AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY __, 2002
                      REGISTRATION STATEMENT NO. 333-_____

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ------------------------------


                                    FORM S-1

                             REGISTRATION STATEMENT
                                     Under
                           THE SECURITIES ACT OF 1933
                         ------------------------------

                          AMERICAN UNITED GLOBAL, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                        5082                  95-4359228
       (State or other             (Primary Standard         (I.R.S. Employer
jurisdiction of incorporation  Industrial Classification Identification Number)
     or organization)                Code Number)


                  11108 NE 106th PLACE
                 KIRKLAND, WASHINGTON                98033
       (Address of principal executive offices)     Zip code


                              DAVID M. BARNES, CFO
                          AMERICAN UNITED GLOBAL, INC.
                              11108 NE 106TH PLACE
                           KIRKLAND, WASHINGTON 98033
                                 (425) 869-7410

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                   COPIES TO:

                                JAY M. KAPLOWITZ
                        GERSTEN, SAVAGE & KAPLOWITZ, LLP
                          101 E. 52ND STREET, 9TH FLOOR
                            NEW YORK, NEW YORK 10022
                                 (212) 752-9700

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   As soon as practicable after this Registration Statement becomes effective.

                         ------------------------------

     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 registration statement for the same offering. [ ]

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
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 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. [ ]
<PAGE>

<TABLE>
<CAPTION>

                        CALCULATION OF REGISTRATION FEE

=============================================================================================================================
                                                                               PROPOSED           PROPOSED
                                                                               MAXIMUM            MAXIMUM         AMOUNT OF
     TITLE OF EACH CLASS OF SECURITIES TO BE                               OFFERING PRICE        AGGREGATE       REGISTRATION
                   REGISTERED                      AMOUNT TO BE REGISTERED PER UNIT/PER SHARE  OFFERING PRICE(1)     FEE
-----------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                     <C>                <C>                 <C>

Rights...........................................       4,500                   $0                   $0               $0

Units............................................       4,500                   $666            $3,000,000            $717

7.5% Convertible Secured Promissory Notes........       4,500                   (2)                 (2)               $0

Common Stock.....................................   6,000,000                   (2)                 (2)               $0

Common Stock issuable upon the conversion
of the Notes (3).................................   6,000,000                   $0.50           $3,000,000            $717


</TABLE>
                         ------------------------------

     (1)  Estimated  solely for purposes of  calculating  the  registration  fee
          pursuant to Rule 457.

     (2)  Units are comprised of one 7.5% Convertible Secured Promissory Note in
          the  principal  amount of $666  ("Notes"),  and 1,332 shares of common
          stock  ("Common  Stock").  The amount to be registered  includes up to
          4,500  Notes  for  an  approximate   aggregate   principal  amount  of
          $3,000,000, and up to approximately 6,000,000 shares of Common Stock.

     (3)  Holders of the Notes have the option to convert the  principal  amount
          of the Notes into Common  Stock.  Every dollar of principal  due under
          the Notes is convertible into 2 shares of Common Stock.






     THE REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES  ACT OF 1933, AS AMENDED,  OR UNTIL THIS  REGISTRATION  STATEMENT
SHALL  BECOME  EFFECTIVE  ON SUCH DATE AS THE  COMMISSION,  ACTING  PURSUANT  TO
SECTION 8(A), MAY DETERMINE.

<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
     INFORMATION IN THIS  PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY
NOT SELL  THESE  SECURITIES  UNTIL THE  REGISTRATION  STATEMENT  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO  SELL  THESE  SECURITIES  AND IT IS NOT  SOLICITING  AN  OFFER  TO BUY  THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                         ------------------------------

                  SUBJECT TO COMPLETION, DATED JANUARY __, 2002

                      AMERICAN UNITED GLOBAL, INC.


                                   4,500 Units

     This  Prospectus  relates to the  offering  of rights to our  shareholders.
Pursuant to this  offering our  shareholders  who own at least 100 shares of our
common stock as of the close of business on _________, 2002 (the "Record Date"),
will have the  opportunity to buy an aggregate of up to 4,500 Units  ($3,000,000
approximate aggregate dollar amount).  Every 100 shares of our common stock will
entitle the holder to receive  one right to  purchase  one Unit in the amount of
$666.

     Each Unit consists of a 7.5%  Convertible  Secured  Promissory  Note in the
principal  amount of $666 (the  "Notes"),  and 1,332 shares of our common stock.
The Notes have a term of five (5) years. Interest due under the Notes is payable
quarterly in arrears, on the first day of each January,  April, July and October
commencing on __________,  2002 until  ________,  2007 unless earlier re-paid in
full by American United Global,  Inc. ("AUGI").  The Notes are secured by a lien
granted by AUGI on all of its assets.  Those  shareholders who own less than 100
shares will not be eligible to participate in this offering.

     Shareholders may exercise the  subscription  rights for a period of fifteen
(15) days beginning on  __________,  2002 and ending at 5:00 p.m. New York time,
on ________,  2002,  unless such exercise  period is extended by us, in our sole
discretion, for up to an additional thirty (30) days.

     Purchasers  of the Units may offer the common  stock  received in the Units
and the common stock received upon  conversion of the Notes, if any, for sale by
use of  this  prospectus.  See  "Description  of the  Notes"  on page 31 of this
prospectus for a full  description of the terms of the Notes and "Description of
Securities" on page 33 for a full description of the underlying shares.

     AUGI will receive  total net proceeds,  after  deducting  various  offering
expenses, from the sale of the Units of approximately $2,900,000.  AUGI will not
receive  any  proceeds  from the sale of the common  stock or the  common  stock
received  upon any  conversion  of the Notes (the  "Conversion  Shares")  by the
selling holders thereof,  who may sell the common stock or the Conversion Shares
from time to time at prevailing market prices.  The Notes will not be listed for
trading.  The  Common  Stock  and the  Conversion  Shares  may be  traded on the
Over-the-Counter  Bulletin  Board  of the  National  Association  of  Securities
Dealers,  Inc.  ("OTCBB") under the symbol AUGB. On January 4, 2002, the closing
price of the common stock, as reported on OTCBB, was $1.95 per share.


                 These securities involve a high degree of risk.
                    See "Risk Factors" beginning on page 5.


                        ------------------------------

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or disapproved of these securities or determined if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

<TABLE>
<CAPTION>

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                Offering Price               Underwriting discounts and   Proceeds to the Company(1)
                                                             commissions
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                            <C>                          <C>                          <C>
Per Unit                        $666.00                      $0.00                        $666.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total                           $3,000,000.00                $0.00                        $3,000,000.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>


     (1)  Before deducting expenses of the offering payable by AUGI estimated at
          $100,000.


                The date of this prospectus is January ___, 2002


<PAGE>
                              TABLE OF CONTENTS
                                                               Page

Prospectus Summary........................................       1

Risk Factors..............................................       5

Capitalization............................................       8

Dividend Policy...........................................       9

Use of Proceeds...........................................       9

The Offering..............................................      10

Price Range of Securities.................................      11

Selected Financial and Operating Data.....................      13

Management's Discussion and Analysis of
Financial Condition and Results of Operations.............      14

Business and Properties...................................      18

Management................................................      21

Compensation Committee Interlocks and
   Insider Participation..................................      27

Certain Relationships and Related
   Transactions...........................................      28

Beneficial Ownership of Common Stock......................      30

Description of the Notes..................................      31

Description of Securities.................................      33

Certain Federal Income Tax Considerations.................      35

Plan of Distribution......................................      37

Legal Matters.............................................      37

Experts...................................................      37

Available Information.....................................      37

Index to Financial Statements.............................      F-1




<PAGE>


                               PROSPECTUS SUMMARY

     The  following  summary is qualified  in its entirety by the more  detailed
information and financial  statements and notes thereto  appearing  elsewhere in
this prospectus.

                          American United Global, Inc.

     We are American United Global, Inc. ("AUGI"),  a Delaware corporation which
owns minority equity positions in five companies. Our primary equity position is
our  ownership of 1,222,586  shares,  or  approximately  36% of Western  Power &
Equipment Corp. ("Western"), and we are Western's largest stockholder.  Prior to
November  1, 2000,  we owned 59.6% of  Western,  and  Western was our  operating
subsidiary,  engaged  primarily  in the  distribution,  rental and  servicing of
construction equipment.

     We intend to focus our business strategy on acquisitions of, joint ventures
with or  limited  investments  in,  operating  businesses  in  various  sectors,
although we have not yet identified any definitive opportunities.

