10QSB
      1
      wide-q1.txt
      FORM 10-QSB FOR SEPTEMBER 30, 2001


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                           SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON, D.C. 20549


                                       FORM 10-QSB


      [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the quarterly period ended   September 30, 2001
                                             -------------

                                           OR

      [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
            EXCHANGE ACT OF 1934.

            For the transition period from _______________ to _______________


                             Commission file number  1-13588
                                                     -------

                                 THE WIDECOM GROUP INC.
      ---------------------------------------------------------------------------
                 (Exact Name of Registrant as specified in Its Charter)

              ONTARIO, CANADA                            98-0139939
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      (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
       Incorporation or Organization)

      37 GEORGE STREET NORTH, SUITE 103, BRAMPTON, ONTARIO, CANADA      L6X 1R5
      ---------------------------------------------------------------------------
      (Address of principal executive offices)                         (Zip
Code)

      Registrant's Telephone Number, Including Area Code (905) 712-0505
                                                         --------------


      ---------------------------------------------------------------------------
                   Former Name, Former Address and Former Fiscal Year,
                              If Changed Since Last Report.

            Indicate by check X whether the registrant: (1) has filed all
reports
      required to be filed by Section 13 or 15 (d) of the  Securities  Exchange
      Act of 1934 during the preceding 12 months  (or for such shorter periods
      that the registrant was required to file such reports), and (2)
      has been subject to such filing requirements for the past 90 days.
                                  Yes   X    No
                                      -----     -----

            The number of shares outstanding of registrant's common stock as of
      December 21, 2001 was 2,633,585 shares.


                                 THE WIDECOM GROUP INC.
                                       FORM 10-QSB
                                          INDEX





The WideCom Group Inc.


Consolidated Financial Statements (Unaudited)
For the quarters ended September 30, 2001 and 2000

Together with Review Engagement Report

TABLE OF CONTENTS


Review Engagement Report 					  2

Financial Information						  3

Consolidated Balance Sheets                                       4

Consolidated Statements of Operations                             5

Consolidated Statements of Cash Flows                             6

Notes to Consolidated Financial Statements                       7- 9


Item 2 - Management's Discussion and Analysis of
         Financial Condition and Results of Operations           7-8



Part II Other Information					   9

               None.


Signatures     							 10

2 of 9


 	                				   Page 2


Review Engagement Report

I have reviewed the balance of The Widecom Group Inc. as at September 30, 2001 and the statements of income and retained earnings for the quarter then ended, and the statement of cash flow for the six months then ended. My review was made in accordance with the US generally accepted standards for review engagements and accordingly consisted primarily of enquiry, analytical procedures and discussion related to information to me by the management.

A reviw does not constitute an audit and consequently I do not express an audit opnion on these financial statements.

Based on my review, nothing has come to my attention that causes me to believe that these financial statements are not, in all material respects, in accordance with the US generally accepted accounting principles.




Mississauga, Ontario						Charted Accountant

21-Dec-01							/s/ Zafar Husain Siddiqui












PART I FINANCIAL INFORMATION



                                                         Page 3


The WideCom Group Inc.
Consolidated Balance  Sheet
(in United States dollars)
                                                September 30
                                                     2000      2001

Current Assets                  Notes
Cash and cash equivalents                           49854      7771
Accounts receivable                                654277    423194
Inventory                              3           824478    528457
Prepaid expenses                                    29554     21263
Advances to related parties                        344964    295658
Deferred financing costs                            24894      9802

Total Current Assets                              1928021   1286145

Capital Assets                         4          1088968    620963

Purchased research and
    development technology             5            40774     13997
Investment in affiliate                8           174066         0

Total Assets                                      3231829   1921105


Liabilities & Stockholders' Equity

Current Liabilities

Bank indebtedness                                  214678    120609
Accounts payable and  accrued liabilities          605454    606675
Loans from related parties                         537942    737981
Convertible debentures                 5           192803    180085

Total Current Liabilities                         1550877   1645350

Stockholders' Equity
Common shares
 5,000,000*  shares authorized of no par value
 2,443,730*  shares issued and outstanding on
                        March 31, 2000
 2,633,585*  shares issued and outstanding on
                        June 30, 2001            14703589  14711179
Contributed surplus                                159825    159825
Deficit                                         -13182464 -14595249
                                                  1680950    275755
Total Liabilities & Stockholders' Equity          3231827   1921105

*  Adjusted for reverse split of Company's stock (1:4) on January 29, 1999.

