UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB

[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2001

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

For the transition period from _____________ to _________________

Commission file number: 0-20995

EDGE TECHNOLOGY GROUP, INC.
(Exact name of small business issuer as specified in its charter)

DELAWARE 13-3778895
(State or other jurisdiction (IRS Employer
incorporation or organization) Identification No.)

901 YAMATO ROAD, SUITE 175, BOCA RATON, FLORIDA 33431
(Address of principal executive offices)

(214) 999-2245
(Issuer's telephone number)

(Former name, former address and former fiscal year, if
changed since last report)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the issuer was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes [ ] No [X]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

As of August 15, 2001 the issuer had 16,385,143 shares of
Common Stock outstanding.

EDGE TECHNOLOGY GROUP, INC.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION Page No.

ITEM 1. Financial Statements:

Balance Sheets as of June 30, 2001 (unaudited) and
December 31, 2000...................................... 3
Unaudited Statements of Operations for the
Three and Six Months Ended June 30, 2001 and 2000... 4
Unaudited Statements of Cash Flows for the
Six Months Ended June 30, 2001 and 2000............. 5
Notes to Unaudited Interim Financial Statements......... 6

ITEM 2. Management's Discussion and Analysis or Plan of
Operations........................................... 10

PART II OTHER INFORMATION

ITEM 1. Legal Proceedings..................................... 18

ITEM 2. Changes in Securities and Use of Proceeds............. 18

ITEM 3. Defaults Upon Senior Securities....................... 18

ITEM 4. Submission of Matters to a Vote of Security Holders... 18

ITEM 5. Other Information..................................... 18

ITEM 6. Exhibits and Reports on Form 8-K...................... 18

Signatures.................................................... 19

EDGE TECHNOLOGY GROUP, INC.
BALANCE SHEETS

December 31, June 30,
2000 2001
----------- ----------
ASSETS
(unaudited)
Current Assets:
Cash and cash equivalents........ $ 169,846 $ 117,937
Accounts receivable.............. 13,504 7,201
Inventories...................... 9,096 9,849
Prepaid expenses - advance
royalties....................... 5,024 --
Other current assets............. 85,390 49,838
------------ ------------
Total current assets............. 282,860 184,825

Fixed Assets, net................ 67,394 102,770
Other Assets..................... -- 16,929
Investment - Related Party....... 4,587,262 2,280,000
Note Receivable.................. 1,400,000 1,400,000
------------ ------------
Total Assets............ $ 6,337,516 $ 3,984,524
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................. $ 390,991 $ 373,875
Accrued expenses................. 345,011 243,552
Other current liabilities........ 73,496 35,301
Notes Payable-related parties.... -- 1,239,000
------------ ------------
Total Current Liabilities........ $ 809,498 $ 1,891,728
Notes Payable-related parties.... 839,000 --
------------ ------------
Total Liabilities....... $ 1,648,498 $ 1,891,728
------------ ------------

Stockholders' Equity:
Common Stock, $.01 par value,
22,500,000 shares authorized,
16,016,335 shares issued and
outstanding at December 31, 2000
and 16,385,143 shares issued and
outstanding at June 30, 2001....

160,163 163,851
Additional paid in capital....... 37,978,720 41,607,532
Deferred stock option
compensation.................... (316,696) (257,290)
Deferred offering costs.......... -- (2,966,666)
Accumulated deficit.............. (33,133,169) (36,454,631)
------------ ------------
Total Stockholders' Equity.. 4,689,018 2,092,796
------------ ------------
Total liabilities and
stockholder's equity.................. $ 6,337,516 $ 3,984,524
============ ============

The accompanying notes are an integral part of these financial
statements.

EDGE TECHNOLOGY GROUP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)

For the Three Months Ended For the Six Months Ended
June 30, June 30,
2000 2001 2000 2001
------------- ------------- ----------- ------------

Sales.................................. $ 540,643 $ 164,243 $ 645,895 $ 264,297

Cost of Sales.......................... 417,343 42,250 557,398 74,398
------------- ------------ ------------ ------------

Gross Profit .......................... 123,300 121,993 88,497 189,899
------------- ------------ ----------- ------------

Operating Expenses:
General and administrative........ 271,962 442,460 692,191 850,284
Selling and marketing............. 112,318 37,390 225,639 58,250
------------- ------------ ----------- ------------
Total operating expenses..... 384,280 479,850 917,830 908,534
------------- ------------ ----------- ------------
Operating loss............... (260,980) (357,857) (829,333) (718,635)
------------- ------------ ----------- ------------