     At our  annual  meeting  of  stockholders  held on  August  28,  2001,  our
stockholders  approved a reverse  stock split of 1-for-15,  1-for-20 or 1-for-25
with the precise ratio to be  determined by our Board of Directors.  On December
7, 2001,  our Board of Directors  declared a 1-for-25  reverse stock split.  The
reverse stock split became effective on December 17, 2001 (the "Effective Date")
and  each 25  shares  of our  common  stock  that  was  issued  and  outstanding
immediately  prior to the  Effective  Date was changed into one validly  issued,
fully paid and  non-assessable  share of our common  stock  without  any further
action  by the  holders  of  shares  of our  common  stock.  Where  appropriate,
references in this  registration  statement give effect to the 1-for-25  reverse
stock  split.  Such  change  was  also  effective  on  December  17,  2001,  see
"Description  of  Securities".   In  addition,  our  shareholders  approved  the
cancellation of 25 million shares of authorized,  unissued Class A Common Stock.
Such change was effective on August 28, 2001.

     Our  offices  are  located at 11108 NE 106th  Place,  Kirkland,  Washington
98033. Our telephone number is (425) 869-7410.

                                       1

<PAGE>
<TABLE>
<CAPTION>

                                 The Offering



<S>                                                        <C>

SECURITIES OFFERED                                           4,500 Units, at a purchase price of $666 per Unit. Each
                                                             Unit consists of a 7.5% Convertible Secured Promissory
                                                             Note for a principal amount of $666, and 1,332 shares
                                                             of our common stock.


SUBSCRIPTION RIGHTS                                          Each of our shareholders who own at least 100 shares of
                                                             common stock as of the close of business on _________,
                                                             2002 (the "Record Date")will be granted one
                                                             nontransferable right to purchase a Unit for every 100
                                                             shares of common stock owned on the Record Date.


STANDBY COMMITMENT                                           To the extent that the subscription rights are not
                                                             exercised by the shareholders, the Rubin Family
                                                             Irrevocable Stock Trust (the "Rubin Family Trust"), has
                                                             agreed to subscribe to purchase, in addition to those
                                                             Units purchased upon the exercise of its subscription
                                                             rights, any remaining Units, up to a total purchase
                                                             price of $1,000,000, or approximately 1,500 Units.  As
                                                             compensation for its standby commitment, the Rubin
                                                             Family Trust will receive a fee of $100,000 payable in
                                                             common stock.  If the Rubin Family Trust purchases such
                                                             number of Units under the standby commitment, the Rubin
                                                             Family Trust will become our majority and controlling
                                                             shareholder.


COMMON STOCK OUTSTANDING AS OF THE RECORD DATE               _____________ shares


COMMON STOCK OUTSTANDING AFTER THE OFFERING                  ______________, assuming the sale of all the Units
                                                             offered.  The number of shares of common stock
                                                             outstanding after the offering does not give effect to
                                                             the conversion of the Notes into common stock.


NO REVOCATION                                                If you exercise any rights, you are not allowed to
                                                             revoke or change the exercise or request a refund of
                                                             monies paid.

SUBSCRIPTION PERIOD                                          The offering will remain open for a fifteen (15) day
                                                             period from ____________, 2002 until__________, 2002, unless
                                                             such period is extended by us, in our sole discretion,
                                                             for up to an additional 30 days. Shareholders who wish
                                                             to exercise their subscription rights must return the
                                                             completed subscription certificates along with their
                                                             payment, as instructed in the subscription
                                                             certificates, to us at: PMB 549, 218 Main Street,
                                                             Kirkland, Washington 98033, Attn: David M. Barnes, CFO,
                                                             no later than 5:00 p.m., New York time, on __________,
                                                             2002, unless the subscription period is extended by us
                                                             as described above.


WITHDRAWAL, AMENDMENT AND TERMINATION                        We reserve the right to withdraw, amend or terminate
                                                             this offering at any time for any reason. In the event
                                                             that the offering is withdrawn or terminated, we will
                                                             return all funds received from such subscriptions
                                                             (without interest).


REPAYMENT OF PRINCIPAL                                       The Notes have a term of five years, expiring on
AND INTEREST UNDER THE NOTES                                 ______, 2007, or unless earlier re-paid in full by
                                                             AUGI.  Interest under the Notes is payable quarterly in
                                                             arrears, on the first day of each January, April, July
                                                             and October commencing on __________, 2002 until
                                                             ________, 2007 unless earlier re-paid in full by AUGI.
                                                             We may pay interest due under the Notes in cash or
                                                             common stock in our sole discretion.  In the event that
                                                             we decide to pay the interest due under the Notes in
                                                             common stock, the price of the common stock at which
                                                             the payment will be made shall be the greater of $0.50
                                                             per share or the ten-day average closing price of the
                                                             common stock, as reported on the OTCBB, prior to the
                                                             date of payment.

                                      2
<PAGE>

CONVERSION                                                   Shareholders will have the option to convert the
                                                             principal and interest under the Notes into common
                                                             stock.  Each dollar of principal and interest will be
                                                             convertible into two (2) shares of our common stock
                                                             (the "Conversion Shares") at the option of the holder
                                                             at any time after July 31, 2003, and before maturity of
                                                             the Notes, unless previously repaid by AUGI.


SECURITY INTEREST                                            The Notes are secured by a lien granted by us on all of
                                                             our assets, including 1,222,586 shares of Western Power
                                                             & Equipment Corp. owned by us.


PREPAYMENT                                                   We may elect to prepay the principal amount of the
                                                             Notes at any time, plus accrued interest.


ACCELERATION OF PAYMENT BY HOLDERS                           If an event of default occurs, the holders of at least
                                                             51% in principal amount of the Notes may accelerate
                                                             maturity and demand payment in full of all unpaid
                                                             amounts, plus expenses.  No assurance can be given that
                                                             we will be able to pay the amounts due under the Notes
                                                             if an event of default occurs.


USE OF PROCEEDS                                              We intend to use the proceeds of the offering to pursue
                                                             our acquisition strategy, and for working capital and
                                                             general corporate purposes.


LISTING FOR TRADING                                          The Notes will not be listed for trading.  The Common
                                                             Stock and the Conversion Shares may be traded on the
                                                             OTCBB under the symbol AUGB.


RISK FACTORS                                                 The securities offered hereby involve a high degree of
                                                             risk and investors should carefully consider the
                                                             information set forth under "Risk Factors," as well as
                                                             the other information and data in this prospectus.


</TABLE>
                                       3
<PAGE>


                 Summary Financial and Operating Data

     The following Summary Condensed Financial Data for each of the years in the
three-year  period  ended July 31,  2001,  are derived  from,  and  qualified by
reference to our audited financial  statements and should be read in conjunction
with the audited financial statements and "Management's  Discussion and Analysis
of Financial  Condition and Results of Operations"  appearing  elsewhere herein.
The  financial  statements  for the three year  period  ended July 31,  2001 are
included elsewhere in this prospectus.  The unaudited  financial  statements for
the fiscal  quarters  ended  October  31, 2001 and 2000 are  derived  from,  and
qualified by reference to our unaudited financial  statements for these periods.
Such unaudited  financial  statements  have been prepared in conformity with the
accounting  principles  generally  accepted  in the  United  States  of  America
reflected  in the  consolidated  financial  statements  for the  preceding  year
included  in the annual  report on Form  10-K/A for the year ended July 31, 2001
filed with the  Securities and Exchange  Commission.  All  adjustments  are of a
normal recurring  nature and are, in the opinion of management,  necessary for a
fair statement of the consolidated results for the interim periods.


                        Summary Condensed Financial Data

INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
                                                  QUARTER ENDED OCTOBER 31,                      YEAR ENDED JULY 31,
                                                      2001           2000                2001            2000           1999

                                                    -----          ------               -----           -----         ------
<S>                                          <C>               <C>                <C>             <C>            <C>

Net sales....................................         -              -                   -          $155,637,000    $163,650,000

Loss from continuing operations.....            $ (272,000)     $(1,217,000)        $(6,400,000)      (7,030,000)     (5,054,000)

Net loss per share:                                  (0.55)           (2.51)             (13.02)          (14.71)         (10.75)

Gain from discontinued operations...                  -               -                     -               -           1,989,000

Per Share                                             -               -                     -               -                4.23

Net loss ..........................               (272,000)      (1,217,000)         (6,400,000)      (7.030,000)      (3,065,000)

Net loss per share                              $    (0.55)     $     (2.51)        $    (13.02)    $     (14.71)    $      (6.52)


</TABLE>
<TABLE>
<CAPTION>

BALANCE SHEET DATA:
                                                       OCTOBER 31                                        JULY 31,

                                                  2001              2000                    2001         2000            1999
                                                ------             ------                  ------        -----           -----
<S>                                         <C>                 <C>                    <C>          <C>            <C>
Total assets..........................       $   1,629,000       $6,344,000             $1,724,000    $128,549,000   $142,909,000

Total liabilities......................          2,922,000        4,051,000              2,909,000     115,413,000    121,700,000

Working capital (deficit)...............        (2,374,000)       1,868,000             (2,137,000)    (17,579,000)   (16,751,000)

Shareholders' (deficit) equity..........     $  (1,293,000)      $2,293,000            $(1,185,000)   $  7,373,000    $12,797,000

</TABLE>

Ratio of Earnings to Fixed Charges

     The ratio of earnings to fixed charges,  (interest expense and one-third of
real estate and vehicle lease payments, the assumed interest expense portion) is
expressed as the ratio of: (1) fixed charges plus income from operations, to (2)
fixed charges. The ratio was deficient for all periods listed below.

