Sema for their CENTRON and SENTINEL Electric meters, for the
integration of the T3000 InterfaceBoards into these devices for remote Automatic Meter Reading.

PCS Signaling Standards. PCS systems generally use one of three digital signal transmission technologies: GSM, CDMA and
TDMA. Each of these signaling standards, which are incompatible with each other, has been adopted by at least two different PCS
carriers in major U.S. markets. Each standard has distinct advantages and disadvantages. TDMA resembles the signaling standard used
by many cellular carriers. CDMA should require fewer cell sites and offer greater capacity, call quality and hand-off advantages.
However, GSM is the leading digital wireless technology worldwide, with systems in over 170 countries serving over 600 million
subscribers. Further, major carriers like AT&T, Cingular and TelCel Mexico have recently announced plans to change over from TDMA to
GSM technology. GSM uses an open system architecture that allows carriers to purchase network equipment from a wider variety of
vendors and provides significant flexibility for the carrier in vendor cost leveraging and provisioning of features, products and
services. The T3000 e-Telemetry Data System TM is currently available for use on GSM networks.
2. Basis of Presentation of Interim Information
The consolidated unaudited financial statements for March 2002, and 2001 and audited financial statements for December 31,
2001 include the accounts of Telemetrix Inc. (the parent company) and its wholly owned subsidiaries, Telemetrix Solutions and
Telemetrix Technologies.

The results for three months ended March 31, 2002, do not necessarily indicate the results of operations for the full year.
These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto
included in the Company's 2001 Annual Report on SEC Form 10-KSB filed with the U.S. Securities & Exchange Commission.

In Management's opinion, the accompanying unaudited interim financial statements include all normal adjustments necessary to
present fairly the Company's financial position at March 31, 2002, and the results from operations for the three months ended March
31, 2002, and the cash flows for the three months ended March 31, 2002.

3. Related Party Transactions
The Company borrowed $500,000 from two principal shareholders, Mr. Tracy (President, Treasurer and Director) and Mr. Glaser
(Secretary and Director) at interest rates ranging from 10% to 11%. Funds were borrowed as needed throughout the quarter and notes
created on specific loan dates. All notes are demand notes and listed as short-term liabilities. All funds were used for the
continuation of the development of the T3000 technology and for working capital.

The following is a detail of the amounts due from and to related parties.

Due from related parties

Tracy Broadcasting Company $
16,000
Software Factory Inc. $
176,000
------------------
Total due from related parties $
192,000

Due to related parties

Becker Group of Companies(BGC) Investments $
41,000
Michael Tracy $ 2,258,750
Becker Group $
457,000
Michael Glaser $
683,000
Becker Capital Management $
399,000
Tracy Broadcasting Company $
7,000
------------------
Total Due to Related Parties $ 3,845,750

Hartford Holdings Ltd., a significant shareholder of Telemetrix Inc., was the parent of WEB, BGC, and Software Factory Inc.
At the time the transactions occurred, a person related to the stockholder of Hartford Holdings Ltd controlled Mondetta.

The Company has a note receivable from the Software Factory, which matured May 1999. The outstanding balance at March 31,
2002 was $176,000 net of a $167,000 allowance. The note accrued interest at 7.5% until maturity at which time the interest rate was
adjusted to 15% and a penalty of 15% of the outstanding balance was incurred.

Current portion-long term debt-related parties increased due to additional notes payable from major shareholders, interest
rates ranging from 8.5% to 23.4%. Principal and interest are due on demand. The proceeds were used to fund operations.

4. Commitments & Contingencies
Software Agreements. The Company entered into an agreement with a vendor for the research and development of software to be
used in conjunction with the Company's telemetry technology. The total contract amount was $500,000 USD and is payable as the
project is completed. During 1999 to 2000, the Company has paid $443,000 to the vendor. The Company is also committed to an
automatically renewing service agreement requiring monthly payments of $12,000. The agreement automatically renews as long as the
software is used. At March 31, 2002, the Company has included in trade payables $283,000 due to this vendor for unpaid contract
completion costs and for monthly service charges.

Operating Leases - Related Parties. The facility occupied by the Company in Gering, Nebraska is being leased at $2,500 per
month from an officer of the Company. The lease requires WTC to pay for utilities and taxes and contains no provisions for renewal.

Legal Proceedings. The Company is party to various negotiations and legal proceedings regarding claims on contracts in the
normal course of its business. Management believes that the outcome of such negotiations and legal proceedings, as well as
commitments, will not have a material adverse effect on the Company's consolidated and combined financial statements.

Employment Contracts. The Company is party to four employment contracts, which require total annual salary payments of
approximately $524,000. These contracts expire at various dates through 2003 with options to extend.

5. Related Party Loans

The Company obtained related party loans totaling $550,000 in the current period. The loan offered stock at closing price
on the day of funding for each dollar loaned resulting in the deferred issuance of 2,080,000 shares. The Company recorded accrued
Common Stock and APIC costs as a contra-equity for the value of the stock issued.

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

The following discussion should be read in conjunction with the unaudited Consolidated Financial Statements and related
notes. The results presented in this report do not necessarily indicate the results to be expected in any future periods. This
discussion contains forward-looking statements based on our current expectations, which involve risks and uncertainties. These risks
and uncertainties mean that future events could dramatically differ from our forward-looking statements.