The accompanying notes are an integral part of the consolidated financial statements.
                                                         Page 4


The WideCom Group Inc.
Consolidated Statements of Operations
(in United States dollars)              For the three monFor the six
                                        SeptembeSeptembermonths ended
                                            2000     2001Sept. 30, 2001
                                        (Unaudit(Unaudite(Unaudited)

Revenue

Product sales                             381372   147879    233631
Research and development grants                0        0         0
Interest income                              102      131       222

Total Revenue                             381474   148010    233853

Expenses
  Cost of product sales                    83533    36211     58377
  Research and development                 21745    83795     95587
  Selling, general and administrative     194134   121106    221638
  Interest and bank charges                10189     2985      6353
  Management fees and salaries             55479    12458     51958
  Amortization                             65201    31810     55436
  Financing fees                            5322        0         0
  Foreign exchange loss (gain)               629     4850      2492

Total Expenses                            436232   293215    491841

Operating loss                            -54758  -145205   -257988

Legal settlement costs                         0        0         0
Equity in loss of affiliate               -78227   -84650   -159193

Net loss for the period                  -132985  -229855   -417181


Loss per common share, basic
       and diluted                         -0.05    -0.09     -0.16


Weighted average number of shares outsta 2443730  2633585   2633585


*  Adjusted for reverse split of Company's stock (1:4) on January 29, 1999.


The accompanying notes are an integral part of the consolidated financial statements.









                                                         Page 5

The WideCom Group Inc.
Consolidated Statements of Cash Flows
(in United States dollars)                      For the six months ended
                                                SeptemberSeptember 30
                                                     2000      2001
                                                (Unaudite(Unaudited)

Cash provided by (used in)

Operating Activities
Loss for the year                                 -280250   -417181
(Add (deduct) items not requiring a cash outlay)
   Amortization                                    124775     55437
   Foreign exchange loss (gain)                    -22830      2492
   Share issued to settle lawsuits and corporate
       indebtedness                                               0
   Equity in loss of affiliate                     151866    159193
Net changes in non-cash
 Working capital balances related to operations:
   Decrease (increase) in receivables              -92635     30724
   Decrease in research and development grants r        0         0
   Decrease (increase) in inventory                 53165    215102
   Increase (decrease) in accounts payable and accrued
      liabilities                                 -174564   -155962
   Increase (decrease) in prepaid expenses         -10932      1201
                                                  -251405   -108994
Investing Activities

Disposal (purchase) of capital assets                 840         0
Advances to related parties                       -110533      1412
                                                  -109693      1412
Financing Activities

Deferred financing costs
Increase (decrease) in bank indebtedness            42298    -49690
Shares and warrants issued, net of issue costs          0         0
Loan from related parties                          171560     92496
Issuance of convertible debentures                      0
                                                   213858     42806
Effect of exchange rate change on cash             185780      2972

Net increase (decrease) in cash during the perio    38540    -61804

Cash and cash equivalents, beginning of the peri    11314     69576

Cash and cash equivalents, end of the period        49854      7771





The accompanying notes are an integral part of the consolidated financial statements.




                                                         Page 6

The WideCom Group Inc.
Notes to Consolidated Financial Statements (Unaudited)
(in United States dollars)

September 30, 2001


1. Presentation of Interim Information

        In the opinion of Management, the accompanying unaudited financial statements include all
        normal adjustments necessary to present fairly the financial position at September 30, 2001, and
        the results of operations for the three months ended September 30, 2001 and 2000 and cash flows
        for the six months ended September 30, 2001. Interim results are not necessarily indicative of
        of results for full year.

        The condensed consolidated financial statements and notes are presented as permitted by
        Form 10QSB and do not contain certain information included in Widecom's audited
        consolidated financial statements and notes for the fiscal year ended March 31, 2001.

2. Financial Statements

        The consolidated financial statements include the accounts of Widecom and its wholly
        owned subsidiary. All significant intercompany balances, transactions and stockholdings
        have been eliminated.

