-----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, PO5RnNSPSw7ZNscUzU1ujvvLR9lXoUvNhfnPoQsIx5Qv7cN8ClXQyazIq13Lj7tn zTXD7vQN632Fg+uc5pWnfA== 0001021890-02-000259.txt : 20020627 0001021890-02-000259.hdr.sgml : 20020627 20020626193203 ACCESSION NUMBER: 0001021890-02-000259 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020627 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-14724 FILM NUMBER: 02688246 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/A 1 tlmx33110qam.htm TELEMETRIX INC.--AMENDED 3/31/2002 FORM 10-QSB Telemetrix Inc. Amended March 31, 2002 10-QSB

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

FORM 10-QSB/A

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/A
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......11

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..........................................................29
Item 4.    Submission of Matters to a Vote of Security Holders......................................29
Item 5.    Other Information........................................................................29
Item 6.    Exhibits and Reports on Form 8-K.........................................................29
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
(As of March 31, 2002 this financial data has not been audited or reviewed by the corporation‘s independent accountants)


                                                                                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
Goodwill .....................................................................      4,529       4,529
Other Intangibles ............................................................        461         485
                                                                                 --------    --------
         Total assets........................................................  $    6,909    $  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 ..........................................................    (50,731)    (49,494)
Prepaid Consulting Services ..................................................          0        (171)
       Total shareholders' deficit ...........................................     (4,100)     (2,646)
                                                                                 --------    --------
            Total liabilities and shareholder's deficit ...................... $    6,909    $  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
(As of March 31, 2002 this financial data has not been audited or reviewed by the corporation‘s independent accountants)

                                                               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 ...................................            67             12
   Research & development ............................            25             63
   Selling, general & administrative .................           324            763
                                                         -----------    -----------
       Total operating expenses ......................           416            838
                                                         -----------    -----------
 Net loss from operations ............................          (369)          (781)
                                                         -----------    -----------
Other Expense:
   Interest expense (income) .........................           671            456
   Other expense (income) ............................            (4)            (9)
                                                         -----------    -----------
       Total other expense (income) ..................           667            447
                                                         -----------    -----------
Net (loss)............................................   $    (1,036)   $    (1,228)
                                                         ===========    ===========

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

Loss per share........................................   $     (0.06)   $     (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
(As of March 31, 2002 this financial data has not been audited or reviewed by the corporation‘s independent accountants)

                                                                                               Three Months
                                                                                              Ended March 31,
                                                                                            2002           2001
                                                                                            ----           ----
Cash flow from operating activities
   Net loss for the period..............................................................$    (1,036)   $(1,228)

Adjustments to reconcile net loss to cash used in operations
     Stock issued in-lieu of wages ......................................................         0          0
     Amortization & depreciation ........................................................        24        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 ..............................................................     1,380        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 $ 550,000 in accrued expenses was recorded related to the issuance of deferred shares of stock.

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
(As of March 31, 2002 this financial data has not been audited or reviewed by the corporation‘s independent accountants)

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 System^TM 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 System^TM 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^TMwill 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. Goodwill as it relates to FASB 142

Telemetrix Inc. is in the process of evaluating the goodwill using the discounted cash flow method. We cannot estimate any impairment until our analysis is complete.

4. Acquired Intangible Assets


                           Acquired Intangible assets
                           --------------------------
                                 Gross                                     Weighted
                                 Carrying  Accumulated         Yearly      Average
INTANGIBLE ASSETS AS OF 3/31/02  Amount    Amortization     Amortization   Life Yrs
- -------------------------------  --------  ------------     ------------   --------

Patents                           55,972     (16,026)            3,731      10.71
FCC Licenses                     923,856    (502,933)           92,286       4.55
                                 -------    --------           -------
     Total                       979,828    (518,960)           96,017       4.79

Aggregate Amortization Expense:
 For period ended 3/31/02                     24,000

5. Related Party Loans

The Company obtained related party loans totaling $550,000 in the current period. The loanoffered 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.

6. 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                               $      3,000
      Software Factory Inc.                                    $    174,000
                                                               ------------
      Total due from related parties                           $    177,000

      Due to related parties
      ----------------------

      Becker Group of Companies (BGC) Investments              $     41,000
      Becker Group                                             $    185,000
                                                               ------------
      Total Due to Related Parties                             $    226,000

      Related party loans
      -------------------

      Michael Tracy                                            $  2,168,000
      Michael Glaser                                           $    664,000
      Becker Capital Management                                $    369,000
      Tracy Broadcasting Company                               $     40,000
                                                              -------------
      Total Due to Related Parties                             $  3,241,000

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.

7 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.

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 System^TM 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 2^nd 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 1^st 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 System^TMfor 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 System^TM. The agreement calls for Telemetrix to provide Ericsson, for resale, all of the hardware components of the T3000 e-Telemetry Data System^TM 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 System^TM. The agreement calls for Telemetrix to provide Ericsson with Telemetrix e-Telemetry Data^TM 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 System^TM 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:

•

installing a measurement device at a remote location;

•

controlling the device from a central station;

•

obtaining data with the device;

•

transmitting the data to the central station;

•

collecting and analyzing the data; and

•

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.