OVERVIEW.

Telemetrix offers wireless e-Telemetry Data TM Solutions for businesses and telecommunications carriers, particularly
wireless Personal Communications Services ("PCS"). The Company's T3000 wireless telemetry system uses a patented method for
automatically collecting and transmitting telemetry data over the Short Message Service control channel of digital communications
networks (PCS systems). Telemetrix was granted patents covering this proprietary technology in January and November 2000.
Telemetrix received another Granted Patent # 6,369,719.

The Company has experienced substantial change over the past two reporting years. During April 1999, the Company was formed
through a corporate combination between Arnox Corporation and Telemetrix Resource Group, Inc. Arnox was an inactive corporate
shell prior to the combination. In September 1999, Tracy Corporation II d/b/a/ Western Total Communication was acquired for
stock. Telemetrix Resource Group, Inc. was comprised of Telemetrix Resource Group, LTD, a Canadian corporation, which was later
renamed Telemetrix Solutions. Telemetrix Solutions offered billing services and consulting to telephony companies. Western
Total Communications, later renamed Telemetrix Technologies, was formed in 1982 to provide wide area paging in western Nebraska,
eastern Wyoming and northeastern Colorado. It acquired two PCS licenses (30 MHZ and 10MHZ) for Business Trading Area 411, as
defined by the Federal Communications Commission, and has constructed the 30 MHZ licensed network. It is also certified as a
competitive local exchange carrier ("CLEC") in the State of Nebraska. Telemetrix Technologies developed the T3000 wireless
telemetry system.

In addition to the corporate formation during 1999, the Company focused on the research and development of the T3000
system. The Company developed its own proprietary GSM module for use in the T3000 system as well as a Subscriber Line Interface Card
module.

The T3000 e-Telemetry Data SystemTM will be available for commercial distribution in the second quarter of 2002. The
software development required for the T3000 was completed in the first quarter of 2002. The redesigned Modular Hardware was
finished, and beta-Product was delivered and successfully deployed at an electrical utility in Iowa. Test & Evaluation Agreements
are being negotiated for additional bets-field installations with other electrical utilities, all scheduled for 2nd quarter 2002.
During 2002, we will increase our marketing efforts to create the demand for our systems. Two major industry trade shows were
attended in the 1st Quarter: DistribuTECH where many utility industry customers seeking AMR solutions were contacted; and CTIA
(Cellular Telephone Industry Association) where many contacts were made with customers seeking remote data acquisition and management
solutions utilizing wireless solutions. Telemetrix Inc. expects regular sales to meet historical and future projections.

The next evolution of the T3000 system will be the enhancement with European GSM and TDMA licensed frequencies. This will
allow for a broader geographical distribution of our system. These enhancements should be operational by year-end 2003.

Currently, the Company is seeking additional financing. It is estimated that no more than an additional $10 million will be
required for manufacturing inventory, working capital and to re-pay current liabilities. The Company has immediate need for short
and long term financing.

Telemetrix Inc. expects to continue as a going concern. The strategic plan is to partially exit the design phase of the
business after trial and testing of products. Production will then commence from contracts generated and develop an income stream
from operations. Previous to and including this reporting period, minimal revenue has been derived from operations and most of the
funding has been through financing activities. In late 2002, cash flow from operations is expected to materialize.

Other Developments

On November 29, 2000, United States Patent #6,150,955 was issued to Telemetrix. The patent covers claims which relate to
the use of the Telemetrix T3000 e-Telemetry Data SystemTM for monitoring certain digital packets associated with a digital
communications system control channel, identifying of certain packets and replacing of certain non-information bearing packets with
packets that contain useful data and information. Advantageously, this system and method does not impact the capacity of the digital
communications network.

On December 1, 2000, Telemetrix entered into a Reseller Agreement with Ericsson Messaging Systems, Inc. a wholly owned
subsidiary of L. M. Ericsson ("Ericsson"), whereby, Ericsson will resell the hardware components of Telemetrix's patented T3000
e-Telemetry Data SystemTM. The agreement calls for Telemetrix to provide Ericsson, for resale, all of the hardware components of the
T3000 e-Telemetry Data SystemTM including the T3500 and T3600 Optical Readers. On the same day, Telemetrix entered into a Software
Original Equipment Manufacturer ("OEM") Agreement with Ericsson, whereby Telemetrix will provide software to Ericsson on an OEM basis
for Ericsson to sell under their brand name(s). The software will be used in association with the Telemetrix patented T3000
e-Telemetry Data SystemTM. The agreement calls for Telemetrix to provide Ericsson with Telemetrix e-Telemetry DataTM Software that
Ericsson will deploy to customers and PCS operators throughout North America and the world, under Ericsson's brand and labeled with
the phrase "Powered by Ericsson."

Industry And Technology Overview

PCS Networks. Certain wireless communications networks, such as cellular telephone and PCS, use an architecture, where the service region
is divided into multiple cells. Each cell contains a Base Station (including a transmitter, receiver and signaling equipment) which
is connected to the wireless network switch and which, in turn, is connected to the public switched telephone network. Within a
cell, the mobile units (e.g., the handset) communicate with the Base Station using radio waves. To prevent interference, adjacent
cells use different radio frequencies. As a mobile unit moves away from the Base Station in a particular cell, the network switch
monitors the signal strength of the call and transfers the call to a new Base Station in another cell where the signal strength is
greater. PCS licensed services use higher radio frequencies than traditional cellular telephone, which reduces the distance PCS
transmissions can travel without significant degradation. Consequently, PCS networks require smaller operating cells and more Base
Stations than cellular telephone networks.

PCS Signaling Standards. PCS systems generally use one of three digital signal transmission technologies: GSM, CDMA and TDMA. Each of
these signaling standards, which are incompatible with each other, has been adopted by at least two different PCS carriers in major
U.S. markets. Each standard has distinct advantages and disadvantages. TDMA resembles the signaling standard used by many cellular
carriers. CDMA require fewer cell sites and offer greater capacity, call quality and hand-off advantages. However, GSM is the
leading digital wireless technology worldwide, with systems in 110 countries serving over 30 million subscribers. Further, major
carriers like AT&T and TelCel Mexico have recently announced plans to change over from TDMA to GSM technology. GSM uses an open
system architecture that allows carriers to purchase network equipment from a wider variety of vendors and provides significant
flexibility for the carrier in vendor cost leveraging and provisioning of features, products and services. The T3000 e-Telemetry
Data SystemTM is currently available for use on GSM networks. The Company is also completing development of the T3000 for CDMA and
TDMA networks.

Wireless Telemetry. Telemetry involves the use of remote devices for data collection and analysis, and encompasses the following activities:
|X| installing a measurement device at a remote location;
|X| controlling the device from a central station;
|X| obtaining data with the device;
|X| transmitting the data to the central station;
|X| collecting and analyzing the data; and
|X| responding to the results of the analysis.

Telemetry requires measurement and transceiver devices, transmission services, central control devices and management
software. Since it offers widespread coverage and permits mobility, wireless telecommunications is an effective transmission
component for telemetry.

Potential Customers and Markets

The U.S. telecommunications industry has approximately 4,830 service providers, serving more than 96 million households and
25 million businesses (approximately 180 million access lines), and generated revenues approaching $268 billion in 1999.
Telecommunications wireline services involve three principal markets: long distance, local exchange and data products and services.
Wireless communications services include cellular telephone service, PCS, Specialized Mobile Radio ("SMR") and paging. The Company
believes that service providers in each of these market segments can benefit from these value-added carrier support services. The
T3000 system and T3100 CommCenter technology should appeal to both wireless carriers as well as original equipment manufacturers
("OEMs") that sell their products to telecommunications carriers.

The Data Products and Services Market. Data products and services were the highest growth segment of the telecommunications
industry in the 1990's. According to Data Communications, data-related products and services accounted for revenues of almost $111
billion in 1999 - a growth rate of approximately 18.8% from 1998. According to the Yankee Group, current trends suggest that data
revenues will double over the next three years and will grow five times faster than voice revenues.

The Wireless Services Market. The wireless communications market, which includes cellular telephone service, PCS,
Specialized Mobile Radio ("SMR"), paging, and other applications, has grown dramatically in recent years. U.S. wireless telephone
service revenues grew from $5.7 billion in 1991 to $50.2 billion in 1999, and the number of subscribers increased from 7.6 million in
1991 to 86 million in 1999. The growth in wireless communications results from lower prices for consumer equipment, more
comprehensive service coverage, lower rates and technological advances that have improved transmission quality and reliability.

Wireless Telemetry. Developments in computing, Internet and wireless technologies have created an opportunity for a new
business, wireless telemetry. The need for accurate and timely data is rapidly increasing, especially with the advent of techniques
such as "just-in-time" inventory management. As measurement and transceiving devices become smaller and more robust, companies will
install telemetry devices into more products. Just as the use of microprocessors expanded well beyond computing applications,
telemetry devices could become ubiquitous. Telemetry creates demand for measurement and transceiver devices, transmission services,
control devices and management software. The Yankee Group forecasts revenue for wireless telemetry devices to grow from $1.2 billion
in 1999 to nearly $5 billion in 2004, while revenue for wireless telemetry airtime will grow to approximately $1.7 billion.
[OBJECT OMITTED]Source: The Yankee Group
[OBJECT OMITTED]

Telemetry is the science and technology devoted to measuring values and variables (such as pressure, temperature, humidity,
blood flow, radiation levels, or sound levels), transmitting the results of the measurements to a distant station, and interpreting,
indicating, displaying, recording or using the information that is obtained. The wireless telemetry market is relatively undefined
and is now emerging. The following demonstrates the targeted market segments and their benefits:

Targeted Telemetry Market Segments
Segmentation Telemetry Application Benefits Example
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Alarm and Security o Commercial / o Alarm and status o A burglar breaks
Residential Secruity messages sent to into a house and cuts
Alarms alarm monitoring the phone and power
o Smoke Detectors center wires
o Fire Alarms o Security against o Alarm company is
compromise of still notified of the
wireline connections break in and
dispatches for police
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Agricultural Irrigation, and o Pipeline o Monitor o A city registers
Environmental Corrosion Systems environmental unusually high air
o Water Pump condition pollutions readings
Failures, Levels And o Alarm systems for o A public service
Contamination Air hazardous announcement is sent
Quality Systems environmental out warning those
conditions with medical
conditions to stay
indoors
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Asset Management, and Tracking o Office Equipment o Monitor meter o A delivery truck
o Industrial Information follows a specific
Machinery and o Service diagnosis route to fill a
Manufacturing and maintenance vending machine
Processes o Inventory o Truck can be
o Vending Machines management re-routed if the
o Fleet / route vending machine is
management still full from last
delivery
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Atmosphere Controls o Heating, o Air quality o A commercial
Ventilation, and Air standards refrigerator door in
Conditioning o Temperature a restaurant is left
o Refrigeration, controls for food and open after a food
Temperature and other perishable items delivery
Humidity Controls o Climate control o An alarm is
for greenhouses and triggered, alerting
agricultural products people to close the
door to save the food
from spoiling
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Healthcare o Health Status o Patient health o A patient takes a
Monitoring Devices status alarms blood test everyday
o Mobile patient o Test data is sent
monitoring to hospital where
o Centralized doctor can monitor
storage of patient patient daily
information
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Public and Municipal Services o Parking Meters o Parking meter o A city is losing
o Highway Tolls servicing money because parking
o Streetlights o Service route meters are full or
o Railroad Crossing management robbed
Switches o Preventive o Meter attendants
security for are rerouted to full
hazardous public meters, and police
situations are dispatched to
tampered meters
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Transportation Systems and o Vehicle Location o Inventory o A truck is making
Facilities o Vehicle Engine management an urgent delivery
Computers o Emergency but a major accident
o Container asset communications will delay the arrival
tracking o Remote o Information can
be sent to driver to
take an alternative
route to deliver
shipment on time
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Utilities o Utility Meter o Reduced cost of o A Customer is
Reading servicing meters moving out of town
o Oil and Gas o Customer account o Utility company
Pipeline Facilities management can provide
o o Remote meter up-to-minute readings
control
- ------------------------------- ---------------------------- ---------------------------- ----------------------------

Competition

Competitors are extremely diverse. There is no single company that dominates the wireless telemetry market or any
individual segment of the telemetry market. Each competitor has created a niche for their business and seems to stay within that
niche. There is no competitor that can offer the universal capabilities of the T3000 end-to-end solution, from ease of installation
and use to a complete "turn-key" telemetry data implementation solution.

Many of the Company's competitors have multiple divisions and do not break out the telemetry data and equipment sales
individually on their publicly available financial statements. However, information on various companies with much of their revenues
derived from telemetry data and equipment sales are listed below.

Telemetry Technology Landscape

Service Technologies Description Advantages Weaknesses
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Digital Cellular / PCS (GSM, Currently SMS technology; IP Capable, Cost of network Small but growing
TDMA, CDMA) packet data technology will is shared, Migrateable GSM footprint / Service
be overlaid on digital / TDMA transceiver still in deployment /
(Telemetrix Technologies) cellular / PCS networks in technology Focus on wireless voice
long term
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Proprietary Wireless Networks Networks originally built Understanding of telemetry Proprietary networks
for utility meter reading business, AMR expertise and systems, Limited
Partnerships with major coverage, Limited
utilities companies, message size
(CellNet, Itron) Alliances with system
integrators
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Dedicated Packet Data Digital packet data radio Coverage, Good in-building Strong urban, weak
Networks (DPD) services designed for mobile penetration, Alliances with rural coverage, Limited
data and interactive paging system integrators, low deployment of
(ARDIS, BSWD) functions latency technologies by service
providers
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Cellular Digital Packet Data Digital packet technology is Well-suited for short burst Coverage dependent on
(CDPD) an overlay on analog transmissions, IP capable cellular carriers
cellular technology agreements, Strong
(AT&T Wireless, GTE Wireless, urban weak rural
Bell Atlantic Mobile, coverage
Ameritech)
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Mobile Satellite Services Services using Ku band and Excellent coverage Poor in-building
(MSS) low earth orbit satellite penetration, expensive,
systems to provide wide area low data rate, limited
(QUALCOMM, Orbcomm and other blanket coverage message size, networks
LEO Systems) still in deployment
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Cellular Control Channel Uses overhead control Low latency, low cost, IP Coverage dependent on
Technologies (CCT) channels of analog cellular capable, cost of network is cellular carriers
network, and the SS7 network shared agreements, limited
(Cellemetry, Aeris Microburst) via IS-41 message size
- ------------------------------- ------------------------------ ----------------------------- -------------------------
- ------------------------------- ------------------------------ ----------------------------- -------------------------
Narrowband PCS (NPCS) Two-way messaging networks Medium message size, Networks still in
based on ReFLEX technology Spectral efficient low deployment, high
(Skytel, Pagenet, cost, excellent in-building comparative latency
Pagemart) penetration, coverage (low data rate)
- ------------------------------- ------------------------------ ----------------------------- -------------------------

Marketing & Sales

The T3000 e-Telemetry Data SystemTM was designed and patented as a user friendly, end-to-end solution for wireless telemetry
and an inexpensive Wireless Local Loop (WLL) device. The T3000 utilizes existing PCS infrastructure to provide its capabilities and
operates over standard, existing wireless digital communication networks without any modification to the network. The T3000 employs
a patented method of utilizing Short Message Service for telemetry data transmission. The T3000 also accesses the voice channel of
the PCS system to provide wireless local loop, which provides voice capabilities. The use of existing wireless communication
infrastructure speeds deployment of telemetry services and significantly reduces costs. The Telemetrix e-Telemetry Data SystemTM
offers support services to telemetry users and carriers, including telemetry network management, billing support, system design,
consulting and service bureau capabilities.

The T3000 system:

--........Acquires data from remote devices.

--........Controls, polls and activates remote devices.

--........Manages the entire wireless telemetry data system.

--........Offers real-time access to telemetry data.

--........Provides Wireless Local Loop voice type telephony services.

The T3000 is in test and evaluation program at many Clients, and will move to the full marketing and commercialization phase
in late fourth quarter of 2001. Numerous meetings are set, field trials are scheduled and convention exhibits are booked. The T3000
e-Telemetry Data SystemTM is ready for early scheduled deliveries in the early second quarter 2002 and product delivery early third
quarter 2002.

Through the relationship with Ericsson, Telemetrix will use wireless operators (carriers), with established relationships in
their service market and coverage area, to capitalize on their market presence, and their wireless brand awareness. Telemetrix
e-Telemetry Data System will make the PCS operator (a) the most competitively priced telemetry data service in their operating
region, (b) provide a complete and installed infrastructure which does not have to be maintained by the telemetry data users, and (c)
provide financial incentives for the PCS operator to generate additional revenues through the use of SM telemetry data on their
networks. The wireless operators are seen as the leaders in communication technology, therefore, their reputation, stature and
standing will generate credibility for the delivery of new wireless telemetry data technology, which cannot be delivered by any other
entity in a market, at a competitive price.

Telemetrix Inc. is positioned to quickly gain nationwide capability and to become a nationwide telemetry data service
provider.

Regulation

Wireless telecommunications services are subject to significant regulation and the Company could become subject to
additional regulatory requirements as our services grow. Pursuant to the Communications Act of 1934, as amended (the "Communications
Act") including amendments by the Telecommunications Act of 1996, the FCC regulates the facilities and services we use to provide,
originate, or terminate interstate or international communications. Provision of PCS and other wireless services requires radio
frequency licenses from the FCC or a contractual arrangement with a licensee. The provision of local exchange service through
wireless local loop may be subject to state regulation. Approvals from state and local governments may be required to utilize public
rights-of-way necessary to install and to operate networks, transmission towers, equipment, and other facilities. Furthermore,
transfers of control of certificated carriers and assignments of regulatory authorizations often require prior approval from the FCC
and state regulatory agencies.

....................The Company's telecommunications services also must comply with federal and state common carrier regulations,
including certification, notification, registration and tariffing requirements. Although the FCC eliminated the tariffing
requirements for interstate non-dominant carriers, such carriers must continue to file interstate tariffs until a federal court
completes reviewing such detariffing and declares that the detariffing order is lawful. When necessary, we will file interstate
tariffs with the FCC and state tariffs with the State of Nebraska and any other states where the Company is certified to provide
wireless local exchange services. The FCC and numerous state agencies also impose prior approval requirements on transfers of
control of certificated carriers and assignments of regulatory authorizations. States also often require prior approvals or
notifications for the issuance of stock, bonds or other forms of indebtedness. The FCC and state regulatory agencies generally
retain the right to sanction a carrier, impose forfeitures, mandate refunds or impose other penalties in the event of regulatory
non-compliance by a carrier. There can be no assurance that future regulatory, judicial or legislative activities will not have a
material adverse effect on the business, operating results and financial condition of the Company or that domestic or international
regulators or third parties will not raise material issues with regard to the Company's compliance or non-compliance with applicable
laws and regulations.

Employees

The Company had 11 full-time employees on March 31, 2002. The Company employs certain employees pursuant to offer letters,
which might lead to employment contracts. See "Management". While Nebraska is an Open Shop State, no Company employees are members
of labor unions. The Company also utilizes independent contractors and consultants.

CORPORATE HISTORY

Telemetrix was formed through a corporate combination ("Combination") between Arnox Corporation, Telemetrix Resource Group
Inc. ("TRG--US") and Tracy Corporation II d/b/a Western Total Communications ("WTC"). Arnox was originally formed in 1983 to develop,
manufacture, market and license fire retardant products and technology, and Arnox's stock was listed for trading on the NASDAQ
system. However, a 1989 bankruptcy left Arnox as an inactive shell without material assets, liabilities or operations. WTC was
formed in 1982 as a paging company operating in western Nebraska. TRG--US was formed in 1998 after its founders acquired the rights
to an initial version of the TRACCS Software; TRG--US's principal activity was licensing the TRACCS Software to Telemetrix Resource
Group Ltd.("TRG--Canada"), which offered some Customer Care Services in Canada; TRG--US then acquired TRG--Canada in early 1999. In a
"reverse takeover" during the second and third quarters of 1999, the stockholders of WTC and TRG--US ("Principal Stockholders")
acquired 11,500,000 Shares (approximately 90%) from Arnox in exchange for all WTC and TRG--US stock; as a result, the Principal
Stockholders acquired control of Arnox. After the Combination, the companies changed their names to reflect their complementary
businesses:
- -- Arnox became Telemetrix Inc. ("Telemetrix");
- -- TRG-US became Telemetrix Solutions Ltd. ("Telemetrix Solutions"; for the collective activities of both TRG-US and
TRG--Canada, we use "TRG" and "Telemetrix Solutions" for activities before and after, respectively, the Combination);
- -- WTC became Telemetrix Technologies Inc. ("Telemetrix Technologies"; we use "WTC" and "Telemetrix Technologies" for
activities before and after, respectively, the Combination).

OPERATIONS ANALYSIS

The Company has experienced substantial change over the past two years. During April 1999, the Company was formed through a
corporate combination between Arnox Corporation and Telemetrix Resource Group, Inc. Arnox was an inactive corporate shell prior to
the combination. In September 1999, Tracy Corporation II d/b/a/ Western Total Communication was acquired for stock. Telemetrix
Resource Group, Inc. was comprised of Telemetrix Resource Group, LTD, a Canadian corporation, which was later renamed Telemetrix
Solutions. Telemetrix Solutions offered billing services and consulting to telephony companies. Western Total Communications, later
renamed Telemetrix Technologies, was formed in 1982 to provide wide area paging in western Nebraska, eastern Wyoming and northeastern
Colorado. It acquired two PCS licenses (30 MHZ and 10MHZ) for Business Trading Area 411, as defined by the Federal Communications
Commission, and has constructed the 30 MHZ licensed network. It is also certified as a competitive local exchange carrier ("CLEC")
in the State of Nebraska. Telemetrix Technologies developed the T3000 wireless telemetry system.

The focus of the Company has shifted to the commercialization of the T3000 wireless telemetry system. During late 1999, the
TRACCS software, which was used for the billing service operations, was closely analyzed and management believed the value of the
software was impaired and was written- off. The original value of the software prior to any amortization or write down was $25
million. The majority of the accumulated deficit in the Shareholder's Equity is the amortization and subsequent write-down of this
software. Early in 2000, management reviewed the continued operation and the future of the billing service bureau and concluded that
the Telemetrix Solutions business should be sold. During the second and third quarter, the Company sought a buyer for the business
and was successful in selling it in August 2000. The sale was to Nextech Catalysts Inc., and included almost all of the assets of
the operations as well as certain liabilities. The assets and liabilities were exchanged for a certain number of shares of
Superwire.Com common stock. This has allowed the company to reduce the monthly operating overhead, eliminate the operating deficits
created by this operation, focus on the core competencies of the company and redirect management and operation's efforts to
commercializing and deploying of the T3000 system.

As stated earlier, the primary focus of the Company in 2000 has been the commercial development and testing of the T3000
system. The Company completed manufacturing design of the T3000 hardware and has substantially completed the software design of the
operating components. Additionally, the required PCS network infrastructure has been installed. Several of the T3000 components,
such as the GSM module, have undergone independent testing and have received approval. During 2000, the Company was granted two
patents related to the T3000 technology. Both patents cover the equipment as well as the method of automatically collecting and
transmitting telemetry information using the Short Message Service (SMS) portion of a Personal Communications Systems ("PCS")
Network and further enhance the creation of content, which may be accessed via the Internet. These patents provide the foundation of
our Technology.

The Company signed several testing and evaluation agreements during 2000 with various utility and transportation companies.
The agreements are for testing of our T3000 system under each company's specific environment, prior to a complete commercial
installation. Those companies who have signed agreements include: The Bay Area Rapid Transit District of Oakland, CA; PSP
Products Inc., Manassas, Virginia; Northern California Power Association of Roseville, CA.

In addition to the commercial development and testing of the T3000 system, the Company has undertaken an extensive marketing
campaign to promote our e-Telemetry Data SystemTM, to the utility marketplace. Since our technology is cutting edge, we have had to
conduct considerable "missionary" marketing to create an awareness of our products and services. This effort has continued in 2001.
As part of our marketing and commercialization strategy, we formed an alliance with Ericsson Messaging Systems Inc.("Ericsson")
Ericsson is a leading worldwide communications supplier providing total communications solutions from systems and applications to
wireless telephone and other communication tools. The alliance is in the form of four separate agreements signed in 2000. The
Company also in 2000 began discussions with a second international company to market our products in Mexico, Central and South
America. These discussions have continued during 2001.

During 2000, the Company undertook two rounds of financing to support our activities. The first was a private placement of
1,311,250 shares of common stock, which raised $2.4 million in March 2000. The second round of financing, a convertible debenture,
raised $1.2 million in September 2000.

The focus of 2001 has been the continuation of the software development for the Network Operations Center as well as the
development of documentation and tutorials for installation and maintenance of the system. We also have spent significant resources
in marketing the T3000 system. The T3000 e-Telemetry Data SystemTM will be available for commercial distribution late in the first
quarter of 2002.

Currently, the Company is seeking additional financing. It is estimated that no more than an additional $5-8 million will
be required for manufacturing inventory, working capital and for capital equipment.

DESCRIPTION OF FINANCIAL COMPONENTS
The following summarizes the components of revenue and the associated cost of sales (excluding depreciation) from our
proposed operations:

Activity Revenue Source Costs of Sales (excluding depreciation)

Wireless telecommunications PCS Services Network Operation and Maintenance; Carrier settlements

Wireless Telemetry Licensing T3000 Customer Care and Support; Development costs; licensing fees
T3000 equipment sales Manufacturing costs; Customer Care and Support, licensing fees
T3000 software sales Customer Care and Support; License fees
Data transmission Carrier settlements; roaming fees

WIRELESS SERVICES
Our wireless communications services currently consist of paging operations in Nebraska, Wyoming and Colorado over the WTC
Network. These operations (paging services plus equipment sales, rentals and repairs) now generate approximately $18,000 in monthly
revenue. We will not expand the paging operations but instead will integrate them into the PCS operations. We acquired the PCS
licenses in 1996, began network deployment in late 1997 and finished network deployment in April 1999. The network has primarily
been used for the research and development of the T3000. We will commence commercial PCS operations in 2nd Quarter 2002 for short
message services to support the T3000 technology development.