3.   Inventory
                                                SeptemberSeptember 30
      Inventories are summarized as follows:         2000      2001

        Raw material                               612850    442987
        Work-in-progress                            42358     28218
        Finished goods                             169270     57252
                                                   824478    528457

4.   Capital Assets

        Capital assets consist oSeptember 30, 20September 30, 2001
                                        Accumulated      Accumulated
                                Cost    AmortizaCost     Amortization

        Machinery, plant & compu 1923339 1388830  1646001   1476163
        Furniture and fixtures    101749   86247    91395     77692
        Prototypes and jigs       290381  170150   239494    146663
        Land                       56457       0    45806         0
        Building under construct  362269       0   298785         0
                                 2734195 1645227  2321481   1700518
        Net book value                   1088968             620963

5.   Convertible Debentures

        During 1999, the Company conducted a private placement of ten specific investment
        units, each comprising 10,000 common shares  and a three-year 12% convertible subor-
        dinated convertible subordinated note in the amount of $20,000.  Interest payments are
        payable quarterly and conversion is available at an exercise price of $1.00 per share.
        One-half of the principal amount of the note is exercisable during the 30 day period
        commencing 180 days from the initial closing on February 19, 1999.  The remaining principal


                                                         Page 7


The WideCom Group Inc.
Notes to Consolidated Financial Statements
(in United States dollars)

September 30, 2001

5.   Convertible Debentures (cont'd)

        amount is convertible following 360 days after the initial closing.  During the fiscal year ended
        March 31, 2000, the Company issued the remaining one-half unit comprising of 5,000
        common shares ( see Note 10(b)(x)) and a three-year 12% convertible subordinated note
        in the amount of $10,000.

        The Company is presently in default on the interest payments on the 12% convertible
        debentures.  The consequences of this default has not been determined.


6.   Loans from Related Parties

        The loans from related parties are non-interest bearing, due on demand and were advanced
        to the Company in order to assist in certain working capital requirements.

7. Contingent Liabilities

            (a)  The Company has been served with a claim, with respect to a breach of contract
        regarding the Company's rights under two specific joint venture and development
        agreements to use and distribute various iterations of software components allegedly
        the sole property of the claimant.  The action claims damages for breach of contract
        along with copyright and trademark infringement.  The claim seeks a total of $15.85
        million in damages and is in progress in the Province of Ontario.  Management considers
        that the prospects of a successful resolution are likely.

        Several other claims against the Company are in various stages of litigation.  In
        management's opinion, these claims are not material and accordingly no provision has
        been made in the consolidated financial statements.

        Loss, if any, on the above claims will be recorded when settlement is probable and the
        amount of the settlement is estimable.

           (b)  The Company's wholly owned subsidiary, Indo WideCom International Ltd., in India, has
        not met export obligations for the fiscal year which may result in additional customs duty
        levied by the authorities in India.  As at year end, this amount was not determinable.












                                                         Page 8


The WideCom Group Inc.
Notes to Consolidated Financial Statements
(in United States dollars)

September 30, 2001



8.   Investment in Affiliate                    September 30,
                                                     2000      2001

        3294340 Canada Inc.                        174066Nil

        In October 1996, the Company entered into a joint venture agreement which resulted in
        the purchase of a 45% stake in 3294340 Canada Inc., a Quebec based company, for
        approx. $1,875,000.  The investee carries on research and development activities in order
        to develop improvements, modifications, additions or alteration to the intellectual
        property and to develop new products.  In connection with the transaction, the Company
        also entered into a Stock Exchange Agreement with Societe Innovatech du Grand
        Montreal ("Innovatech"), an economic development agency of the government of the
        Province of Quebec, pursuant to which Innovatech would be permitted, under certain
        circumstances, to exchange its 45% interest for up to 63,250* common shares of the
        Company.

        During the fiscal year ended March 31, 2000,  Innovatech had made a request to convert 80% of
        its shares in 329430 Canada Inc. into the Company's common stock.

        During the fiscal year ended March 31, 2001, the Company issued 50,600 shares to Innovatech.
        As a result of another transaction with M.S. Judge Systems, and with the other shareholders of
        329430 Canada Inc., the Company had no further stake in the affiliate.

        At the end of September 2001, the asset value of the Company's investment in its affiliate
        became nil, and the Company divested itself of its stake in 329430 Canada Inc.

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

            Since inception, we have generated limited revenues from operations
      and have not yet achieved significant profitability. Our revenues are
      primarily derived from product sales that are recognized for accounting
      purposes when products are shipped.  We have limited revenue from
      operations, significant losses and have a significant deficit.  Due to
      limited cash resources, we have often relied on cash infusions from
      management to meet ongoing obligations.  There is no certainly that such
      access to funds will be available to us in the future.  In order to reduce
      our losses, we have significantly reduced Selling, General and
      Administrative costs.  We expect this to have a reduction on sales.