Other income (Expense):
Interest income................... 541 281 2,400 981
Interest expense.................. (222,238) (19,234) (306,193) (37,350)
Amortization of deferred financing
fees............................. (42,176) -- (85,866) --
(Loss) on sale of fixed
assets........................... (36,313) (951) (26,719) (362)
Financing fees.................... (2,450) (2,680) (5,224) (5,705)
Unusual and non-recurring expenses (177,627) (54,875) (178,999) (64,437)
Impairment of assets.............. -- (2,495,954) -- (2,495,954)
------------- ------------ ------------ ------------
Total other income (expense). (407,637) (2,573,413) (600,601) (2,602,827)
------------- ------------ ------------ ------------
Net loss..................... (668,617) (2,931,270) (1,429,934) (3,321,462)
Provision for Preferred Stock
Dividends............................ (393,570) -- (393,570) --
------------- ------------ ------------ ------------

Net loss to common stockholders....... $ (1,062,187) $(2,931,270) $ (1,823,504) $ (3,321,462)
============= ============ ============ ============

Net loss per share, basic and diluted.. $ (0.21) $ (0.18) $ (0.36) $ (0.21)
============= ============ ============ ============

Weighted average common shares 4,998,324 16,385,143 4,998,324 16,200,739
outstanding.......................... ============= ============ ============ ============

The accompanying notes are an integral part of these financial statements.

EDGE TECHNOLOGY GROUP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)

For the Six Months
Ended
June 30,
---------------------------
2000 2001
------------- ------------

Operating Activities:
Net cash used in operating activities.......... (153,635) (606,174)
------------- ------------

Investing activities:
Capital expenditures................................... (28,127) (60,429)
Proceeds from the sale of assets....................... 122,958 14,694
------------- -----------
Net cash provided by (used in) investing
activities...................................... 94,831 (45,735)

Financing activities:
Equity contributions................................... -- 200,000
Repayment of borrowings................................ (174,779) --
Borrowings on short-term notes payable, net............ 231,209 400,000
------------- ------------
Net cash provided by financing activities......... 56,430 600,000
------------- ------------

Net change in cash and cash equivalents........... (2,374) (51,909)
------------- ------------
Cash and cash equivalents at beginning of period............ 19,724 169,846
------------- ------------
Cash and cash equivalents at end of period.................. $ 17,350 $ 117,937
============= ============

Supplemental disclosure of cash flow information:
Cash paid for interest................................. $ 24,563 $ 275
============= ============

The accompanying notes are an integral part of these financial statements.

EDGE TECHNOLOGY GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

(1) Basis of Presentation

The financial statements included herein have been prepared
by Edge Technology Group, Inc. ("Edge" or the "Company") without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management, the accompanying
unaudited financial statements include all necessary adjustments
(consisting only of normal recurring adjustments) necessary to
present fairly the financial position, results of operations and
cash flows of the Company. The results of operations and cash
flows for the six month period ended June 30, 2001 are not
necessarily indicative of the results of operations or cash flows
that may be reported for the year ended December 31, 2001. The
unaudited financial statements included herein should be read in
conjunction with the audited financial statements and the notes
thereto included in the Company's Form 10-KSB for the year ended
December 31, 2000.

In July 2001, the Financial Accounting Standards Board issued
SFAS No. 141, "Business Combinations" and SFAS 142, "Goodwill and
Other Intangible Assets." The new standards require that all
business combinations initiated after June 30, 2001 must be
accounted for under the purchase method. In addition, all
intangible assets acquired that are obtained through contractual
or legal right, or are capable of being separately sold,
transferred, licensed, rented or exchanged shall be recognized as
an asset apart from goodwill. Goodwill and intangibles with
indefinite lives will no longer be subject to amortization, but
will be subject to at least an annual assessment for impairment by
applying a fair value based test. The Company will be required to
adopt these standards as of January 1, 2002. As the Company does
not have any recorded intangible assets, the adoption of these
standards is not expected to have an impact on the Company's
operations.

(2) Uncertainty of Proposed Plan of Operation

The Company has suffered recurring losses from operations and
has an accumulated deficit of approximately $36.5 million at June
30, 2001.

The Company's recent focus on information technology
consulting services, business process software applications and
application services is a new business concept for the Company and
the Company cannot predict the nature and extent of demand for its
anticipated products and services.

During the past two years, Edge has experienced declining
sales and increasing operating losses. Should this trend continue,
it will be necessary to secure additional financing to continue
operations. There can be no assurance that any additional
financing will be available on acceptable terms. Should Edge be
unable to obtain additional financing, it may be unable to
develop, enhance, and market products, retain qualified personnel,
take advantage of future opportunities, respond to

competitive pressures, or continue operations, any of which could
have a material adverse effect on its business, operating results,
financial condition and liquidity.

(3) Investment - Related Party

In September 2000, the Company issued 2,644,841 shares of its
common stock to PurchasePooling Investment Fund in return for
9,593,824 shares of Series A Convertible Preferred Stock of
PurchasePooling Solutions, Inc. ("PurchasePooling"). In December
2000, the Company invested an additional $620,000 with
PurchasePooling in return for 2,214,285 shares of Series C
Convertible Preferred Stock. As a result, the Company now has an
approximately 18% ownership interest in PurchasePooling, a Web-
based demand aggregator enabling government and educational
entities to save significantly on large-ticket capital items by
combining their purchasing power nationwide and globally. The
Company is accounting for this investment under the cost method of
accounting. The Company's President and CEO is also the CEO of
PurchasePooling. In 2000, the Company entered into an agreement to
acquire from Odyssey Ventures Online S.A. 975,000 shares of Series
A Convertible Preferred Stock of PurchasePooling in exchange for
268,808 shares of the Company's common stock. In April 2001, the
agreement was finalized and the shares of common stock were
issued. PurchasePooling is in its development stage and is not
generating any cash flow. Should PurchasePooling be unable to
generate sufficient future revenue and cash flow, it could have a
negative impact on the Company's operations. Based on valuation
obtained on PurchasePooling in July 2001, the Company determined
that the investment was impaired. Accordingly, the Company
recorded an impairment charge of $2,495,954 which is included in
impairment of assets in the Statement of Operations.

The Company has entered into a management agreement with
PurchasePooling in which PurchasePooling pays the Company a
management fee of $20,000 per month in return for the services
provided by the Company's President and other employees of Edge.
During the three-month and six-month periods ended June 30, 2001,
the Company received $60,000 and $120,000, respectively, of
management fees from PurchasePooling which is reflected as a
reduction in general and administrative expenses in the statement
of operations.

(4) Loss per Share

The Company follows SFAS No. 128, "Earnings Per Share." SFAS
No. 128 establishes standards for computing and presenting basic
and diluted earnings per share. Basic loss per share is calculated
by dividing loss attributed to common stockholders by the weighted
average number of shares of common stock outstanding during each
period. For all periods presented basic and diluted net loss per
share are the same.

As of June 30, 2000 and 2001, due to the Company's net
losses, shares of common stock issuable upon conversion of
convertible debt and the exercise of outstanding

options and warrants have been excluded from the computation of
diluted loss per share in the accompanying statements of
operations as their impact is antidilutive.

(5) Note Receivable

In September 2000, the Company loaned $1.4 million to Hencie,
Inc. ("Hencie") in the form of a Promissory Note (the "Note"). The
Note accrues interest at a rate of 8% per annum and the principal
and interest is due on or before November 21, 2001. The Note was
convertible into 885,543 shares of Hencie's common stock through
November 22, 2000, however, the Company did not exercise the
conversion option. The Note is unsecured and guaranteed by
Hencie's President. Should Hencie be unable to generate sufficient
future revenue and cash flow, it could have a negative impact on
the Company's operations.

(6) Financings

a. Infinity Loans

In 2000, Infinity Investors Limited, a related party,
made certain loans to the Company for working capital
purposes. These loans totaled $219,000. As part of the
reorganization of the Company effective September 1, 2000,
Infinity Investors Limited became entitled to the repayment
of these loans. In April 2001, the loan agreement was
renegotiated to extend the payment date to January 31, 2002.

b. Catalyst Loans

In December 2000, the Company entered into a loan
agreement with Catalyst Master Fund, L.P. (the "Catalyst
Loan"), a related party, to borrow $620,000. The Catalyst
Loan was originally due on June 30, 2001 and bears interest
at a rate equal to eight percent (8%) per annum. The Company
used the proceeds of the Catalyst Loan to purchase 2,214,285
shares of Series C Convertible Preferred Stock of
PurchasePooling. Catalyst Master Fund is a shareholder of the
Company and certain of the Company's directors are also
officers of an entity that manages Catalyst Master Fund. The
Catalyst Loan is convertible at the option of the holder into
the Company's common stock at a conversion price of $1.50 per
share. The Catalyst Loan is also secured by a pledge of
substantially all of Edge's assets.

Effective April 16, 2001, the Company entered into an
amended loan agreement with Catalyst that increased the
borrowings available under the original loan agreement from
$620,000 to a total of $2,120,000. Under the amended loan
agreement, the Company can draw down amounts under the loan
agreement as the Company has need for funds, subject to the
Company being in compliance with the covenants contained in
that loan agreement. The amended loan agreement bears
interest at eight percent (8%) per annum and is due March 31,
2002. The additional amount available under the amended loan
agreement is also convertible into the Company's common stock
at a conversion price of $1.50 per share and is secured by a
pledge of substantially all of the Company's assets. As of
June 30, 2001, the total amount outstanding under this loan
agreement is $1,020,000.

c. Infinity Option

On May 31, 2001, Edge issued to Infinity Investors
Limited an option to put to Edge a certain secured note of
Aura Systems, Inc. totaling approximately $10 million (the
"Aura Note") held by Infinity (the "Infinity Option").
Pursuant to the Infinity Option, Infinity may elect on
May 31, 2002 to exercise its option to put the Aura Note to
Edge in exchange for 3,333,333 shares of Edge common stock.
As consideration for the Infinity Option, Infinity is
obligated to pay to Edge cash consideration of $1 million,
consisting of $200,000 due every three months beginning
May 31, 2001 through May 5, 2002. If Infinity exercises the
Infinity Option, Infinity is obligated to transfer the Aura
Note and related security agreements to the Company, and pay
to the Company any cash payments of the Current Principal
Amount (as defined in the operative documents) received by
Infinity after May 31, 2001 and prior to exercise of the
Infinity Option. The Company received the first $200,000
payment during the three-month period ended June 30, 2001.
As a result of issuing this option, the Company recorded
deferred offering expense of $3,166,666 related to the fair
value of the option. The deferred offering expense will be
reduced as an offset to the proceeds from Infinity as they
are received. As of June 30, 2001, the remaining deferred
offering expenses is $2,966,666, which is reflected as a
contra equity amount in the June 30, 2001 Balance Sheet.

(7) Common Stock

a. Reverse Stock Split

During September 2000, Edge effected a four(4)for one(1)
stock split. All share and per share amounts have been restated
accordingly.

b. Reorganization

(8) Stock Options

In July 2000, the Company granted 1,275,000 options to
purchase the Company's common stock, 225,000 to an employee and
850,000 to a consultant of the Company at an exercise price of
$2.31 per share. Later in July 2000, the Company granted 82,000
options to purchase the Company's common stock to employees of the
Company at an exercise price of $2.32 per share. In both
instances, the grants were made with exercise prices equal to the
fair market value of the Company's stock at the time of the grant.
For the 850,000 options to a consultant, the fair value of the
options were $1,343,000, of which $223,833 was recorded as expense
in 2000 and $227,436 was recorded as expense during the six months
ended June 30, 2001.

(9) Proceedings with Former Officers and Directors

In September 1999, former officers of the Company filed suit
against Edge and certain other parties, asserting claims for
breach of contract and other matters. In October 1999, the Company
counter-sued the former officers for, among other items, breach of
fiduciary duty and breach of employment agreements. In April
2001, the Company, the former officers, and the other individuals
and entities named in the lawsuits, entered into a settlement
agreement whereby Edge issued 100,000 shares of restricted common
stock and paid a cash amount of $30,000 to the former officers in
satisfaction of any outstanding claims or claims to options. Accordingly,
the Company recorded an accrual for $84,000 related to this settlement
of which $54,000 is included in accrued expenses as of June 30, 2001.

(10) Employment Agreements

The Company has entered into employment agreements with
several of its executive officers for periods ranging from three
to four years. The agreements provide the employees with salary,
bonuses and the right to terminate their agreements and receive
certain lump sum payments of compensation if there is a change of
control of the Company. In connection with two of the employment
agreements, in January 2001, the Company granted stock options to
certain executive officers to purchase up to 2,250,000 shares of
the Company's common stock at an exercise price of $1.50 per
share. Of these options, 25% are exercisable upon grant and an
additional 18.75% vest annually each anniversary date. The options
expire 10 years from the date of grant. The Company will not be
required to record any compensation expense in 2001 as a result of
the grant of these options.

(11) Recent Developments - Planned Sale of Certain Assets

The Company's Board of Directors has unanimously approved,
subject to stockholder approval, the sale of assets related to the
Company's "One-on-One" golf lesson CD-ROM and video production
business (the "One-on-One Business") to Visual Edge, Inc.
("Visual Edge") under the terms of an Asset Purchase and
Assignment and Assumption Agreement (the "Asset Purchase
Agreement"). This transaction involves the sale of a significant
portion of the Company's assets, business and operations and,
arguably constitutes a sale of substantially all of the assets of
the Company. Because a transaction constituting a sale of
substantially all of assets requires approval of a majority of a
corporation's outstanding voting shares under Delaware law, the
Board of Directors decided to seek approval by the Company's
stockholders for the sale of the assets to Visual Edge. Visual
Edge is not a related party; however, the President of
Visual Edge, Ronald Seale, is a former President of the Company.

The Company will receive (a) an initial cash payment of
$300,000 (offset by $53,000 by Visual Edge for One-on-One
Business expenses paid)]; (b) a promissory note in the amount of
$250,000 payable October 24, 2001, and bearing an interest rate of
8% per annum, secured by all of the assets of Visual Edge; and (c)
future royalties not to exceed $3,000,000, payable as an
increasing percentage of revenues.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS

The following discussion and analysis should be read in
conjunction with the financial statements and notes thereto. This
discussion and analysis contains certain forward-looking
statements that involve risks and uncertainties. Edge's actual
results and the timing of certain events could differ materially
from those discussed in the forward-looking statements as a result
of certain factors including those set forth in Edge's filings
with the Securities and Exchange Commission, specifically
including the risk factors set forth below.

GENERAL

Recent Developments
-------------------

(a) Planned Sale of One-on-One Business.
-----------------------------------

Background. Edge operates, acquires and invests in
technology products and services, including information technology
consulting services, business process software applications and
application service providers. We are in the early stages of
continuing to broaden and expand the scope of our business to
include business opportunities beyond our historical golf training
technology products. As part of this expansion, we intend to seek
opportunities in technology products and services for acquisition
by Edge to include in an overall business strategy of developing a
complete business process software application and delivery
targeted primarily towards middle market businesses. We have
historically developed, marketed and sold personalized CD-ROM and
videotape golf lessons.

The One-on-One Business. We developed several personalized
"One-on-One" golf lessons for both right- and left-handed golfers.
Our personalized products include a lesson stressing basic golf
fundamentals for either males or females, a lesson geared towards
senior golfers, an advanced lesson for lower-handicap players and
a "follow-up" lesson which measures a golfer's improvement from
prior lessons. Our One-on-One personalized golf lesson analyzes a
golfer's swing by comparing it to a professional golfer's swing at
several different club positions from two camera angles. The
golfer receives a CD-ROM at the time of filming and receives,
within a few days, an e-mail containing a link to that golfer's
processed golf swing. The CD-ROM, once installed on the golfer's
home computer, captures the e-mailed swing and integrates it into
the lesson for the side-by-side comparison with the professional
golfer. A professional golfer's pre-recorded instructional
commentary, analysis and computer graphics highlight important
golf fundamentals intended to improve a golfer's performance. In
addition, the CD-ROM features an additional golf instructor who
provides pre-recorded drills and instruction designed to correct
the specific errors made by the golfer.

Reasons for Selling the One-on-One Business. In September
2000, our board of directors began to explore a range of strategic
alternatives while, at the same time, attempting to develop the
One-on-One Business. In early 2001, we began exploring the
possibility of our former President, Ronald Seale, acquiring the
One-on-One Business. Discussions began informally, and as our
focus began to shift toward the proposed business as described
above, negotiations with Mr. Seale (Visual Edge's President)
commenced in earnest late in the first quarter. Although we held
discussions with other interested parties, Visual Edge sustained
the highest level of interest in acquiring this business.

During this time, the Board of Directors increasingly
believed that the best possibility for profitability of Edge was
to divest the One-on-One Business and its related expenses and
focus on the new business strategy. The One-on-One Business,
which we are selling to Visual Edge, contributed substantially to
our operating loss for the fiscal year ended December 31, 2000,
and the three and six months ended March 31, 2001 and June 30, 2001.
In July 2001, we resolved the principal terms for a sale of the
One-on-One Business to Visual Edge.

(b) Other Developments.
------------------

Edge also effected the following changes in management during
the first part of 2001:

* Effective August 6, 2001, Edge appointed David
Pilotte as our Executive Vice President and Chief
Financial Officer.

As a result of our reorganization in September 2000, our
business strategy is changing. We have expanded our business model
to include developing additional technology solutions through
organic growth, investments in other businesses or acquisitions of
other businesses. These strategies will require significant
amounts of capital to undertake. We will be entirely dependent on
raising additional capital through public or private offerings of
our debt or equity securities. We can give no assurance that we
will be able to raise any additional capital for the purposes of
funding the historical business operations of Edge or any
contemplated businesses we may desire to enter.

RESULTS OF OPERATIONS

Quarter ended June 30, 2001 compared with quarter ended June
30, 2000.

Sales for the three months ended June 30, 2001 decreased 70%
to $164,243, as compared to $540,643 for the three months ended
June 30, 2000. This decrease in sales in 2001 as compared to 2000
is due to the Company's decision to participate in fewer events
while pursuing other opportunities to develop licensing revenues
for its software.

The cost of sales for the three months ended June 30, 2001
decreased 90% to $42,250, as compared to $417,343 for the three
months ended June 30, 2000. This decrease in the cost of sales is
primarily attributable to the lower cost of sales associated with
the reduction of events being performed.

Operating expenses for the three months ended June 30, 2001
increased 25% to $479,850, as compared to $384,280 for the three
months ended June 30, 2000. Even though the event business has
decreased, the operating expenses have not proportionately
decreased due to overhead costs. In addition, under Edge's new
business concept, operating expenses and salary expenses have
increased to develop the new business plan going forward. This
increase is primarily attributable to additional executive
salaries and salaries relating to personnel associated with Edge's
strategy of acquiring and operating technology businesses. As of
August 15, 2001, Edge has four executive employees and nine
employees.

Interest expense for the three months ended June 30, 2001
decreased 91% to $19,234 from $222,238 for the three months ended
June 30, 2000. This decrease is primarily attributable to the
elimination of penalty interest payable on the convertible notes
that were converted into common stock in September 2000.

As a result of the above, operating loss for the three months
ended June 30, 2001 increased 37% to $357,857 as compared to
$260,980 for the three months ended June 30, 2000.

The Provision for Preferred Stock Dividends of $393,570 for
the three months ended June 30, 2000 relates to the dividends on
the Company's Series A-2 Convertible Preferred Stock. The
dividends commenced on January 1, 2000. As of December 31, 2000,
all of the outstanding preferred stock had been converted into
common stock.

Six months ended June 30, 2001 compared to the six months ended
June 30, 2000.

Sales for the six months ended June 30, 2001 decreased
$381,598 or 59% to $264,297 from $645,895 for the six months ended
June 30, 2000. This decrease in sales is primarily due to the Company's
decision to participate in fewer events while pursuing other opportunities
to develop licensing revenues for its software.

The cost of sales for the six months ended June 30, 2001
decreased $483,000 or 87% to $74,398 from $557,398 for the six
months ended June 30, 2000. This decrease in the cost of sales is
attributable to Visual Edge's reduced sales and the Company's efforts
to reduce direct costs related to the events.

Operating expenses for the six months ended June 30, 2001
decreased $8,846 or 1% to $908,534 from $917,380 for the six
months ended June 30, 2000. Operating expenses for the two periods
have remained relatively flat even though the One-on-One expenses have
decreased because of cost cutting efforts. The new Edge business
strategy has incurred operating expenses to develop its business plan.

As a result of the factors described above, the operating
loss for the six months ended June 30, 2001 decreased $110,698 or
13% to $718,635 from $829,333 for the six months ended June 30,
2000.

Interest expense for the six months ended June 30, 2001
decreased $268,843 or 88% to $37,350 from $306,193 for the six
months ended June 30, 2000. This decrease in interest expense is
primarily attributable to the elimination of penalty interest
payable on the convertible notes that were converted into common
stock in September 2000.

Net loss before preferred stock dividends for the six months
ended June 30, 2001 increased $1,703,528 or 119% to $3,133,462
from $1,429,934 for the six months ended June 30, 2000. Net loss
per share, basic and diluted, for the six months ended June 30,
2001 decreased 47% to $0.19 from $0.36 for the six months ended
June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company has suffered recurring losses from operations and
has an accumulated deficit of approximately $36.5 million at June
30, 2001.

The Company's plan of operation and prospects are largely
dependent upon the Company's ability to achieve significant market
acceptance for its proposed products, successfully hire and retain
skilled technical, marketing and other personnel, and successfully
implement its new business plan and strategy. Although implementation
of the new plan is progressing, the can be no assurance that the
Company will be able to continue to fully implement its new business plan.
Failure to implement its business plan would have a material adverse
effect on the Company.

Demand and market acceptance for the Company's One-on-One
personalized CD-ROM and videotape golf lesson continues to be
subject to a high level of uncertainty. The Company's sale of the
One-on-One Busniess will help reduce the consistent losses incurred
by the business operations related to the golf product. The Company's
new business focus on information technology consulting services,
business process

software applications and application services is a new business concept
for the Company and the Company cannot predict the nature and extent
of demand for its services.

Edge does not currently maintain a bank credit facility. Edge
has historically financed its operations primarily through the
sale of equity securities or instruments convertible into equity
securities. On June 30, 2001, Edge had cash and cash equivalents
of $117,937, and a working capital deficit of $1,760,903, as
compared to cash and cash equivalents of $169,846, and a working
capital deficit of $526,638 at December 31, 2000. Net cash used in
operating activities for the six months ending June 30, 2001 was
$606,174. Net cash provided by investing activities was $45,735
and $600,000 was provided by financing activities for a total
decrease in cash and cash equivalents of $51,909.

Edge has entered into an Amended Loan Agreement with Catalyst
Master Fund L.P., a related party, for borrowings up to
$2,120,000. Under the Amended Loan Agreement, Edge can draw down
amounts as Edge has needs for funds, subject to Edge being in
compliance with the covenants contained in the Amended Loan
Agreement. The loan bears interest at 8.0% per annum and is due
March 31, 2002. Further, the loan is convertible into Edge common
stock at a conversion price of $1.50 per share and is secured by a
pledge of substantially all of Edge's assets. As of August 15,
2001, Edge has approximately $1,100,000 available under the
Amended Loan Agreement. Edge believes that this facility will be
adequate to fund Edge's needs for at least twelve months, although
additional financing for acquisitions as part of Edge's business
plan will be necessary.

In addition, Edge owes $219,000 of principal as of June 30,
2001 to Infinity Investors Limited ("Infinity"), a related party,
as a result of loans that were not repaid in our September 2000
reorganization. These loans are due January 31, 2002.

On May 31, 2001, Edge issued to Infinity an option to put to
Edge a certain secured note of Aura Systems, Inc. totaling
approximately $10 million (the "Aura Note") held by Infinity (the
"Infinity Option"). Pursuant to the Infinity Option, Infinity may
elect on May 31, 2002 to exercise its option to put the Aura Note
to Edge in exchange for 3,333,333 shares of Edge common stock. As
consideration for the Infinity Option, Infinity is obligated to
pay Edge cash consideration of $1 million, consisting of $200,000
due every three months beginning May 31, 2001 through May 5, 2002.
If Infinity exercises the Infinity Option, Infinity is obligated
to transfer the Aura Note and related security agreements to Edge,
and pay to Edge any cash payments of the Current Principal Amount
(as defined in the operative documents) received by Infinity after
May 31, 2001 and prior to exercise of the Infinity Option. Edge
received the first $200,000 payment during the three-month period
ended June 30, 2001.

Edge expects to meet future liquidity requirements through
(i) cash reserves and maturities or sales of marketable securities,
(ii) income from the Infinity Option, and (iii) utilization of its
Amended Loan Agreement. It is anticipated that those sources of funds
will also fund capital expenditure programs, if any. These capital
expenditure programs can be suspended or delayed at any time with
minimal disruption to Edge's operations if cash is needed in other
areas of Edge's operations. The expected operating cash flow,
current cash reserves and the Amended Loan Agreement are expected
to allow Edge to meet working capital requirements during periods
of low cash flows.

During the past two years Edge has experienced declining
sales and increasing operating losses resulting from the One-on-
One Business. Edge has accordingly entered into an agreement to
sell its One-on-One Business. Edge must be successful in
implementing its new business strategy in order to reverse the
decline trend. Should this trend continue, it will be necessary
to secure additional financing to continue operations. There can
be no assurance that any additional financing will be available on
acceptable terms. Should Edge fail to implement successfully its
business strategy or be unable to obtain additional financing, it
may be unable to develop, enhance and market products, retain
qualified personnel, take advantage of future opportunities,
respond to competitive pressures or continue operations, any of
which could have a material adverse effect on its business,
operating results, financial condition and liquidity.

On June 30, 2001, Edge had stockholders equity of $2,038,796,
as compared to stockholders equity of $4,689,018 at December 31,
2000.

SEASONALITY

With the planned sale of the One-on-One Business, Edge does not
anticipate a seasonal component to its business.

THIRD-PARTY REPORTS AND PRESS RELEASES

Edge does not make financial forecasts or projections nor
does Edge endorse the financial forecasts or projections of third
parties or comment on the accuracy of third-party reports. Edge
does not participate in the preparation of the reports or the
estimates given by analysts. Analysts who issue financial reports
are not privy to non-public financial information. Any purchase of
our securities based on financial estimates provided by analysts
or third parties is done entirely at the risk of the purchaser.

Edge periodically issues press releases to update
shareholders on new developments relating to Edge and our
business. These releases may contain certain statements of a
forward-looking nature relating to future events or the future
financial performance of Edge within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and which
are intended to be covered by the safe harbors created thereby.

Readers are cautioned that such statements are only
predictions and that actual events or results may materially
differ with those statements. In evaluating such statements,
readers should specifically consider the various risk factors
identified which could cause actual results to differ materially
from those indicated by such forward-looking statements.

RISK FACTORS

Readers of this report or any of our press releases should
carefully consider the following risk factors, in addition to the
other information contained herein. This report and our press
releases contain statements of a forward-looking nature relating
to future events or the future financial performance of Edge
within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and which are intended to be covered by the safe
harbors created thereby. Only risk factors that have materially
changed from those contained in our Form 10-KSB for the fiscal year
ended December 31, 2000 are included below, and readers are encouraged
to read the following risk factors in conjunction with those in the
Form 10-KSB for the fiscal year ended December 31, 2000. Readers are
cautioned that such statements are only predictions and that actual
events or resultsmay differ substantially. In evaluating those statements,
readers should specifically consider the various factors identified in
this quarterly report, as well as our filing with the Securities and
Exchange Commission, including our Form 10-KSB for the fiscal year ended
December 31, 2000 including the matters set forth below, which
could cause actual results to differ substantially from those
indicated by those forward-looking statements.

WE HAVE EXPERIENCED SIGNIFICANT AND CONTINUING LOSSES.

As of June 30, 2001, we had an accumulated deficit of
approximately $36.5 million. For the six months ended June 30,
2001, we recorded a net loss of $3,133,462. For each of the five
years ended December 31, 2000, we have recorded an operating loss;
in certain cases, a substantial operating loss. We incurred a net
loss of $8,959,625 for the year ended December 31, 2000. We
believe that we will continue to incur losses until we are able to
generate sufficient revenues to offset the operating costs
associated with implementing the revised business model. These losses
could limit our ability to grow and to raise new funds and could
ultimately jeopardize our ability to remain in business.

WE ARE AT A RELATIVELY EARLY STAGE WITH OUR REVISED BUSINESS MODEL
AND THEREFORE OUR BUSINESS AND PROSPECTS ARE DIFFICULT TO
EVALUATE.

Our corporate reorganization and related shift in our
business strategy commenced in September 2000 and is ongoing.
Since that time, we have been engaged principally in (1)
assembling our senior management team, (2) managing our existing
portfolio companies, (3) developing our revised business plan,
including the sale of the One-on-One Business, and (4) attending
to various capital raising activities. As such, we have not begun
to establish, on any meaningful basis, the strategic relationships
and/or to identify the potential businesses, products, or
technologies that will be necessary for us to ultimately succeed
in the business segment in which we now expect to compete.
Accordingly, we do not have any meaningful operating history on
which to base an evaluation of our business and prospects. Our
prospects must be considered in light of the many risks,
uncertainties, expenses, delays, and difficulties frequently
encountered by companies in their early states of development,
particularly companies participating in new and rapidly
evolving markets. Some of the risks and difficulties we expect to
encounter include our ability to:

* adapt and successfully execute our revised business
plan;
* overcome the negative market stigma associated with
certain over-the-counter technology companies;

* manage and adapt to changing and expanding operations;
* implement and improve operational, financial and
management systems and processes;
* locate, negotiate with, close and ultimately
integrate additional attractive portfolio investments;
* attract, retain and motivate qualified personnel; and
* numerous other risks and difficulties generally
experienced by early stage business models.

Because of our recent reorganization and our sale of the One-
on-One Business, we may have limited insight into trends and
conditions that may exist or might emerge and affect our business.
We cannot be certain that our revised business strategy will be
successful or that we will successfully address these risks. As a
result of our continuing losses, the low market price of our
common stock and the delisting of our common stock from the Nasdaq
SmallCap Market, we believe that it will be very difficult, if not
impossible, for Edge to raise additional capital in the future. As
of June 30, 2001, Edge had a total of cash and cash equivalents of
$117,937. Edge is unlikely to become profitable in
the reasonably foreseeable future. Accordingly, if Edge cannot
raise new funds, Edge may exhaust its cash resources and be unable
to continue in business.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Unchanged since originally reported in our Annual Report on
Form 10-KSB for the year ended December 31, 2000.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

10.24 Option Agreement dated as of May 31, 2001
between Infinity Investors Limited and Edge
Technology Group, Inc. (filed herewith)

(b) Reports on Form 8-K

None

SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Edge Technology Group Inc.

By: /s/ Graham C. Beachum II
-----------------------------
Graham C. Beachum II
Chairman and Chief Executive
Officer and Principal Financial
Officer

August 20, 2001

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

10.24 Option Agreement dated as of May 31, 2001 between
Infinity Investors Limited and Edge Technology Group,
Inc. (filed herewith)