Operating Expenses

As we develop our products and services and ready them for market, the operating expenses principally consist of research &
development, pre-production, license and general & administrative costs. When we launch products and services, sales & marketing
expenses substantially increase, while research %amp; development, pre-production and license costs decrease. After sales of products
and services reach "regular" levels, the principal operating expenses will be research %amp; development, sales %amp; marketing,
manufacturing, general %amp; administrative. Since we are still in the initial stages of our business plan, we believe that operating
expenses, particularly for wireless telemetry and wireless telecommunications, will continue to increase during the next year as we
continue development and commercialization, pre-production and manufacturing and expand our operations.

DEVELOPMENT AND COMMERCIALIZATION
Our development and commercialization activities will principally focus on completing T3000 for commercial release in June
2002. We expect development and commercialization will always constitute a significant operating expense because we must continually
develop, enhance and upgrade our products and services. For example, we must extend T3000 to integrate other wireless technologies
such as TDMA, CDMA, and ReFLEX.

Capital Expenditures

The most significant capital expenditure will be deploying and equipping the T3000 Network Operation Center ("T-NOC"). The T-NOC
is the central repository of telemetry information and acts as the gateway between the PCS service providers and the Telemetry
Users of T3000 (e.g., utilities and alarm companies).

LICENSING

Some of our products and services utilize intellectual property of other parties, which generally requires us to pay
license fees. Such license fees can take the form of initial payments, continuing royalties or both types of payments. We also
must reserve funds to pay licenses on "essential patents" on the GSM radio and protocols, which is a standard practice in the
industry.

PRE-PRODUCTION

Pre-production costs include certification by the Underwriters Laboratory and ANSI to prove that our T3000 device
complies with electronic emissions, safety and system interoperability standards. Pre-production costs will end when the system
is commercially available, in June 2002.

SALES %amp; MARKETING

Sales %amp; Marketing expenses include salaries and commissions for sales staff, trade show expenses, consulting fees and
advertising. Since our Company's, products and services are innovative and relatively unknown, we must conduct considerable
market development programs to create awareness of our products and services.

MANUFACTURING

The largest manufacturing expense will be costs associated with component purchase guarantees to manufacturers and
holding inventory on the T3000 units. Since T3000 includes some customized components and custom circuit boards, we must commit
to large volume purchases to ensure timely delivery and to lower costs. Large production runs avoid multiple set-up charges and
therefore are more economical, especially since third parties will manufacture the T3000 units for us. We anticipate building a
minimal inventory to satisfy Test and Evaluation orders. Commercial production will be against firm orders from customers.

GENERAL %amp; ADMINISTRATIVE

General %amp; administrative expenses primarily consist of salaries and related expenses of management, support personnel,
occupancy fees, professional fees, general corporate and administrative expenses. As the size and scope of our business grow, we
may expand our corporate and administrative staff, especially accounting and contract management.

RESULTS OF OPERATIONS
Quarter and three months ended March 31, 2002 compared to quarter and three months ended March 31, 2001

The following discussion contains comparisons between the quarter ("Recent Quarter")and three months ended March 31, 2002
("Recent Period") and the quarter (Prior Quarter") and three months ("Prior Period") ended March 31, 2001. The financial statement
for the prior period includes TSI and Telemetrix Technologies. TSI in the Prior Period included the operations of the Billing
Service Bureau, which was sold in the third quarter 2000. The decrease in revenues and operating expenses from Recent Period and
Prior Period can be attributed to the sale of this operation.

During the recent period, our prime focus has been the finalization of the software development for the T3000 system, as
well, making significant progress in marketing the T3000 to the marketplace.

Revenue totaled $47,000 during the Recent Period, compared to $57,000 for the Prior Period. During the Recent Period, we
received $47,000 from equipment sales and rentals. The decrease in revenues from the Prior Period is due to the switch consumers are
making from pagers to cellular phones. We expect revenue to increase substantially over the next 12 to 18 months as we launch the
T3000 system.

Operating expenses were $833,000 during the Recent Period. These expenses are primarily due to the impairment of
technological advances, the software development costs for the T3000 technology and other operating costs. Operating expenses were
838,000 for the Prior Period.

Costs of Revenue was approximately $484,000 for the Recent Period. These expenses primarily consist of the costs of the
equipment sold, commissions of sales employees, agent fees and repair parts for the WTC paging operations. Approximately $460,000 of
that is depreciation and impairment of outdated technology.

Research %amp; Development expenses were $25,000 for the Recent Period. The primary component of the year to date expense is
the software development costs for the T3000 system as well as some costs for pre-manufacturing development.

Selling, General and Administrative expenses were $324,000 for the Recent Period. The primary component of the SG%amp;A expense
is salary costs for the T3000 and administrative costs of Telemetrix Solutions and Technologies.

Interest expense was $631,000 for the Recent Period. This expense represents primarily the interest charges on the
convertible debentures that occurred in 2000 as well as interest charged on loans from related parties. The proceeds from the
convertible debentures and related party loans were used to fund the research and development of the T3000 as well as operations.
Interest expense for the Prior Period was $456,000, interest on loans from related parties.

Net loss. We reported a net loss of $1.453 million for the Recent Period. The principal components of this net loss for
the Recent Period were amortization and depreciation of $441,000, interest expense of $631,000, research and development of $25,000
and normal operating expenses. We did not reflect any benefit for income taxes due to the uncertainty surrounding the realization of
the favorable tax attributes in future tax returns.

Accumulated Deficit. Accumulated deficit for the Recent Quarter was $51.15 million. The primary component of the
accumulated deficit is the amortization and the subsequent write-off of the TRACCS software. The TRACCS software was used for the
billing service bureau operation. The software value was written-off in late 1999. The total amount of amortization and write-off
was $25 million.

LIQUIDITY AND CAPITAL RESOURCES. During the Recent Period, we used $344,000 in cash for operations, primarily for salaries,
marketing expenses and other operating expenses. During the Recent Period we generated cash flow from financing activities of
$175,000 that primarily came in the form of notes payable with related parties and stock issued for operating expenses.

Funding Requirements. In order to pay operating expenses and achieve self-sustaining operations, we expect to require
substantial funding during the next twelve months. We will need funds for:

Development and Commercialization
Development and commercialization prior to commercial distribution will require approximately $100,000. This includes
documentation for training, customer user and installation manuals, licensing fees, compliance testing (i.e., FCC, ANSI, UL, and CE
Mark), software interface development, and completion of manufacturing design. After commercial distribution begins, $800,000 will
be required for the integration of TDMA, CDMA, the European GSM module and new technologies.

Working Capital
Working capital will be required to fund the operations until it reaches positive cash flow. Working capital will be used
for salaries and wages for our customer service, network management, marketing, and administrative employees. It will also be used
for marketing expense including advertising and trade show, and other operating expenses such as rent, office supplies, postage and
professional fees. Working capital also includes a reserve for unanticipated expenses.

Manufacturing Expense
The anticipated demand for the T3000 will require the manufacturing of product for inventory prior to sale. We estimate
that an initial 2,000 units will be required at a cost of approximately $500,000.

Repay Current Liabilities
During our start up phase, we incurred several lines of credit and above normal levels of accounts payable. Approximately
$270,000 will be used to partially pay down the accounts payable to a normal level.

PART II - OTHER INFORMATION
Item 1. Legal Proceedings

The Company is party to various negotiations and legal proceedings regarding claims on contracts in the normal course of
its business. Management believes that the outcome of such negotiations and legal proceedings, as well as commitments, will not have
a material adverse effect on the Company's consolidated and combined financial statements.

Item 2. Changes in Securities and Use of Proceeds.

(a) Not Applicable.

(b) Not Applicable.

(c) Issuance of Unregistered Securities - The following tables summarize all securities that we issued during the quarter
ended March 31, 2002, in unregistered offerings:
Deemed Per
Date Title of Security Amount Class of Purchaser Exemption Share Price Proceeds
1/30/02 Common Stock1 312,500 Becker Capital Mgmt Rule 506 $0.162 3
2/22/02 Common Stock4 625,000 Michael Glaser Rule 506 $0.162 3
3/29/02 Common Stock5 1,142,857 Michael Tracy Rule 506 $0.356 3

--------------------
1 Issued as part consideration for a bridge loan of $50,000.
2 The closing price of the stock on the loan draw down date.
3 Issued as part consideration for a bridge loan, so no cash consideration was received specifically for this stock.
4 Issued as part consideration for a bridge loan of $100,000.
5 Issued as part consideration for a bridge loan of 400,000.
6 Closing price of the stock on date of issuance.

(d) Not Applicable.

Item 3. Defaults Upon Senior Securities.
(a) Not Applicable.

(b) Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted for a vote of Security Holders.

Item 5. Other Information
None.

Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. None
(b) Reports on Form 8-K. Filed March 12, 2002. The Company Board of Directors approved by
Corporate Resolution dated March 11, 2002, the appointment of Paul Zolman as acting Chief
Financial Officer effective this same date. The board had previously received notification from
Mr. Doyle of his desire to purchase and operate a private business once a replacement was
found.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                                                                                                               TELEMETRIX INC., a Delaware corporation

May 20, 2002                                                                                               By: /s/   Paul Zolman
                                                                                                                                        Paul Zolman
                                                                                                                                       Signing for Registrant

INDEX TO EXHIBITS FILED WITH THIS QUARTERLY REPORT

Exhibit Exhibit Page

None

-----END PRIVACY-ENHANCED MESSAGE-----

U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.

FORM 10-QSB

TABLE OF CONTENTS FOR FORM 10-QSB PART I - FINANCIAL INFORMATION

PART II - OTHER INFORMATION

SIGNATURES

INDEX TO EXHIBITS FILED WITH THIS QUARTERLY REPORT

Exhibit Exhibit Page

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

TABLE OF CONTENTS FOR FORM 10-QSB
PART I - FINANCIAL INFORMATION