<TABLE>
<CAPTION>
                             QUARTER ENDED
                              OCTOBER 31,                                         YEAR ENDED JULY 31,
                        2001            2000                2001           2000           1999         1998         1997
                        ----            ----                ----           ----           ----         ----         ----
<S>                 <C>            <C>                <C>           <C>            <C>          <C>           <C>


Ratio                    <1              <1                  <1             <1            <1          <1             <1

Deficiency           $ 34,000       $ 149,000          $  248,000     $ 7,042,000    $ 6,260,000  $ 5,525,000   $ 4,296,000

</TABLE>

                                       4

<PAGE>
                                  RISK FACTORS

     This prospectus contains forward-looking statements, including among others
(i) anticipated trends in AUGI's financial  condition and results of operations,
and (ii) AUGI's business strategy.  These  forward-looking  statements are based
largely on our  current  expectations  and are  subject to a number of risks and
uncertainties. Actual results could differ materially from these forward-looking
statements.  In  addition  to other  risks  described  elsewhere  in this  "Risk
Factors"   discussion,   important   factors  to  consider  in  evaluating  such
forward-looking  statements  include (a) changes in external  competitive market
factors or in AUGI's  internal  budgeting  process  which might impact trends in
AUGI's results of  operations;  (b)unanticipated  working  capital or other cash
requirements; (c) changes in AUGI's business strategy or an inability to execute
its strategy due to  unanticipated  changes in the  operations in companies AUGI
has/or will acquire;  and (d) various  competitive factors that may prevent AUGI
from  competing  successfully  in the  marketplace.  In light of these risks and
uncertainties,   there  can  be  no  assurance  that  the  events  predicted  in
forward-looking  statements will, in fact, transpire. An investment in the Units
involves  a high  degree of risk.  You should not  acquire  them  unless you can
afford the loss of your entire investment.  As a prospective investor you should
carefully  consider  all  of  the  information  contained  in  this  prospectus,
including the following risk factors:

Risks Associated with AUGI

     NO SIGNIFICANT  OPERATIONS;  WORKING CAPITAL  DEFICIT.  We currently do not
have any significant business operations.  We have had a working capital deficit
for each of the three years  ending July 31, 1999,  2000 and 2001.  In addition,
the cash, cash equivalents and marketable  securities of $745,000 as at July 31,
2001 are not sufficient to fund current levels of operations  through the end of
fiscal 2002.

     OUR INABILITY TO SUCCESSFULLY COMPLETE THIS OFFERING AND RAISE THE EXPECTED
PROCEEDS WOULD POTENTIALLY LEAVE US WITHOUT ADEQUATE WORKING CAPITAL WHICH COULD
MATERIALLY  IMPAIR OUR BUSINESS AND OPERATIONS.  We are not generating  adequate
revenues to fund our  operations  and are  experiencing  operating  losses.  The
amount  of our  cash,  cash  equivalents  and  marketable  securities  generally
available  to  fund  our  working  capital  requirements,  has  diminished  from
$4,086,000  as of July 31, 2000, to $745,000 as of July 31, 2001 due to sales of
marketable securities, most of which were at a loss, in order to provide working
capital;  and a  significant  decrease  in the  market  value  of the  remaining
marketable  securities  held by AUGI. In addition,  cash,  cash  equivalents and
marketable  securities  decreased by an additional $232,000 in the quarter ended
October 31, 2001.

     POTENTIAL NEED FOR ADDITIONAL FINANCING.  We may require additional capital
in order to finance our current  business  strategy and  operations.  Sources of
funds may include  the  issuance of common  stock or  preferred  stock sold in a
public  offering or in private  placements,  debt  securities or bank financing.
There can be no  assurance  that we will be able to obtain  capital  on a timely
basis, on favorable terms, or at all. If we are unable to obtain such financing,
or generate funds from operations sufficient to meet our needs, we may be unable
to implement our business strategy or may be required to cease all operations.

     DEPENDENCE ON KEY  PERSONNEL.  We depend to a  significant  degree upon the
continuing  contributions  of our  management.  The loss of the  services of our
management  could have a material  adverse  effect on our business and financial
condition.

     CERTAIN  PROVISIONS IN THE  CERTIFICATE OF  INCORPORATION;  OBSTRUCTIONS TO
CHANGE IN CONTROL. Our Certificate of Incorporation  contains certain provisions
that could  have the effect of  delaying  or  preventing  a change of control of
AUGI, which could limit  shareholders'  ability to dispose of their common stock
at a premium in such transactions.  The Certificate of Incorporation  authorizes
the Board of Directors to issue one or more series of  preferred  stock  without
stockholder  approval,  which stock could have voting and conversion rights that
adversely affect the voting power of the holders of Common Stock.  Moreover,  we
are  subject to the  anti-takeover  provisions  of Section  203 of the  Delaware
General  Corporation  Law. In general,  this Section  prohibits a publicly  held
Delaware corporation from engaging in a "business combination" (as defined) with
an "interested  stockholder"  (as defined) for a period of three years after the
date of the  transaction  in which the person became an interested  stockholder,
unless the business combination is approved in a prescribed manner. This section
may render more  difficult or discourage  an attempt to obtain  control of us by
means of a proxy contest, tender offer, merger or otherwise, and thereby protect
the continuity of our management.  In addition,  in certain cases,  this section
may prevent our  shareholders  from  realizing a premium  upon the sale of their
shares in any tender offer or merger opposed by our management.

     BROAD  DISCRETION IN APPLICATION OF PROCEEDS.  If all of the Units are sold
in this offering,  we will receive proceeds of approximately  $2,900,000,  after
deducting  offering  expenses.  We intend to use such  proceeds to implement our
business  strategy  and for  general  corporate  and working  capital  purposes.
However,  all proceeds received in connection with this offering may be expended
at the discretion of our management. See "USE OF PROCEEDS."

                                       5
<PAGE>


     NO  DIVIDENDS.  We have not paid any  dividends to date on our common stock
and do not expect to declare or pay any dividends in the foreseeable  future. We
intend to retain future  earnings for  investment  in our  business.  Any future
determination  to pay cash  dividends  will be at the discretion of the Board of
Directors  and  will be  dependent  upon our  financial  condition,  results  of
operations,  capital  requirements  and  such  other  factors  as the  Board  of
Directors  deems  relevant.  Investors  should,  therefore,  be aware that it is
highly  unlikely that any cash dividends will be paid on our common stock in the
foreseeable future.

     DILUTIVE EFFECT OF POSSIBLE ISSUANCE OF ADDITIONAL  OPTIONS.  On October 3,
2000, the Board of Directors approved and adopted the 2001 Employee Stock Option
Plan (the "2001 Plan"), which was authorized and ratified by our shareholders at
our annual meeting on August 28, 2001. The 2001 Plan provides  7,500,000  shares
of common stock  underlying  stock options  available for grant  thereunder,  of
which an aggregate of 124,400  options are issued and  outstanding.  Such issued
options are exercisable for five years after issuance for $6.875 per share.  The
exercise of any such options may further  dilute the net tangible  book value of
the common stock.

Risks Associated with this Offering

     WE MAY PAY  INTEREST IN COMMON  STOCK.  We  currently  have no  significant
operations or revenue.  As a result,  we may not be able to pay the interest due
under the Notes in cash. In such event, we may pay the interest in common stock.
If we decide to pay the  Interest due under the Notes by issuing  common  stock,
the price of the  common  stock at which the  payment  will be made shall be the
greater of $0.50 per share or the ten-day  average  closing  price of the common
stock, as reported on the OTCBB, prior to the date of payment.  As of January 4,
2002, the last reported sales price of the common stock was $1.95.


     ASSETS  UNDERLYING  SECURITY  INTEREST  WILL NOT SATISFY  REPAYMENT  OF THE
NOTES.  At  October  31,  2001 our total  assets  are  valued  at  approximately
$1,629,000. In the event that all of the Units are sold in this offering, and we
issue  Notes in an  aggregate  dollar  amount  of  $3,000,000,  our  assets,  as
currently valued, would not satisfy our obligations under the Notes.

     NO  REVOCATION.  You are not allowed to revoke or change  your  exercise of
rights after you send in your subscription  forms and payment.  If we cancel the
offering,  we are obligated only to refund payments actually  received,  without
interest.

     FAILURE TO SUBSCRIBE WILL DILUTE YOUR OWNERSHIP INTEREST. If you choose not
to exercise your subscription  rights in full, your relative  ownership interest
will be diluted.

     STANDBY SUBSCRIPTION COMMITMENT. To the extent that the subscription rights
are not  exercised  by the  shareholders,  the Rubin  Family Trust has agreed to
subscribe to purchase,  in addition to the Units  purchased upon the exercise of
its rights, any remaining Units, up to a total purchase price of $1,000,000,  or
approximately  1,500 Units.  If the Rubin Family Trust  purchases such number of
Units,  the  Rubin  Family  Trust  will  become  our  majority  and  controlling
shareholder.  In such event, the Rubin Family Trust could exert  significant and
controlling  influence  over all matters  requiring  approval  by  shareholders,
including  the election or removal of  directors  and the approval of mergers or
other business combination  transactions.  This concentration of ownership could
have the effect of  delaying  or  preventing  a change in  control or  otherwise
discouraging  a potential  acquirer from  attempting to obtain  control of AUGI.
This in turn could  decrease the market price of our common stock or prevent our
shareholders  from realizing a premium over the market price for their shares of
common stock.

     NEED TO ACT PROMPTLY AND FOLLOW SUBSCRIPTION INSTRUCTIONS. Shareholders who
desire to purchase  Units in the  offering  must act promptly to ensure that all
required forms and payments are actually  received by us prior to the expiration
date, ________, 2002. If you fail to complete and sign the required subscription
forms,  send an  incorrect  payment  amount,  or  otherwise  fail to follow  the
subscription  procedures  that  apply  to  your  desired  transaction,  we  may,
depending on the  circumstances,  reject your  subscription  or accept it to the
extent of the payment received. We will not undertake to contact you concerning,
or to attempt to correct, an incomplete or incorrect  subscription form. We have
the sole  discretion  to  determine  whether a  subscription  exercise  properly
follows the subscription procedures.

     DEFAULT AND ACCELERATION.  If we default,  the Notes may be accelerated and
our  funds may be  insufficient  for their  payment.  If we fail to make  timely
payment of  principal  or interest on the Notes,  fail to issue the common stock
upon  conversion of the Notes,  or fail in certain other respects to comply with
the  technical  provisions  of the Notes,  the  holders  may  declare all unpaid
obligations  immediately due and payable.  The Notes also become immediately due
and payable if we file an action for  bankruptcy,  liquidation,  reorganization,
dissolution  or winding up. Our ability to pay the amount due under the notes if
they are accelerated  will depend on the  availability  of sufficient  funds. No
assurance can be given that we will be able to pay the notes upon the occurrence
of an event of default.

                                       6

<PAGE>


     NO MARKET FOR THE NOTES.  There is no market for the Notes.  The Notes will
not be listed for trading on any stock exchange, or otherwise.



     DILUTIVE  EFFECT OF SHARES  ELIGIBLE FOR FUTURE SALE.  The number of shares
eligible for future sale will potentially  dilute the price of our common stock.
At January 4, 2002,  497,602  shares of our common stock,  and 407,094 shares of
Series  B-1  Preferred  Stock  were  outstanding  (each 25  shares  of which are
convertible into one common share.), of which 445,771 shares of common stock and
no shares of Series B-1 Preferred Stock were freely tradeable.  51,831 shares of
common stock, and 407,094 shares of Preferred Stock were "restricted securities"
as that term is defined in Rule 144 under the  Securities  Act. At that date, we
also had  outstanding  options and warrants to acquire  227,000 shares of common
stock. Beginning July 31, 2003, the Notes are convertible into common stock at a
conversion  rate of $1.00 of principal and interest for two (2) shares of common
stock.  If all  4,500  Units  are sold and if all of the  holders  of the  Notes
convert their Notes into common stock, approximately 6,000,000 additional shares
would be issuable  upon  conversion  of the Notes.  The issuance of  substantial
additional  shares or sales of  substantial  amounts of the common  stock in the
public market could adversely  affect the market price of the common stock.  See
"Description of Securities."


     FOR ALL OF THE FOREGOING  REASONS AND OTHERS SET FORTH IN THIS  PROSPECTUS,
THE  SECURITIES  OFFERED  HEREBY  INVOLVE  A HIGH  DEGREE  OF RISK.  ANY  PERSON
CONSIDERING  AN INVESTMENT IN THE  SECURITIES  OFFERED HEREBY SHOULD BE AWARE OF
THESE AND OTHER FACTORS SET FORTH IN THIS  PROSPECTUS.  THE  SECURITIES  OFFERED
HEREBY SHOULD BE PURCHASED  ONLY BY PERSONS WHO CAN AFFORD A TOTAL LOSS OF THEIR
INVESTMENT IN THE COMPANY.





                                       7
<PAGE>


                                 CAPITALIZATION

     The  following  table  sets  for the  actual  capitalization  of AUGI as of
October 31, 2001,  (after giving  effect to the 1-for-25  reverse stock split of
our common  stock),  and as adjusted to give effect to the  issuance and sale of
the all of the Units offered hereby at an offering price of $666 per Unit.  This
table should be read in conjunction with the Financial  Statements and the notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>


                                                                      Actual              As Adjusted
                                                                      ------              -----------
<S>                                                            <C>                     <C>

7.5% Convertible Notes, net of discount                                                      1,450,000

Series A Preferred Stock, $0.01 par value, 1,200,000
authorized, 0 issued and outstanding....................         $       -               $        -

Series B-1 Preferred Stock, $0.01 par value, 1,000,000                   4,000                  4,000
authorized, 407,043  issued and outstanding.............

Series B-2 Preferred Stock, $0.01 par value,500,000                          0                      0
authorized, 0 issued and outstanding....................

Common Stock, $0.01 par value, 40,000,000 authorized;                    5,000                 65,000
497,572 shares issued and outstanding; 6,497,572 shares
issued and outstanding as adjusted......................

Additional paid in capital..............................            50,390,000             51,780,000

Accumulated other comprehensive loss....................             (710,000)              (710,000)

Accumulated deficit.....................................          (50,982,000)           (50,982,000)
                                                                  -----------             ----------

   Total capitalization                                            (1,293,000)             1,607,000
                                                                   ==========             ==========
</TABLE>

(1)  The proceeds from the Rights Offering,  reduced by issuance costs estimated
     by AUGI to be $100,000 will be credited to the 7.5% Convertible  Notes, net
     of discounts and Common Stock and  Additional  paid in capital as reflected
     in the above table.

                                       8

<PAGE>


                                 DIVIDEND POLICY

     For the foreseeable future, we intend to retain earnings, if any, to assist
in financing our business  strategy.  In the future, the payment of dividends by
us on our common stock will also depend on our financial  condition,  results of
operations  and such  other  factors  as the  Board of  Directors  may  consider
relevant.

                                 USE OF PROCEEDS

     We estimate that the net proceeds from the sale all of the 4,500 Units will
be  approximately  $2,900,000,   after  deducting  estimated  expenses  of  this
offering. We intend to apply the proceeds of the offering, as follows:


Application                    Approximate Dollar Amount        Percentage
-----------                    -------------------------        ----------

Expansion and Acquisitions           $1,975,000                     68%

Working Capital                      $  925,000                     32%
                                        -------                     --

Total                                $2,900,000                    100%
                                     ==========                    ===


     Until  applied as set forth above,  all  proceeds  will be invested in U.S.
Government obligations and securities or deposited in federally insured accounts
of banks.

     Although we do not  presently  have any  agreements  or  understandings  to
acquire  any  businesses,  we  intend  to  actively  seek and  investigate  such
opportunities  as they  become  available.  We  would  likely  finance  any such
transaction with cash, the issuance of equity or debt securities,  incurrence of
indebtedness  or any  combination of the foregoing.  To the extent that any such
transaction  would be paid for by us in cash,  we intend to use a portion of the
net proceeds from this offering.

     This  discussion of Use of Proceeds  represents our present  intentions and
best  estimate  with respect to the  allocation of the proceeds of this offering
based upon its present plans and business  condition.  We may require additional
financing in the future to make acquisitions,  continue our business strategy or
finance and  maintain  businesses  acquired by us.  There is no  assurance  that
unforeseen events or changed business  conditions will not result in a different
application of the proceeds of this offering.


DETERMINATION OF SUBSCRIPTION PRICE

     The  subscription  price  of the  Units  was  determined  by our  Board  of
Directors  without any  independent  valuation  or appraisal of the value of our
common stock. The subscription  price is not necessarily  related to the assets,
book value or net worth of AUGI or any other  established  criteria of value and
may  not  be  indicative  of  the  fair  value  of the  securities  offered.  In
determining the  subscription  price, the Board of Directors  considered,  among
other things,  the historic and current  market price of the common stock on the
OTCBB  (approximately  $1.95 per share at January 4, 2002), our need for working
capital, and the lack of alternative sources of capital available to us within a
time frame reasonable to meet our financial needs.



                                       9
<PAGE>
                                  THE OFFERING

GENERAL

     Our shareholders, who own at least 100 shares of our common stock as of the
close of  business  on  _________,  2002  (the  "Record  Date"),  will  have the
opportunity to purchase  Units in this offering.  Every 100 shares of our common
stock will entitle the holder to receive one subscription  right to purchase one
Unit in the amount of $666.  Each Unit  consists of a 7.5%  Convertible  Secured
Promissory Note in the principal  amount of $666, and 1,332 shares of our common
stock.  We have not  engaged  an  underwriter  in  connection  with this  rights
offering.  We intend to  distribute  on  ____________,  2002,  the  subscription
documents and copies of this prospectus to our shareholders,  promptly following
the effectiveness of the registration statement of which this prospectus forms a
part.  If the  offering  is fully  subscribed,  we expect to raise  proceeds  of
approximately three million dollars ($3,000,000),  before deducting costs of the
offering.

     Our   employees,   officers  and  directors  may  solicit   responses  from
shareholders  receiving  rights to purchase,  but these persons will not receive
any  commissions  or  compensation  for their  services  other than their normal
employment or director compensation.

PURPOSE OF THE RIGHTS OFFERING

     Completion  of this  offering  will enable us to raise up to  approximately
three million  dollars($3,000,000),  before deducting the costs of the offering.
The primary purpose of this rights offering is to alleviate  potentially serious
liquidity and capital  adequacy  concerns.  We do not currently have significant
operations and currently own minor equity  positions in five (5)  companies.  We
are not generating adequate revenues to fund our operations and are experiencing
operating  losses.  The  amount of our cash,  cash  equivalents  and  marketable
securities  generally  available to fund our working capital  requirements,  has
diminished  from $4,086,000 as of July 31, 2000, to $745,000 as of July 31, 2001
due to sales of marketable securities, most of which were at a loss, in order to
provide working capital;  and a significant  decrease in the market value of the
remaining  marketable   securities  held  by  AUGI.  In  addition,   cash,  cash
equivalents and marketable securities decreased by $232,000 in the quarter ended
October 31, 2001. This lack of available cash has created increased  operational
and capital adequacy  problems which we hope to alleviate through this offering.
Our inability to complete this  offering and raise the expected  proceeds  would
potentially  leave us without  adequate  working capital which could  materially
impair our future business and operations.

DESCRIPTION OF THE RIGHTS OFFERING

  Subscription Rights

     We are granting to each of our  shareholders,  who own at least 100 shares,
one nontransferable subscription right for each 100 shares of common stock owned
by the  shareholder  on the  Record  Date.  Each  right  entitles  the holder to
purchase a Unit in the amount of $666. If all such  shareholders  fully exercise
their  subscription  rights,  we will issue  Notes in an  approximate  aggregate
principal  amount  of three  million  dollars  ($3,000,000)  and an  approximate
aggregate  of 6,000,000  shares of common  stock.  We will not issue  fractional
shares.  A  shareholder  who does not  participate  in the rights  offering will
experience ownership dilution. Our officers and directors,  in their capacity as
shareholders,  will  have the same  rights  to  purchase  shares  in the  rights
offering as other shareholders.

     Shareholders  cannot  revoke their rights  subscription  certificates  once
submitted.  Our board  reserves the right to modify,  withdraw or terminate  the
rights offering at any time prior to its consummation if it determines that such
modification, withdrawal or termination is in our best interests.

DELIVERY OF SHARE CERTIFICATES

     As soon as  practicable  after  receipt of funds from the  exercise  of the
subscription  rights, we will mail certificates for shares to shareholders whose
rights subscription certificate have been accepted.

  How to Subscribe for Rights

     You may subscribe to purchase  shares by completing  and signing the rights
subscription  certificate  which  accompanies  this  prospectus  and  mailing or
delivering it to us,  together with the required  payment set forth  pursuant to
the  instructions  regarding  use of the  subscription  certificate.  You should
carefully  read and follow such  instructions.  To be accepted,  we must receive
your rights  subscription  certificate before the expiration of the subscription
period.  Shareholders cannot revoke their rights subscription  certificates once
submitted to us.

     Funds should be remitted directly to us. You should make checks payable to:
American  United  Global,  Inc. You should mail or deliver  checks and completed
rights subscription  certificates to us at: PMB 549, 218 Main Street,  Kirkland,
Washington, 98033, Attn: David M. Barnes, CFO.

                                       10
<PAGE>


     Any  shareholder  who has not submitted a properly  completed  subscription
certificate  along with payment for the  subscription  price to us by 5:00 p.m.,
New York  time,  on  ____________,  2002,  unless  such  subscription  period is
extended by us, in our sole  discretion,  for up to an additional 30 days, shall
forfeit their rights to subscribe in the rights offering.

     If you wish to exercise your subscription rights, but you or your broker do
not have sufficient time to deliver the subscription certificate before the time
your rights expire,  you may exercise your rights by delivering  your payment in
full along with the notice of guaranteed  delivery form included as part of your
subscription documents.


  Acceptance of Subscriptions

     In addition to any rights  subscriptions  we do not accept because they are
incomplete or otherwise not properly  submitted,  we may in our sole  discretion
elect to accept or  reject  all of the  subscriptions  in this  rights  offering
before its expiration. We also reserve the right to amend the terms of, postpone
or  cancel  the  rights  offering  at any time  prior to the  expiration  of the
subscription period.

     We are  entitled  to  resolve  all  questions  concerning  the  timeliness,
validity,  form and eligibility of any exercise of rights.  Our determination of
these questions will be final and binding. In our sole discretion,  we may waive
any defect or  irregularity,  or permit a defect or irregularity to be corrected
within such time as we may  determine,  or reject the purported  exercise of any
right because of any defect or irregularity.

     Subscription certificates will not be considered received or accepted until
all irregularities have been waived or cured within such time as we determine in
our sole  discretion.  We have no duty to give  notification  of any  defect  or
irregularity in connection  with the submission of subscription  certificates or
any other required document. We will not incur any liability for failure to give
such notification.

     We reserve the right to reject any exercise of  subscription  rights if the
exercise  does not fully comply with the terms of the rights  offering or is not
in proper form or if the exercise of rights would be unlawful.










                                       11
<PAGE>

PRICE RANGE OF SECURITIES

     On February 4, 1998, The Nasdaq Stock Market,  Inc. ("Nasdaq") delisted our
common stock and warrants (the "Public Warrants") from Nasdaq.  Since such date,
the principal  market for trading our securities is the National  Association of
Securities  Dealers  Over-the-Counter  Bulletin Board  ("OTCBB").  The following
table lists the high and low bid  information  for shares of our common stock on
the OTCBB during the periods identified:

<TABLE>
<CAPTION>
                            Common Stock
                           ------------
                       High               Low
                       ----               ---
<S>                   <C>               <C>
Fiscal 2000
-----------
First Quarter             $7.75          $6.00

Second Quarter            18.00           4.50

Third Quarter             37.50          10.00

Fourth Quarter            21.875          5.3375

Fiscal 2001
----------

First Quarter             17.50           5.50

Second Quarter            14.845          3.125

Third Quarter              5.25           3.25

Fourth Quarter             4.50           2.25

Fiscal 2002
----------

First Quarter              3.50           1.75

Second Quarter
through January 4, 2002    2.50           1.125

</TABLE>

     Since the Public Warrants were delisted from Nasdaq,  they have been thinly
traded on the  OTCBB.  It is our  opinion  that  since  February  4, 1998  price
information  for the Public Warrants is either  unreliable or  unavailable,  and
that trading activity since such date has been extremely sporadic,  and that for
such reasons any such price information may either be misleading, inaccurate, or
not indicative of the true market price of the Public  Warrants since such date.
However,  according  to the most recent  price  information  provided to us, the
Public  Warrants  had a  bid/ask  price on  January  4,  2002 of $4.00 and $8.00
respectively.

     In July 2001, we extended the exercise  period of the Public  Warrants from
July 31, 2001 to July 31, 2003 and reduced  the  exercise  price to $1.00.  As a
result of the reverse stock split  effective  December 17, 2001,  each 25 Public
Warrants are exercisable for 1 share of common stock.

     At January 4, 2002,  497,602 shares of our common stock, and 407,094 shares
of  Series  B-1  Convertible  Preferred  Stock  (each 25  shares  of  which  are
convertible into one common share.) were outstanding, of which 445,771 shares of
common stock and no shares of Series B-1 Preferred Stock were freely  tradeable.
51,831  shares of common  stock,  and  407,094  shares of  Preferred  Stock were
"restricted securities" as that term is defined in Rule 144 under the Securities
Act.  At that date,  we also had  outstanding  options  and  warrants to acquire
227,000 shares of common stock.

     At January  4, 2002 the last sale  price of the Common  Stock was $1.95 per
share.  Also at such date,  AUGI had  approximately  114  record  holders of its
Common Stock,  approximately  1579 beneficial  holders of its Common Stock and 6
beneficial holders of its Public Warrants.

                                       12
<PAGE>

                      SELECTED FINANCIAL AND OPERATING DATA

     The following  Selected  Financial and Operating Data for each of the years
in the five-year  period ended July 31, 2001, are derived from, and qualified by
reference to our audited financial  statements and should be read in conjunction
with the audited financial statements and "Management's  Discussion and Analysis
of Financial  Condition and Results of Operations"  appearing  elsewhere herein.
The  financial  statements  for the three year  period  ended July 31,  2001 are
included elsewhere in this prospectus.  The unaudited  financial  statements for
the fiscal  quarters  ended  October  31, 2001 and 2000 are  derived  from,  and
qualified by reference to our unaudited financial  statements for these periods.
Such unaudited  financial  statements  have been prepared in conformity with the
accounting  principles  generally  accepted  in the  United  States  of  America
reflected  in the  consolidated  financial  statements  for the  preceding  year
included  in the annual  report on Form  10-K/A for the year ended July 31, 2001
filed with the  Securities and Exchange  Commission.  All  adjustments  are of a
normal recurring  nature and are, in the opinion of management,  necessary for a
fair statement of the consolidated results for the interim periods.


    Income Statement Data (all figures in thousands, except per share data):
<TABLE>
<CAPTION>
                              Quarter ended
                              October 31,                              Year ended July 31,

                            2001      2000       2001      2000     1999(1,2)  1998(1)    1997
                            ----      ----       ----      ----     ----       ----       ----
<S>                      <C>       <C>        <C>      <C>        <C>       <C>        <C>

Net sales                 $   -     $  -       $   -     $155,637   $163,650  $163,478  $152,021

Loss from
continuing operations      (272)    (1,217)     (6,400)   (7,030)    (5,054)  (5,121)    (7,944)

Net loss                   (272)    (1,217)     (6,400)   (7,030)    (3,065)  (9,615)   (27,257)

Basic and Diluted Loss
 Per Share:

Loss from
continuing operations     (0.55)     (2.51)     (13.02)   (14.71)   (10.75)   (10.75)    (26.25)

Net loss                  (0.55)     (2.51)     (13.02)   (14.71)    (6.52)   (21.25)    (68.75)
</TABLE>

                 Balance Sheet Data (all figures in thousands):

<TABLE>
<CAPTION>
                                 October 31,                        July 31,
                                 2001    2000       2001     2000     1999     1998       1997
                                 ----    ----       ----     ----     -----    ----       ----

<S>                           <C>      <C>        <C>     <C>      <C>       <C>        <C>
Total assets                   $ 1,629  $6,344     $1,724  $128,549 $142,409  $146,904   $144,723

Total liabilities                2,922   4,051      2,909  $115,413 $121,700  $121,914   $110,742

Working capital (deficit)       (2,374)  1,868     (2,137)  (17,579) (18,751)  (5,972)      2,467

Stockholders'(deficiency)equity (1,293)  2,293     (1,185)    7,373   12,797    15,862     24,101
</TABLE>

     (1)  Includes loss from discontinued operations of the Technology Companies
     (2)  Includes a gain on disposal of $1,989.
     (3)  For 2001,  Western  has been  accounted  for under the equity  method,
          whereas in 1997 through 2000 Western was included in the  consolidated
          financial statements of the Company.


                                       13
<PAGE>


           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

     You  should  read the  following  discussion  together  with the  financial
statements and related notes included elsewhere in this Prospectus.  The results
discussed below are not necessarily  indicative of the results to be expected in
any  future  periods.  To the  extent  that the  information  presented  in this
discussion  addresses financial  projections,  information or expectations about
AUGI or otherwise  makes  statements  about future events,  such  statements are
forward-looking  and are  subject  to a number of risks and  uncertainties  that
could cause actual results to differ  materially  from the statements  made. See
"Risk  Factors-  Forward-Looking   Statements"  for  further  information  about
forward-looking statements.

         General Overview

     We  own  equity  interests  in  five  (5)  operating  entities.   Our  most
significant  interest  is our 36%  interest in Western  Power & Equipment  Corp.
("Western")  which engages in the sale,  rental and servicing of light,  medium-
sized and heavy construction,  agricultural and industrial equipment,  parts and
related  products.  The major  supplier to Western is Case  Corporation  and the
items sold,  rented and serviced include backhoes,  excavators,  crawler dozers,
compactors,  log loaders,  street  sweepers and forklifts.  Western  operates 18
facilities in Nevada,  Oregon,  Washington,  California  and Alaska and sells to
contractors,  governmental agencies and other customers primarily for use in the
construction  of residential  and commercial  buildings,  roads,  levees,  dams,
underground power projects and municipal construction.

     Prior to November 1, 2000, we were the majority shareholder of Western with
a  59.6%  ownership.  The  results  of  operations  of  Western  were  therefore
consolidated  with those of AUGI in all prior fiscal years.  On November 1, 2000
we distributed  777,414 shares of Western common stock owned by AUGI pursuant to
the final court  approved  settlement  of the  shareholder  class  action.  As a
result,  our ownership in Western  became 36% and our  investment in Western has
been accounted for under the equity method effective August 1, 2000.

     Our  ownership in each of the other four entities is less than five percent
and is not material to the financial statements.

     In previous  years we engaged in other  additional  businesses  such as the
Technology  Business and the  Telecommunications  and  Construction  Businesses,
which have all since been  discontinued.  We were formerly a stockholder  of the
majority of the  outstanding  common stock of IDF  International,  Inc.  through
which it engaged in the Telecommunication and Construction Businesses,  however,
since early  fiscal  1998 have been only a minority  stockholder.  TechStar  and
Hayden-Wegman,  IDF's two operating subsidiaries, ceased operations in June 1999
and September 2000 respectively. During Fiscal 1998 and 1999, we either divested
of all assets of, or otherwise  discontinued  all  operations of, the Technology
Businesses.  Consequently,  our operations during Fiscal 2000 consisted entirely
of the Distribution  Business which we engaged in through Western.  Accordingly,
the following  discussion relative to fiscal 2000 and 1999 consists primarily of
a discussion of Western.


Results of Operations


     The Three Months ended  October 31, 2001 compared to the Three Months Ended
October 31, 2000

     General and  Administrative  expenses totaled $175,000 for the three months
ended  October 31, 2001  compared to $853,000 for the three months ended October
31, 2000. The net decrease of $678,000 is primarily  attributable to $532,000 of
stock option compensation recorded in the fiscal 2000 quarter for which there is
no  comparable  expense in the current year.  The  remaining  decrease is due to
reduced headcount and lower administrative expenses in the current year.

     Loss on sale of marketable  securities  was $192,000 for the current year's
quarter,  a decrease of $191,000  from  $383,000 in the prior year's  comparable
period.  The decrease is due to lower cash  requirements  in the current quarter
than in the prior year resulting in fewer sales of securities at losses.

     Net interest expense of $34,000 in the quarter ended October 31, 2001 was a
decrease of $115,000  from  $149,000 in the prior year.  The  decrease is due to
interest  expense  of  $115,000  in  the  prior  years  quarter  related  to the
shareholder  settlement agreement,  as amended in August 2000 for which there is
no comparable expense in the current year.

     The Company has recorded a full  valuation  allowance  against the deferred
tax benefit for net operating losses  generated,  since in management's  opinion
the net  operating  losses do not meet the more  likely  than not  criteria  for
future realization.


                                       14

<PAGE>

Fiscal Year 2001, as compared to fiscal 2000

     Our share of  Western's  fiscal  2001 loss was  $2,823,000  while in fiscal
2000, our share of Western's  loss was  $4,294,000.  Western  recorded a loss of
$7,842,000 in fiscal 2001 and a loss of $7,198,000 in Fiscal 2000, however,  the
decrease  in our  proportionate  share  is due to the  lower  percentage  of our
ownership of Western.

     Selling,   general  and   administrative   expenses  in  fiscal  2001  were
$1,214,000,  an increase of $274,000  over fiscal 2000 which was $940,000 net of
Western.  The  increase  is  primarily  due to a bad debt  reserve  of  $175,000
recorded in the current year for a note receivable from Ego  Magazine.com,  Inc.
The note was issued to AUGI in January 2000 pursuant to a loan agreement and the
borrower  defaulted  upon such note in April 2001.  In addition,  there were two
additional employees during the first half of fiscal 2001.

     Interest  expense in Fiscal  2001 was  $248,000,  slightly  higher than the
$238,000,  net of  Western's  interest,  recorded in fiscal  2000.  Such amounts
consist primarily of interest accrued on short term borrowings.

     Other income of $506,000 in 2001 is comprised  of gains on  settlements  of
$415,000 and an adjustment to the valuation of the final shareholder  litigation
settlement in the amount of $91,000 which was paid by Mr. Rubin during the third
quarter of fiscal  2001.  Other  income in prior  years  consisted  of net gains
related to asset dispositions by Western.

                                       15

<PAGE>

Fiscal Year 2000, as Compared with Fiscal Year 1999

     Western reported net revenue for Fiscal 2000 of $155,637,000  compared with
net revenue of $163,650,000 for Fiscal 1999. Stores opened longer than 12 months
showed an overall  revenue  decrease  of 4.9  percent  from  prior year  revenue
reflecting a general  softening in economic  conditions in the  northwest  along
with  increased  competitive   pressures.   Western  consolidated  five  of  its
facilities  during fiscal 2000 into larger  facilities in the region in order to
reduce costs and leverage existing, larger facilities in the region to cover the
territories previously served by the closed facilities.

     Western  had a net loss for Fiscal  2000 of  $7,198,000  or $2.18 per share
compared  with a net loss of  $1,815,000  or $0.55 per share in Fiscal 1999.  In
Fiscal  2000,   Western   recognized  a  fourth  quarter   inventory  charge  of
approximately  $2,547,000 to provide  allowances to recognize  decreasing market
prices on aged  equipment in the last half of fiscal 2000. In addition,  Western
recorded a valuation  allowance of $2,956,000 related to its deferred tax asset.
Other income  consists  primarily of net gains related to asset  dispositions by
Western.

     Our share of Western's  Fiscal 2000 loss was $4,294,000.  We also accrued a
loss of $1,434,000 on the transfer of 777,414 common shares of Western  pursuant
to the  settlement  of  shareholder  litigation  (see note 10);  recorded a full
reserve of $364,000 in  connection  with  advances to and  investment in IDF and
sold a patent  having to do with  certain  technology  previously  developed  by
eXodus for a gain of $240,000.  Exclusive of Western,  we also incurred $940,000
of selling,  general and administrative expenses (primarily salaries,  taxes and
professional fees) and $238,000 of net interest expense.

     Western's  gross margin was 7.4 percent  during  Fiscal 2000 which is lower
than its 8.9 percent  gross  margin  during  Fiscal 1999.  Margins  decreased in
Fiscal 2000 due mainly to competitive pressures and the fourth quarter equipment
reserve.  Management  continues to place a high  priority on  improving  overall
gross margins by working to increase  higher margin service,  parts,  and rental
revenues,  focusing more sales efforts on specialty and niche product lines, and
by obtaining higher prices for new and used equipment.

     Selling,  general,  and  administrative  expenses were  $14,474,000  or 9.3
percent of revenues for Fiscal 2000  compared to $ 15,705,000  or 9.6 percent of
sales  for  Fiscal  1999.  The  decrease  was  primarily  due to a  decrease  of
approximately  $938,000 in expenses  relative to shareholder  litigation and bad
debts in 2000 as well as generally  lower expense levels at AUGI compared to the
amount  incurred in 1999  somewhat  offset by higher  expenses at Western  which
primarily were due to the costs of closing stores during the year.

     Net interest expense for Fiscal 2000 was $6,307,000,  up from $5,329,000 in
Fiscal 1999  primarily  due to an  increase  in interest  rates at Western and a
decrease in interest income due to lesser principle amounts having been invested
during  fiscal  2000.  In June 1997,  Western  obtained a $75 million  inventory
flooring  and  operating  line of credit  facility  through  Deutsche  Financial
Services ("DFS").  The facility is a three year, floating rate facility at rates
as low as 50 basis  points  under the prime  rate.  Prime  interest  rates  have
increased  from  those in  Fiscal  1999.  Management  of  Western  has used this
facility to allow Western to take  advantage of more  purchase  discounts and to
lower overall interest expense.

                                       16

<PAGE>


Liquidity and Capital Resources

         General

     During Fiscal 2001 our cash,  cash  equivalents  and marketable  securities
decreased  by  $3,341,000,  from  $4,086,000  to  $745,000  net of the  decrease
attributable to no longer consolidating Western. This decrease was primarily due
to sales of  marketable  securities,  most of which were at a loss,  in order to
provide  working  capital and a significant  decrease in the market value of the
remaining marketable securities held by AUGI.

     During the quarter ended October 31, 2001, our cash,  cash  equivalents and
marketable  securities  decreased by another $232,000 due to sales of marketable
securities  to fund  operations  as well  as a  decrease  in  value  of  certain
securities held.

     Our cash,  cash  equivalents  and  marketable  securities of $513,000 as of
October 31, 2001 are not  sufficient to fund current levels of operation for the
next twelve  months.  In order to continue to operate  through the end of fiscal
2002 and on into  fiscal  2003,  we will have to  receive  minimum  proceeds  of
approximately  $1,000,000  from the  rights  offering.  In the  event  that such
proceeds are not raised,  we will have to obtain other financing or sell some or
all of our share ownership in Western.  In addition to the rights  offering,  we
are actively pursuing other financing sources but have not obtained a commitment
or agreement for any financing.

     In prior years, we invested  substantially all cash and cash equivalents in
money market funds, United States Treasury  securities and similar  instruments.
We had sought to provide a high current  return on its  investments  of cash and
cash equivalents  while  preserving both liquidity and capital.  The established
policy guidelines for its investment portfolio included investments that include
United States Treasury securities,  United States government agency obligations,
deposit-type  obligations  of United  States  banking  institutions,  repurchase
agreements,  United States denominated A1 grade commercial paper,  United States
money market funds and interests in mutual funds that invest in the above listed
instruments.  Concentration of the portfolio was limited to not more than 20% of
the  investment  portfolio in the  securities  of any one bank,  corporation  or
non-government issuer.



                                       17

<PAGE>

                           BUSINESS AND PROPERTIES

General

     We own minority equity positions in five companies. Our primary interest is
our 36%  ownership  of Western  Power & Equipment  Corp.  ("Western").  Prior to
November 1, 2000,  Western was our 59.6%  majority owned  operating  subsidiary,
engaged  primarily in the  distribution,  rental and  servicing of  construction
equipment.  On November 1, 2000, we distributed 777,414 shares of Western common
stock  owned by us  pursuant  to the  final  court  approved  settlement  of the
shareholder class action. Due to the distribution of the Western shares, Western
is no longer a majority owned  subsidiary of ours.  However,  we are the largest
stockholder of Western. We no longer consolidate the results of Western with our
operations  and  effective  as of August 1, 2000 account for our  investment  in
Western using the equity method.  All other equity positions held by us are each
less than 5% and are  recorded in the  financial  statements  under the captions
Investment in marketable securities and Other assets.

STRATEGIC GOALS

     We intend to focus our business  strategy on  acquisitions of businesses in
various sectors. A portion of the proceeds from this offering will be used by us
to implement our acquisition  strategy.  However, we have not yet identified any
definitive acquisition candidates.

HISTORY

     AUGI was  initially  organized as a New York  corporation  on June 22, 1988
under the name  Alrom  Corp.,  and  completed  an  initial  public  offering  of
securities in August 1990. The Company  effected a statutory  merger in December
1991,  pursuant to which the Company was reincorporated in the State of Delaware
under the name American United Global, Inc. ("AUGI").

Western

     Western  commenced  operations in November 1992 with the  acquisition  from
Case of seven retail  distribution  facilities located in Oregon and Washington.
Western  became  our  subsidiary  simultaneous  with such  acquisition.  We held
approximately 59.6% of the outstanding shares of Western common stock as of July
31,  2000.  Pursuant to the final  settlement  of a  shareholder  class  action,
777,414 shares of Western common stock owned by us were transferred to the class
on November 1, 2000 and since that date we have  continued to own  approximately
36% of Western's  outstanding common stock. We will grant a security interest in
the shares of Western  common  stock owned by us to secure the  repayment of the
Notes.

 National O-Ring and Stillman Seal

     In  January  1996,  we sold all of the  assets of our  National  O-Ring and
Stillman Seal  businesses,  comprising  the  manufacturing  business of AUGI, to
Hutchinson   Corporation   ("Hutchinson")   for  $24,500,000   (the  "Hutchinson
Transaction"),  of  which  $20,825,000  was  paid  in  cash  and  the  aggregate
$3,675,000  balance was paid by delivery of two  24-month  non-interest  bearing
promissory notes due and paid in January 1998.




                                     18

<PAGE>

The Technology Companies

Connectsoft

     Effective  as of July 31,  1996,  we  acquired,  through  a merger  with an
acquisition  subsidiary  of AUGI  consummated  in August 1996 (the  "Connectsoft
Merger"),  all of the  outstanding  capital  stock of  Connectsoft,  Inc. for an
aggregate of 976,539 shares of AUGI's Series B-1 Preferred Stock (the "Preferred
Stock").  Such  Preferred  Stock  does not pay a  dividend,  is not  subject  to
redemption,  has a liquidation  preference of $3.50 per share over AUGI's Common
Stock and votes  together  with AUGI's  Common  Stock as a single class on a one
vote for one share basis.  Each share of Preferred  Stock was  convertible  into
either one, two or three  shares of Common  Stock of AUGI if certain  benchmarks
for pre-tax  income were achieved.  As such  benchmarks  were not achieved,  the
Preferred  Stock  has  been  and is only  convertible  into  Common  Stock  on a
one-for-one  basis.  To date,  568,646  shares  of  Preferred  Stock  have  been
converted into an equal number of shares of Common Stock,  and 407,893 shares of
Preferred  Stock  remain  outstanding.  As a result of the  reverse  stock split
effected  December 17, 2001, each 25 shares of Preferred  Stock  outstanding are
convertible into one share of common stock.

     On July 10, 1998, we entered into an agreement to sell substantially all of
the assets of our Connectsoft Communications  Corporation subsidiary,  including
the  network   operations   center  ("NOC"),   to  eGlobe,   Inc.   (eGlobe)  As
consideration,  eGlobe  issued  approximately  $2,000,000  (as  valued)  of  its
convertible  preferred  stock  to us and  assumed  approximately  $5,182,000  of
Connectsoft  liabilities  and  leases,  of  which  about  $2,900,000  are  lease
obligations  guaranteed by AUGI.  Although  eGlobe is responsible for payment of
the assumed  liabilities,  the assumption of such  liabilities  will not relieve
AUGI from its  guarantees  until such  liabilities  have been paid.  The sale to
eGlobe was consummated in June 1999.  Thereafter,  in August 1999, the agreement
with eGlobe was amended to reduce the  conversion  price of their  preferred  in
return for AUGI's  agreement to cancel the redemption  feature of the preferred.
This increased the number of eGlobe common shares into which the preferred could
be converted from  1,000,000 to 1,923,000.  We  subsequently  sold all shares of
eGlobe owned by us.

Interglobe

     In September 1996, we acquired Interglobe for a purchase price of $400,000,
and 32,000 shares of our Common  Stock.  The former  stockholders  of Interglobe
also received four-year employment  agreements with Interglobe and AUGI pursuant
to which they  received  seven-year  options to  purchase an  additional  32,000
shares of our Common  Stock at an  exercise  price of $6.00 per share.  All such
options have since been canceled. In August 1998, we discontinued the operations
of Interglobe.

 Exodus

     AUGI's Exodus  subsidiary,  had developed a proprietary  software  program,
marketed as NTERPRISE,  which allowed users to run WindowsTM  application server
software  programs  designed for the Microsoft TM Windows NT TM operating system
developed by Microsoft on (i) users' existing Unix TM workstations,  X-terminals
and other X-windows devices which would otherwise not be Windows compatible, and
(ii) on older versions of Windows  compatible  workstations  which are otherwise
incapable of running the then newer versions of Microsoft  compatible  software.
AUGI  discontinued its Exodus  operations in January 1998 following  Microsoft's
decision not to renew its license with Exodus.

 Seattle OnLine

     In November 1996, we acquired the assets of Seattle OnLine,  Inc. ("Seattle
OnLine"),   a  company   engaged  in  providing  a  regional   Internet/Intranet
telecommunication  service in the form of high bandwidth  Internet  connectivity
and hosting for  businesses in the Pacific  Northwest.  We purchased the Seattle
OnLine assets for the sum of $147,000 in cash and 640 shares of our Common Stock
which were used to settle certain creditor claims.  We also issued to the former
stockholders  of such  corporation  warrants to purchase an  aggregate of 13,333
shares of our Common Stock.  Seattle OnLine ceased operations in August 1997 and
its  remaining  assets  were sold to a  privately  held  company for $25,000 and
shares of  preferred  stock of the  acquiring  company  valued at  approximately
$50,000 on the closing date.

                                     19
<PAGE>

Other Acquisitions

 TechStar and IDF

     Effective  December 11, 1996,  we acquired  TechStar  Communications  Corp.
("TechStar").   In  connection  therewith  we  issued  to  the  former  TechStar
stockholders  an aggregate of 20,290 shares of our Common Stock,  paid $780,000
in cash and delivered three year promissory  notes  aggregating  $600,000.  In a
related transaction, in April 1997 we also acquired Arcadia Consulting,  Inc., a
company  formed by Solon L.  Kandel  for the  purpose  of  providing  consulting
services  to  clients  in the  wireless  telecommunications  industry.  We  paid
$220,000 and issued 7,710 shares of Common Stock to Mr. Kandel.

     In August 1997, we sold TechStar to IDF,  pursuant to an agreement and plan
of  merger,  dated  July 31,  1997 (the "IDF  Merger  Agreement"),  among  AUGI,
TechStar,  IDF and an acquisition  subsidiary of IDF. Upon  consummation  of the
transaction,  we received  6,171,553  shares of IDF common  stock,  representing
approximately  58% of the fully diluted  outstanding IDF common stock,  and as a
result, for accounting purposes, AUGI was deemed to have acquired IDF.

     Robert M. Rubin,  the Chief Executive  Officer and Chairman of the Board of
AUGI, was also a principal stockholder and a member of the board of directors of
IDF. Prior to  consummation of the  transactions  contemplated by the IDF Merger
Agreement,  Mr. Rubin  converted an $800,000  loan  previously  made to IDF into
preferred stock convertible into 400,000 shares of IDF common stock.

     During Fiscal 1998, additional IDF preferred shares were issued pursuant to
a private  placement and  subsequently,  the holders of all IDF preferred shares
converted to IDF common shares.  As a result,  our ownership of IDF common stock
was reduced to  approximately  39%.  Therefore,  effective  August 1, 1998,  the
results of operations of IDF were accounted for using the equity method.

     During  Fiscal  2000 and 1999,  we  advanced  IDF a total of  $364,000  and
$992,000, respectively. However, IDF throughout all of Fiscal 2000 experienced a
significant decrease in revenue and was unable to obtain further financing.  Due
to these  circumstances  and the  uncertainty  of  recovery,  we recorded a full
reserve in July 2000 against all advances to and investments in IDF.

     In April 1999, IDF discontinued the operations of TechStar and in September
2000 also discontinued the operations of  Hayden/Wegman,  Inc., its other wholly
owned operating subsidiary, which was based in New York City.

Office Facilities

     We  maintain  an  executive  office  at  11108 NE  106th  Place,  Kirkland,
Washington 98033.

Employees

     As of January 4, 2002, we had two employees, both in management.

Legal Proceedings

     There are no pending material legal proceedings in which AUGI or any of its
subsidiaries is a defendant,  or to which any of their respective properties are
subject,  which  either  individually  or in the  aggregate  may have a material
adverse effect on the results of operations or financial position of AUGI.

     See "Transactions with ERD" as regards the 1998 shareholder  litigation and
settlement thereof.

     AUGI is the plaintiff in a lawsuit  entitled  American United Global,  Inc.
vs.  Greenberg  Traurig  LLP which was  filed in the  circuit  court of the 11th
Judicial Circuit in and for Miami-Dade County, Florida, