SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM SB-2
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                                   -----------

                           UNITY WIRELESS CORPORATION
                 (Name of small business issuer in its charter)

       Delaware                      9995                       91-1940650
(State or jurisdiction of        (Primary Standard           (I.R.S. Employee
   of incorporation or       Industrial Classification      Identification No.)
     organization)                  Code Number)


      31635 36th Avenue S.W., Federal Way, WA 98023-2105 - 1 (800) 337-6642
          (Address and telephone number of principal executive offices)

               31635 36th Avenue S.W., Federal Way, WA 98023-2105
(Address of principal place of business or intended principal place of business)

                       Evergreen Corporate Services, Inc.
                             31635 36th Avenue S.W.
                           Federal Way, WA 98023-2105
                                 (253) 874-2949)
            (Name, address and telephone number of agent for service)

                                   -----------

                Approximate date of proposed sale to the public: As soon as
  possible after the effective date of this registration statement.

                                   -----------

     If any of the securities being registered on this form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|

     If this Form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective statement for the same offering. |_|

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act  registration  statement number of the earlier  effective  statement for the
same offering. |_|

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(d)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering. |_|

     If delivery of the  prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|

                                   -----------

                         CALCULATION OF REGISTRATION FEE


  Title of each class of         Number of shares   Proposed maximum     Proposed maximum      Amount of
securities to be registered      to be registered(1)   offering price        aggregate         registration fee
                                                         per unit          offering price
---------------------------------------------------------------------------------------------------------------
                                                                                   
Common Stock issued in             796,428 shares of      $0.21(2)          167,250               $41.81
private placements                 common stock

Common Stock                       175,000 shares         $0.21(2)           36,750               $ 9.19
acquired in                        of common stock
private resales

Common Stock Underlying the        300,000 shares of       $0.29            $87,000(3)            $21.75
Mueller and Ideas warrants         common stock

---------------------------------------------------------------------------------------------------------------
TOTAL                                                                       $291,000              $72.75

(1)  Calculated  pursuant  to Rule  457(c) and (g) under the  Securities  Act of
     1933.

(2)  Estimated pursuant to Rule 457(c), based on the average of the last bid and
     asked prices for the Registrant's  Common Stock on October 8, 2001.

(3)  Based on the actual warrant exercise price per Rule 457(g).
                                   ----------


================================================================================


                                   PROSPECTUS

                                 October 10, 2001


                                   -----------

                           UNITY WIRELESS CORPORATION
                      (FORMERLY SONIC SYSTEMS CORPORATION)

                                   -----------

                        1,271,428 Shares of Common Stock

                                   -----------

     The Company has prepared this prospectus to register up to 1,271,428 shares
of common stock for sale by certain  shareholders  and by the Company to certain
warrant  holders.  Up to 796,428  shares  may be sold  under  this  registration
statement  by 10  shareholders  who  received  shares from the  Company  through
various  private  placements.  An  additional  175,000  shares  may be sold by 4
shareholders, of whom 1 is included in the 10 shareholders mentioned previously,
who acquired their shares through various private resales. The remaining 300,000
shares  covered by the  registration  statement  are issuable  upon  exercise of
warrants that were issued to consultants of the Company.

     The Company's  common stock is traded on the NASD OTC Bulletin  Board under
the symbol  UTYW.  The  closing  sale  price for its  common  stock was $0.15 on
September 4, 2001.

     FOR INFORMATION  REGARDING CERTAIN RISKS RELATING TO THE COMPANY, SEE "RISK
FACTORS" ON PAGES 2-7.

     THESE  SECURITIES  HAVE NOT BEEN APPROVED OR  DISAPPROVED BY THE SEC OR ANY
STATE SECURITIES  COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES  COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY  REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

                 The date of this prospectus is October 10, 2001.






                                TABLE OF CONTENTS


                                                                        Page No.
                                                                       --------

SUMMARY INFORMATION..........................................................1

RISK FACTORS.................................................................1

USE OF PROCEEDS..............................................................8

SELLING SECURITY HOLDERS.....................................................8

PLAN OF DISTRIBUTION........................................................11

LEGAL PROCEEDINGS...........................................................11

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS................12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..............15

DESCRIPTION OF SECURITIES...................................................16

INTEREST OF NAMED EXPERTS AND COUNSEL.......................................17

THE SEC'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES........17

DESCRIPTION OF THE BUSINESS.................................................18

MANAGEMENT'S DISCUSSION AND ANALYSIS........................................25

DESCRIPTION OF PROPERTY.....................................................29

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS....................30

EXECUTIVE COMPENSATION......................................................31

FINANCIAL STATEMENTS........................................................42

INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................II-1

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION...............................II-1

RECENT SALES OF UNREGISTERED SECURITIES...................................II-1

EXHIBITS..................................................................II-4

UNDERTAKINGS..............................................................II-5

SIGNATURES................................................................II-6



                                       i


                           FORWARD-LOOKING STATEMENTS

     The  Company  may  use  words  like  "expects,"  "intends,"  "anticipates,"
"plans,"  "projects" or "estimates" in this  prospectus.  When used, these words
identify "forward-looking"  statements.  Forward-looking statements are by their
nature subject to many varied uncertainties and risks. Actual results could vary
greatly.  Potential  investors  should  review  the "Risk  Factors"  below for a
discussion of some of these risks.

     The Company is making these  statements only as of the date of this amended
and  restated  prospectus.  It has no  obligation  to  update  or  revise  these
statements if circumstances or its expectations change.


                               SUMMARY INFORMATION

     Because  this  section  is a  summary,  it  may  not  contain  all  of  the
information  important to an  investor.  Investors  should read this  prospectus
completely and carefully before deciding whether to invest.

Summary of the Offering

     This is an  offering  of up to  1,271,428  shares  of  common  stock of the
Company,  including  up to  971,428  shares  held by  certain  of the  Company's
security holders (the "Selling  Shareholders")  and 300,000 shares issuable upon
the exercise of certain outstanding warrants previously issued by the Company to
certain of the Selling Shareholders and others. The Company will not receive any
proceeds from the sale of the shares by the Selling Shareholders but the Company
will receive up to $87,000 in proceeds upon exercise of the warrants.

Summary of Our Business

     Unity Wireless  Corporation is a designer,  developer and  manufacturer  of
wireless  technologies  and  products  for  a  broad  range  of  industrial  and
commercial  applications.  The Company's  business is focused upon its UltraTech
high power linear radio frequency (RF) amplifiers.

     UltraTech high power linear RF amplifiers are used in both mobile and fixed
wireless voice, Internet and data base station and repeater networks and support
Cellular, PCS (Personal Communications Services), Paging and WLL (Wireless Local
Loop)  frequencies.  Unity Wireless produces 6 different models of high power RF
amplifiers,  and  is  developing  sub-systems  and  components,   including  new
ultra-linear  RF  amplifiers,  that are designed to improve the  performance  of
wireless  telecommunications  networks, making it faster and more cost effective
for our customers to build out their next-generation 2.5, 3 and 4G networks.

     The Company formerly  produced an acoustic siren detector unit (the "Sonem"
product) and a wireless  communication  card (the "UniLinx"  product).  Both the
Sonem and the UniLinx businesses have been sold.


                                  RISK FACTORS

     Readers should carefully consider the risks described below before deciding
whether to invest in shares of the Company's common stock.

     If the Company does not successfully address any of the risks described
below, there could be a material adverse effect on the Company's business,
financial condition or results of operations, and the trading price of the
Company's common stock may decline and investors may lose all or part of their
investment.


                                        1



     The Company  cannot assure any investor that it will  successfully  address
these risks.

Risks Relating to the Common Stock of the Company

Possible Loss of Entire Investment

     Given the Company's  continued need for additional  capital,  the Company's
stock  involves a high degree of risk, and should not be purchased by any person
who cannot afford the loss of the entire investment. A purchase of the Company's
stock is  currently  "unsuitable"  for a person  who  cannot  afford to lose his
entire investment.

Need for Additional Capital

     Since its inception,  the Company has been dependent on investment  capital
as its primary  source of liquidity.  Sales of the  Company's  Sonem and UniLinx
products have provided insufficient cash flow to sustain operations. The Company
had an  accumulated  deficit at June 30,  2001 of  $11,237,439.  During the year
ended  December  31,  2000 the  Company  incurred a loss of  $5,318,633  (1999 -
$2,025,101)  and used cash from  operations of $3,097,829  (1999 -  $1,760,306).
Operations to date have been primarily financed by equity. During the six months
ended June 30, 2001, the Company incurred a loss of $505,164 (2000  -$1,727,467)
and used cash from operations of $644,838 (2000 - $954,493).

"Going Concern" Opinion

     The financial  statements (See Financial  Statements) have been prepared on
the going  concern  basis  under  which an entity  is  considered  to be able to
realize  its  assets and  satisfy  its  liabilities  in the  ordinary  course of
business.  Operations to date have been primarily financed by long-term debt and
equity  transactions.  The Company's  future  operations  are dependent upon the
identification  and successful  completion of additional  long-term or permanent
equity  financing,  the continued  support of creditors and  shareholders,  and,
ultimately, the achievement of profitable operations. There can be no assurances
that the Company will be successful.  If it is not, the Company will be required
to reduce operations or liquidate assets.  The Company will continue to evaluate
its projected expenditures relative to its available cash and to seek additional
means of  financing  in order to  satisfy  its  working  capital  and other cash
requirements.  The  auditors'  report  on the  December  31,  2000  consolidated
financial  statements includes an explanatory  paragraph that states that as the
Company has suffered recurring losses from operations,  substantial doubt exists
about its ability to continue as a going  concern.  The  consolidated  financial
statements  do not include any  adjustments  relating to the  recoverability  of
assets and  classification  of assets and  liabilities  that might be  necessary
should the Company be unable to continue as a going concern.

No Public Market for Common Stock

     The Company's common stock is quoted on the OTC electronic  bulletin board.
Management's  strategy is to develop a public  market for the  Company's  common
stock by  soliciting  brokers to become  market  makers of the  stock.  To date,
however, the Company has



                                        2



solicited  only a limited  number of such  securities  brokers to become  market
makers.  There can be no assurance that a stable market for the Company's common
stock will ever develop or, if it should  develop,  be  sustained.  It should be
assumed  that the market for the  Company's  common  stock will  continue  to be
highly  illiquid,  sporadic  and  volatile.  The  Company's  stock should not be
purchased by anyone who cannot afford the loss of the entire investment.

     The Company is required to maintain  status as a  "reporting"  issuer under
the  Securities  Exchange Act of 1934,  in order to be traded by  broker-dealers
regulated by the National  Association of Securities  Dealers  ("NASD").  If the
Company  fails to continue to be a reporting  issuer,  management  may encounter
difficulty in  maintaining or expanding a trading market in the near term, if at
all, and shareholders may not be able to sell their shares in the public market.
While  management  currently  intends to maintain  status as a reporting  issuer
under the Exchange Act,  there can be no assurance  that the Company can or will
maintain such status.

Penny Stock Regulation

     The  SEC  has  adopted  rules  that  regulate  broker-dealer  practices  in
connection  with  transactions  in "penny  stocks."  Penny stocks  generally are
equity  securities  with a price  of less  than  $5.00  per  share  (other  than
securities  registered on certain national securities exchanges or quoted on the
NASDAQ  National  Market System,  if current price and volume  information  with
respect to  transactions  in such  securities  is  provided  by the  exchange or
system). The penny stock rules require a broker-dealer, before consummation of a
transaction in a penny stock not otherwise  exempt from the rules,  to deliver a
standardized  risk  disclosure  document  prepared  by  the  SEC  that  provides
information  about  penny  stocks and the nature and level of risks in the penny
stock market.  The broker-dealer also must provide the customer with bid and ask
quotations for the penny stock,  the compensation of the  broker-dealer  and its
salesperson  in the  transaction,  and monthly  account  statements  showing the
market value of each penny stock held in the  customer's  account.  In addition,
the penny stock rules require that,  before  consummation  of a transaction in a
penny stock not otherwise exempt from such rules, the broker-dealer  must make a
special written  determination  that a penny stock is a suitable  investment for
the purchaser and receive the purchaser's  written agreement to the transaction.
These  disclosure  requirements  often have the effect of reducing  the level of
trading activity in any secondary market for a stock that becomes subject to the
penny stock rules.  The Company's stock is currently  subject to the penny stock
rules, and accordingly, investors may find it difficult to sell their shares, if
at all.

Possible Issuance of Additional Shares in the Future

     The  Company's  Certificate  of  Incorporation  authorizes  the issuance of
100,000,000  shares of common stock and 5,000,000 shares of preferred stock. The
Company's  Board of Directors may issue all such shares that are not yet issued,
without  stockholder  approval.  The Company's  Board of Directors may choose to
issue some or all of such  shares to  acquire  one or more  businesses  or other
types of  property,  or to  provide  additional  financing  in the  future.  The
issuance  of any such  shares  may  result in a  reduction  of the book value or
market price of the  outstanding  shares of the Company's  common stock.  If the
Company does issue any such additional  shares,  such issuance also will cause a
reduction  in  the  proportionate  ownership  and  voting  power  of  all  other
shareholders.  Further,  any such  issuance may result in a change of control of
the Company.



                                        3



Absence of Dividends; Dividend Policy

     The  Company  has never paid  dividends  on its  common  stock and does not
anticipate  paying any dividends on its common stock in the foreseeable  future.
The  declaration  and  payment of  dividends  by the  Company are subject to the
discretion of the  Company's  Board of Directors.  Any  determination  as to the
payment of  dividends  in the future  will depend  upon  results of  operations,
capital  requirements,  and  restrictions in loan  agreements,  if any, and such
other factors as the Board of Directors may deem relevant.

Stock Options

     The Company has adopted a stock option plan.  The total number of shares of
common stock to be delivered  on the exercise of all options  granted  under the
plan  may  equal  up to 20% of all  outstanding  shares  of such  common  stock,
including shares of common stock  previously  issued under the plan. The Company
had options for 4,353,250  shares of common stock issued and  outstanding  as of
September 4, 2001 (out of 6,442,038  issuable under the plan as of that date) at
the following exercise prices:

    Number of Shares*                Exercise Price ($)
    -----------------                -----------------
      3,169,500                            0.38
        210,000                            0.47
        385,000                            0.50
        332,500                            0.51
         10,000                            0.64
        238,750                            1.00
          7,500                            2.06

*    These  numbers do not include  options  for  500,000  shares at an exercise
     price  of  $1.00   originally   granted  to  Integrated   Global  Financial
     Corporation  ("IGF").  IGF has sued the Company for a declaration  that the
     grant of 500,000  options is of unlimited  duration.  The Company takes the
     position that the options have expired. See "Legal Proceedings."

     The existence of  below-market  options could  adversely  affect the market
price of the Company's  common stock and impair the  Company's  ability to raise
additional capital through the sale of its equity securities or debt financing.

     Exercise of any such  options  will result in dilution of the  proportional
interests of  shareholders  of the Company at the time of exercise,  and, to the
extent that the  exercise  price is less than the book value of the common stock
at that time, to the book value per share of the common stock.

Risks Related to the Business and Operations of the Company

Lack of Prior Operations and Experience

     The Company has limited  revenues from  operations  and has no  significant
tangible  assets.  Accordingly,  there can be no assurance that the Company will
operate at a profitable level. The Company's  business involves the development,
manufacture and marketing of



                                        4


products, novel and otherwise, in the wireless communications  industry.  Future
development  and operating  results will depend on many  factors,  including the
completion of developed products,  demand for the Company's  products,  level of
product and price competition,  success in setting up and expanding distribution
channels,  and whether the  Company  can  develop  and market new  products  and
control costs. In addition, the Company's future prospects must be considered in
light  of  the  risks,  expenses  and  difficulties  frequently  encountered  in
establishing a new business in the technology  industry,  which is characterized
by intense competition,  rapid technological change, and significant regulation.
There can be no assurance that the Company's future financial  forecasts will be
met.

Need for Experienced  Management and Key Employees/Limited  Experience of Senior
Management

     The Company is a growing  company  dependent  upon the  services of certain
management  and  technical  personnel,  particularly  John  Robertson and Roland
Sartorius. The loss of the services of any one of these persons, or an inability
to recruit  and retain  additional  qualified  personnel,  could have a material
adverse effect on the Company. The Company has no plans at present to obtain key
person life insurance for any of its officers and directors.

Substantial Competition

     The wireless  communications  industry is characterized by rapidly evolving
technology and intense  competition.  The Company may be at a disadvantage  with
other companies having larger technical  staffs,  established  market shares and
greater  financial and operational  resources than the Company.  There can be no
assurance that the Company will be able to successfully compete.  There also can
be no assurance  that the Company's  competitors  will not succeed in developing
products or competing  technologies  that are more effective or more effectively
marketed  than  products  marketed by the Company,  or that render the Company's
technology  obsolete.  Earlier  entrants into a market often obtain and maintain
significant  market share relative to later entrants.  The Company believes that
an increasing number of products in the market and the desire of other companies
to obtain  market  share  will  result in  increased  price  competition.  Price
reductions  by the  Company in  response to  competitive  pressure  could have a
material,  adverse effect on the Company's business,  financial  condition,  and
results of operations.

Protection of Proprietary Technology

     The  Company's  success  will depend in part on its ability to preserve and
protect its trade secrets and any proprietary technology, and to operate without
infringing  upon the patents or proprietary  rights of third parties in both the
United States and other countries.

     The  Company  does not own any  patents in  connection  with its  UltraTech
products or technologies.  Furthermore, the Company does not intend to apply for
patent protection of UltraTech products or technologies.

     The Company has filed  applications  for trade mark  protection in the U.S.
and Canada.



                                        5


     The  Company  is not  aware  of any  disputes  with  respect  to any of its
intellectual property, except as follows:

a.   a possible opposition to the application for registration of the trade mark
     "Unity  Wireless" in Canada by a party applying for  registration in Canada
     of the trade mark "Unity;" and

b.   an examiner's  opposition to the application for  registration of the trade
     mark "Unity Wireless" in the United States on the basis that the trade mark
     "Unity Wireless" is confusing with currently registered trade marks.

The Company is working to resolve these issues and believes it will be able to
so do successfully.

     The Company is not involved in any litigation  respecting its  intellectual
property.  The use of trade marks, service marks, trade names, slogans,  phrases
and other  expressions  in the course of the  business  of the  Company  and its
subsidiaries,  however,  may be the subject of dispute and possible  litigation.
The Company may have to defend itself from infringement  claims by others.  Such
litigation  is  expensive  and  time-consuming,  and can be used by  well-funded
adversaries as a strategy for depleting the resources of a small enterprise such
as the  Company.  There is no assurance  that the Company  will have  sufficient
resources to  successfully  protect its interests in any litigation  that may be
brought.  There can be no assurance that the Company or its subsidiaries will be
able to continue to use their current  trade names and marks.  Any changes could
result in confusion to potential  customers and negatively  affect the Company's
business.

Dependence on Suppliers and Third Parties

     The  Company is a small  enterprise  and has yet to  establish  substantial
internal  management,   personnel  and  other  resources.  The  Company  depends
substantially  upon third parties for several critical  elements of its business
including,   among  other  things,  promotion  and  marketing,   technology  and
infrastructure development and distribution activities. The Company also depends
substantially  upon third  party  sales  agents.  A  substantial  portion of the
Company's high power RF amplifier revenues to date have been derived through its
South  Korean  sales  agent.  The loss of any of these  resources  could  have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of operations.

     The  Company  relies  on  outside  suppliers  for some  components  and the
assembly of some portions of the Company's  products.  There can be no assurance
that component parts, materials or services obtained from outside suppliers will
continue to be  available  in adequate  quantities  or on  adequate  terms.  The
inability to obtain sufficient  quantities of such materials,  parts or services
at  reasonable  cost  could  have a  material  adverse  affect on the  Company's
business, financial condition and results of operations.

Need for Marketing and Sales

     The successful  execution of the Company's business plan entails marketing,
brand  development  and sales.  There is no  guarantee  that the Company will be
successful  in  managing  such a  strategy  of  marketing  and sales to effect a
reasonable  penetration of its technologies  into its target markets on a timely
basis or at all.


                                        6


Need for Future Strategic Partnerships

     The successful  execution of the Company's  business  strategy is partially
dependent upon enlisting a number of strategic partners, regionally,  nationally
and globally,  in order to assist in a focused  marketing  effort and to provide
financial strength. There is no assurance that the Company will be successful in
developing such strategic partnerships on a timely basis or in developing enough
strategic  partnerships to successfully  market the Company's  technologies  and
products globally.

Acceptance of Company's Technology; Creation of New Markets

     There can be no assurance that the Company's  technologies will be adopted,
that its technologies will be incorporated into products, or that products based
on its technologies will be marketed successfully.  In addition, there can be no
assurance  that the Company's  technologies  will be adopted  widely as industry
standards,  even if  products  based on its  technologies  have been  introduced
successfully to the marketplace.

     The markets for the Company's  communication card technologies and products
have only  recently  begun to  develop.  As is  typical in the case of a new and
rapidly evolving industry,  demand and market acceptance for recently introduced
products  and  services  are  subject to a high level of  uncertainty  and risk.
Because the markets for the Company's  technologies  and products are new and/or
evolving, it is difficult to predict the future growth rate, if any, and size of
these markets.  There is no assurance  either that the markets for the Company's
technologies  and products will emerge or become or remain  sustainable.  If the
markets fail to develop,  develop more slowly than expected or become  saturated
with competitors,  or if the Company's  technologies and products do not achieve
or sustain market acceptance,  the Company's business, results of operations and
financial condition will be materially and adversely affected.

Uncertainty of New Product Development

     The Company has only recently released  commercial  versions of some of its
technologies and products.  Additional efforts and expenditures to enhance their
capabilities are critical to commercial viability.

Product Warranty

     The Company's  products are relatively new to their respective  markets and
lack  extensive  field  operating  experience.  While the Company has tested its
products for failure in certain  circumstances,  there can be no assurance  that
the Company's products will continue to operate  satisfactorily  after sustained
field use. If a  substantial  number of products  are  returned and accepted for
warranty  replacement,  the cost to the  Company  could have a material  adverse
effect  on  the  Company's  business  and  financial   condition.   See  "Recent
Developments - Sale of Sonem Business."

Product Liability

     The emergency  traffic  preemption  devices of the Company's Sonem division
(sold in October 2000) are installed at traffic intersections. Also, the Company
has sold some of its UniLinx(TM)  devices for use with traffic control equipment
located at  intersections.  If any of these  products fail to perform  properly,
significant personal injury, property damage or death could


                                        7


arise from traffic accidents  resulting from such failure.  Although the Company
maintains product liability insurance,  there is no assurance that the amount of
coverage  will be  sufficient  in the event of a claim,  or that  coverage  will
continue to be available to the Company on reasonable terms and conditions or at
all.

Failure to Maintain Technological Advantages/Risk of Obsolescence

     The  Company  is  dependent  upon what it  perceives  as the  technological
advantages of its products and its ability to maintain  trade secret  protection
for its  products.  There can be no  assurance  that the Company will be able to
obtain or  maintain  such  advantages;  failure to do so would have  substantial
adverse consequences to the business of the Company.

     Technological  obsolescence  of the  Company's  technologies  and  products
remains a possibility. There is no assurance that the competitors of the Company
will not succeed in developing  related  products  using  similar  processes and
marketing  strategies  before  the  Company,  or  that  they  will  not  develop
technologies  and products that are more  effective  than any which have been or
are being  developed  by the  Company.  Accordingly,  the  Company's  ability to
compete  will  be  dependent  on  timely  enhancement  and  development  of  its
technologies and products,  as well as the development and enhancement of future
products.  There is no assurance that the Company will be able to keep pace with
technological developments or that its products will not become obsolete.

Foreign Currency Exposure

     The Company's  functional  currency is the Canadian dollar.  The Company is
exposed  to  fluctuations  in the US dollar  relative  to the  Canadian  dollar,
because it  collects  revenues  in U.S.  dollars.  As the  Company  expands  its
operations,  it may begin to collect revenues from customers in currencies other
than the US or Canadian  dollar.  The Company does not  currently  engage in any
hedging activities.


                                 USE OF PROCEEDS

     The Company  will not receive any  proceeds  upon the sale of shares by the
selling  shareholders  described in this prospectus.  The Company will, however,
receive  proceeds if the warrant holders  described in this prospectus  exercise
their  warrants.  The  Company  will use such  proceeds to fund  operations  and
corporate acquisitions.


                            SELLING SECURITY HOLDERS

     This  registration  statement covers the offering of shares of common stock
by certain selling security holders (the "Selling Shareholders") and the sale of
common  stock by the Company to certain  warrant  holders  upon the  exercise of
their warrants. It is being filed in order to register, on behalf of the Selling
Shareholders  and the Company,  a total of  1,271,428  shares of common stock as
follows:

     (i)  796,428 shares issued to investors through various private placements;



                                        8


     (ii) 175,000 shares owned by shareholders who acquired their shares through
          various private resales.

          (collectively, the "secondary shares")

     (iii)a total of 300,000 shares of common stock issuable by the Company upon
          the exercise of certain warrants  previously  issued by the Company as
          follows:  300,000  shares  of common  stock  issuable  to  consultants
          Mueller &Company,  Inc. and Ideas Inc.  ("Mueller and Ideas") upon the
          exercise of warrants  granted under an amendment  dated as of April 1,
          2001 to a  consulting  agreement  between  the Company and Mueller and
          Ideas dated as of January 1, 2001. (the "warrant shares").

     The secondary shares are "restricted"  shares under applicable  federal and
state securities laws and are being registered to give the Selling  Shareholders
the opportunity to sell their shares.  The  registration of such shares does not
necessarily mean,  however,  that any of these shares will be offered or sold by
the Selling  Shareholders.  The Selling Shareholders may from time to time offer
and sell all or a portion of their  shares in the  over-the-counter  market,  in
negotiated  transactions,  or otherwise, at prices then prevailing or related to
the then current market price or at negotiated prices.

     The secondary shares may be sold directly or through brokers or dealers, or
in a  distribution  by one or more  underwriters  on a firm  commitment  or best
efforts basis. To the extent  required,  the names of any agent or broker-dealer
and applicable  commissions or discounts and any other required information with
respect to any particular offer will be set forth in an accompanying  Prospectus
Supplement.  See  "Plan  of  Distribution."  Each  of the  Selling  Shareholders
reserves the sole right to accept or reject,  in whole or in part,  any proposed
purchase of the  secondary  shares to be made  directly or through  agents.  The
Selling  Shareholders and any agents or broker-dealers that participate with the
Selling Shareholders in the distribution of secondary shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities  Act"),  and any commissions  received by them and any profit on the
resale of the secondary  shares may be deemed to be underwriting  commissions or
discounts under the Securities Act.

     There will be no  proceeds  received  by the  Company  from the sale of any
secondary shares and the Company has agreed to bear the expenses of registration
of the  secondary  shares,  other than  commissions  and  discounts of agents or
broker-dealers and transfer taxes, if any.

     The  Company   will  sell  the  warrant   shares  to  the  holders  of  the
above-described  warrants if and when they choose to exercise  them. If this (or
any  subsequent)  registration  statement  is then in effect,  once the  warrant
holders have exercised  their  warrants,  they will be free to re-sell the stock
they receive at such time or times as they may choose,  just as any purchaser of
stock in the open market is allowed to do. The  Company  does not know how much,
if any,  of such stock these  investors  will hold or re-sell  upon  exercise of
their warrants.



                                        9


     The foregoing  summary of the warrant terms is qualified in its entirety by
the full terms of the applicable warrant  agreements,  a sample form of which is
incorporated by reference in this  Prospectus as an exhibit to the  registration
statement.


Selling shareholders who acquired their shares through private placements
-------------------------------------------------------------------------

     The following is a list of the private placement  investors who own 796,428
of the secondary  shares received  through various private  placements.  Some of
these  investors  hold or have held a  position,  office  or any other  material
relationship  with the Company or  predecessors  or  affiliates  within the past
three  years.  See  "Directors,   Executive  Officers,  Promoters,  and  Control
Persons." Also, Jong Kil Kim is an agent of the Company responsible for sales in
Korea.  None of these persons holds over one percent of the outstanding stock of
the  Company,  except  for Mark Godsy who owns  9.30% of the  outstanding  stock
including  options that are  exercisable  on September 30, 2001 (9.30% after the
offering is complete).


                               Amount of Securities     Amount to be Offered   Amount to be Owned
                            Owned on August 30, 2001    for Security Holder's   After Offering is
                                                               Account              Complete
                                                                        
John Robertson                     203,315                      203,315                      0
Mirza Kassam                       144,198                      144,198                      0
Chris Neumann                      130,212                      130,212                      0
Robert Fetherstonhaugh              82,363                       82,363                      0
John MacBain                        43,706                       43,706                      0
Louise Blouin                       43,706                       43,706                      0
Hugh Notman                        200,500                       26,250                174,250(1)
Peter Scott                         26,250                       26,250                      0
3OE Enterprises Inc.                65,000(2)                    25,000                 40,000(2)
Mark Godsy                       2,265,412                       21,428              2,243,984
Jong Kil Kim                        50,000                       25,000                      0
Robert Singer                       25,000                       25,000                      0

(1)  Includes  50,000 shares  registered  under the Company's SB-2A filed May 3,
     2001.
(2)  Includes  40,000 shares owned  directly or  indirectly  by Norm Dowds,  the
     principal of 3OE Enterprises.


Selling shareholders who acquired their shares through private resales
----------------------------------------------------------------------

     The  following  is a list of the  shareholders  who own  175,000  secondary
shares received through various private  resales.  None of these investors holds
or has held any position,  office or any other  material  relationship  with the
Company or  predecessors  or affiliates  within the past three years,  except as
noted above.


                               Amount of Securities     Amount to be Offered   Amount to be Owned
                            Owned on August 30, 2001    for Security Holder's   After Offering is
                                                               Account              Complete
                                                                        
One Level Holdings Limited         100,000                      100,000                       0
James Carruthers                    26,500                       25,000                   1,500
Jong Kil Kim                        25,000(1)                    25,000                       0
Holger Spielberg                    27,500                       25,000                   2,500

(1)  Excludes 25,000 to be offered in previous table.

Warrants Held by Consultants

     The  following  is a list of  holders  of  warrants  for a total of 300,000
warrant shares as described above and issued by the Company as compensation  for
consulting  services.  None of these  persons  holds  or has held any  position,
office or any other material  relationship  with the Company or  predecessors or
affiliates  within  the  past  three  years,  except  as  provided  for in their
respective consulting agreements.  To the best of the Company's knowledge,  none
of these


                                       10


persons holds any other stock of the Company and if they were to sell all of the
shares listed below, they would hold no equity interest in the Company.


                                            No. of Warrant         Per Share Exercise Price
Name                                             Shares              for Warrant Shares ($)
----                                        --------------         ------------------------
                                                                    
Mueller & Company, Inc. and Ideas, Inc.          300,000                   0.29


     Of the  300,000  warrants  at $0.29 held by Mueller  and Ideas,  25,000 are
immediately  exercisable  and the balance vest ratably and  quarterly,  with the
final vesting to occur on March 31, 2004.

     The foregoing  summary of the terms and  conditions of the warrants held by
consultants  is qualified  in its  entirety by the full terms of the  applicable
consulting and warrant  agreements,  which are incorporated by reference in this
Prospectus as exhibits to the registration statement.


                              PLAN OF DISTRIBUTION

     It is  anticipated  that the  secondary  shares will be sold by brokers and
dealers on a best efforts basis.  It is  anticipated  that  commissions  will be
charged in line with the commissions charged by such brokers or dealers in other
standard  transactions for the purchase and sale of publicly traded  securities.
Such  commissions  will be paid by the  Selling  Shareholders  just as with  any
ordinary sale of stock.

     The  secondary  shares  may also be sold in a  distribution  by one or more
underwriters on a firm commitment or best efforts basis. To the extent required,
the names of any agent or broker-dealer and applicable  commissions or discounts
and any other required  information with respect to any particular offer will be
set  forth  in an  accompanying  Prospectus  Supplement.  Each  of  the  Selling
Shareholders  reserves the sole right to accept or reject,  in whole or in part,
any proposed  purchase of the  secondary  shares to be made  directly or through
agents.  The  Selling   Shareholders  and  any  agents  or  broker-dealers  that
participate  with the Selling  Shareholders  in the  distribution  of  secondary
shares may be deemed to be  "underwriters"  within the meaning of the Securities
Act,  and any  commissions  received by them and any profit on the resale of the
secondary shares may be deemed to be underwriting commissions or discounts under
the Securities Act.

     The Company will distribute the warrant shares if and when holders exercise
their warrants.  As described above, the private offering investors may exercise
the warrants held by them in accordance with the appropriate  vesting schedule.,
Assuming this or a subsequent  registration  statement with respect to the stock
is then in effect,  the stock issued to the warrant holders upon exercise may be
re-sold in any manner and at any time the holder chooses  (subject to applicable
securities  laws).   This  registration   statement  does  not  cover  any  such
re-distribution of such shares.


                                LEGAL PROCEEDINGS

     The  Company,   along  with  Sonic  Systems   Corporation  and  M&M  Realty
Incorporated, has been sued in the Supreme Court of British Columbia, Canada, by
Integrated Global Financial  Corporation ("IGF"). The action is dated January 5,
2001.  The  Plaintiff  alleges it has options to purchase  500,000  shares at an
alleged exercise price of $1.00 per share, plus unspecified damages. The Company
disputes the allegations and is defending the claim vigorously.



                                       11


     No trial  date has been  set.  No  Examinations  for  Discovery  have  been
conducted or are even set down. The matter is at a very preliminary stage.

     It is the Company's view that the claim has little,  if any, merit and does
not expect the proceeding to have any material adverse effect on the Company.


          DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

     The directors, executive officers, and significant employees of the Company
and significant employees of its subsidiary, UW Systems, are as follows:


NAME                                         POSITION
----                                         --------
                          
Mark Godsy.................  Director and Chairman of Board of Directors of the Company
                             Director and Chairman of Board of Directors of UW Systems

John Robertson.............  Director, President and Chief Executive Officer of the Company
                             Director, President and Chief Executive Officer of UW Systems

Roland Sartorius...........  Director, Chief Financial Officer and Secretary of the Company
                             Director, Chief Financial Officer and Secretary of UW Systems

Thomas Dodd................  Director of the Company
                             Director and Senior Vice President of UW Systems

Ken Maddison...............  Director of the Company

Robert W. Singer...........  Director of the Company

Robert Fetherstonhaugh.....  Director of the Company


     Mark Godsy-Age 46. Mr. Godsy is a Director and the Chairman of the Board of
Directors of the Company and UW Systems.  He previously served as a Director and
the  Chairman of the Board of Directors of UW Systems from May 1993 to November,
1998, and as the Secretary of UW Systems from May, 1993 to July,  1995, and from
May, 1997 to November,  1998. Mr. Godsy was also Chief Executive  Officer of the
Company from  February 2000 until  November 17, 2000.  His term as a Director of
the  Company  runs  until the next  annual  meeting of the  shareholders  unless
earlier  terminated.  Mr. Godsy is an  experienced  entrepreneur  working in the
areas of  corporate  development  and  venture  capital.  He  practiced  law for
approximately five years before entering business and co-founding two successful
companies,  ID Biomedical  Corporation and Angiotech  Pharmaceuticals Ltd., both
leading  Canadian  biotechnology  firms. Mr. Godsy's  responsibilities  included
building executive management teams,  coordinating  corporate finance activities
and strategic positioning.  Mr. Godsy is a graduate of the University of British
Columbia and received his law degree from McGill  University.  He is currently a
member of the Law Society of British Columbia.

     John  Robertson-Age  49. Mr. Robertson is a Director of the Company and the
Chief Executive  Officer of the Company and of UW Systems.  His term as Director
of the Company runs until the next annual meeting of shareholders unless earlier
terminated. Mr. Robertson has over 18 years experience in the telecommunications
industry with both public and private  companies.  He has held senior  executive
positions with Glentel, Glenayre Communications and Uniden Canada. Mr. Robertson
played a key role in Glentel's  increase in annual  revenues  from $9 million to
over $40 million,  in addition to leading the  restructuring  of related company
Glenayre  Communications.  At Uniden Canada, his leadership resulted in over $32
million in annual revenues.


                                       12


Recently,  he  founded  Ultratech  Linear  Solutions   ("Ultratech")in  mid-1999
achieving over US$3 million in revenue before being acquired in November 2000 by
Unity Wireless.

     Roland Sartorius-Age 48. Mr. Sartorius is a Director of the Company and the
Chief Financial Officer and Secretary of the Company and of UW Systems. His term
as Director of the Company  runs until the next annual  meeting of  shareholders
unless earlier  terminated.  Mr.  Sartorius has over 12 years  experience in the
position of Chief Financial Officer in several public and private  multinational
entities.  Most recently, he was based in Switzerland and held the same position
with a private  equity/venture  capital firm managing several significant equity
funds, exceeding Sfr 100 million, with investments in various European and North
American technological/industrial  companies. His focus has been in the areas of
corporate  finance,  strategic  planning,   financial  reporting  and  controls,
international tax planning, compliance and investor/shareholder  relations. From
1981 to 1988, Mr. Sartorius was employed with KPMG,  initially as an auditor and
subsequently as a Management  Consultant in Corporate Finance. Mr. Sartorius,  a
Certified  General   Accountant,   holds  a  Bachelor  of  Commerce  &  Business
Administration  degree from the  University  of British  Columbia.  He currently
serves and has previously served on boards of directors for a variety of private
companies.

     Thomas  Dodd-Age  50. Mr. Dodd is a Director of the Company and Senior Vice
President  of the  Company  and of UW  Systems.  His term as a  Director  of the
Company runs until the next annual  meeting of the  shareholders  unless earlier
terminated.  Mr. Dodd is a senior marketer/manager with over 25 years experience
as an end user, OEM, consultant,  and manufacturer,  in roles ranging from field
technical  support  to  executive  management.  He  has  held  senior  executive
positions  with Dynapro  Systems Inc.  and  Campbell  Technologies  with primary
responsibilities in sales and marketing. Currently, Mr. Dodd serves on the Board
of Directors of FutureFund (VCC) Capital Corp.

     Ken  Maddison-Age  60. Mr. Maddison is a Director of the Company.  His term
runs  until  the  next  annual  meeting  of  the  shareholders   unless  earlier
terminated. Mr. Maddison, a Chartered Accountant since 1966 and elected a Fellow
of the Institute of Chartered Accountants of BC in 1975, retired in August, 1997
after a lengthy  career as a partner with the  accounting  firm KPMG.  In public
practice over the past 32 years, Mr. Maddison provided auditing,  accounting and
business advisory  services to a wide range of clients in the hospitality,  real
estate,   construction,   non-profit  and  insurance  industries.  Mr.  Maddison
currently serves on the boards of  International  Wayside Gold Mines Ltd, Island
Mountain  Gold  Mines  Ltd.,  Northern  Continental   Resources  Inc.,  Northern
Hemisphere Development Inc. and Golden Cariboo Resources Ltd.

     Robert W. Singer - Age 53. Senator Singer is a New Jersey state senator and
serves within the Senate leadership circle as Assistant Majority Leader. Senator
Singer is also  Vice-Chairman  of the Senate Commerce  Committee and a member of
the Senate Health Committee.  In his former duties as an elected  representative
in the Upper House,  Senator Singer was Chairman of the Senate Senior  Citizens,
Veterans Affairs and Agriculture  Committee and was  Vice-Chairman of the Senate
Environment  Committee,  and had been  appointed to chair the Joint  Legislative
Biotechnology  Task Force and the Software  Task  Committee.  Senator  Singer is
presently Chairman of the Senate Task Force on Science and Technology, which was
established in 2001. On a national level, Senator Singer was also appointed as a
member of the Health Committee of the Assembly on Federal Issues of the National
Conference of State Legislatures. Members of the Assembly on Federal Issues meet
with federal  officials and play a key role in developing  recommendations  on a
wide range of  national  issues  that affect  state-federal  relations.  Senator
Robert Singer has  distinguished  himself  among his national  peers through his
recognition  and  understanding  of  high  technology  industries,  particularly
biotechnology  and the  economic  development,  health  care,  agricultural  and
environmental  benefits  this  industry  offers  his state and the  nation.  The
Senator has also been honored at the national and state level for his leadership
and support in promoting the  biotechnology  industry.  Senator Singer currently
serves on the boards of Brocker Technology Group. and Healthchoice Incorporated.



                                       13


     Robert  Fetherstonhaugh  -  Age  45.  Mr.  Fetherstonhaugh  is a  chartered
accountant  with  executive   experience  in  technology  companies  and  public
accounting.   He  is  presently  Deputy  Chairman  and  Corporate  Secretary  of
Trader.com,  a public  company in the business of online and print  publication,
which he joined in 1998. Mr.  Fetherstonhaugh  is  responsible  for internet and
media acquisitions in Canada, U.S.A., Holland, and Russia, and closed three such
acquisitions  in 1999. He is also  responsible  for  coordinating  the company's
Russian operations,  which now generate $20 million in free cash flows per year,
and has set up  operation  in China.  From 1978 to 1998 he served  with KPMG and
became Partner in charge of the Financial Institutions Practice for Montreal. He
also set up, led, and  significantly  expanded the High  Technology  Practice in
Montreal.

     Directors  of  the  Company  are  elected  at  the  annual  meeting  of the
shareholders  and serve until their  successors  are elected and  qualified,  or
their  earlier  resignation  or removal.  Officers are appointed by the Board of
Directors  and serve at the  discretion of the Board of Directors or until their
earlier resignation or removal.

     There are no family  relationships among directors or executive officers of
the Company.




                                       14


                    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership  of the common  shares of the Company as of  September  4, 2001 by (i)
each person who is known by the Company to beneficially  own more than 5% of the
issued and  outstanding  common shares of the Company;  (ii) the chief executive
officer of the Company and the  Company's  two former chief  executive  officers
during its last fiscal year,  individually  named in the executive  compensation
table  below;  (iii)  the  Company's  directors;  and (iv) all of the  Company's
executive  officers and directors as a group.  Unless otherwise  indicated,  the
persons  named below have sole voting and  investment  power with respect to all
shares  beneficially  owned by them,  subject to community  property  laws where
applicable.  As of September 4, 2001, there were 25,768,153 common shares of the
Company issued and outstanding. Each common share entitles the holder thereof to
one  vote  in  respect  of  any  matters  that  may  properly  come  before  the
shareholders of the Company. To the best of the knowledge of the Company,  there
exist no  arrangements  that  could  cause a change  in  voting  control  of the
Company.


                                                                                                   SHARES
                       NAME AND ADDRESS              RELATIONSHIP                                 BENEFICALLY      PERCENT
TITLE OF CLASS             OF OWNER                  TO COMPANY                                    OWNED(1)        OWNED
--------------         ----------------              ----------                                    --------        -----
                                                                                                       
Common Stock........   Mark Godsy                    Director, 5% Shareholder and Past CEO         2,402,495        9.30
                       7575 Carnarvon Street         (February 22, 2000 - November 17,
                       Vancouver, B.C. V6N 1K6       2000)

Common Stock........   John Robertson                Director and Current CEO (November              386,648        1.49
                       #203-728 Farrow Street        17, 2000 - present)
                       Coquitlam, B.C. V3J 3S6

Common Stock........   Roland Sartorius              Director and Executive Officer                  186,667        0.72
                       #203 - 7155 Granville Street
                       Vancouver, B.C. V6P 4X6

Common Stock........   Thomas Dodd                   Director and Executive Officer                  203,333        0.78
                       808 Seymour Blvd..
                       North Vancouver, B.C.
                       V7J 2J6

Common Stock........   Ken Maddison                  Director                                         37,500        0.15
                       2591 Lund Avenue
                       Coquitlam, B.C.
                       V3K 6J8

Common Stock........   Robert W. Singer              Director                                         31,250        0.12
                       2110 West County Line Road
                       Jackson, NJ
                       08527

Common Stock........   Robert Fetherstonhaugh        Director                                         89,446         0.35
                       20 Avenue Lilas
                       Dorval, Quebec
                       H9S 3L9



                                       15




                                                                                                   SHARES
                       NAME AND ADDRESS              RELATIONSHIP                                 BENEFICALLY      PERCENT
TITLE OF CLASS             OF OWNER                  TO COMPANY                                    OWNED(1)        OWNED
--------------         ----------------              ----------                                    --------        -----
                                                                                                       

Common Stock........   H. William Brogdon            Past CEO (February, 1999 to February            550,000         2.13
                       1817 Sleepy Hollow Lane       22, 2000)
                       Petaluma, CA 94954

Common Stock........   All directors and executive                                                 3,974,751        15.43
                       officers as a group
                       (8 individuals)
-----------


(1)  Includes the following numbers of shares of common stock (total of804,583)
     that may be acquired by the exercise of stock options or warrants that are
     now exercisable or will become exercisable within the next 60 days:
     o    Mark Godsy - 67,083 shares;
     o    John Robertson - 183,333 shares;
     o    Roland Sartorius - 186,667 shares;
     o    Thomas Dodd - 183,333 shares;
     o    Ken Maddison - 37,500 shares;
     o    Robert Singer - 6,250 shares
     o    Robert Fetherstonhaugh - 7,083 shares


                            DESCRIPTION OF SECURITIES

General Provisions of Common Stock

     All outstanding shares of common stock are duly authorized, validly issued,
fully paid and  non-assessable.  Upon liquidation,  dissolution or winding up of
the Company,  the holders of common  stock are entitled to share  ratably in all
net  assets  available  for  distribution  to  stockholders   after  payment  to
creditors.  The  common  stock  is not  convertible  or  redeemable  and  has no
preemptive, subscription or conversion rights.

     Each  outstanding  share of  common  stock is  entitled  to one vote on all
matters  submitted to a vote of  shareholders.  There are no  cumulative  voting
rights.

     The holders of  outstanding  shares of common stock are entitled to receive
dividends  out of assets  legally  available  therefor at such times and in such
amounts as the Board of Directors  may from time to time  determine.  Holders of
common stock will share equally on a per share basis in any dividend declared by
the Board of  Directors.  The Company has not paid any  dividends  on its common
stock and does not  anticipate  paying any cash  dividends  on such stock in the
foreseeable future.



                                       16


     In the event of a merger or consolidation, the holders of common stock will
be entitled to receive the same per share consideration.

General Provisions of Preferred Stock

     The Board of Directors is authorized by the Certificate of Incorporation of
the Company to issue up to 5,000,000  shares of preferred stock on such terms as
the Board may  determine.  No such stock has been issued to date.  The preferred
shares  could,  in certain  instances,  render more  difficult  or  discourage a
merger,   tender  offer,  or  proxy  contest  and  thus   potentially   have  an
"anti-takeover"  effect,  especially if preferred shares were issued in response
to a potential takeover.  In addition,  issuances of authorized preferred shares
can be implemented, and have been implemented by some companies in recent years,
with voting or conversion privileges intended to make acquisition of the Company
more  difficult  or more  costly.  Such an  issuance  could  deter  the types of
transactions   which  may  be  proposed  or  could   discourage   or  limit  the
shareholders'  participation  in  certain  types of  transactions  that might be
proposed (such as a tender offer), whether or not such transactions were favored
by the majority of the  shareholders,  and could enhance the ability of officers
and directors to retain their positions.

                      INTEREST OF NAMED EXPERTS AND COUNSEL

     Our  auditors  are KPMG  LLP,  Chartered  Accountants,  of Suite  900,  777
Dunsmuir Street, Vancouver,  British Columbia, Canada V7Y 1K3. Prior to December
31, 2000,  our auditors  were Ernst & Young LLP,  Chartered  Accountants,  Suite
2200,  700 Georgia  Street,  Vancouver,  British  Columbia,  Canada V7Y 1C7. Our
consolidated financial statements as at and for the year ended December 31, 2000
have been  included in this  prospectus  and in the  registration  statement  in
reliance upon the report of KPMG LLP,  independent  chartered  accountants,  and
upon the authority of KPMG LLP as experts in accounting and auditing.

     The  consolidated   financial  statements  of  Unity  Wireless  Corporation
(formerly  Sonic Systems  Corporation)  at December 31, 1999,  and the year then
ended, appearing in this Prospectus and Registration Statement have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing  elsewhere herein,  and is included in reliance upon such report given
on the authority of such firm as experts in accounting and auditing.


                      THE SEC'S POSITION ON INDEMNIFICATION
                         FOR SECURITIES ACT LIABILITIES

     The  Company's   bylaws  provide  that  directors  and  officers  shall  be
indemnified  by the Company to the fullest  extent  authorized  by the  Delaware
Business  Corporation  Act  ("DBCA"),   against  all  expenses  and  liabilities
reasonably incurred in connection with services for or on behalf of the Company.
The bylaws also  authorize  the board of directors to indemnify any other person
who the Company has the power to indemnify  under the DBCA, and  indemnification
for such a person may be greater or different  from that provided in the bylaws.
To the extent that  indemnification for liabilities arising under the Securities
Act may be permitted  for  directors,  officers and  controlling  persons of the
Company,  the  Company  has been  advised  that in the  opinion  of the SEC such
indemnification  is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.



                                       17


                           DESCRIPTION OF THE BUSINESS

General

     The  Company  is  a  designer,   developer  and  manufacturer  of  wireless
technologies  and  products  for a broad  range  of  industrial  and  commercial
applications.  The Company's  business is focused upon its UltraTech  high power
linearradio frequency (RF) amplifiers.

     UltraTech  high  performance  linear  RF  amplifiers  are  used in  current
generation wireless voice,  Internet and data base station and repeater networks
and support Cellular, PCS (Personal  Communications  Services),  Paging, and WLL
(Wireless Local Loop) frequencies.

Recent Developments

Sale of Sonem Business

     The Company was founded to commercialize the Sonem technology. Based on its
knowledge of intersection  controllers  gained in the traffic signal  preemption
business, specifically the specialized computers that control the signal lights,
the Company developed its "UniLinx(TM)" technology.  With further development of
the UniLinx(TM) technology,  management came to believe that the Company's Sonem
business  should be  de-emphasized  in favor of a focus on UniLinx(TM) and other
wireless technologies.

     In keeping with this change in focus, the Company's Sonem business was sold
on October 6, 2000,  to Traffic  Systems  LLC  ("Traffic  Systems"),  an Arizona
limited  liability  corporation  owned 37% by UW  Systems  and 63% by one of the
Sonem  contractors  of UW  Systems.  The sale took  place  pursuant  to an Asset
Purchase  Agreement  (the " Sonem Asset Purchase  Agreement")  among UW Systems,
Traffic  Systems  and  others,  a copy of which is attached as an exhibit to the
Company's  Form 8-K filed with the SEC on October 23,  2000 (the  "Sonem  8-K").
Under the Sonem Asset Purchase Agreement,  UW Systems licensed substantially all
of its Sonem patent rights to Traffic Systems (on an exclusive world-wide basis)
and Traffic Systems  covenanted to commercialize  and sell the Sonem technology.
In addition to its equity interest in Traffic  Systems,  UW Systems was entitled
to receive $2,000,000 from the gross profits of Traffic Systems. UW Systems also
agreed to assist  Traffic  Systems in the transition of the Sonem  business,  by
providing limited technical, consulting and financial support.

     Although Traffic Systems agreed under the Sonem Asset Purchase Agreement to
assume  the  warranty  obligations  of UW  Systems  for Sonem  products  already
installed,  UW Systems was  required  to advance the costs of such  obligations,
with  repayment to come from the gross profits of Traffic  Systems.  The Company
believes that the costs of such  obligations  in the future may be  substantial,
and has  agreed,  pursuant to a term sheet dated  January 31,  2001,  that these
obligations  will be assumed by Traffic Systems in  consideration of UW System's
transfer of its equity  interest in Traffic  Systems and the Company's  residual
interest in the Sonem  patents.  The Term Sheet is attached as an exhibit to the
Company's  Form 8-K filed with the SEC on February 16, 2001 (the  "Second  Sonem
8-K").  On April 30, 2001,  UW Systems and Traffic  Systems  signed a definitive
agreement  consummating the Term Sheet. The definitive  agreement is attached as
Exhibit 10.5 to this SB-2A.

     The foregoing is only a summary of the terms of the Sonem transactions, and
by its nature does not contain all of the terms thereof.  Investors are directed
to Exhibit 2.1 of the Sonem 8-K for the complete Sonem Asset Purchase Agreement,
and to Exhibit 2.1 of the Second  Sonem 8-K for the  complete  terms of the Term
Sheet.

     For financial  reporting  purposes,  the ultimate  disposition of the Sonem
business  results  in  it  being  considered  to  be a  discontinued  operation.
Accordingly,  all  discussions  of the Company's  continuing  operations in this
Registration  Statement  exclude  the  Sonem  business.  See also  note 5 to the
consolidated financial statements.


                                       18


Acquisition of Ultratech

     Also as part of its strategy to focus on wireless technologies, the Company
acquired Ultratech Linear Solutions, Inc., of Burnaby, British Columbia, Canada,
in a share purchase transaction that completed on November 16, 2000. The Company
reported the acquisition on Form 8-K filed with the SEC on December 4, 2000 (the
"Ultratech 8-K") and amended Form 8-K (providing audited financial  information)
on  February  15,  2001.  Ultratech  is  a  wireless  communications  technology
designer,   developer  and  marketer   specializing  in  high  power  linear  RF
amplifiers.  In consideration of the Ultratech  shares,  the Company paid to the
shareholders of Ultratech Cdn.$72,000 ($48,000) on account of shareholder loans,
and issued  700,000  shares of the common stock of the Company.  The Company had
loaned Cdn.$300,000 ($200,000) to Ultratech before closing.

     The foregoing is a summary only of the terms of the Ultratech  acquisition,
and by its nature does not contain all the terms thereof. Investors are directed
to Exhibit 2.1 of the Ultratech 8-K for the complete Share Purchase Agreement.

Disposition of Integration Services Business

     To complement internally developed Sonem technology, the Company had formed
wholly-owned  UW  Integration  (and its wholly owned  subsidiary  Unity Wireless
Integration  (S)  Pte  Ltd.)  to  pursue  alliances,  licensing  agreements  and
marketing  partnerships  in the ITS  (intelligent  transportation  systems)  and
communications  markets.  In order to better  focus on its new high power linear
amplifier  business,  the Company sold UW Integration to Lyma Sales & Management
Corp.  ("Lyma"),  a British  Columbia,  Canada  company  wholly owned by Siavash
Vojdani, a former officer and director of the Company, on December 30, 2000. The
sale took place pursuant to an Asset Purchase  Agreement (the "Integration Asset
Purchase  Agreement")  among UW  Integration,  the  Company  and Lyma and  dated
December 30,  2000,  a copy of which is attached as an exhibit to the  Company's
Form 8-K filed with the SEC on January 16, 2001 (the "Integration 8-K").

     The  foregoing  is  only a  summary  of  the  terms  of the UW  Integration
transaction,  and by its  nature  does not  contain  all of the  terms  thereof.
Investors  are directed to Exhibit 2.1 of the  Integration  8-K for the complete
Integration Asset Purchase Agreement.

Change of Auditor

     Ernst & Young LLP ("E&Y") was dismissed from its position as the certifying
accountant  of the  registrant  on December  31,  2000.  KPMG LLP  ("KPMG")  was
appointed the new certifying accountant of the registrant on the same day.

     E&Y's report on the financial  statement  for the years ended  December 31,
1999 and 1998 did not contain an adverse opinion or a disclaimer of opinion, and
was not  qualified or modified as to  uncertainty,  audit scope,  or  accounting
principles,  except  for the  report  on the  1998  financial  statement,  which
contained an explanatory paragraph (after the opinion paragraph) that stated the
Company's  recurring losses from operations  raised  substantial doubt about its
ability to continue as a going concern.  The 1998  financial  statements did not
include any adjustments that might result from the outcome of this  uncertainty.
The report on the 1999 financial  statement did not contain any such explanatory
paragraph as to uncertainty.



                                       19


     The decision to change  accountants  was approved by the board of directors
of the Company  pursuant to a consent board  resolution dated December 31, 2000.
The Company has an audit committee,  but the decision to change  accountants was
not considered by this committee.

     During the Company's  fiscal years ended December 31, 1999 and 1998 and the
subsequent  interim  period  preceding  the  dismissal  of  E&Y,  there  were no
disagreements  with E&Y on any matter of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

     KPMG was engaged as the new  principal  accountant  of the Company to audit
the Company's  financial  statements.  The date of  engagement  was December 31,
2000.  The  Company  filed a Form 8-K with  respect to its change in auditors on
January 24, 2001.

Corporate History

     Unity Wireless  Corporation  was  incorporated  in the State of Delaware on
October 1, 1998,  under the name Sonic Systems  Corporation.  The Company is the
successor  to M&M  International  Realty,  Inc.,  a Florida  corporation,  which
effected a  reincorporation  as a Delaware  corporation by merger on December 1,
1998,  with the Company as the  surviving  corporation.  Before the merger,  the
Florida  corporation had had no material  commercial  activity.  On December 11,
1998 the Company acquired all of the issued and outstanding  stock of UW Systems
in exchange for 11,089,368  shares of Company common  shares.  As a result,  the
former shareholders of UW Systems owned a majority of the Company's  outstanding
stock.  Therefore,  for  accounting  purposes,  UW  Systems  was  deemed to have
acquired the Company.

     In connection with the acquisition of UW Systems, the Company formed 568608
B.C. Ltd. ("568608") to act as an acquisition  vehicle. As of December 31, 2000,
568608,  Ultratech and UW Systems were merged,  with UW Systems remaining as the
surviving corporation.

     In keeping with its decision to focus on wireless technologies, the Company
changed its name to Unity Wireless  Corporation by filing  Articles of Amendment
with the State of Delaware  Secretary of State that became effective on July 20,
2000. The Company began using the new name as a "dba" in March, 2000.

     The Company's fiscal year end is December 31.


Principal Products & Services

     The  Company   currently   has  a  line  of   UniLinx(TM)   wireless   data
communications devices that are being offered commercially.

High Power Linear RF Amplifiers

     High  power  linear RF  amplifiers  allow  radio  frequency  signals  to be
amplified  and  broadcast  in a given area with minimal  distortion.  RF signals
carry voice and data  information used in wireless  transmissions  such as those
used for cell phones and wireless Internet access.

     "Linearity" of the signal (the lack of  distortion)  becomes more important
as the amount of data transported and the density of adjacent channels in a cell
increases.



                                       20


     The following table identifies currently marketed UltraTech products:

PRODUCT:            DESCRIPTION:                      FREQUENCY RANGE:
--------            ------------                      ----------------
Black Bear          4 Channel, 25 Watt Amplifier      1840-1870 MHz

Dolphin             2 Channel, 12 Watt Amplifier      1840-1870 MHz

Otter               4 Channel, 30 Watt Amplifier      1840-1870 MHz

Cougar              W-CDMA, 15 Watt Amplifier         2110-2170 MHz

Manx                10 Watt Amplifier                 1930-1990 MHz

Buffalo             4 Channel, 30 Watt Amplifier      1840-1870 MHz


     Wireless   communications   infrastructure   is  the   quickest   and  most
cost-effective  method of providing  both fixed and mobile  voice,  Internet and
data  network  communications.  The  global  market is being  driven by  several
economic and other factors as it goes wireless:

a.   Consumers and  businesses  worldwide are driving up  penetration  rates and
     therefore  increasing  the demands for voice,  Internet  and data  wireless
     communication networks.

b.   Affordable  telecommunication   infrastructure  is  becoming  necessary  in
     developing  countries and the  construction  of wireless local loops is the
     quickest and most cost-effective solution.

c.   Telecommunication  service providers are starting to incorporate and bundle
     wireless technology into their suite of offerings.

d.   Applications  such as video demand higher  bandwidth to support higher data
     rates.

e.   The move to one or a small number of global  standards for 3G wireless will
     cause most current infrastructure to be upgraded or replaced.

     The Company  expects that factors such as these will  continue to drive the
global demand for wireless  technologies for the foreseeable future. As consumer
usage of wireless  applications  increases,  the demand for more system capacity
and greater system  coverage also increases,  thus creating an increased  demand
for amplifiers.  Industry analysts estimate that the wireless telecommunications
networks and technologies market will grow to $135 billion by 2004, and that the
total  global  market sales of RF power  amplifiers  to support such growth will
increase from $1.1 billion in 1999 to $3.5 billion by 2003.

     Network service  providers  typically  source their network  equipment from
companies  known as  system  integrators,  which  in turn  source  their  system
components from a variety of subcontractors and component  suppliers.  Typically
they use  representative  agents to source  and  present  to them  suppliers  of
network sub  components  such as  amplifiers.  The  amplifier  supplier that has
experienced sales and agent representation, combined with the required technical
and operational capability will have the market advantage. The Company currently
has strong agent  representation  in Asia and plans to develop a broader network
of agents in the coming year, as well as building its direct sales and marketing
capabilities.

     The wireless  telecommunications industry consists of four primary sectors:
(1) wireless system integrators or infrastructure providers; (2) handset and end
user terminal devices; (3) accessory items, including towers, cable,  connectors
etc.; and (4) the amplifying  equipment sector. The Company's UltraTech products
compete in the amplifying equipment sector.

     Several  trends have  affected  the supply and demand for high power linear
amplifiers in the global market. As recently as a few years ago, the global


                                       21


market was small and dominated by only two or three players.  With the explosion
in the growth of  wireless  technologies  in the past five years,  however,  the
smaller  companies  that supplied  amplifiers to niche markets grew very quickly
into large companies with very large overheads to sustain.

     While the high growth rates these companies have enjoyed over the past five
years have  allowed  them to flourish  financially,  they have also made it more
difficult  for them to deal with the rapid  pace of  change in the  second  tier
amplifier market.  Management  believes these changes in the marketplace  create
additional  opportunities  for the  Company  to  provide  quality  products  for
specialty applications.

     The  large,  conventional  amplifier  suppliers  will  continue  to deliver
approximately 80% of the market,  but a great opportunity exists for smaller and
better-focused  amplifier  businesses to supply the  non-captive  or specialized
markets that it is expected will prevail for many years to come.

Product Research & Development

     The  Company  has  recently   augmented   its   research  and   development
capabilities in the area of its Ultratech High Power Linear Amplifiers, with the
addition  of RF  design  engineers  and  the  leasing  of  additional  test  and
measurement  equipment.  The  Company  has and will  continue  to devote a large
portion of its  research  and  development  resources  towards  next  generation
products,   using  leading  edge  design   techniques   and  other   progressive
technologies.

     The  Company  spent $ 880,818 on  research  and  development  in 2000 and $
502,643 in 1999 (includes stock based compensation of $ 238,655 in 2000 and $nil
in 1999).

Sales & Marketing

     The Company plans to build strategic alliances and partnerships to create a
network of  distributors  and  original  equipment  manufacturers  to extend the
Company's position in the wireless communications market.

     The Company  sells its high power linear RF  amplifiers  primarily  through
sales agent  channels  and on-site  visits with its  customers.  The majority of
UltraTech  amplifier  sales to date have been in South Korea  through one agent.
The agent is under contract with the Company for sales commissions, and has been
granted a  significant  number of  options  (vesting  over  three  years) in the
Company's stock as a longer-term incentive.

     The  Company  intends to expand  its  marketing  efforts  to include  North
America and Europe.  Initial  sales have already been made in North  America and
appearances  will be made at  industry  trade  shows in order to get the Company
name and brand in front of the wireless network infrastructure market.

     An experienced vice-president of Marketing has been hired for the UltraTech
products,  joining the  vice-president  of Sales, and marketing  activities have
begun.  Short term  marketing  efforts will focus on two areas to expand  sales:
direct sales and channel  development.  Direct sales  activities will target the
large "tier one"  suppliers of base  transceiver  station (BTS)  equipment.  The
Company's  positioning  will be built  around its  ability  to quickly  turn out
specialty product to high standards,  with the several thousand  installed units
in  Korea  providing   needed   credibility  for  technical  and   manufacturing
capabilities,

     Channel  development   activities  will  focus  on  sales   representatives
following  closely the model already working in Korea, that is, to contract with
agents who are currently representing  manufacturers of complementary  products,
selling to system integrators of cellular,  PCS and related wireless transceiver
equipment.


                                       22


     A third,  longer-term component of the Company's marketing strategy for the
UltraTech RF amplifier  products is to align with developers of new technologies
in the RF marketplace  to keep current with  technical  advances and position as
key supplier to the innovators. Several organizations with exciting technologies
have been identified and/or are being worked with currently.


Manufacturing & Suppliers

     The Company subcontracts its digital electronics manufacturing to qualified
companies  with a history  of quality  assurance.  This  minimizes  the need for
capital expenditures related to electronics manufacturing facilities,  minimizes
staff  and uses  specialists  in each  stage  of  manufacturing.  All  enclosure
metalwork and painting is also subcontracted.  Alternate contract  manufacturers
are available, should any of its existing contract manufacturers cease providing
services to the Company.  RF circuitry is assembled and tested  in-house,  as is
all final assembly, integration, configuration, tuning and final testing.

     The  principal  raw  materials  used  in the  production  of the  Company's
products are mostly standard electronic,  plastic and hardware  components.  The
Company  has,  from time to time,  experienced  difficulties  in  obtaining  raw
materials and reduces supply risk by using alternate suppliers.

Competition

     Two sizes and types of players characterize the RF amplifier business:  (1)
large-scale  manufacturers  with anywhere from  $100,000,000  to $500,000,000 in
annual sales,  specializing in large volume  production runs and mainstream type
products; and (2) smaller companies with anywhere from $1,000,000 to $30,000,000
in annual sales, specializing in custom order markets. The large and dominant RF
amplifier  companies are Powerwave  Technologies Inc.  ("Powerwave"),  Spectrian
Inc.  ("Spectrian"),  and Microwave Power Devices Inc. ("MPD"). MPD was recently
purchased by  Ericsson.  The  dominant  smaller  companies  are  Amplidyne  Inc.
("Amplidyne"),   Stealth  Microwave  Inc.  ("Stealth")  and  AML  Communications
("AML").

     Powerwave,  located in Irvine, California, is an independent supplier of RF
high  performance   amplifiers  that  it  designs  and   manufacturers  for  the
multi-carrier  ultra-linear  high  power RF  amplifier  market.  These  types of
amplifiers  are key  components  in  wireless  communications  networks  such as
Cellular  and PCS  (Personal  Communications  Services).  Powerwave  is also the
leading supplier of RF amplifiers for the Land Mobile Radio ("LMR") market. More
than 50% of Powerwave's $500,000,000+ annual revenue comes from Nortel Networks.

     Spectrian, located in Sunnyvale,  California, is also a leading supplier of
ultra-linear high power RF amplifiers to wireless communications  infrastructure
manufacturers   and  service   providers   worldwide.   Spectrian   designs  and
manufactures  power  amplifiers for use in microcell and macrocell base stations
for cellular, PCS and wireless local loop.

     MPD,  located in  Hauppauge,  New York,  designs,  manufactures,  and sells
linear  power  amplifiers,  and related  subsystems  to the  worldwide  wireless
telecommunications market. These single and multi channel amplifiers,  which are
an essential  component  in wireless  base  stations,  increase the power of the
radio frequency and microwave signals with low distortion. In addition, MPD also
designs  amplifiers  for  the  satellite   communications   market  and  medical
applications.  As Powerwave is linked to Nortel Networks, it is assumed that MPD
will likely be the prime supplier of amplifiers to Ericsson's network products.

     Amplidyne, located in Somerset, New Jersey, designs, manufactures and sells
ultra-linear  power amplifiers and related  subsystems to the worldwide wireless
telecommunications   market.   These  single  and  multi-carrier   linear  power
amplifiers,  which are key components in cellular and PCS base stations, utilize
a patented pre-distortion technique.


                                       23


     Stealth,  located in Trenton,  New Jersey,  designs and manufactures single
channel  amplifiers  for the cellular  market and is trying to penetrate the PCS
bands with newer technology.

     ADL, located in Camarillo,  California, designs and manufactures high power
linear amplifiers for cellular,  PCS and satellite markets. ADL also is involved
in the design and manufacture of low noise amplifiers.

Intellectual Property

Trade Marks

     The Company  registered the trade marks "We Hear the Future Now(R)," "Sonic
Solution(R)," and "Sonic Systems  Corporation(R)" with the Canadian Intellectual
Property Office in 1997. The Company has also been using the unregistered  trade
mark "SONEM  2000(TM)"  since 1997,  but did not  register it at the time due to
resource constraints. As a result of the sale of its Sonem division, the Company
does not intend to formally  register this trade mark. The Company is also using
the  unregistered  trade  mark  "Unity  Wireless(TM)".  The  Company  intends to
register this mark in the U.S., Canada and, possibly, other countries.

     The  Company's  Sonem  business  was sold on October  6,  2000,  to Traffic
Systems LLC ("Traffic Systems"),  an Arizona limited liability corporation owned
37% by UW Systems and 63% by one of the Sonem  contractors  of UW  Systems.  The
sale took place  pursuant  to an Asset  Purchase  Agreement  (the " Sonem  Asset
Purchase Agreement"). The US and Canadian siren detector patents and trade marks
related to the Sonem  business of the  Company,  except for the trade mark Sonic
Solution(R), were licensed on an exclusive basis to Traffic Systems under the

     Sonem  Asset  Purchase  Agreement.  All  rights  to the  trade  mark  Sonic
Solution(R)  were  sold to  Traffic  Systems  under  the  Sonem  Asset  Purchase
Agreement. See "Recent Developments -- Sale of Sonem Business."

Patents

     The  Company  does not have  any  patents  with  respect  to its  Ultratech
technology.  The Company has an immaterial  residual interest in several patents
associated with the Sonem  technology,  substantially all of which it has agreed
to transfer to Traffic Systems under the Term Sheet. See "Recent Developments --
Sale of Sonem Business."

Service & Product Warranty

     The  Company  offered a standard  warranty on its Sonem  products  covering
parts and labor for a fixed period, either 1 year, 2 years or 5 years, depending
on the product and application. The Company's warranty obligations for its Sonem
products  were  assumed  by  Traffic  Systems  under  the Sonem  Asset  Purchase
Agreement. See "Recent Developments -- Sale of Sonem Business."

     The Company offers a standard  warranty of one year on parts and labor from
date of shipment on its Ultratech  amplifiers.  In some cases, a warranty period
of two years may be negotiated.  For instance,  the sale of Ultratech amplifiers
into Korea to date typically have a two year warranty.

     The Company will repair units under warranty at its cost and return freight
prepaid  back  to the  customer.  A  repaired  unit  will be  warranted  for the
remainder of the original  warranty period or for one year from the repair date,
whichever is longer.

     The Company's warranties specifically exclude all liabilities for "special,
incidental,  direct,  indirect, or consequential damages or expenses whatsoever"
arising  from  the  functioning  or use,  or  inability  to use,  the  warranted
products.  The warranties are void if the product has been improperly installed,
subjected to abuse or  negligence,  or tampered  with.  State and other laws may
limit the Company's  ability to limit its liability or exclude  certain types of
damages.



                                       24


Government Regulation

     UltraTech RF power  amplifiers  are sold as  components  which form part of
larger systems,  which are tested for FCC compliance at the system level, by the
manufacturer  or integrator of the system  equipment.  The Company does not test
its amplifier products for compliance at the component level.

Management & Employees

     The Company's  senior  management team has proven  experience in exploiting
technologies in emerging markets and the Company's  technical team is proficient
in wireless  technologies.  Employees and  management  have a commitment to help
create and, in turn,  share in the success  potential of the Company.  Currently
each holds stock and/or options with future vesting dates to encourage continued
commitment and focus for several years. As of September 4, 2001, the Company had
36 full-time employees and 11 contract or part-time employees. The employees are
not represented by a collective  bargaining  agreement and the Company considers
its relationship with its employees to be good.

Reports to Security Holders

     The  Company is a reporting  company  under the  Exchange  Act. It files an
annual report (10-KSB) and quarterly  statements  (10-QSB) with the SEC. It must
also file other  reports,  such as Form 8-K, as  applicable.  In  addition,  the
Company  files a proxy  statement for its annual  shareholders  meeting (and, if
applicable, any special meetings).

     The public may read and copy any  materials  filed by the Company  with the
SEC at the SEC's Public  Reference  Room at 450 Fifth Street,  N.W.,  Washington
D.C.  20549.  The public may obtain  information  on the operation of the Public
Reference  Room  by  calling  the  SEC  at  1-800-SEC-0330.  The  Company  is an
electronic  filer.  The SEC maintains an Internet  site that  contains  reports,
proxy and information  statements,  and other information regarding issuers that
file  electronically  with  the  SEC.  The  Internet  address  of  the  site  is
http://www.sec.gov.     The    Internet    address    of    the    Company    is
http://www.unitywireless.com.


                      MANAGEMENT'S DISCUSSION AND ANALYSIS

     The following discussion of the financial  condition,  changes in financial
condition,  and  results  of  operations  of  Unity  Wireless  Corporation  (the
"Company")  should  be  read in  conjunction  with  the  Company's  most  recent
financial  statements and notes appearing elsewhere in this Form SB-2 and in the
SB-2A filed May 3, 2001;  the 8-K's filed January 9, 2001,  January 16, 2001 and
February 16, 2001 (see Item 6. Exhibits and Reports on Form 8-K); the 10-KSB for
Dec.  31, 2000 filed on April 2, 2001,  and the  10-QSB's for March 31, 2001 and
June 30, 2001, filed on May 10 and August 14, 2001 respectively.

OVERVIEW

     The Company is in the business of designing,  developing and  manufacturing
high power linear RF amplifiers and specialized communications products that use
traditional   wireless   channels.   Prior  to  the   introduction   of  its  RF
communications  products,  the Company had designed,  manufactured,  and sold an
acoustic-based  traffic signal  preemption  system under the trade name "Sonem".
The Sonem product  accounted  for all revenues  earned in the fiscal years ended
December 31, 1998 and 1999,  and the quarter  ending March 31, 2000.  In view of
the Company's strategic  repositioning  toward RF wireless products during 2000,
the Company, through its subsidiary Unity Wireless Systems Corporation, sold its
Sonem  business  to Traffic  Systems,  L.L.C.  on October 6, 2000.  Accordingly,
revenue from acoustic products ended in the third quarter of 2000. This business
has been accounted for as a discontinued operation in the company's consolidated
financial statements.



                                       25


     The Company  agreed,  pursuant to a term sheet dated January 31, 2001, that
warranty  obligations of its subsidiary Unity Wireless Systems  Corporation ("UW
Systems")  for Sonem  products  already  installed  will be  assumed  by Traffic
Systems,  L.L.C.  ("Traffic  Systems"),  the  purchaser of the  Company's  Sonem
business,  in  consideration  of UW System's  transfer of its equity interest in
Traffic Systems and the Company's  residual  interest in the Sonem patents.  The
term sheet is  attached as an exhibit to the  Company's  Form 8-K filed with the
SEC on February  16,  2001.  On April 30,  2001 UW Systems  and Traffic  Systems
entered into a definitive agreement  consummating the term sheet. The definitive
agreement  is attached as an exhibit to the  Company's  SB-2A which was filed on
May 3, 2001.

     Also in late 1999,  the Company  increased its  marketing  efforts in Asia,
resulting  in a contract  in the first  quarter of 2000 with the  Transportation
Management Systems division of Orbital Sciences  ("Orbital").  Under the Orbital
contract,  UW Integration,  through its wholly owned  subsidiary,  UW Singapore,
provided systems integration support,  warranty and maintenance services for the
Automatic  Vehicle  Management  System  ("AVMS") to be  delivered by Orbital and
Sanyo Trading Company to Singapore Bus Services Ltd.  Revenue from this contract
started in the quarter  ended June 30, 2000,  and  continued for the rest of the
year. As the Company  continued to refocus upon RF communication  products,  the
Orbital  contract was assigned to Lyma Sales & Management  Corp. on December 30,
2000, and therefore the Company has no further interest in any revenue resulting
from the contract.

     In 1999 and 2000,  the  Company  designed a  specialized  RF  communication
product with the trade mark "UniLinx",  which it introduced  commercially in the
later part of 2000. This wireless IP (Internet Protocol) gateway was deployed in
the traffic  control  market and the remote POS market  during 2000.  Sales from
UniLinx  commenced in the quarter ended June 30, 2000 and continued for the rest
of the year and into the first  quarter of 2001. In order to focus solely on the
RF communication  products,  the Company sold the UniLinx business and assets on
June 12, 2001 to Horton  Automation Inc.  ("Horton") for Cdn $150,000 , which is
payable on a percentage of unit sales by Horton. Consequently,  revenue from the
Unilinx business ended in second quarter on 2001.

     On November 16, 2000 the Company  acquired  Ultratech Linear Solutions Inc.
("Ultratech"), a designer, developer and manufacturer of linear power amplifiers
for the wireless  network  infrastructure  industry.  Its  operations  have been
consolidated from the date of acquisition.  The revenues from sales of Ultratech
amplifiers  from its  inception  on April 22,  1999 to  December  31,  2000 were
approximately $3,200,000. The Company received revenue from the sale of RF power
amplifiers  starting in the quarter ended December 31, 2000.  Management expects
that the  Ultratech  acquisition  will  have a  significant  positive  impact on
Company revenues in the current year and beyond.

     The Company has incurred  net losses  since it became  active in July 1995.
Losses resulted from low sales of the Company's Sonem traffic signal  preemption
system,  combined  with  startup  manufacturing  activity  and  engineering  and
research  and  development  costs  relating  to  product   improvement  and  new
technologies.

     Losses  continued into 2000 as the Company's  revenue from Sonem sales, and
the  later  revenue  from  UniLinx  and the  Orbital  contract,  did not  exceed
expenditures   for  research  and  development,   marketing,   and  general  and
administrative  activities.  In the  first  half of 2000  the  Company  became a
registrant  with  the  SEC,  requiring  additional  expenditures  on  legal  and
accounting services.  Also, up to the time of the sale of the Sonem product, the
Company  made  further  development  expenditures  on this  product  to  improve
performance and to reduce unit costs. Marketing and additional development costs
were also incurred on the UniLinx product.

     With the completion of the Ultratech  purchase,  the  discontinuance of the
contract  services   (Singapore)   business   segment,   the  ending  of  active
participation in the Sonem product,  the sale of the Unilinx  business,  the has
Company restructured its operations and staff complement to adjust for the needs
of higher  manufacturing  volumes and  development  activities  for its RF power
amplifier  products.  The Company has also reviewed  other costs and  eliminated
expenditures not directly required to implement its RF wireless focus. Given the
effectiveness of Ultratech's  existing  distribution  channels and the potential
for increased  amplifier sales as the Company introduces these products in U.S.,
European,  and additional  Asian markets,  management  believes that losses from
operations will diminish and be eliminated as the Company  advances its business
plan into the current year and beyond.



                                       26


Results of Operations

(All amounts are in US dollars unless otherwise stated)

     As mentioned in Note 5 of the Notes to  Consolidated  Statements and in the
Overview  Section of  Management's  Discussion and Analysis or Plan of Operation
above,  the  Company  operations  in  2001  related  mainly  to  the  designing,
developing  and  marketing  of  high  power  linear  RF  amplifiers   after  the
discontinuance of the Sonem, Unilinx and UW Integration operations.

     Due to this restructuring of operations,  there are no comparative  numbers
and analysis  for the  periods,  3 months ended June 30, 2000 and 6 months ended
June 30, 2000.

3 Months Ended June 30, 2001

     Net Sales in the second  quarter of 2001 from sales of RF  amplifiers  were
$570,559.

     Cost of goods sold in the second quarter of 2001 amounted to $336,802.  The
gross margin of $233,757 or 41% of Net Sales reflects lower  commissions paid to
distributors  due to a lower  volume  of  sales  operation.  Stock  compensation
expense from the variable  plan stock  options was nil in the second  quarter of
2001.

     Research  and  development  expenses  in the  second  quarter  of 2001 were
$218,304.  This amount was primarily  due to the focus on R&D  activities in the
second  quarter  of 2001  comprising  the  hiring  of senior  level  engineering
positions  and the  development  of  additional  RF  amplifier  products.  Stock
compensation  expense  from the variable  plan stock  options was $58,621 in the
second quarter of 2001.

     Sales  and  marketing  expenses  in the  second  quarter  of 2001  amounted
$139,987.  The costs were primarily  attributable to the  restructuring of sales
and marketing staff to eliminate  UniLinx marketing staff and an increase in the
level of sales and marketing support for RF amplifier  products,  which included
hiring  senior  level  marketing  and  sales  positions,   revamping   corporate
promotional  material and  attendance  at various  industry  trade shows.  Stock
compensation  expense  from the variable  plan stock  options was $36,870 in the
second quarter of 2001 .

     Exchange gain in the second quarter of 2001 was $20,320 due to fluctuations
in the  currency  exchange  rate  between  the U.S.  and Canada.  The  Company's
revenues are received mostly in U.S. dollars, while the majority of expenses are
incurred in Canadian dollars.

     General  and  administrative  expenses  in the second  quarter of 2001 were
$661,840.  Expenses occurred due to non-recurring  legal and regulatory  related
costs  associated  with  restructuring  the operations of the Company in 2001 as
well as increased  investor  relations and corporate finance  activities.  Stock
compensation  expense from the variable  plan stock  options was $218,678 in the
second quarter of 2001.

     Interest income in the second quarter of 2001 generated $6,069. This amount
results primarily from interest earned from term deposits.

     Net gain from  discontinued  operations  amounted  to  $217,966.  A loss of
$165,125 is  attributable  to sale of the Unilinx  business on May 1, 2001 and a
gain of $383,091  resulted on the sale of the Sonem business from a reduction of
the warranty  accrual for the Sonem product due to the replacement of previously
installed Sonem systems and the sale of the remaining interest in the Sonem

6 Months Ended June 30, 2001

     Net Sales in the first 6 months of 2001  amounted  to  $1,963,506  from the
sales of RF amplifiers.

     Cost of goods sold in the first 6 months of 2001 was $1,382,802 . The gross
margin amounted to $580,704 or 30% of Net Sales.



                                       27


     Research  and  development  expenses  in the  first 6 months  of 2001  were
$312,883.  These  expenses  are  primarily  due to the  hiring of  senior  level
engineering  positions and the  development  of additional  amplifier  products.
Stock  compensation  expense from the variable plan stock options was $33,985 in
the first 6 months of 2001 .

     Sales and  marketing  expenses  in the first 6 months of 2001  amounted  to
$180,672.  The costs were primarily  attributable to the  restructuring of sales
and marketing staff to eliminate the UniLinx  marketing staff and ramp up in the
level of sales and marketing  support for  amplifier  products,  which  included
hiring  senior  level  marketing  and  sales  positions,   revamping   corporate
promotional  material and  attendance  at various  industry  trade shows.  Stock
compensation  expense  from the variable  plan stock  options was $25,897 in the
first 6 months of 2001.

     Exchange gain in the first 6 months of 2001 was $75,318 due to fluctuations
in the  currency  exchange  rate  between  the U.S.  and Canada.  The  Company's
revenues are received mostly in U.S. dollars, while the majority of expenses are
incurred in Canadian dollars.

     General  and  administrative  expenses  in the  first 6 months of 2001 were
$835,350.  Non-recurring  legal and regulatory related expenses  associated with
restructuring  the  operations  of the  Company  in 2001  as  well as  increased
investor  relations  and  corporate  finance  activities  were  incurred.  Stock
compensation  expense from the variable  plan stock  options was $165,183 in the
first 6 months of 2001 .

     Interest  income  in the  first 6 months of 2001  generated  $34,639.  This
amount results primarily from interest earned term deposits

     Net gain from  discontinued  operations  amounted  to  $267,504.  A loss of
$165,125 is  attributable  to sale of the Unilinx  business on May 1, 2001 and a
gain of $432,629  resulted on the sale of the Sonem business from a reduction of
the warranty  accrual for the Sonem product due to the replacement of previously
installed Sonem systems and the sale of the remaining interest in the Sonem

Years Ended December 31, 2000 and 1999

     Net Sales in fiscal 2000 totalled  $474,003 from the sales of RF amplifiers
between November 16 and December 31, 2000.

     Cost of goods sold in fiscal 2000 was $364,423 from sales of RF amplifiers.
The gross margin for RF amplifiers was positive,  which  reflected the Company's
acquisition of a going concern business.

     Sales and marketing expenses in fiscal 2000 of $10,745 were incurred in the
Ultratech  power  amplifier  business  between  acquisition  of the  business on
November 16, 2000 and the end of the fiscal year

     Exchange  loss (gain)  decreased by $93,357 to ($3,036)  from  ($96,393) in
1999 due to  fluctuations  in the  currency  exchange  rate between the U.S. and
Canada.  The Company's  revenues are received mostly in U.S. dollars,  while the
majority of expenses are incurred in Canadian dollars.

     General and  administrative  expenses in fiscal 2000  increased by 357%, or
$1,524,978 to $1,952,469 from $427,491 in 1999. The increase is due primarily to
$334,902 in  additional  salary and  consulting  costs,  $118,096 in  additional
accounting and legal  expenses due to the costs of becoming a reporting  issuer,
increases  of  $107,160  in investor  relations  expenses,  and $45,861 in staff
placement fees.  $354,426 of the increase was attributable to stock compensation
expense resulting from the granting of stock options and warrants.

     Loss from  discontinued  operations in fiscal 2000  increased to $3,479,424
from  $1,660,004 in 1999. This loss was incurred in connection with the disposal
of the Sonem, Unilinx and of UW Integration operations.


Liquidity and Capital Resources

     Since its  inception,  the Company has been  dependent on equity capital as
its  primary  source  of  funding.  Prior to  December  31,  2000,  sales of the
Company's Sonem traffic signal



                                       28


priority product,  and sales of its UniLinx product,  has provided  insufficient
cash flow to sustain operations.  The Company had an accumulated deficit at June
30,  2001 of  $11,237,439.  During the first 6 months  ended  June 30,  2001 the
Company  focused  entirely  on  the  wireless  product  segment,  primarily  its
amplifier  products,  and incurred a net loss,  after  stock-based  compensation
expense,  of $505,164  (2000 - loss of  $1,727,466).  The Company also used cash
from  operations of $644,830 (2000 - $954,493 in cash used).  Operations to date
have been primarily financed by equity.

     The  financial  statements  have been  prepared on the going  concern basis
under which an entity is considered to be able to realize its assets and satisfy
its liabilities in the ordinary course of business. Operations to date have been
primarily  financed by long-term  debt and equity  transactions.  The  Company's
future  operations  are  dependent  upon  the   identification   and  successful
completion of additional long-term or permanent equity financing,  the continued
support of creditors and  shareholders,  and,  ultimately,  the  achievement  of
profitable  operations.  There can be no  assurances  that the  Company  will be
successful.  If it is not, the Company will be required to reduce  operations or
liquidate   assets.   The  Company  will  continue  to  evaluate  its  projected
expenditures  relative to its  available  cash and to seek  additional  means of
financing in order to satisfy its working  capital and other cash  requirements.
The auditors' report on the December 31, 2000 consolidated  financial statements
includes an  explanatory  paragraph that states that as the Company has suffered
recurring losses from operations,  substantial doubt exists about its ability to
continue  as a going  concern.  The  consolidated  financial  statements  do not
include  any  adjustments   relating  to  the   recoverability   of  assets  and
classification  of assets and  liabilities  that might be  necessary  should the
Company be unable to continue as a going concern.

     During the first 6 months of 2001, the Company's cash position decreased by
$553,394 to  $1,448,690  on June 30, 2001 from  $2,002,084 on December 31, 2000.
The  $644,838  used by  operations  was  comprised of a net loss  $505,164,  and
non-cash  charges  including  $48,783 in  depreciation  and  $92,700 in goodwill
amortization.  Stock-based  compensation expense was $225,415 during the first 6
months.  Other  significant  non-cash working capital changes included  accounts
receivable,  which decreased by $68,716  primarily due to  collections.  Ongoing
operations  during  the first 6 months  resulted  in an  inventory  decrease  of
$182,741 and a decrease in accounts payable and accrued liabilities of $287,541.
The product warranty accrual decreased by $471,700 as the Company contributed to
the replacement of previously installed Sonem systems.

     The  Company's  investing  activities  during  the  first 6 months  of 2001
amounted to $46,528,  which was mainly  attributable  to increased  purchases of
computing hardware and software.

     Financing  activities during the first 6 months included a repayment in the
Cobratech  loan  receivable  of $118,824  and the bank  overdraft  decreased  by
$34,872  due to a lower  level of cheques  outstanding  at June 30, 2001 than at
December  31,  2000.  The  operating  loan was  replaced in April,  2001 by a US
$66,072 (Cdn  $125,000)  operating  line of credit from HSBC Bank Canada,  at an
interest  rate of HSBC prime,  and secured by an $80,000  guaranteed  investment
certificate.

     Other  than  operating  loan  commitments,  the  Company  has  no  material
commitments, including capital commitments, outstanding at June 30, 2001.


Inflation

     The Company does not believe that inflation has had a significant impact on
its  consolidated  results of operations or financial  condition.  However,  the
Company has recently  experienced some  significant  price increases for certain
components that are used in the wireless industry.


                             DESCRIPTION OF PROPERTY

     The Company  currently  leases 11,425  square feet of office,  research and
development,  and  production  space on a triple net basis at 7438  Fraser  Park
Drive,  Burnaby,  British  Columbia,  Canada.  The  lease has a  five-year  term
expiring  on  August  31,  2005,  with an  option  to  renew  for an  additional
three-year term. Minimum basic rental rates are as follows:



                                       29


     (a)  years 1 and 2 - Cdn$10.00 per square foot per annum;

     (b)  year 3 - Cdn$10.25 per square foot per annum; and

     (c)  years 4 and 5 - Cdn$10.50 per square foot per annum.

     The  Company's  head office is located at 31635 36th Avenue  S.W.,  Federal
Way, WA.

     The Company does not  currently  maintain any  investments  in real estate,
real estate mortgages or persons  primarily  engaged in real estate  activities,
nor does it expect to do so in the foreseeable future.


               CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Corporation  has a loan  receivable  from  Cobratech  Industries  Inc.
("Cobratech"),  a company with two common directors,  in the principal amount of
$200,000.  Interest is payable to the  Corporation  at 1% per month,  calculated
monthly  not in  advance.  The loan is secured by a general  security  agreement
which  includes all of the personal and real property of Cobratech.  The loan is
repayable upon demand.  Cobratech repaid the Corporation $100,000 on January 10,
2001, and has agreed to repay the balance later in 2001.

     There are no other material related  transactions or related contracts with
a value of over $60,000.


            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's common stock is traded on the  over-the-counter  or "Bulletin
Board" market under the symbol "UTYW."  Between  February 6, 1999 and August 17,
2000, the common stock traded under the symbol "ZSON." Before  February 6, 1999,
the common stock traded under the symbol  "MMIM." The  following  comprises  the
high and low bid prices  for the  Company's  common  stock as of the end of each
period  indicated  since  March 31,  1999 (the stock was not  "publicly  traded"
before December 31, 1998), unless otherwise indicated:


                                               High                                 Low
Period                                         Bid                                  Bid
------                                         ---                                  ---
                                                                            
January 1 - March 31 1999..............        3.3125                              0.0000
April 1 - June 30 1999.................        3.0000                              0.8750
July 1 - September 30 1999.............        1.0625                              0.4375
October 1 - December 31 1999...........        1.1875                              0.3750
January 1 - February 9 2000............        1.27                                0.89
February 10 - April 27 2000*...........        6.25 (No Bid/Ask - High Trade)      0.9000 (No Bid/Ask - Low Trade)
April 28 - June 30 2000................        4.50                                1.0625
July 1 - September 30 2000.............        1.90                                1.16
October 1 - December 31 2000...........        1.53                                0.37
January 1 - March 31 2001..............        0.68                                0.26
April 1 - June 30, 2001                        0.48                                0.19


Source: Nasdaq Trading & Marketing Services
--------------------------------------------------------------------------------

*    The common shares of the corporation were traded on the National  Quotation
     Bureau  "Pink  Sheets"  from  February  10,  2000 until  April 27, 2000 and
     therefore high and low bid information is not available during this period.



                                       30


     Over-the-counter  market  quotations  reflect  inter-dealer  prices without
retail  mark-up,  mark  down  or  commission,   and  may  not  represent  actual
transactions.

     As of September 4, 2001 there were  approximately  175 holders of record of
the Company's  common stock.  The Company has never  declared a cash dividend on
its common stock.


                             EXECUTIVE COMPENSATION

     The  following  table sets  forth all  compensation  earned by all  persons
serving as the Chief  Executive  Officer of the  Company  during the fiscal year
ended  December 31, 2000. No officer of the Company or its  subsidiaries  earned
greater than  $100,000 in total salary and bonus during 2000,  the most recently
completed fiscal year of the Company.


Summary Compensation Table

                                                                  Restricted       Securities
Name and Position                       Year         Salary       Stock            Underlying
                                                                  Awards($)        Options(#)

                                        Annual Compensation ($)      Long Term Compensation
                                        -----------------------      ----------------------
                                                                        
John Robertson                          2000(1)      10,300            0            275,000(2)
Mark Godsy                              2000(3)      0            72,000            200,000(4)
William Brogdon                         1999         38,756            0                  0
William Brogdon                         1998         64,167       61,480(5)         200,000
-----------


NOTES:
(1)  Mr. Robertson,  the current Chief Executive Officer of the Company,  served
     as Chief  Executive  Officer  during the period  November 17 - December 31,
     2000.
(2)  Mr.  Robertson  received  200,000  options  in  December  2000  as  partial
     compensation for serving as Chief Executive Officer of the Company. He also
     received 75,000 options in December 2000 as  compensation  for serving as a
     director of the Company.
(3)  Mr.  Godsy  served as Chief  Executive  Officer of the  Company  during the
     period  February 22 - November  17, 2000.  At the end of this  period,  Mr.
     Godsy  was  paid  accrued  wages  in  restricted   stock  (171,428  shares)
     equivalent to $72,000 on the date of issue.
(4)  Mr. Godsy received  200,000  options in December 2000 as  compensation  for
     serving as the Chairman of the Board of the Company.
(5)  Mr. Brogdon served as Chief  Executive  Officer of UW Systems from February
     1, 1998 and the Company from December, 1998. Both appointments concluded on
     February 22, 2000.


     At the end of 2000 the named executive  officers held  restricted  stock of
the Company as follows.  The value of these  holdings is calculated at 50 cents,
which was the price of the Company's stock on December 31, 2000.

                        Restricted shares held   Value of restricted shares held
                        ----------------------   -------------------------------
    John Robertson             203,315                      $101,658
    Mark Godsy               2,178,261                    $1,089,131
    William Brogdon            550,000                      $275,000


As of December 31, 2000, Mark Godsy also owned 215,151 unrestricted shares for a
total of 2,393,412.



                                       31



OPTION GRANTS IN 2000

Option/SAR Grants Table

Option/SAR Grants in Last Fiscal Year
Individual Grants
(a)               (b)                       (c)                     (d)                (e)              (f)
                                            % of Total
                  Number of Securities      Options/SARs Granted                       Market price on
                  Underlying Options/SARs   to Employees in Fiscal  Exercise or Base   date of grant
Name              Granted (#)               Year*                   Price ($/Sh)       ($/sh)           Expiration Date
----              -----------------------   ----------------------  ----------------   ---------------- ---------------
CEO
                                                                                          
John Robertson**        200,000                    6.1                   0.38               0.38         December 31, 2005
John Robertson           75,000                    2.3                   0.38               0.50         December 31, 2005
Mark Godsy***           200,000                    6.1                   0.38               0.38         December 31, 2005


*    The  denominator  (of 3,300,000)  was arrived at by  calculating  the total
     number of new options  awarded  during the year,  and adjusting this number
     downward  for those awards  during the year that were later  reduced due to
     repricing.

**   John Robertson received 200,000 options at $1.00 (one-half fully vested and
     one-half  time-based) on December 22, 2000. Mr.  Robertson  renounced these
     options in return for 200,000  options  (one-half fully vested and one-half
     time-based)  with an exercise  price of $0.38  granted on December 27, 2000
     (first  vesting date December 31, 2000).  He received an additional  75,000
     with an exercise price of $0.38 options on December 31, 2000.

***  Mark Godsy received  500,000  options at $2.06  (one-half  fully vested and
     one-half  time-based)  on  February  22,  2000.  He  also  received  50,000
     time-based  options in December 1999. Mr. Godsy renounced all these options
     in return for 200,000  time-based  options with an exercise  price of $0.38
     granted on December 27, 2000 (first vesting date December 31, 2000).


FISCAL YEAR-END OPTION VALUE

     The following  table presents the value of  unexercised  options held as of
December  31,  2000 by each of the named  executive  officers  appearing  in the
Summary  Compensation  Table  in this  section.  None of these  named  executive
officers  exercised any of their options in 2000. Mr. Brogdon held no options as
of December 31, 2000.


Aggregate Option Exercises in Last Fiscal Year and FY-End Option Values
-----------------------------------------------------------------------

                                                 Number of Securities       Value of Unexercised
                                                Underlying Unexercised       In-the-Money Options
                                                  Options at FY-End (#)         at FY-End ($)
                 Shares Acquired     Value
Name               on Exercise      Realized    Exercisable/Unexercisable   Exercisable/Unexercisable
----               -----------      --------    -------------------------   -------------------------
                                                                         
John Robertson          0             $0          114,583 / 160,417           $ 13,750  / $ 19,250
Mark Godsy              0             $0           16,667 / 183,333           $  2,000 /  $ 22,000





                                       32


Compensation of Directors

     The directors of the Company do not receive salaries or fees for serving as
directors of the Company,  nor do they receive any  compensation  for  attending
meetings  of the Board of  Directors  or serving on  committees  of the Board of
Directors.  The Company may,  however,  determine to compensate its directors in
the future.  Directors  are entitled to  reimbursement  of expenses  incurred in
attending  meetings.  In addition,  the directors of the Company are entitled to
participate in the Company's stock option plan. The Company has adopted a policy
whereby members of the Board of Directors receive initial grants of options upon
appointment or upon adoption of the policy, as follows:

         Chairman                           200,000 options
         Director (other than Chairman)      75,000 options
         Compensation Committee               5,000 options
         Audit Committee                      5,000 options
         Options Committee                    2,500 options


Employment Agreements

     There  are no  employment  agreements  between  the  Company  or any of its
subsidiaries  with William Brogdon or Mark Godsy.  The Company had an employment
agreement with John Robertson,  dated November 16, 2000, which was replaced with
a consulting  agreement of indefinite  term on February 1, 2001.  The consulting
agreement may be terminated on three months' notice.  Pursuant to the employment
agreement,  Mr.  Robertson  was  entitled to a salary of Cdn.  $9,000 per month,
reviewable annually, with such increases as the Company deems appropriate. Under
the consulting  agreement,  Mr. Robertson is entitled to fees of Cdn. $10,833.33
per month.  Mr.  Robertson is also entitled to options to purchase up to 375,000
shares of the common stock of the Company,  to benefits as are  ordinarily  made
available to employees of the Company,  and to the  reimbursement  of reasonable
job-related expenses.

Repricing of Options

     On December 22, 2000 the Board of Directors approved the Stock Option Grant
Policy (see Exhibit 10.7 to the  Company's  report on Form 10-KSB filed April 2,
2001).  This policy was implemented on December 27, 2000. See notes to the table
"Option/SAR Grants in Last Fiscal Year" for the impact of this policy on options
held by John  Robertson and Mark Godsy.  H. William  Brogdon was not affected by
this policy as he no longer holds options in the Company's common stock.






                                       33


Financial Statements - Quarter ending June 30, 2001

                           UNITY WIRELESS CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                           (expressed in U.S. dollars)


                                                                                      June 30        December31
                                                                                        2001             2000
----------------------------------------------------------------------------------------------------------------
                                                                                    (unaudited)       (Note 1)
                                                                                     $                $
                                                                                                
ASSETS
Current assets
Cash and cash equivalents                                                             1,448,690       2,002,084
Restricted cash (note 3)                                                                 80,000         100,000
Accounts receivable (less allowance for doubtful accounts
   of $22,799 in 2001 and $4,245 in 2000)                                               163,875         232,591
Loan receivable                                                                          85,610         204,434
Government grant receivable                                                                 172          13,905
Inventory (note 2)                                                                      280,671         463,412
Prepaid expenses                                                                         33,830          14,309
Other receivable                                                                         30,750          61,500
----------------------------------------------------------------------------------------------------------------
                                                                                      2,123,598       3,092,235

Equipment, net                                                                          248,651         221,651
Goodwill                                                                                834,295         926,995
----------------------------------------------------------------------------------------------------------------
                                                                                      3,206,544       4,240,881
----------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness (note 3)                                                              241,939         276,811
Accounts payable and accrued liabilities (note 4)                                       441,266         728,807
Loans payable                                                                            74,451          42,312
Product warranty                                                                        151,797         623,497
----------------------------------------------------------------------------------------------------------------
                                                                                        909,453       1,671,427

Loans payable                                                                                 0         115,781
----------------------------------------------------------------------------------------------------------------
Total liabilities                                                                       909,453       1,787,208
----------------------------------------------------------------------------------------------------------------
Stockholders' Equity
 Common stock, $0.001 par value 100,000,000 authorized,
    25,768,153 (2000 - 25,743,153) issued and outstanding                                25,768          25,743
 Additional paid-in capital                                                          13,393,508      13,251,498
 Deferred stock compensation                                                                  0         (89,719)
 Accumulated deficit                                                                (11,237,439)    (10,732,275)
 Other accumulated comprehensive gain (loss)                                            115,254          (1,574)
----------------------------------------------------------------------------------------------------------------
                                                                                      2,297,091       2,453,673
----------------------------------------------------------------------------------------------------------------
                                                                                      3,206,544       4,240,881
----------------------------------------------------------------------------------------------------------------


Commitments and contingent liabilities (note 10)

See accompanying notes to consolidated financial statements


                                       34


                                       UNITY WIRELESS CORPORATION

                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                    AND COMPREHENSIVE INCOME (LOSS)
                                      (expressed in U.S. dollars)

                                              (Unaudited)


                                                    Three months ended June 30         Six months ended June 30
                                                      2001              2000           2001                2000
                                                    --------          --------       --------             ------
                                                                                              
Net sales                                           570,559                0          1,963,506               0
Cost of goods sold (6 months data includes
  stock-based compensation (recovery) expense
  ($350) in 2001 and $ nil in 2000)                 336,802                0          1,382,802               0
---------------------------------------------------------------------------------------------------------------
                                                    233,757                0            580,704               0
---------------------------------------------------------------------------------------------------------------
Expenses:
Research and development (6 months data
  includes stock-based  compensation  expense
  $33,985  in 2001 and $10,600 in 2000)             218,304                0            312,883               0
Sales and marketing (6 months data includes
  stock-based compensation  expense $25,897
  in 2001 and $84,800 in 2000)                      139,987                0            180,672               0
Depreciation and amortization                        73,250            3,022            141,483           5,802

Exchange (gain) loss                                (20,320)               0            (75,318)              0

Interest expense                                      1,151            5,375              2,219          12,827
General and administrative (6 months data
  includes stock-based  compensation  expense
  $165,183  in 2001 and $nil in 2000)               661,840          372,606            835,350         604,350
---------------------------------------------------------------------------------------------------------------
                                                  1,074,212          381,003          1,397,289         622,979
---------------------------------------------------------------------------------------------------------------

Operating loss for the period                      (840,455)        (381,003)          (816,585)       (622,979)

Interest income                                       6,069           53,028             34,639          57,261
Other income                                            616                0              9,278              56
Provision for income taxes                                0                0                  0               0
---------------------------------------------------------------------------------------------------------------
Loss from continuing operations                    (833,770)        (327,975)          (772,668)       (565,662)
---------------------------------------------------------------------------------------------------------------
Gain (loss) from discontinued operations
  (note 5)                                          217,966         (728,809)           267,504      (1,161,805)
---------------------------------------------------------------------------------------------------------------
Loss for period                                    (615,804)      (1,056,784)          (505,164)     (1,727,467)

Comprehensive income (loss):
Loss for the period                                (615,804)      (1,056,784)          (505,164)     (1,727,467)

Currency translation adjustment                       3,948           38,968            116,828          49,815
---------------------------------------------------------------------------------------------------------------
Comprehensive loss                                 (611,856)      (1,017,816)          (388,336)     (1,677,652)
---------------------------------------------------------------------------------------------------------------
Basic and diluted loss per common share
  (note 6):
    Continuing operations                            (0.032)          (0.015)            (0.030)         (0.028)
    Discontinued operations                           0.008           (0.032)             0.010          (0.056)
---------------------------------------------------------------------------------------------------------------
Basic and diluted loss per common share              (0.024)          (0.047)            (0.020)         (0.084)
---------------------------------------------------------------------------------------------------------------


See accompanying notes to consolidated financial statements


                                       35



                           UNITY WIRELESS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (expressed in U.S. dollars)
                                   (Unaudited)




                                                                           Six months ended June 30
                                                                            2001              2000
                                                                          -------           -------
                                                                                    
Operating activities:
    Loss for period                                                       (505,164)       (1,727,466)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
         Amortization of patents                                                 -            26,183
         Depreciation of equipment                                          48,783             5,802
         Amortization of goodwill                                           92,700                 -
         Shares issued for service                                           7,000                 -
         Stock based compensation                                          225,415            95,400
    Changes in non-cash working capital relating to operations:
         Accounts receivable                                                68,716           (54,142)
         Government grant receivable                                        13,733            (4,076)
         Investment tax credit receivable                                        -           123,245
         Inventory                                                         182,741           212,561
         Prepaid expenses                                                  (19,521)          (28,280)
         Accounts payable and accrued liabilities                         (287,541)          359,089
         Income taxes payable                                                    -             5,999
         Product warranty                                                 (471,700)           31,192
------------------------------------------------------------------------------------------------------
    Net cash used in operating activities                                 (644,838)         (954,493)

Investing activities:
    Acquisition of equipment                                               (77,278)          (42,407)
    Increase in patents                                                          -             6,701
    Other receivables                                                       30,750                 -
    Related party advances                                                       -               (58)
------------------------------------------------------------------------------------------------------
    Net cash used in investing activities                                  (46,528)          (35,764)

Financing activities:
    Repayment of loan receivable                                           118,824                 -
    Restricted cash                                                         20,000                 -
    Bank overdraft                                                         (34,872)          (18,220)
    Repayment of loan payable                                              (83,642)         (597,809)
    Proceeds from loan payable                                                   -           497,898
    Cash proceeds from issued and to be issued common shares                     -         6,307,394
    Share issue costs                                                            -          (415,431)
------------------------------------------------------------------------------------------------------
    Net cash provided by financing activities                               20,310         5,773,832

Effect of foreign exchange rate changes on cash and cash equivalents       117,662            49,815

Increase (decrease) in cash                                               (553,394)        4,833,390

Cash, beginning of period                                                2,002,084            32,970

Cash, end of period                                                      1,448,690         4,866,360


See accompanying notes to consolidated financial statements



                                       36


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The accompanying interim unaudited  consolidated  financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for interim financial  information and with the instructions to Form 10-QSB
     and Regulation SB. Accordingly,  they do not include all of the information
     and footnotes  required by generally  accepted  accounting  principles  for
     complete set of annual financial statements.  In the opinion of management,
     all  adjustments  (consisting of normally  recurring  accruals)  considered
     necessary for a fair presentation have been included. Operating results for
     the six-month period ending June 30, 2001 are not necessarily indicative of
     the results that may be expected for the year ended December 31, 2001.

     For further information, refer to the consolidated financial statements and
     footnotes thereto included in Unity Wireless Corporation's annual report on
     Form 10-KSB for the year ended  December 31, 2000 and the Company's  report
     on Form 10-QSB for the quarter ended March 31, 2001.

     The  Company's  ability  to  realize  the  carrying  value of its assets is
     dependent on achieving profitable operations, and continuing development of
     new  technologies,  the outcome of which  cannot be predicted at this time.
     Accordingly,  the Company will require for the  foreseeable  future ongoing
     capital  infusions in order to continue its  operations,  fund its research
     and development activities, and ensure orderly realization of its assets at
     their carrying values.

2.   Inventory:

     The components of inventory consist of the following:

                                                June 30           December 31
                                                  2001                2000
                                                    $                   $
        ------------------------------------------------------------------------
        Raw materials                           267,704              248,863
        Work in progress                              -              195,504
        Finished goods                           12,967               19,045
        ------------------------------------------------------------------------
                                                280,671              463,412
        ------------------------------------------------------------------------

3.   Bank indebtedness:

     The Company has a $66,072 ($Cdn  125,000)  demand  revolving loan with HSBC
     Bank Canada Inc.  with an  interest  rate of Canadian  prime plus 0.25% per
     annum.  The loan is secured by a $80,000  term  deposit  with the HSBC Bank
     Canada Inc.

     Canadian bank prime rate at June 30, 2001 was 6.25%.

     On May 1, 2001, the Company replaced an existing demand revolving loan with
     Royal Bank of Canada  with a demand  revolving  loan from HSBC Bank  Canada
     Inc.


                                       37



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


4.   Accounts payable and accrued liabilities:

                                               June 30           December 31
                                                 2001                2000
                                                   $                   $
        ------------------------------------------------------------------------
        Trade accounts payable                 258,009            468,866
        Accrued liabilities                    183,257            259,941
        ------------------------------------------------------------------------
                                               441,266            728,807
        ------------------------------------------------------------------------


5.   Loss from discontinued operations:

     During  2001,  the Company  focused  mainly on  designing,  developing  and
     marketing high power linear RF amplifiers after it completed the sale of UW
     Integration Inc. (intelligent transportation systems) on December 30, 2000.

     On October 6, 2000,  the Company also  disposed of its  acoustic  emergency
     traffic preemption business to Traffic Systems LLC ("Traffic Systems"),  an
     Arizona corporation.  The Company sold or licensed substantially all of its
     assets  and  undertaking   involved  in  its  acoustic   emergency  traffic
     preemption business. As consideration,  the Company received a 37% interest
     in the  purchaser,  Traffic  Systems,  and was  entitled  to  receive up to
     $2,000,000,  subject to certain  upward  adjustments,  payable in quarterly
     installments  equal to 10% of the gross profits of Traffic  Systems for the
     relevant quarter.

     The  Company  did  not  record  the  $2,000,000  consideration  as  it  was
     contingent on Traffic Systems  generating  gross profits.  The Company also
     wrote off its  investments  in Traffic  Systems  as of  December  31,  2000
     because of uncertainty with regard to future operations,  profitability and
     cash flow of Traffic  Systems.  Since the  Company  had a 37%  interest  in
     Traffic Systems over which it could exert significant  influence,  the sale
     of  acoustic  business  was  not  considered  at  October  6,  2000  to  be
     discontinued operations. On April 30, 2001, the Company disposed of its 37%
     interest in Traffic System and all remaining  intellectual property related
     to the acoustic  business and in return the purchaser  assumed the warranty
     liability  related to Acoustic  business.  The warranty as at June 30, 2001
     was  estimated  to be $383,091.  As a result,  the Company has no direct or
     indirect continuing interest in the acoustic business. For the three months
     ended June 30, 2001, the income from operations prior to the disposition of
     the Sonem  business was nil and the gain on disposition of the business was
     $383,091.  For  the six  months  ended  June  30,  2001,  the  income  from
     operations prior to the disposition of the Sonem business was $49,538.

     On June 12,  2001,  the Company  also  disposed  of its last  non-amplifier
     operation,  the Unilinx business, to Horton Automation Inc. ( "Horton"),  a
     British Columbia,  Canada  corporation.  The Company sold all of its assets
     and  undertakings  involved in the Unilinx  business.  The assets  involved
     include inventory, equipment and intellectual property of the business. The
     purchase  price is being  paid over time on a  percentage  of future  sales
     basis within a period of two years until June 12, 2003. The Company has not
     recorded the  consideration as it is contingent on Horton  generating sales
     for the  Unilinx  product.  Consequently  the  Company  recorded  a loss of
     $165,125 on the disposition of the Unilinx  business.  For the three months
     and six months ended June 30, 2001, the income from operations prior to the
     disposition of the Unilinx  business was nil and the loss on disposition of
     the business was $165,125.



                                       38



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


6.   Earnings per share data:

     The following  table sets forth the computation of basic and diluted income
     (loss) per common share:


                                               Three months ended June 30            Six months ended June 30
                                                2001               2000               2001              2000
                                                                                         
     Numerator
     Loss from continuing operations ($)      (833,770)          (327,975)          (772,668)         (565,662)
     Gain (Loss) from discontinued
       operations ($)                          217,966           (728,809)           267,504        (1,161,805)
     ----------------------------------------------------------------------------------------------------------------
     Loss for period ($)                      (615,804)        (1,056,784)          (505,164)       (1,727,467)

     Denominator
     Weighted average number of common
       shares outstanding                   25,745,626         24,061,692         25,744,396        22,339,137

     Adjusted                                        0         (1,562,418)                 0        (1,651,429)
     ----------------------------------------------------------------------------------------------------------------
                                            25,745,626         22,499,274         25,744,396        20,687,708
     Basic and diluted gain (loss) per
       common share  ($):
         Continuing operations                  (0.032)            (0.015)            (0.030)           (0.028)
         Discontinued operations                 0.008             (0.032)             0.010            (0.056)
     ----------------------------------------------------------------------------------------------------------------
     Basic and diluted loss per common          (0.024)            (0.047)            (0.020)           (0.084)
       share ($)


     For the 6-month  period ended June 30, 2001,  all of the  Company's  common
     shares  issuable  upon the  exercise  of stock  options and  warrants  were
     excluded from the  determination  of diluted loss per share as their effect
     would be anti-dilutive.


7.   Stock Option Plan:

     During the year ended  December  31, 1998 the Company  established  a stock
     option plan  pursuant to which  3,000,000  common  shares were reserved for
     issuance. This plan was replaced on December 6, 1999, by a new stock option
     plan pursuant to which 5,000,000  common shares were reserved for issuance.
     On July 5, 2000 the shareholders approved a change in the maximum number of
     options  issuable  under  this plan to 20% of the  number of common  shares
     outstanding  including shares of common stock  previously  issued under the
     plan. As of June 30, 2001 this maximum number was 6,442,038.



                                       39


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


7.   Stock Option Plan (continued):

     Stock  option  transactions  for the  respective  periods and the number of
     stock options outstanding are summarized as follows:


                                                                           Outstanding options
     ---------------------------------------------------------------------------------------------------
                                               Shares available    No. of common      Weighted average
                                                 under option      shares issuable     exercise price
     ---------------------------------------------------------------------------------------------------
                                                                                    
     Balance, December 31, 2000                    1,981,123         4,454,666               0.77
     Options granted                              (1,493,667)        1,493,667               0.45
     ---------------------------------------------------------------------------------------------------
     Options expired                               1,730,083        (1,730,083)              1.28
     Change in number of authorized options            6,249
     Balance, June 30, 2001                        2,223,788         4,218,250               0.45
     ---------------------------------------------------------------------------------------------------


8.   Segmented information:

     a.   Segment information:

          During the 6 months ended June 30, 2001 the Company was operating only
          in the wireless product segment.

     b.   Geographic information ($000):

          Substantially  all assets and operations  are in Canada.  A summary of
          sales by region is as follows:

                                                Six months ended June 30,
         ---------------------------------------------------------------------
                                                 2001                  2000
         ---------------------------------------------------------------------
         Korea                            $     1,821              $       -
         Canada                                    17                      -
         United States                            126                      -
         ---------------------------------------------------------------------
         Total sales                      $     1,964              $       -
         ---------------------------------------------------------------------


     c.   Major customers ($000):

          The approximate sales to major customers is as follows:

                                                Six months ended June 30,
         ---------------------------------------------------------------------
                                                 2001                  2000
         ---------------------------------------------------------------------
         Customer A                       $       852              $       -
         Customer B                               810                      -
         ---------------------------------------------------------------------



                                       40


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



9.   Warrants:

     Under the consulting  agreement  between the Company and Mueller & Company,
     Inc. and Ideas Inc. ("Mueller and Ideas") dated as of July 1, 2000, 500,000
     shares of common stock were  issuable to Mueller and Ideas upon exercise of
     warrants  at $2.06 per share.  On January 1, 2001,  the Company and Mueller
     and Ideas agreed to modify this  agreement such that the number of warrants
     was reduced to 200,000  and the  exercise  price was  reduced to $0.38.  On
     April 1, 2001 Mueller and Ideas agreed to provide additional services under
     the  consulting  agreement.  The Company  agreed to increase  the number of
     warrants by 300,000,  with the additional warrants  exercisable into shares
     of common stock at a price of $0.29.  These warrants were valued using fair
     market value under FAS 123.


10.  Commitments and contingent liabilities:

     a.   Lease commitments

          The Company has the following  future  minimum lease  commitments  for
          premises and equipment:

                                                        $000
             2001                                        44
             2002                                        86
             2003                                        85
             2004                                        82
             2005                                        53
                                                         --
                                                        350

     b.   Legal proceedings

          The Company is currently a party to an action in the Supreme  Court of
          British  Columbia,  Vancouver  Registry,  brought  by an  optionholder
          seeking a declaration  that certain  options to purchase shares in the
          common  stock  of the  Company  held by it  have a term  of  unlimited
          duration.

          The Company provides for costs related to contingencies when a loss is
          probable and the amount is reasonably determinable.  It is the opinion
          of  management,   based  on  advice  of  counsel,  that  the  ultimate
          resolution of this contingency,  to the extent not previously provided
          for,  will  not  have a  material  adverse  effect  on  the  financial
          condition of the Company.




                                       41


Financial Statements - Year ending December 31, 2000



       Independent Auditors Report ......................................F-1

       Balance Sheet ....................................................F-3

       Statement of Operations ..........................................F-4

       Statement of Shareholders' Deficit ...............................F-5

       Statement of Cash Flows ..........................................F-6

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









                                       42


INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
Unity Wireless Corporation


We have audited the  accompanying  consolidated  balance sheet of Unity Wireless
Corporation (formerly Sonic Systems Corporation) as of December 31, 2000 and the
related   consolidated   statements  of  operations  and   comprehensive   loss,
stockholders'  equity and cash flows for the year then ended. These consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.  The financial  statements as of and for the year
ended  December 31, 1999 were  audited by other  auditors  whose report  thereon
dated March 3, 2000 expressed an unqualified opinion on those statements, before
the retroactive  restatement for discontinued  operations as described in note 5
to the financial statements.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our  opinion,  these  consolidated  financial  statements  referred  to above
present  fairly,  in all  material  respects,  the  financial  position of Unity
Wireless Corporation and subsidiaries as of December 31, 2000 and the results of
its  operations  and its cash flows for the year then ended in  conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  on a  going  concern.  As  discussed  in  note 2 to the
financial statements,  the Company has suffered recurring losses from operations
that raise  substantial  doubt about its ability to continue as a going concern.
Management's  plans in regard to these matters are also described in note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

We also audited adjustments for the discontinued operations as described in note
5 that were applied to restate the 1999  financial  statements.  In our opinion,
such adjustments are appropriate and have been properly applied.


/s/ KPMG LLP

Chartered Accountants
Vancouver, Canada
March 2, 2001, except as to note 4 which is as of April 30,2001 and note 5 which
is as of June 12, 2001



                                       F-1




INDEPENDENT AUDITORS' REPORT


To the Board of Directors
Sonic Systems Corporation


We have audited the  accompanying  consolidated  balance  sheet of Sonic Systems
Corporation   and   subsidiaries  as  of  December  31,  1999  and  the  related
consolidated  statements of operations  and  comprehensive  loss,  stockholders'
equity  and  cash  flows  for  the  year  then  ended,  before  the  retroactive
restatement  for  discontinued   operations  as  described  in  note  5  to  the
consolidated   financial   statements.   These  financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the United States.  Those standards require that we plan and perform an audit
to obtain  reasonable  assurance  whether the financial  statements  are free of
material  misstatement.  An audit  also  includes  examining,  on a test  basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In  our  opinion,   the  1999  financial   statements  (before  the  retroactive
restatement  discussed in the introductory  paragraph) referred to above present
fairly, in all material respects,  the consolidated  financial position of Sonic
Systems Corporation as of December 31, 1999, and the consolidated results of its
operations  and its cash  flows  for the year  then  ended  in  conformity  with
accounting principles generally accepted in the United States.


/s/ Ernst & Young LLP

Chartered Accountants
Vancouver, Canada
March 3, 2000



                                       F-2



UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Consolidated Balance Sheets
(Expressed in U.S. dollars)

December 31, 2000 and 1999
================================================================================



                                                                                     2000                 1999
-------------------------------------------------------------------------------------------------------------------
                                                                                            
Assets

Current assets:
     Cash and cash equivalents                                             $    2,002,084         $     32,970
     Restricted cash (note 13(b))                                                 100,000                    -
     Accounts receivable (less allowance for doubtful accounts of
       $4,245 in 2000 and nil in 1999)                                            232,591               26,191
     Loan receivable (note 7)                                                     204,434                    -
     Government grant receivable                                                   13,905               25,794
     Investment tax credit receivable                                                   -              123,245
     Inventory (note 8)                                                           463,412              529,528
     Prepaid expenses                                                              14,309               11,003
     Related party advances (note 10)                                                   -               10,024
     Other receivable (note 5)                                                     61,500                    -
-------------------------------------------------------------------------------------------------------------------
                                                                                3,092,235              758,755

Equipment, net (note 9)                                                           221,651               49,664
Goodwill (note 6)                                                                 926,995                    -
Patents, net (notes 4 and 11)                                                           -              493,407
-------------------------------------------------------------------------------------------------------------------
                                                                           $    4,240,881         $  1,301,826
-------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity

Current liabilities:
     Bank indebtedness                                                     $      276,811         $     18,220
     Accounts payable and accrued liabilities (note 12)                           728,807              455,677
     Loans payable (note 13)                                                       42,312              277,664
     Product warranty (note 3(n))                                                 623,497               19,670
-------------------------------------------------------------------------------------------------------------------
                                                                                1,671,427              771,231

Loans payable (note 13)                                                           115,781                    -
Product warranty (note 3(n))                                                            -               49,616
-------------------------------------------------------------------------------------------------------------------
                                                                                1,787,208              820,847
Stockholders' equity:
     Common stock, $0.001 par value 100,000,000 authorized, 25,743,153
       (1999 - 20,588,725) issued and outstanding                                  25,743               20,589
     Additional paid-in capital                                                13,251,498            5,909,624
     Deferred stock compensation                                                  (89,719)                   -
     Accumulated deficit                                                      (10,732,275)          (5,413,642)
     Other accumulated comprehensive loss                                          (1,574)             (35,592)
-------------------------------------------------------------------------------------------------------------------
                                                                                2,453,673              480,979
-------------------------------------------------------------------------------------------------------------------
                                                                           $    4,240,881         $  1,301,826
-------------------------------------------------------------------------------------------------------------------


Commitments (note 15)
Subsequent events (note 18)
Contingent liabilities (note 19)


See accompanying notes to consolidated financial statements.



                                       F-3


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================




                                                                                   2000              1999
--------------------------------------------------------------------------------------------------------------
                                                                                          
Net sales                                                                   $     474,003       $          -
Cost of goods sold                                                                364,423                  -
--------------------------------------------------------------------------------------------------------------
                                                                                  109,580                  -
Expenses:
     Sales and marketing                                                           10,745                  -
     Depreciation and amortization                                                  2,024             13,428
     Exchange gain                                                                 (3,036)           (96,393)
     Interest expense                                                                 659             20,571
     General and administrative (includes stock-based
       compensation $354,426 in 2000 and nil in 1999)                           1,952,469            427,491
--------------------------------------------------------------------------------------------------------------
                                                                                1,962,861            365,097
--------------------------------------------------------------------------------------------------------------
Operating loss for the year                                                    (1,853,281)          (365,097)

Interest income                                                                     3,855                  -

Other income                                                                       10,217
--------------------------------------------------------------------------------------------------------------
Loss from continuing operations                                                (1,839,209)          (365,097)

Discontinued operations:
     Loss from discontinued operations (note 5)                                (3,479,424)        (1,660,004)
--------------------------------------------------------------------------------------------------------------
Loss for the year                                                           $  (5,318,633)      $ (2,025,101)
--------------------------------------------------------------------------------------------------------------
Comprehensive loss:
     Loss for the year                                                      $  (5,318,633)      $ (2,025,101)
     Currency translation adjustment                                               34,018            (43,890)
--------------------------------------------------------------------------------------------------------------
Comprehensive loss                                                          $  (5,284,615)      $ (2,068,991)
--------------------------------------------------------------------------------------------------------------
Basic and diluted loss per common share (note 14(c)):
     Continuing operations                                                  $       (0.08)      $      (0.03)
     Discontinued operations                                                        (0.15)             (0.12)
--------------------------------------------------------------------------------------------------------------
                                                                            $       (0.23)      $      (0.15)
--------------------------------------------------------------------------------------------------------------



See accompanying notes to consolidated financial statements.



                                       F-4


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Consolidated Statements of Stockholders' Equity
(Expressed in U.S. dollars)
================================================================================



                                                   Common                                                     Other
                                                    stock    Additional       Deferred                   accumulated          Total
                                     Common    issued and       paid-in          stock    Accumulated  comprehensive  stockholders'
                                      stock   outstanding       capital    compensation       deficit   (loss)income         equity
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                   
Balance December 31, 1998        19,589,368    $  19,589    $ 4,274,104     $       -   $ (3,388,541)     $   8,298     $  913,450

Issued for services rendered          6,500            7         12,993             -              -              -         13,000
Issued for cash pursuant to
 private placement, net of
 share issue costs of $151,480      992,857          993      1,622,527             -              -              -      1,623,520

Loss for the year                         -            -              -             -     (2,025,101)             -     (2,025,101)
Currency translation adjustment           -            -              -             -              -        (43,890)       (43,890)
-----------------------------------------------------------------------------------------------------------------------------------

Balance December 31, 1999        20,588,725       20,589      5,909,624             -     (5,413,642)       (35,592)       480,979

Issued for debt settlement           65,000           65        117,903             -              -              -        117,968
Issued for services rendered
 (note 14(a))                       254,428          254        142,886             -              -              -        143,140
Issued pursuant to private
  placement                       3,850,000        3,850      5,771,150             -              -              -      5,775,000
Issued for cost of share
 issuance (note 14(a))              285,000          285        427,215             -              -              -        427,500
Share issue costs                         -            -       (427,500)            -              -              -       (427,500)
Shares issued on acquisition
  of Ultratech                      700,000          700        538,300             -              -              -        539,000
Compensation expense of
 options and warrants                     -            -        682,201             -              -              -        682,201
Deferred stock compensation               -            -         89,719       (89,719)             -              -              -
Loss for the year                         -            -              -             -     (5,318,633)             -     (5,318,633)
Currency translation
 adjustment                               -            -              -             -              -         34,018         34,018
-----------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 2000        25,743,153    $  25,743    $13,251,498     $ (89,719)  $(10,732,275)       $(1,574)    $2,453,673
-----------------------------------------------------------------------------------------------------------------------------------



See accompanying notes to consolidated financial statements.



                                       F-5


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


                                                                                     2000                 1999
-------------------------------------------------------------------------------------------------------------------
                                                                                            
Operating activities:
     Loss for the year                                                       $ (5,318,633)        $ (2,025,101)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
         Amortization of patents                                                   66,657               56,693
         Depreciation of equipment                                                 12,578               13,428
         Write down of assets and investment                                      581,800                    -
         Shares issued for services rendered (note 14(a))                         143,140               13,000
         Asset disposed for services                                                    -                3,319
         Stock based compensation                                                 682,201                2,000
         Loss on sale of business (note 5)                                         80,726                    -
     Changes in non-cash working capital relating to operations:
         Accounts receivable and government grant receivables                    (146,824)             199,569
         Investment tax credit receivable                                         123,245               86,727
         Inventory                                                                 27,224             (328,677)
         Prepaid expenses                                                         (13,283)               3,382
         Accounts payable and accrued liabilities                                 109,129              178,678
         Product warranty                                                         554,211               36,676
-------------------------------------------------------------------------------------------------------------------
     Net cash used in operating                                                (3,097,829)          (1,760,306)

Investing activities:
     Acquisition of equipment                                                    (200,941)             (11,079)
     Increase in patents                                                           (5,050)             (50,020)
     Related party advances                                                        10,024              (10,024)
     Sale of business, net cash and cash equivalents disposed of (note 5)        (314,990)                   -
-------------------------------------------------------------------------------------------------------------------
     Net cash (used in) provided by investing activities                         (510,957)             (71,123)

Financing activities:
     Advance of loan                                                             (204,434)                   -
     Bank overdraft                                                               115,001               18,220
     Restricted cash (note 13(b))                                                (100,000)                   -
     Repayment of loan payable                                                    (49,603)          (1,371,159)
     Proceeds from loan payable                                                         -            1,381,184
     Cash proceeds on issuance of common shares                                 5,775,000            1,775,000
     Share issue costs                                                                  -             (151,480)
-------------------------------------------------------------------------------------------------------------------
     Net cash provided by financing activities                                  5,535,964            1,651,765

Effect of foreign exchange rate changes on cash and cash equivalents               41,936              (43,890)
-------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash                                                     1,969,114             (223,554)

Cash, beginning of year                                                            32,970              256,524
-------------------------------------------------------------------------------------------------------------------
Cash, end of year                                                            $  2,002,084         $     32,970
-------------------------------------------------------------------------------------------------------------------
Supplementary information:
     Cash paid for:
         Interest                                                            $     26,749         $     14,332
         Income taxes                                                                   -                    -
     Non-cash financing and investing activities:
         Shares issued in acquisition of business (note 6)                        539,000                    -
         Shares issued for services rendered                                      143,140               13,000
         Shares issued on settlement of debt                                      117,968                    -
         Share issue cost (note 14(a))                                            427,500                    -
         Sale of assets for 37% interest in Traffic Systems (note 4)              150,000                    -
         Receivable on sale of business (note 5)                                   61,500                    -
-------------------------------------------------------------------------------------------------------------------


See accompanying notes to consolidated financial statements.



                                       F-6


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


1.   Nature of business:

     Unity Wireless Corporation (the "Corporation") was incorporated in Delaware
     on  October  1,  1998  under the name  Sonic  Systems  Corporation  ("Sonic
     Delaware").  Sonic Delaware changed its name to Unity Wireless  Corporation
     on July 17, 2000. The Corporation is a designer, developer and manufacturer
     of wireless  technologies  and products for a broad range of industrial and
     commercial applications. The Corporation's business has two primary product
     focuses:  its Ultratech high power linear radio  frequency (RF)  amplifiers
     and its  UniLinx(TM)  wireless  communications  modem card.  Ultratech high
     power  linear RF  amplifiers  are used in both  mobile  and fixed  wireless
     voice,  Internet and data base  station and  repeater  networks and support
     Cellular, PCS (Personal Communications Services),  Paging and WLL (Wireless
     Local Loop) frequencies.  The UniLinx(TM) wireless communications card is a
     multi-purpose wireless data communications card that allows the sending and
     receiving of data to and from remote locations,  offering secure end-to-end
     wireless  communication  between  a host  application  and  various  remote
     devices.


2.   Future operations:

     The  Corporation  is  continuing  to  develop  its  products  and  markets,
     accordingly  during the year ended  December 31, 2000 it incurred a loss of
     $5,318,633  (1999 - $2,025,101) and used cash from operations of $3,097,829
     (1999 -  $1,760,306).  Operations to date have been  primarily  financed by
     equity.

     These  financial  statements  have been prepared on the going concern basis
     under  which an entity is  considered  to be able to realize its assets and
     satisfy its liabilities in the ordinary  course of business.  Operations to
     date  have  been   primarily   financed  by   long-term   debt  and  equity
     transactions.  The  Corporation's  future operations are dependent upon the
     identification  and  successful   completion  of  additional  long-term  or
     permanent  equity  financing,   the  continued  support  of  creditors  and
     shareholders,  and, ultimately,  the achievement of profitable  operations.
     There can be no assurances that the Corporation  will be successful.  If it
     is not, the Corporation will be required to reduce  operations or liquidate
     assets.   The   Corporation   will   continue  to  evaluate  its  projected
     expenditures relative to its available cash and to seek additional means of
     financing  in  order  to  satisfy  its  working   capital  and  other  cash
     requirements.  The  consolidated  financial  statements  do not include any
     adjustments  relating to the recoverability of assets and classification of
     assets and  liabilities  that might be necessary  should the Corporation be
     unable to continue as a going concern.



                                       F-7


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


3.   Significant accounting policies:

     (a)  Principles of consolidation:

          The  consolidated  financial  statements  include the  accounts of the
          Corporation and its wholly-owned subsidiaries,  Unity Wireless Systems
          Corp., ("Unity Systems") 321373 B.C. Ltd. (British Columbia,  Canada),
          and Unity  Wireless  Integration  Inc.  (Washington  State,  USA). The
          Statement  of  Operations  and  Comprehensive  Loss also  includes the
          accounts  of  Unity   Wireless   Singapore   from  April  1  (date  of
          incorporation),  to December 30, 2000.  All  significant  intercompany
          accounts and transactions have been eliminated.

          The  Corporation  accounts for its investment in companies in which it
          has  significant  influence by the equity  method.  The  Corporation's
          proportionate share of income (loss) as reported,  net of amortization
          of the excess purchase price over the net assets acquired, is included
          in income and is added (deducted from) the cost of the investment.

          On  December  31,  2000 the  Corporation  amalgamated  three  Canadian
          subsidiaries: Unity Wireless Systems Corp., Ultratech Linear Solutions
          Inc.,  and 568608 B.C.  Ltd.,  with Unity  Wireless  Systems Corp. the
          surviving entity.

     (b)  Use of estimates:

          The preparation of the consolidated financial statements in conformity
          with generally accepted  accounting  principles requires management to
          make  estimates and  assumptions  that affect the reported  amounts of
          assets,  particularly  the  recoverability  of property and equipment,
          goodwill patents and liabilities particularly product warranty and the
          disclosure of  contingent  assets and  liabilities  at the date of the
          financial statements and the reported amounts of revenues and expenses
          during the reporting  period.  Actual  results could differ from these
          estimates.

     (c)  Financial instruments:

          At December 31, 2000,  the  Corporation  has the  following  financial
          instruments:  cash and cash equivalents,  accounts  receivable,  other
          receivables,  accounts  payable  and  accrued  liabilities,  and loans
          payable (1999 - cash and cash equivalents, accounts receivables, other
          receivables,  investment tax credit  receivable,  accounts payable and
          accrued  liabilities and loans  payable).  The carrying value of these
          financial instruments is considered to approximate fair value based on
          their short-term nature.

     (d)  Cash and cash equivalents:

          Cash equivalents  include  short-term  deposits,  which are all highly
          liquid securities with a term to maturity of three months or less when
          acquired. Short-term deposits are valued at cost.



                                       F-8


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


3.   Significant accounting policies (continued):

     (e)  Inventory:

          Inventory  is carried at the lower of cost,  determined  on an average
          cost method,  and market.  Market is considered to be replacement cost
          for raw  materials and net  realizable  value for work in progress and
          finished  goods.  The  cost of work in  progress  and  finished  goods
          includes the cost of raw material,  direct labour,  and an appropriate
          allocation of related overhead.

     (f)  Equipment:

          Equipment is stated at cost.  Depreciation  is computed on a declining
          balance  basis  over  the  estimated  useful  lives of the  assets  as
          follows:

          -------------------------------------------------------
          Asset                                            Rate
          -------------------------------------------------------

          Computer equipment and software                   30%
          Furniture and fixtures                            20%
          Production and R&D equipment                      20%
          -------------------------------------------------------

          Leasehold  improvements  are stated at cost and  depreciated  over the
          five-year term of the lease on a straight line basis.

     (g)  Patents:

          Legal  costs  incurred  for the  registration  of  patents  have  been
          capitalized. Patent costs are being amortized on a straight-line basis
          over  their  legal  life  of  10  years.  If  it  is  determined  that
          undiscounted future cash flows do not exceed the carrying value of the
          patents,  an  impairment  charge is  recorded  to the extent  that the
          carrying value exceeds the asset's fair value.

     (h)  Goodwill:

          Goodwill arising on business combinations represents the excess of the
          purchase  price  over  the  fair  values  of net  identifiable  assets
          acquired,  and is  amortized  on a  straight-line  basis over 5 years.
          Management  periodically  reviews the  valuation and  amortization  of
          goodwill, taking into consideration any events and circumstances which
          may impair its value.  If it is determined  that  undiscounted  future
          cash flows do not exceed the carrying value of goodwill, an impairment
          charge is recorded to the extent that the carrying  value  exceeds the
          asset's fair value.


                                       F-9


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


3.   Significant accounting policies (continued):

     (i)  Impairment of long-lived assets:

          The Corporation  accounts for long-lived assets in accordance with the
          provisions  of  SFAS  No.  121,  "Accounting  for  the  Impairment  of
          Long-Lived  Assets and for Long-Lived  Assets to Be Disposed Of." This
          Statement  requires that  long-lived  assets and certain  identifiable
          intangibles be reviewed for impairment  whenever  events or changes in
          circumstances indicate that the carrying amount of an asset may not be
          recoverable.  Recoverability of assets to be held and used is measured
          by a comparison of the carrying  amount of an asset to future net cash
          flows  expected  to be  generated  by the  asset.  If such  assets are
          considered to be impaired, the impairment to be recognized is measured
          by the amount by which the carrying  amount of the assets  exceeds the
          fair value of the assets. Assets to be disposed of are reported at the
          lower of the carrying amount or fair value less costs to sell.

     (j)  Income taxes:

          Income taxes are accounted  for under the asset and liability  method.
          Deferred tax assets and  liabilities are recognized for the future tax
          consequences   attributable  to  differences   between  the  financial
          statement  carrying  amounts of existing  assets and  liabilities  and
          their   respective  tax  bases  and  operating  loss  and  tax  credit
          carryforwards.  Deferred tax assets and liabilities are measured using
          enacted tax rates  expected to apply to taxable income in the years in
          which those  temporary  differences  are  expected to be  recovered or
          settled. The effect on deferred tax assets and liabilities of a change
          in tax rates is  recognized  in income in the period that includes the
          enactment date. To the extent that it is not more likely than not that
          a deferred  tax asset  will be  realized,  a  valuation  allowance  is
          provided.

     (k)  Advertising costs:

          Advertising costs are expensed as incurred.  The Corporation  incurred
          advertising expenses of $19,022 in 2000 and $16,940 in 1999.

     (l)  Foreign currency translation:

          The functional currency of the Corporation and its subsidiaries is the
          Canadian  dollar,  while the  reporting  currency in the  consolidated
          financial  statements is the United States dollar. Asset and liability
          accounts are  translated  into United  States  dollars at the exchange
          rate in effect at the balance sheet date.  Revenue and expense amounts
          are  translated at the average  exchange  rate for the year.  Gains or
          losses  resulting  from this  process are  recorded  in  stockholders'
          equity as an adjustment to other accumulated comprehensive loss.



                                      F-10


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


3.   Significant accounting policies (continued):

     (m)  Revenue recognition:

          Revenue from products is recognized  once a sale  arrangement  exists,
          delivery has occurred,  the revenue is determinable and collectibility
          is  reasonably  assured  which is upon later of shipment or when title
          passes  to the  customer  depending  on  the  contractual  terms.  The
          Corporation  records deferred revenue when cash is received in advance
          of the revenue recognition criteria being met.

     (n)  Product warranty:

          A liability for estimated  warranty expense is established by a charge
          against  cost of  goods  sold  at the  time  products  are  sold.  The
          subsequent  costs  incurred  for  warranty  claims serve to reduce the
          product warranty liability.  The actual warranty costs the Corporation
          will ultimately pay could differ materially from this estimate.

     (o)  Investment tax credits:

          Investment tax credits are recorded  using the cost  reduction  method
          whereby the credits are deducted  from the cost of the related  assets
          or expenditures.

          The Corporation earns investment tax credits for qualifying scientific
          research and  development  expenditures  which are available in future
          years to reduce income taxes  payable.  The investment tax credits are
          recorded  when there is a reasonable  assurance  that the  Corporation
          will have taxable income in the near future.

     (p)  Research and development:

          Research and development costs are expensed as incurred.

     (q)  Stock option plan:

          The Corporation applies the intrinsic value-based method of accounting
          prescribed by  Accounting  Principles  Board  ("APB")  Opinion No. 25,
          "Accounting    for   Stock   Issued   to   Employees,"   and   related
          interpretations  including FASB Interpretation No. 44, "Accounting for
          Certain Transactions involving Stock Compensation an interpretation of
          APB Opinion No. 25" issued in March 2000,  to account for its employee
          plan stock option grants.  Under this method,  compensation expense is
          recorded on the date of grant only if the current  market price of the
          underlying   stock  exceeded  the  exercise   price.   SFAS  No.  123,
          "Accounting for Stock-Based  Compensation," established accounting and
          disclosure  requirements using a fair value-based method of accounting
          for stock-based  employee  compensation  plans. As allowed by SFAS No.
          123, the  Corporation  has elected to continue to apply the  intrinsic
          value-based method of accounting  described above, and has adopted the
          disclosure requirements of SFAS No. 123. Stock compensation granted to
          non-employees  is  recognized  at its fair value as the  services  are
          provided and the compensation is earned.



                                      F-11


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


3.   Significant accounting policies (continued):

     (r)  Net loss per common share:

          The basic loss per share is computed by dividing the loss attributable
          to common stockholders by the weighted average number of common shares
          outstanding  for  that  period.   The  Corporation  has  not  included
          potential common shares  representing  performance shares in the basic
          loss per share  computation.  Escrow  shares with  time-based  vesting
          which are non-contingent returnable are included in the basic loss per
          share  computation.  Diluted  loss per  share is  computed  using  the
          treasury stock method,  giving effect to all dilutive potential common
          shares that were  outstanding  during the period  except to the extent
          where anti-dilutive.

     (s)  Comprehensive (loss) income:

          Comprehensive  income  measures  all changes in  stockholders'  equity
          excluding  capital  transactions.  For the  periods  presented,  other
          comprehensive income comprises only foreign currency translation.

     (t)  Recent pronouncements:

          Statement  of  Financial  Accounting  Standards  No.  133 ("FAS  133")
          "Accounting   Derivative   Instruments  and  Hedging  Activities"  and
          Statement  of  Financial   Accounting  Standards  No.  138  (FAS  138)
          "Accounting  for Certain  Derivative  Instruments  and Certain Hedging
          Activities,"   an  amendment  of  FAS  133,  are   effective  for  the
          Corporation's  fiscal year ending  December 31, 2001.  These standards
          require that an entity  recognize all  derivatives as either assets or
          liabilities  in the statement of financial  position and measure these
          instruments at fair value. The Corporation did not hold any derivative
          instruments and was not involved in any hedging activities at December
          31, 2000.

     (u)  Comparative figures:

          Certain  comparative  figures have been reclassified to conform to the
          presentation adopted in the current year.

4.   Disposal of Sonem business:

     On October 6, 2000,  the  Corporation  disposed of its  acoustic  emergency
     traffic preemption business to Traffic Systems LLC ("Traffic Systems"),  an
     Arizona  corporation.  Unity Systems sold or licensed  substantially all of
     its assets and  undertakings  involved in its  acoustic  emergency  traffic
     preemption business. The assets included equipment, inventory, distribution
     contracts,  customer  lists,  marketing  materials  and the goodwill of the
     business.  Unity Systems retained  ownership of the  intellectual  property
     used in connection with the acoustic emergency traffic preemption business,
     including software,  patents and know-how,  other than certain trade marks.
     The  intellectual  property was being licensed to Traffic  Systems under an
     intellectual  property license agreement dated October 6, 2000. The license
     was  royalty-free and had a term expiring on the earlier of October 5, 2020
     and the date of the final  payment of the purchase  price at which time the
     intellectual property will be transferred to Traffic Systems.



                                      F-12


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


4.   Disposal of Sonem business (continued):

     As consideration  for the sale of the traffic  preemption  business,  Unity
     Systems received a 37% interest in the purchaser,  Traffic Systems, and was
     entitled  to  receive  up  to  $2,000,000,   subject  to  certain   upwards
     adjustments,  payable in quarterly  installments  equal to 10% of the gross
     profits of Traffic  Systems for the relevant  quarter.  The Corporation did
     not record the  $2,000,000  consideration  as it was  contingent on Traffic
     Systems  generating  gross  profits.  The  Corporation  also  wrote off its
     investment  of $150,000 in Traffic  Systems as of December 31, 2000 because
     of uncertainty  with regard to future  operations,  profitability  and cash
     flows of Traffic Systems.

     The net book value of assets disposed off are as follows:

     Inventory                                             $      150,000
     --------------------------------------------------------------------

     Since the  Corporation  has a 37% interest in Traffic Systems over which it
     can exert  significant  influence,  the sale of the Sonem  business was not
     considered at October 6, 2000 to be a discontinued operation.

     Also under the Asset Purchase  Agreement,  Traffic  Systems was responsible
     for warranty work on Unity Systems' acoustic  emergency traffic  preemption
     products already installed,  except Unity Systems had advanced $100,000 for
     costs in connection with such work.  Traffic Systems is responsible for any
     costs in  excess  of  $100,000,  but Unity  Systems  will  fund such  costs
     initially and Traffic  Systems will  reimburse  Unity Systems by adding the
     costs over the initial $100,000 to the $2,000,000 otherwise payable as part
     of the purchase price. The $100,000 for the initial warranty costs was paid
     by Unity Systems on closing and is  non-refundable  regardless of the costs
     incurred by Traffic Systems.

     On April 30,  2001,  the Company  disposed  of its 37%  interest in Traffic
     System and all  remaining  intellectual  property  related to the  acoustic
     business and in return the purchaser assumed the warranty liability related
     to Acoustic business.  The warranty as at June 30, 2001 was estimated to be
     $383,091.  As a result,  the Company  has no direct or indirect  continuing
     interest in the acoustic business.



                                      F-13


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


5.   Discontinued operations:

     Effective  December  30,  2000,  Unity  Wireless  Integration   Corporation
     ("UWIC"), a wholly owned subsidiary of the Corporation,  disposed of all of
     its assets and  obligations,  including its 100%  shareholding  interest in
     Unity  Wireless   Integration  (S)  Pte  Ltd.,  a  Singapore  company  ("UW
     Singapore") to Lyma Sales & Management Corp.  ("Lyma"), a British Columbia,
     Canada  company.  Unity  Wireless  Integration  (S) Pte Ltd.  commenced its
     operations during 2000.

     Under the terms of the Asset Purchase  Agreement,  UWIC sold all its assets
     in return for $61,500 ($Cdn.  92,000),  payable within one year of closing,
     in equal semi-annual  installments of $30,730 ($Cdn. 46,000), plus interest
     on the unpaid  balance at a rate equal to the prime rate of HSBC Canada per
     annum.  Also in  consideration  of the  purchase of assets,  Lyma agreed to
     repay a $37,100  ($Cdn.  54,000)  demand loan within ten  business  days of
     closing. The loan has been repaid as agreed.

     The disposition price was arrived at through arm's length  negotiations and
     management's  determination  that  the  purchase  price of  $61,500  ($Cdn.
     92,000) represented a fair disposition price for the included assets.

     The net book value of assets disposed of are as follows:

     ---------------------------------------------------------------------------
     Cash and cash equivalents                               $      314,990
     Accounts receivable                                             20,396
     Prepaid expenses                                                 9,977
     Equipment                                                       26,178
     Accounts payable                                              (229,315)
     ---------------------------------------------------------------------------
                                                             $      142,226
     ---------------------------------------------------------------------------

     Lyma is  wholly-owned  by an  ex-director of the  Corporation  who was also
     responsible  for  management of the operations of UWIC and its wholly owned
     subsidiary UW Singapore.

     Net sales and income from discontinued  operation for the disposal of Unity
     Wireless Integration is as follows ($000):

                                                         2000           1999
     ------------------------------------------------------------------------
     Net sales                                      $     383       $      -
     Loss from discontinued operations                     (56)              -
     Loss on disposal of business segment                   -              -
     ------------------------------------------------------------------------

     As  discussed  in note 4 , on April  30,2001,  the Company  disposed of its
     remaining  interest in Sonem.  As a result,  these  consolidated  financial
     statements  have been  retroactively  restated  to present  the  results of
     operations of the Sonem business as a discontinued operation.



                                      F-14


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


5.   Discontinued operations (continued):

     On June 12,  2001,  the Company  also  disposed  of its last  non-amplifier
     operation,  the Unilinx business, to Horton Automation Inc. ( "Horton"),  a
     British Columbia,  Canada  corporation.  The Company sold all of its assets
     and  undertakings  involved in the Unilinx  business.  The assets  involved
     include inventory, equipment and intellectual property of the business. The
     purchase  price is being  paid over time on a  percentage  of future  sales
     basis within a period of two years until June 12, 2003. The Company has not
     recorded the  consideration as it is contingent on Horton  generating sales
     for the Unilinx  product.  Consequently  the Company recorded a loss on the
     disposition of the Unilinx business.

     Therefore,  in summary, the loss from discontinued  operations presented in
     the consolidated statements of operations are comprised of the following:

                                                  2000             1999
      Sonem                                     1,619,806        1,660,004
      Unilinx                                   1,803,986             -
      Services (UW Integration)                    55,632             -
                                               -----------      -----------
                                               $3,479,424       $1,660,004


6.   Business acquisition:

     On  November  16,  2000,  the  Corporation  acquired  all  the  issued  and
     outstanding  shares  of  Ultratech  Linear  Solutions  Inc.  ("Ultratech").
     Ultratech,  founded in May,  1999 and based in Burnaby,  British  Columbia,
     Canada,  is  a  wireless  communications  technology  designer,  developer,
     manufacturer and marketer specializing in radio frequency high power linear
     amplifiers.

     The  acquisition  was recorded by the  purchase  method with the results of
     Ultratech included in the financial statements from the date of acquisition
     (November 16, 2000). The total  consideration paid was allocated,  based on
     estimated fair values of the assets acquired and the liabilities assumed on
     November 16, 2000 as follows:


     -------------------------------------------------------------------------------------
                                                                          
     Net assets acquired at assigned values:
         Bank indebtedness                                                   $  (143,590)
         Accounts receivable                                                      68,083
         Inventories                                                             111,108
         Intellectual property                                                       606
         Equipment                                                                17,114
         Accounts payable and accrued liabilities                               (393,316)
         Loans payable                                                           (48,000)
         Goodwill                                                                926,995
     -------------------------------------------------------------------------------------
                                                                             $   539,000
     -------------------------------------------------------------------------------------
     Consideration:
         Issuances of shares (700,000 common shares at $0.77 per share)      $   539,000
     -------------------------------------------------------------------------------------


     Shares issued on the combination  were valued at $0.77, the market price of
     the shares at the date the acquisition was announced to the public.



                                      F-15


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


6.   Business acquisition (continued):

     All of  Ultratech's  management  and  key  employees  have  been  retained.
     Ultratech  has  combined  its  operations  with  Unity  Systems  through an
     amalgamation on December 31, 2000 (note 3(a)).

     The following table reflects, on an unaudited pro forma basis, the combined
     results of the  Corporation as if the above  acquisition had taken place at
     the beginning of the respective  year  presented.  Appropriate  adjustments
     have been made to reflect the  depreciation of the accounting bases used in
     recording these  acquisitions.  This pro forma information does not purport
     to be indicative of the results of operations  that would have resulted had
     the acquisitions been in effect for the entire years presented,  and is not
     intended to be a projection of future results or trends.


                                                        2000            1999
     ---------------------------------------------------------------------------
     Revenues                                     $ 1,982,512     $  1,582,273
     Loss for the year                              5,703,972        2,340,813
     Loss per share                                     0.241            0.163
     ---------------------------------------------------------------------------

7.   Loan receivable:

     The  Corporation  has a loan  receivable  from  Cobratech  Industries  Inc.
     ("Cobratech"), a company with two common directors, in the principal amount
     of  $200,000.  Interest  is  payable  to the  Corporation  at 1% per month,
     calculated  monthly  not in  advance.  The  loan is  secured  by a  general
     security  agreement which includes all of the personal and real property of
     Cobratech.  The  loan  is  repayable  upon  demand.  Cobratech  repaid  the
     Corporation  $100,000  on  January  10,  2001,  and has agreed to repay the
     balance in 2001.

8.   Inventory:

                                                     2000                 1999
     ---------------------------------------------------------------------------
     Raw materials                            $   248,863           $  195,364
     Work in progress                             195,504                    -
     Finished goods                                19,045              334,164
     ---------------------------------------------------------------------------
                                              $   463,412           $  529,528
     ---------------------------------------------------------------------------




                                      F-16


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


9.   Equipment:

     Equipment consists of the following:


                                                                   2000                          1999
     -------------------------------------------------------------------------------------------------
                                                            Accumulated                   Accumulated
                                                 Cost      depreciation         Cost     depreciation
     -------------------------------------------------------------------------------------------------
                                                                               
     Computer equipment                   $   150,475       $    38,331    $  52,165       $   28,931
     Computer software                         27,073                 -            -                -
     Furniture and fixtures                    33,784             6,825       10,869            5,388
     Leasehold improvements                    12,172                 -            -                -
     Production and R&D equipment              56,783            13,480       30,108            9,159
     -------------------------------------------------------------------------------------------------
                                          $   280,287       $    58,636    $  93,142       $   43,478
     -------------------------------------------------------------------------------------------------
     Net book value                       $   221,651                      $  49,664
     -------------------------------------------------------------------------------------------------


10.  Related party advances:

     Advances of nil (1999 - $10,024)  are due from an  employee  and a previous
     employee who is now a distributor of the Corporation.

11.  Patents:


                                                           2000                          1999
     --------------------------------------------------------------------------------------------
                                                    Accumulated                   Accumulated
                                         Cost      amortization         Cost     amortization
     -----------------------------------------------------------------------------------------
                                                                       
     Patents                          $     -      $         -       $ 570,280     $   76,873
     --------------------------------------------------------------------------------------------
     Net book value                         $ 493,407                        $ 493,407
     --------------------------------------------------------------------------------------------


     The Corporation has written down the patents to nil as of December 31, 2000
     since there are no future  cash flows  expected  to be  generated  from the
     patents.


12.  Accounts payable and accrued liabilities:

                                                     2000                 1999
     --------------------------------------------------------------------------
     Trade accounts payable                   $   468,866          $   349,179
     Employee compensation payable                      -               57,287
     Accrued liabilities                          259,941               49,211
     --------------------------------------------------------------------------
                                              $   728,807          $   455,677
     --------------------------------------------------------------------------



                                      F-17


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


13.  Loans payable:

     ----------------------------------------------------------------------------------------------
                                                                         2000                 1999
     ----------------------------------------------------------------------------------------------
                                                                                 
     British Columbia Advanced Systems Institute                  $         -          $    77,115
     Royal Bank of Canada                                              83,642              130,365
     Government of Canada - Ministry of Western Economic
       Diversification                                                 74,451               70,184
     ----------------------------------------------------------------------------------------------
                                                                      158,093              277,664
     Current portion                                                   42,312              277,664
     ----------------------------------------------------------------------------------------------
                                                                  $   115,781          $         -
     ----------------------------------------------------------------------------------------------


     (a)  Government of British Columbia:

          British Columbia Advanced Systems Institute ("ASI"):

               The Corporation  agreed to perform certain specified research and
               development  work and ASI agreed to assist in the funding of this
               work up to $69,286 ($Cdn.  100,000). As of February 22, 2000, ASI
               had  advanced  the  maximum  amount  under  this  agreement.   In
               addition,  $24,250  (Cdn.  $35,000)  became  payable on March 31,
               2000.

               The Corporation discharged all of its obligations under this loan
               by converting the outstanding balance $93,536 ($Cdn. $135,000) to
               equity by issuing 45,000 shares to ASI on February 22, 2000.

     (b)  Royal Bank of Canada:

          The Corporation has a $83,642 ($Cdn. 125,288) loan with the Royal Bank
          of Canada with an interest rate of Canadian  prime plus 1%.  Scheduled
          principal  repayments are $3,526 ($Cdn.  5,239) per month over 5 years
          from the initial drawdown date of January 23, 1998.

          The loan is secured by a $100,000  term  deposit  with the Royal Bank.
          There are also various covenants,  financial  reporting  requirements,
          and  conditions   precedent   associated  with  the  above  loan.  The
          Corporation is in compliance  with these  covenants as at December 31,
          2000.

          Canadian bank prime rate at December 31, 2000 was 6.0 % (1999 - 6.5%).

     (c)  Government of Canada:

          Ministry of Western Economic Diversification:

               The Corporation, through its subsidiary 321373 B.C. Ltd., entered
               into an unsecured  loan  agreement  with the Federal  Ministry of
               Western Economic Diversification,  whereby the Ministry agreed to
               make  financial  contributions  to assist in the  development  of
               certain research and development projects. Under the terms of the
               original agreement, the total loan was to be repaid in five equal
               semi-annual  installments  commencing  October 30,  1993.  If not
               repaid,  each installment will incur interest  compounded monthly
               at the Bank of Canada's prime rate plus 3%.


                                      F-18


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


13.  Loans payable (continued):

     (c)  Government of Canada (continued):

          Ministry of Western Economic Diversification (continued):

               321373 B.C. Ltd. had agreed to repay this loan by allocating  40%
               of royalty payments from Unity Systems. Royalties were payable by
               Unity  Systems at the rate of 3.5% of net sales of Sonem by Unity
               Systems, including a deduction for warranty or replacement costs.
               As of the date of the  disposal  of the Sonem  business  by Unity
               Systems (see note 4), royalties owing to 321373 B.C. Ltd. did not
               exceed  accumulated  warranty or replacement costs, and following
               this date no further  royalties became payable.  321373 B.C. Ltd.
               has  assets  valued  at $Cdn.  1 and is in the  process  of being
               liquidated.


14.  Common stock:

     Authorized share capital:

          100,000,000 common stock at par value of $0.001 per share

          5,000,000 preferred stock at par value of $0.001 per share

     (a)  Shares issued for services:

          In 2000, the  Corporation  issued 254,428 (1999 - 6,500) common shares
          for services  rendered at $143,140  (1999 - $13,000).  The shares were
          issued and assigned a value equal to their market value, determined by
          the closing trading price of the common stock on the date of issuance.
          The value assigned has been recorded by a charge against operations.

          285,000  shares  were  issued to  consultants  providing  services  in
          connection  with the private  placement of $5,775,000 in April,  2000.
          The shares were issued and  assigned a value equal to the value of the
          shares issued in the private  placement.  The value  assigned has been
          recorded  by a charge  against  the  proceeds  pursuant to the private
          placement.

     (b)  Escrowed shares:

          (i)  700,000 escrowed shares ("Indemnity  Shares") were held in Escrow
               pursuant to the terms of the Escrow  Agreement until the 11th day
               of June,  2000,  at which  time  420,000  Indemnity  Shares  were
               released from the terms of this Escrow  Agreement and  thereafter
               an  additional  70,000  Indemnity  Shares were  released from the
               terms of this Escrow  Agreement on and after each of the 11th day
               of September,  2000, and December,  2000. 70,000 Indemnity Shares
               may be released on each of the 11th day of March,  2001 and June,
               2001;



                                      F-19


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


14.  Common stock (continued):

     (b)  Escrowed shares (continued):

          (ii) 1,800,000  escrowed  shares  were held in escrow  pursuant to the
               terms of the Escrow  Agreement  until December 11, 1999, at which
               time 720,000 escrowed shares were released from the terms of this
               Escrow  Agreement and thereafter an additional  180,000  escrowed
               shares were released  from the terms of this Escrow  Agreement on
               and  after  each of the  11th day of  March,  2000,  June,  2000,
               September, 2000, and December, 2000, 180,000 Indemnity Shares may
               be  released  on each of the 11th day of  March,  2001 and  June,
               2001.

     (c)  Loss per share:

          The following  table sets forth the  computation  of basic and diluted
          loss per share:


          --------------------------------------------------------------------------------
                                                                2000                 1999
          --------------------------------------------------------------------------------
                                                                        
          Numerator:
              Loss from continuing operations          $   (1,839,209)        $   (365,097)
              Loss from discontinued operations            (3,479,424)          (1,660,004)

          Denominator:
              Weighted average number of:
                  Common shares outstanding                23,680,518           19,795,202
                  Adjusted                                          -           14,398,734
          --------------------------------------------------------------------------------
          Basic and diluted loss per common share:
              Continuing operations                    $       (0.08)         $      (0.03)
              Discontinued operations                          (0.15)                (0.12)
          --------------------------------------------------------------------------------


          For the year ended December 31, 2000 all of the  Corporation's  common
          shares  issuable upon the exercise of stock options were excluded from
          the  determination  of diluted loss per share as their effect would be
          anti-dilutive.

     (d)  Stock option plan:

          During the year ended December 31, 1998 the Corporation  established a
          stock  option plan  pursuant  to which  3,000,000  common  shares were
          reserved for issuance. This plan was replaced and on December 6, 1999,
          the  Corporation  adopted a new stock  option  plan  pursuant to which
          5,000,000  common shares were  reserved for issuance.  On July 5, 2000
          the  stockholders  approved a change in the maximum  number of options
          issuable  under  this  plan  to 20% of the  number  of  common  shares
          outstanding  including shares of common stock issuable under the plan.
          As of December 31, 2000 this maximum number was 6,435,788.



                                      F-20


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


14.  Common stock (continued):

     (d)  Stock option plan (continued):

          During the year,  certain  options  granted  were  cancelled  and were
          replaced with new options at a lower exercise price. Since the options
          were granted  within six months of the  cancellation,  the new options
          are considered  for  accounting  purposes to be variable in nature and
          compensation  expense will be recorded  equal to changes in the market
          value of the underlying  common shares.  The variable plan  accounting
          has been applied  prospectively for market value changes subsequent to
          the  date of the  repricing.  In  addition,  compensation  expense  is
          recognized  to the extent that options are granted  having an exercise
          price less than the market price of the  underlying  share on the date
          of grant.

          Stock option transactions for the respective periods and the number of
          stock options outstanding are summarized as follows:


        -------------------------------------------------------------------------------------------------------
                                                                                    Outstanding options
                                                                         -------------------------------------
                                                                 Shares
                                                              available          Number of            Weighted
                                                          to be granted             common             average
                                                           under option    shares issuable      exercise price
        -------------------------------------------------------------------------------------------------------
                                                                                              
         Balance, December 31, 1998                             388,000          2,387,000           $   1.00
         Options granted                                       (150,000)           150,000               1.10
         Options expired                                        152,500           (152,500)             (1.00)
         Increase in reserved for issuance                    2,000,000                  -                  -
        -------------------------------------------------------------------------------------------------------
         Balance, December 31, 1999                           2,390,500          2,384,500               1.01
         Options granted                                     (5,912,958)         5,912,957               1.24
         Options expired                                      3,842,791         (3,842,791)             (1.65)
         Increase in reserved for issuance                    1,660,789                  -                  -
        -------------------------------------------------------------------------------------------------------
         Balance, December 31, 2000                           1,981,122          4,454,666           $   0.77
        -------------------------------------------------------------------------------------------------------




                                      F-21


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


14.  Common stock (continued):

     (d)  Stock option plan (continued):

          The following table summarizes  information  about stock options under
          the plan outstanding at December 31, 2000:


        --------------------------------------------------------------------------------------------------------
                                                 Options outstanding                   Options exercisable
                                 -----------------------------------------------  ----------------------------
                                                      Weighted
                                         Number        average          Weighted           Number     Weighted
                                 outstanding at      remaining           average   outstanding at      average
         Range of                  December 31,    contractual          exercise     December 31,     exercise
         exercise prices                   2000     life (yrs)             price             2000        price
        --------------------------------------------------------------------------------------------------------
                                                                                       
         $0.38                        2,406,458           5.00             $0.38          605,208        $0.38
         $0.50                           85,000           4.99             $0.50                -        $0.50
         $1.00                        1,505,416           1.03             $1.00        1,428,208        $1.00
         $2.06                          445,292           2.43             $2.06          254,875        $2.06
         $2.53                           10,000           3.32             $2.53            5,833        $2.53
         $3.90                            2,500           0.29             $3.90            2,500        $3.90
        --------------------------------------------------------------------------------------------------------
                                      4,454,666           3.39             $0.77        2,296,624        $0.96
        --------------------------------------------------------------------------------------------------------


          Stock options become  exercisable at dates  determined by the Board of
          Directors at the time of granting the option.

          Stock options have initial terms of five years.

          Had  compensation  cost been determined based on the fair value at the
          grant dates for those  options  issued to employees  and  consultants,
          consistent   with  the  method   described   in  SFAS  No.  123,   the
          Corporation's loss and loss per common share would have been increased
          to the pro forma amounts indicated below:


        --------------------------------------------------------------------------------------------------------
                                                                                     2000                 1999
        --------------------------------------------------------------------------------------------------------
                                                                                            
         Loss for the year, as reported                                      $  5,318,633         $  2,025,101
         Add SFAS 123 expense                                                   1,740,746               64,589
        --------------------------------------------------------------------------------------------------------
         Pro forma                                                           $  7,059,379         $  2,089,690
        --------------------------------------------------------------------------------------------------------
         Basic and diluted loss per common share, net as reported            $       0.22         $       0.14
         Pro forma                                                                   0.30                 0.15
        --------------------------------------------------------------------------------------------------------




                                      F-22


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


14.  Common stock (continued):

     (d)  Stock option plan (continued):

          The fair value of each option  granted in 2000 and 1999 was  estimated
          on the date of the grant using the Black-Scholes  option-pricing model
          with the following  weighted-average  assumptions:  no dividend yield;
          volatility was based on weekly stock price; risk-free interest rate of
          5% (1999 - 5%) and an expected life of four and one-half years.

          The  weighted-average  fair value of options  granted  during 2000 and
          1999 was $0.95 and $0.58 respectively.

     (e)  Warrants:

          The Corporation has warrants  outstanding to purchase 4,450,000 common
          shares at $2.06 to $3.25 per share. 3,850,000 warrants may be callable
          for exercise by the  Corporation at any time after the average bid-ask
          price, or closing price, as applicable,  for the Corporation's  common
          stock is equal  to or  exceeds  $5.00  for at  least  ten  consecutive
          trading days.  These warrants expire in October 2001. Of the remaining
          600,000 warrants, 100,000 warrants vest after April 2001 and expire in
          April 2005,  and 500,000  warrants  vest until July 2002 and expire in
          July 2003.


15.  Commitments:

     The  Corporation  has the following  future minimum lease  commitments  for
     premises and equipment:

     ---------------------------------------------------------------------------
     2001                                                          $    84,918
     2002                                                               83,029
     2003                                                               81,413
     2004                                                               78,239
     2005                                                               52,159
     Thereafter                                                              -
     ---------------------------------------------------------------------------
                                                                   $   379,758
     ---------------------------------------------------------------------------

     In 2000, rent expense was $43,526 (1999 - $58,136).

16.  Income taxes:

     At December 31, 2000,  the  Corporation  has U.S. tax net operating  losses
     approximating  $1,796,000,   which  will  begin  to  expire  in  2018.  The
     Corporation may have incurred  "ownership  changes"  pursuant to applicable
     Regulations  in effect under Section 382 Internal  Revenue Code of 1986, as
     amended.  Therefore,  the  Corporation's use of losses incurred through the
     date of these  ownership  changes  may be limited  during the  carryforward
     period.



                                      F-23



UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


16.  Income taxes (continued):

     The  Corporation  has Canadian tax net  operating  losses of  approximately
     $7,688,000 which expire as follows:

     -----------------------------------------------------------------------
     2001                                                    $      105,000
     2002                                                           522,000
     2003                                                           636,000
     2004                                                         1,516,000
     2005                                                         1,282,000
     2006                                                         3,627,000
     -----------------------------------------------------------------------

     Deferred  income  taxes  reflect the net effects of  temporary  differences
     between  the  carrying  amounts of assets  and  liabilities  for  financial
     reporting  purposes  and the  amounts  used for  income tax  purposes.  The
     Corporation has recognized a valuation  allowance equal to the deferred tax
     assets due to the  uncertainty  of  realizing  the  benefits of the assets.
     Significant  components  of  the  Corporation's  deferred  tax  assets  and
     liabilities as of December 31 are as follows:

                                                       2000              1999
     ---------------------------------------------------------------------------
     Deferred tax assets:
         Net operating loss carry forwards     $  4,150,672      $  1,814,000
         Depreciation/amortization                  121,713            (1,000)
         Other                                       40,129           387,000
     ---------------------------------------------------------------------------
     Total deferred tax assets                    4,312,514         2,200,000
     Valuation allowance                         (4,312,514)       (2,200,000)
     ---------------------------------------------------------------------------
     Net deferred taxes                        $          -     $           -
     ---------------------------------------------------------------------------

17.  Segmented information:

     (a)  Segment information ($000):

          During the year, the Corporation sold its contract  services  business
          (note 5). As at December 31, 2000, the Corporation is operating in the
          wireless  product  and  acoustic  product  segments.  The  Corporation
          reports  revenues and gross profit to its chief  executive  officer as
          follows:

          Industry   information   related  to  the   Corporation's   continuing
          operations is as follows:


          -----------------------------------------------------------------------------
                                                           Sonem
                                              Wireless   Acoustic
                                              Products   Products    Other      Total
          -----------------------------------------------------------------------------
                                                                   
          Sales to external customers              599        121        -        720
          Gross profit (loss)                       44     (1,101)       -     (1,057)
          Segment assets                         1,879         95    2,267      4,241
          -----------------------------------------------------------------------------



                                      F-24


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


17.  Segmented information (continued):


          During  1999,  the  Corporation  was only  operating  in the  acoustic
          product segment.

     (b)  Geographic information ($000):

          Substantially all assets and operations are in Canada. A summary of
          sales by region is as follows:

          ---------------------------------------------------------------------
                                                    2000                 1999
          ---------------------------------------------------------------------
          Korea                                $      474           $        -
          Canada                                       34                   79
          United States                               212                  122
          ---------------------------------------------------------------------
          Total sales                          $      720           $      201
          ---------------------------------------------------------------------




                                      F-25


UNITY WIRELESS CORPORATION
(Formerly Sonic Systems Corporation)

Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)

Years ended December 31, 2000 and 1999
================================================================================


17.  Segmented information (continued):

     (c)  Major customers ($000):

          The approximate sales to major customers is as follows:

          ----------------------------------------------------------------------
                                                     2000                 1999
          ----------------------------------------------------------------------
          Customer A                           $       409           $        -
          Customer B                                    65                    -
          ----------------------------------------------------------------------

18.  Subsequent events:

     (a)  Mueller and Ideas warrants:

          Under the consulting  agreement  between the Corporation and Mueller &
          Company, Inc. and Ideas Inc. ("Mueller and Ideas") dated as of July 1,
          2000,  500,000  shares of common  stock were  issuable  to Mueller and
          Ideas upon  exercise  of  warrants  at $2.06 per share.  On January 1,
          2001,  the  Corporation  and Mueller  and Ideas  agreed to modify this
          agreement  such that the number of warrants was reduced to 200,000 and
          the exercise price was reduced to $0.38.

     (b)  Stock option grant:

          On  February  6, 2001,  the  Corporation  granted  782,500  options to
          employees and contractors.


19.  Contingent liabilities:

     The  Corporation  is currently a party to an action in the Supreme Court of
     British Columbia,  Vancouver Registry, brought by an optionholder seeking a
     declaration  that certain options to purchase shares in the common stock of
     the Corporation held by it have a term of unlimited duration.

     The Corporation  provides for costs related to contingencies when a loss is
     probable and the amount is  reasonably  determinable.  It is the opinion of
     management,  based on advice of counsel,  that the ultimate  resolution  of
     this contingency,  to the extent not previously provided for, will not have
     a material adverse effect on the financial condition of the Corporation.



                                      F-26


CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND  FINANCIAL
DISCLOSURE

     Ernst & Young LLP ("E&Y") was dismissed from its position as the certifying
accountant  of the  registrant  on December  31,  2000.  KPMG LLP  ("KPMG")  was
appointed the new certifying accountant of the registrant on the same day.

     E&Y's  report on the  financial  statements  for the years  ended  December
31,1999 and 1998 did not contain an adverse  opinion or a disclaimer of opinion,
and was not qualified or modified as to uncertainty,  audit scope, or accounting
principles,  except  for the  report  on the  1998  financial  statement,  which
contained an explanatory paragraph (after the opinion paragraph) that stated the
Company's  recurring losses from operations  raised  substantial doubt about its
ability to continue as a going concern.  The 1998  financial  statements did not
include any adjustments that might result from the outcome of this  uncertainty.
The report on the 1999 financial  statement did not contain any such explanatory
paragraph as to uncertainty.

     The decision to change  accountants  was approved by the board of directors
of the Company  pursuant to a consent board  resolution dated December 31, 2000.
The Company has an audit committee,  but the decision to change  accountants was
not considered by this committee.

     During  the  Company's  years  ended  December  31,  1999  and 1998 and the
subsequent  interim  period  preceding  the  dismissal  of  E&Y,  there  were no
disagreements  with E&Y on any matter of  accounting  principles  or  practices,
financial statement disclosure, or auditing scope or procedure.

     KPMG was engaged as the new  principal  accountant  of the Company to audit
the Company's  financial  statements.  The date of  engagement  was December 31,
2000.



                                      F-27



                                     PART II
                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The  Company's  by-laws  provide  that  directors  and  officers  shall  be
indemnified  by the Company to the fullest  extent  authorized  by the  Delaware
Business  Corporation  Act  ("DBCA"),   against  all  expenses  and  liabilities
reasonably incurred in connection with services for or on behalf of the Company.
The by-laws also  authorize the board of directors to indemnify any other person
which the  Company  has the power to  indemnify  under the DBCA,  including  for
indemnification  greater or different from that provided in the by-laws.  To the
extent that indemnification for liabilities arising under the Securities Act may
be permitted for directors, officers and controlling persons of the Company, the
Company  has  been  advised  that  in  the  opinion  of  the   Commission   such
indemnification  is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.


                   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the estimated costs and expenses, other than
underwriting  discounts (if any),  payable by the registrant in connection  with
the offering of the securities being registered.

        SEC registration fee................................           $ 80
        NASD filing fee.....................................              0
        Printing and engraving expenses.....................              0
        Transfer Agent and registrar fee....................              0
        Legal fees and expenses.............................          2,500
        Accounting fees and expenses........................          4,000
        Miscellaneous fees and expenses.....................          1,000

              Total.........................................        $ 7,580


                     RECENT SALES OF UNREGISTERED SECURITIES

     On approximately December 4, 1998, the Company completed a private offering
to accredited  investors  under Rule 504. The Company  issued  7,500,000  common
shares in consideration of gross proceeds of $975,000. No underwriting discounts
were given or commissions paid.

     On December 11, 1998, in connection with the acquisition of UW Systems, the
Company  issued a total of 11,089,368  common shares to the  shareholders  of UW
Systems, who were non-U.S.  persons, residing outside of the U.S., or accredited
investors,  pursuant to Rule 903 of  Regulation S and Rule 506 of  Regulation D.
The  acquisition  transaction  occurred  outside of the U.S.  The  consideration
received  by  the  Company  was  all of  the  issued  stock  of UW  Systems.  No
underwriting discounts were given or commissions paid.

     In May/June  1999,  the Company  issued 6,500 shares to a non-U.S.  person,
residing  outside of the U.S.,  in payment of $13,000  owing by Unity Systems to
the person. No underwriting discounts were given or commissions paid.

     In the period July to October 1999, the Company completed an offering under
Regulation S, as contemplated by the acquisition  agreement with UW Systems. The
sale was to a non-U.S.  person,  residing  outside  of the U.S.,  and took place
outside of the U.S. The Company issued 500,000 shares in  consideration of gross
proceeds of $1,500,000. The Company paid $150,000 in commission.



                                      II-1


     In November 1999, the Company completed a private offering under Regulation
S to a non-U.S.  person, residing outside of the U.S. The Company issued 350,000
common shares in  consideration  of gross proceeds of $175,000.  No underwriting
discounts were given or commissions paid.

     In December 1999, the Company completed a private offering under Regulation
S to a non-U.S.  person, residing outside of the U.S. The Company issued 142,857
common shares in  consideration  of gross proceeds of $100,000.  No underwriting
discounts were given or commissions paid.

     In  April  2000 the  Company  issued  common  shares  to non U.S.  persons,
residing  outside  of the U.S.,  in  partial  settlement  of debts owed by Unity
Systems to such persons.  The Company issued 65,000 shares in consideration  for
$117,968  of  debt  forgiveness.   No  underwriting   discounts  were  given  or
commissions paid.

     In April 2000 the Company  completed an equity financing  through a private
offering under  Regulation D and Regulation S of the Securities Act. The Company
accepted  subscriptions  for  3,850,000  units  resulting  in gross  proceeds of
$5,775,000.   Each  unit  consisted  of  one  share  of  common  stock  and  one
non-transferable,  callable  warrant to purchase one share of common stock at an
exercise  price of $3.25.  The warrant is  exercisable  for up to 18 months from
closing, unless earlier called by the Company. The Company may call the warrants
for  exercise  at any time after the  average of the  bid-ask  prices or closing
prices,  as applicable,  for the Company's  common stock has equaled or exceeded
$5.00 for at least ten  consecutive  trading days. If determined by the Board of
Directors  of the  Company  that  it  would  be in  the  best  interests  of the
shareholders  of the Company,  and if any  underwriter  or  underwriters  of the
Company's  securities  determine,  in their discretion,  that it would be in the
best interests of the Company, the Company has agreed it will use its reasonable
efforts  to  cause  the  shares  comprising  the  units  to  be  included  in  a
registration   statement  under  the  Securities  Act,  at  such  time  as  such
registration  is  reasonably  practicable  for the  Company to  accomplish.  The
Company  also  agreed  it will  use  its  reasonable  efforts  to  maintain  the
effectiveness of any such registration statement for at least one year after the
Closing of this offering. This registration statement is being filed pursuant to
that  agreement.  The Company  issued  285,000  shares as commissions or fees to
qualified persons.

     On August 15, 2000,  the Company  issued  15,000  shares of common stock to
Doug Stewart in return for consulting services valued at approximately  $22,500.
The  exemption  from  registration  relied  upon was  Regulation  S;  the  share
recipient was a non-U.S. person, residing outside of the U.S.

     On August 15, 2000,  the Company  issued  18,000  shares of common stock to
Hugh Notman in return for consulting  services valued at approximately  $26,900.
The  exemption  from  registration  relied  upon was  Regulation  S;  the  share
recipient was a non-U.S. person, residing outside of the U.S.

     On November 16, 2000,  the Company issued 700,000 shares of common stock in
exchange  for all the issued and  outstanding  securities  of  Ultratech  Linear
Solutions  Inc.  ("Ultratech"),  as described in the  Ultratech  Share  Purchase
Agreement.  Pursuant to the  Ultratech  Share  Purchase  Agreement,  the Company
purchased  the  business of  Ultratech as a going  concern.  The purchase  price
comprised  $48,000 on account of shareholder  loans and 700,000 shares of common
stock of the Company. The Company had previously loaned Ultratech $200,000.  The
persons receiving shares of the Company in the transaction were as follows: John
Roberston,  Mirza Kassam,  Chris Neumann,  Robert  Fetherstonhaugh  and Stirling
Mercantile  Corporation.   The  exemption  from  registration  relied  upon  was
Regulation S; the share recipients were all non-U.S.  persons,  residing outside
of the U.S.

     On December 4, 2000,  the Company  issued  25,000 shares of common stock to
3OE Enterprises Inc. ("3OE") in return for consulting  services rendered by 3OE,
as provided under the Consulting Agreement (the "Consulting  Agreement") between
the Company and 3OE dated August 1, 2000. The  consulting  services did not have
an agreed  value;  the shares were to be issued to 3OE upon the  achieving of an
agreed milestone. The



                                      II-2


exemption from  registration  relied upon was Regulation S; the share  recipient
was a non-U.S. person, residing outside of the U.S., and the consulting services
were performed outside the U.S.

     On December 15, 2000,  the Company issued 171,428 shares of common stock to
Mark Godsy in return for  employment  services  rendered  by Mr.  Godsy as Chief
Executive Officer and valued at $72,000.  The exemption from registration relied
upon was  Regulation  S; the share  recipient  was a non-U.S.  person,  residing
outside of the U.S., and the services were performed outside the U.S.

     On December 15, 2000,  the Company  issued 25,000 shares of common stock to
Jong Kil Kim in return for consulting services rendered by Mr. Kim and valued at
$10,500. The exemption from registration relied upon was Regulation S; the share
recipient was a non-U.S.  person, residing outside of the U.S., and the services
were performed outside the U.S.

     On June 22,  2000,  the Company  issued  25,000  shares of common  stock to
Robert  Singer in return for  consulting  services  rendered  by Mr.  Singer and
valued at $7,000.  This issuance was exempt from  registration  pursuant to Rule
701 and Section 4(2) under the Securities Act of 1933.

     In  addition  to  the  3,850,000  warrants  issued  under  the  April  2000
financing,  the  Company  issued in January,  2001 to Mueller and Ideas  200,000
warrants at an exercise  price of $0.38,  which vest until December 31, 2002 and
expire up to March 31, 2005.  In April,  2001 the Company  issued to Mueller and
Ideas 300,000  warrants an exercise  price of $0.29,  which vest until March 31,
2004 and expire up to March 31, 2005. The Company also issued  100,000  warrants
at an exercise price of $2.06 to Crescent  Communications  Inc. which vest until
April 2001 and expire in April 2005.



                                      II-3


                                    EXHIBITS

     Pursuant to Rule 601 of Regulation SB, the following exhibits are included
herein or incorporated by reference.

Exhibit
 Number        Description
 ------        -----------
  3.1          Amended  and  Restated  Certificate  of  Incorporation  of  Unity
               Wireless Corporation (incorporated by reference to Exhibit 3.1 to
               the Company's Form SB-2 filed on October 4, 2000)

  3.2          Amended  and  Restated  Bylaws  of  Unity  Wireless   Corporation
               (incorporated  by reference to Exhibit 3.2 to the Company's  Form
               SB-2 filed on October 4, 2000)

  4.1          Consulting agreement among Mueller & Company,  Inc., Ideas, Inc.,
               Mark Mueller,  Aaron Fertig and Unity Wireless  Corporation dated
               January 1, 2001  (incorporated by reference to Exhibit 4.2 to the
               Company's Form 10-KSB filed on April 2, 2001)

  4.2          Consulting  agreement  amendment  among Mueller & Company,  Inc.,
               Ideas,  Inc.,  Mark  Mueller,  Aaron  Fertig  and Unity  Wireless
               Corporation dated April 1, 2001

  4.3          Warrant   from   Unity    Wireless    Corporation   to   Crescent
               Communications   Inc.  dated  June  26,  2000   (incorporated  by
               reference  to  Exhibit  4.3 to the  Company's  Form SB-2 filed on
               October 4, 2000)

  5.1          Opinion of Dorsey & Whitney LLP

 10.1          Asset  Purchase  Agreement  dated  October  6, 2000  among  Unity
               Wireless  Systems   Corporation,   a  British  Columbia,   Canada
               corporation,   568608  B.C.  Ltd.,  a  British  Columbia,  Canada
               corporation,   Traffic  Systems,   L.L.C.,   an  Arizona  limited
               liability  company,  Traffic  Safety  Products,  Inc., an Arizona
               corporation  and  James L. Hill  (incorporated  by  reference  to
               Exhibit 2.1 to the Company's Form 8-K filed on October 23, 2000)

 10.2          Intellectual  Property  License  Agreement  dated October 6, 2000
               between Unity Systems as licensor and Traffic Systems as licensee
               (incorporated  by reference to Exhibit 2.2 to the Company's  Form
               8-K filed on October 23, 2000)

 10.3          Share  Purchase  Agreement,  dated  November  16, 2000 among John
               Robertson,  Mirza Kassam, Chris Neumann,  Robert Fetherstonhaugh,
               Unity  Wireless  Corporation,  Stirling  Mercantile  Corporation,
               Peter A. Scott Consulting  Ltd., W. Hugh Notman  (incorporated by
               reference  to  Exhibit  2.1 to the  Company's  Form 8-K  filed on
               December 4, 2000)

 10.4          Asset Purchase Agreement,  dated for reference December 30, 2000,
               among Unity  Wireless  Integration  Corporation  as vendor,  Lyma
               Sales  &  Management   Corp.  as  purchaser  and  Unity  Wireless
               Corporation  (incorporated  by  reference  to Exhibit  2.1 to the
               Company's Form 8-K filed on January 16, 2001)

 10.5          Agreement to Redeem Membership  Interest,  Transfer  Intellectual
               Property and Amend Asset Purchase  Agreement,  effective April 9,
               2001, by and among Traffic Systems, L.L.C. Unity Wireless Systems
               Corporation,   Traffic  Safety   Products,   Inc.  and  Jim  Hill
               (incorporated  by reference to Exhibit 10.5 to the Company's Form
               SB-2A filed on May 3, 2001)

 10.6          1999 Stock Option Plan, as amended  (incorporated by reference to
               Exhibit 10.6 to the Company's Form 10-KSB filed on April 2, 2001)



                                      II-4


Exhibit
 Number        Description
 ------        -----------
 10.7          Recommended   Stock   Option   Grant   Policy  for  the   Company
               (incorporated  by reference to Exhibit 10.7 to the Company's Form
               10-KSB filed on April 2, 2001)

 21.1          Subsidiaries of the Company (incorporated by reference to Exhibit
               21.1 to the Company's Form 10-KSB filed on April 2, 2001.)

 23.1          Consent of KPMG LLP

 23.2          Consent of Ernst & Young LLP

 23.3          Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)

                                  UNDERTAKINGS

     The Company hereby undertakes that it will:

     (1) File,  during  any  period in which it  offers or sells  securities,  a
post-effective amendment to this registration statement to:

          (i)  Include  any  prospectus  required  by  section  10(a)(3)  of the
     Securities Act;

          (ii) Reflect in the prospectus any facts or events which, individually
     or  together,  represent a  fundamental  change in the  information  in the
     registration  statement.  Notwithstanding  the  foregoing,  any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     securities  offered  would not  exceed  that which was  registered)  or any
     deviation from the low or high end of the estimated  maximum offering range
     may be  reflected  in the form of  prospectus  filed  with  the  Commission
     pursuant  to  Rule  424(b)  (ss.230.424(b)  of  this  chapter)  if,  in the
     aggregate,  the  changes in volume and price  represent  no more than a 20%
     change  in  the  maximum   aggregate   offering  price  set  forth  in  the
     "Calculation  of  Registration  Fee"  table in the  effective  registration
     statement; and

          (iii) Include any  additional or changed  material  information on the
     plan of distribution.

     (2)  For  determining  liability  under  the  Securities  Act,  treat  each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

     (3) File a post-effective  amendment to remove from registration any of the
securities that remain unsold at the end of the offering.



                                      II-5


                                   SIGNATURES

     In accordance  with the  requirements  of the  Securities  Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  for filing on Form SB-2 and authorized  this  registration
statement  to be  signed  on its  behalf  by the  undersigned  in  the  City  of
Vancouver, Province of British Columbia, Canada, on October 10, 2001.

                          Registrant: UNITY WIRELESS CORPORATION

                                      By: /s/ Roland Sartorius
                                         ---------------------------------------
                                         Roland Sartorius, Secretary


     In accordance  with the  requirements  of the Securities Act of 1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates stated.




/s/ Mark Godsy               Director and Chairman of          October 10, 2001
-------------------------    the Board
Mark Godsy


/s/ John Robertson          Director, President, and Chief     October 10, 2001
-------------------------   Executive Officer
John Robertson



/s/ Roland Sartorius        Director, Secretary and            October 10, 2001
-------------------------   Chief Financial Officer
Roland Sartorius


/s/ Robert Fetherstonhaugh  Director                           October 10, 2001
-------------------------
Thomas Dodd


/s/ Ken Maddison            Director                           October 10, 2001
-------------------------
Ken Maddison




                                      II-6


                                  EXHIBIT INDEX
                                  -------------
Exhibit
 Number        Description
 ------        -----------
  3.1          Amended  and  Restated  Certificate  of  Incorporation  of  Unity
               Wireless Corporation (incorporated by reference to Exhibit 3.1 to
               the Company's Form SB-2 filed on October 4, 2000)

  3.2          Amended  and  Restated  Bylaws  of  Unity  Wireless   Corporation
               (incorporated  by reference to Exhibit 3.2 to the Company's  Form
               SB-2 filed on October 4, 2000)

  4.1          Consulting agreement among Mueller & Company,  Inc., Ideas, Inc.,
               Mark Mueller,  Aaron Fertig and Unity Wireless  Corporation dated
               January 1, 2001  (incorporated by reference to Exhibit 4.2 to the
               Company's Form 10-KSB filed on April 2, 2001)

  4.2          Consulting  agreement  amendment  among Mueller & Company,  Inc.,
               Ideas,  Inc.,  Mark  Mueller,  Aaron  Fertig  and Unity  Wireless
               Corporation dated April 1, 2001

  4.3          Warrant   from   Unity    Wireless    Corporation   to   Crescent
               Communications   Inc.  dated  June  26,  2000   (incorporated  by
               reference  to  Exhibit  4.3 to the  Company's  Form SB-2 filed on
               October 4, 2000)

  5.1          Opinion of Dorsey & Whitney LLP

 10.1          Asset  Purchase  Agreement  dated  October  6, 2000  among  Unity
               Wireless  Systems   Corporation,   a  British  Columbia,   Canada
               corporation,   568608  B.C.  Ltd.,  a  British  Columbia,  Canada
               corporation,   Traffic  Systems,   L.L.C.,   an  Arizona  limited
               liability  company,  Traffic  Safety  Products,  Inc., an Arizona
               corporation  and  James L. Hill  (incorporated  by  reference  to
               Exhibit 2.1 to the Company's Form 8-K filed on October 23, 2000)

 10.2          Intellectual  Property  License  Agreement  dated October 6, 2000
               between Unity Systems as licensor and Traffic Systems as licensee
               (incorporated  by reference to Exhibit 2.2 to the Company's  Form
               8-K filed on October 23, 2000)

 10.3          Share  Purchase  Agreement,  dated  November  16, 2000 among John
               Robertson,  Mirza Kassam, Chris Neumann,  Robert Fetherstonhaugh,
               Unity  Wireless  Corporation,  Stirling  Mercantile  Corporation,
               Peter A. Scott Consulting  Ltd., W. Hugh Notman  (incorporated by
               reference  to  Exhibit  2.1 to the  Company's  Form 8-K  filed on
               December 4, 2000)

 10.4          Asset Purchase Agreement,  dated for reference December 30, 2000,
               among Unity  Wireless  Integration  Corporation  as vendor,  Lyma
               Sales  &  Management   Corp.  as  purchaser  and  Unity  Wireless
               Corporation  (incorporated  by  reference  to Exhibit  2.1 to the
               Company's Form 8-K filed on January 16, 2001)

 10.5          Agreement to Redeem Membership  Interest,  Transfer  Intellectual
               Property and Amend Asset Purchase  Agreement,  effective April 9,
               2001, by and among Traffic Systems, L.L.C. Unity Wireless Systems
               Corporation,   Traffic  Safety   Products,   Inc.  and  Jim  Hill
               (incorporated  by reference to Exhibit 10.5 to the Company's Form
               SB-2A filed on May 3, 2001)

 10.6          1999 Stock Option Plan, as amended  (incorporated by reference to
               Exhibit 10.6 to the Company's Form 10-KSB filed on April 2, 2001)

 10.7          Recommended   Stock   Option   Grant   Policy  for  the   Company
               (incorporated  by reference to Exhibit 10.7 to the Company's Form
               10-KSB filed on April 2, 2001)

 21.1          Subsidiaries of the Company (incorporated by reference to Exhibit
               21.1 to the Company's Form 10-KSB filed on April 2, 2001.)

 23.1          Consent of KPMG LLP

 23.2          Consent of Ernst & Young LLP

 23.3          Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)