								Page 9

            While we received government grants in the past, we do not meet the
      required pre-qualification for such grants subsequent to conducting its
      public offering. In consideration of this fact, we shifted our research
and
      development to an affiliated joint venture based in Montreal, Canada.

            In February 2000, we established a majority-owned subsidiary,
      Posternetwork.COM Inc., to engage in the business line of offering an
      online printing service. Posternetwork is currently engaged in
      organizational and financing activities.

      Results of Operations
      Quarter Ended September 30, 2001 Compared to Quarter Ended September 30,
      2000

         Sales for the quarter ended September 30, 2001 were $147,879, a
      decrease of
      $233,493 as compared to $381,372 for the quarter ended September 30, 2000.
       Net
      Revenues for the quarter ended September 30, 2001 were $111,799, a
      decrease of
      $186,142 as compared to $297,941 for the quarter ended September 30, 2000.
      The
      decline in revenue was attributed to a decrease in sales and promotional
      efforts in order to conserve cash.

            Operating expenses for the quarter ended September 30, 2001 were
      $257,004
      a decrease of $95,695,  as compared to $352,699 for the quarter
      ended September 30, 2000.  Selling, general and administrative expenses
      for the
      quarter ended September 30, 2001 were $121,106, decreased by $73.028,
      versus the same period in the previous fiscal year. This reduction in
      selling, general and administrative expenses is a result of our efforts to
      preserve our cash resources. Reserch and development cost has been
      incresed
      to the tune of $62,050 compared to the previous fiscal period of
      comparison is
      due to the new reserch activities carring on for improvement of product
      quality .
      Management fees and salaries are reduced by 77% due to voluntary reduction

      of remunaration to President and Vice President

            Our share of the loss incurred by the research and development
      consortium (3294340 Canada Inc.) that had been formed on the second of
      October 1996, for the quarter ended September 30, 2001, amounted to
      $84,650 as
      compared to $78,227 for the quarter ended September 30, 2000. The
      accumulated
       loss from above investment has crossed the total investment in 3294340 .

      Liquidity and Capital Resources

            Our primary cash requirements have been to fund research and
      development activities, acquisition of equipment and inventories and to
      meeting operations expenses incurred in connection with the
      commercialization of our products. We meet our working capital
requirements
      principally through the issuance of debt and equity securities, government
      sponsored research and development grants and reimbursement and cash flow
      from operations.

            Our cash requirements in connection with manufacturing and marketing
      will continue to be significant. We do not have any material commitments

      Page 10

      for capital expenditures. We believe, based on our current plans and
      assumptions relating to our operations, projected cash flow from
operations
      may not be sufficient to satisfy our contemplated cash requirements for
the
      foreseeable future. We have relied on investments from management to cover
      our short falls in the last fiscal year, such investment may not be
      available to us in the future.  In the event that our plans or assumptions
      change, or prove to be incorrect, or if the projected cash flows otherwise
      prove to be insufficient to fund operations (due to unanticipated
expenses,
      delays, problems or otherwise), we could be required to seek additional
      financing sooner than currently anticipated. There can be no assurance
that
      this additional financing will be available to us when needed, on
      commercially reasonable terms, or at all.

      Nasdaq

            The Company's Common Stock was delisted from the Nasdaq Small Cap
      Market effective the close of business April 10, 2001 for failure to meet
      certain minimum net tangible asset requirements.  The stock continues to
      trade on the OTC Bulletin Board.




      PART II:  OTHER INFORMATION

      ITEM 1.   LEGAL PROCEEDINGS.
                -See Contingent Liabilities.

      ITEM 2.   CHANGES IN SECURITIES.
                No material change.

      ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
                None.

      ITEM 5.   OTHER INFORMATION.
                None.

      ITEM 6.   REPORTS ON FORM 8-K and EXHIBITS
                None

                                       SIGNATURES

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

                                             THE WIDECOM GROUP INC.


      December 21, 2001                      /s/Suneet S. Tuli
      ------------------                      ----------------------
      Date                                      Suneet S. Tuli,
                                                Executive Vice President


      December 21, 2001                      /s/Raja S. Tuli
      ------------------                      ----------------------
      Date                                      President, C.E.O