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               messages sent to         into a house and
                                   Security Alarms           alarm monitoring         cuts the phone and
                                o  Smoke Detectors           center                   power wires
                                o  Fire Alarms            o  Security against      o  Alarm company is
                                                             compromise of            still notified of the
                                                             wireline                 break in and
                                                             connectionks             dispatches for police
________________________________________________________________________________________________________________
    Agricultural                o  Pipeline Corrosion     o  Monitor               o  A city registers
  Irrigation, and                  Systems                   environmental            unusually high air
  Environmental                 o  Water Pump                condition                pollutions readings
                                   Failures, Levels       o  Alarm systems for     o  A public service
                                   And                       hazardous                announcement is sent
                                   Contamination Air         environmental            out warning those
                                   Quality Systems           conditions               with medical
                                                                                      conditions to stays
                                                                                      in doors
________________________________________________________________________________________________________________
Asset Management,               o  Office Equipment       o  Monitor meter         o  A delivery truck
 and Tracking                   o  Industrial                Information              follows a specific
                                   Machinery and          o  Service diagnosis        route to fill a
                                   Manufacturing             and maintenance          vending machine
                                   Processes                 Inventory             o  Truck can be
                                o  Vending                   management               re-routed if the
                                   Machines               o  Fleet / route            vending machine is
                                                             management               still full from
                                                                                      last delivery
________________________________________________________________________________________________________________
   Atmosphere                   o  Heating,               o  Air quality           o  A commercial
    Controls                       Ventilation, and          standards                refrigerator door in
                                   Air Conditioning       o  Temperature              a restaurant is left
                                o  Refrigeration,            controls for food        open after a food
                                   Temperature and           and other                delivery
                                   Humidity Controls         perishable items      o  An alarm is
                                                          o  Climate control          triggered, alerting
                                                             for greenhouses          people to close the
                                                             and agricultural         door to save the food
                                                             products                 from spoiling
________________________________________________________________________________________________________________
        HealthcarE              o  Health Status          o  Patient health        o  A patient takes a
                                   Monitoring                status alarms            blood test everyday
                                   Devices                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                  o  Parking Meters         o  Parking meter         o  A city is losing
Municipal Services              o  Highway Tolls             servicing                money everyday
                                o  Streetlights           o  Service route            because parking
                                o  Railroad Crossing         management               meters are full or
                                   Switches               o  Preventive               robbed
                                                             security for          o  Meter attendants
                                                             hazardous public         are rerouted to full
                                                             situations               meters, and police
                                                                                      are dispatched to
                                                                                      tampered meters
________________________________________________________________________________________________________________
 Transportation                 o  Vehicle Location       o  Inventory             o  A truck is making
   Systems and                  o  Vehicle Engine            management               an urgent delivery
   Facilities                      Computers              o  Emergency                but a major
                                o  Container asset           communications           accident will delay
                                   tracking               o  Remote                   the arrival
                                                                                   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  Remote meter             up-to-minute
                                                             control                  readings
________________________________________________________________________________________________________________

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

MARKETING & SALES

The T3000 e-Telemetry Data System^TM 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 System^TM 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.

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Provides Wireless Local Loop 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 System^TM 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 System^TM, 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 System^TMwill 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 2^nd 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 & development, pre-production and license costs decrease. After sales of products and services reach “regular” levels, the principal operating expenses will be research & development, sales & marketing, manufacturing, general & 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 & MARKETING

Sales & 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 & ADMINISTRATIVE

General & 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 $416,000 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 $67,000 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 $43,000 of that is depreciation.

Research & 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&A expense is salary costs for the T3000 and administrative costs of Telemetrix Solutions and Technologies.

Interest expense was $671,000 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 $1.036 million for the Recent Period. The principal components of this net loss for the Recent Period were, interest expense of $671,000, 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 $50.73 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 Stock(1)     312,500  Becker Capital Mgmt      Rule 506       $0.1(2)     3
2/22/02    Common Stock(4)     625,000  Michael Glaser           Rule 506       $0.16(2)    3
3/29/02    Common Stoc(5)    1,142,857  Michael Tracy            Rule 506       $0.35(6)    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

June 26, 2002                                                                                              By: /s/   Paul Zolman
                                                                                                                                        Paul Zolman
                                                                                                                                       Signing for Registrant

INDEX TO EXHIBITS FILED WITH THIS QUARTERLY REPORT

Exhibit Exhibit Page

None

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

FORM 10-QSB/A

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

PART II - OTHER INFORMATION

1. Description of Business

Telemetrix Technologies

T3000 E-TELEMETRY DATA SYSTEM TM

2. Basis of Presentation of Interim Information

3. Goodwill as it relates to FASB 142

4. Acquired Intangible Assets

5. Related Party Loans

6. Related Party Transactions

7 Commitments & Contingencies

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

OVERVIEW.

Other Developments

Industry And Technology Overview

Potential Customers and Markets

Competition

Telemetry Technology Landscape

MARKETING & SALES

REGULATION

EMPLOYEES

CORPORATE HISTORY

OPERATIONS ANALYSIS

DESCRIPTION OF FINANCIAL COMPONENTS

WIRELESS SERVICES

Operating Expenses

DEVELOPMENT AND COMMERCIALIZATION

Capital Expenditures

LICENSING

PRE-PRODUCTION

SALES & MARKETING

MANUFACTURING

GENERAL & ADMINISTRATIVE

RESULTS OF OPERATIONS

Development and Commercialization

Working Capital

Manufacturing Expense

Repay Current Liabilities

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities and Use of Proceeds.

Item 3. Defaults Upon Senior Securities.

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

Item 5. Other Information

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

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/A
PART I - FINANCIAL INFORMATION

T3000 E-TELEMETRY DATA SYSTEM^TM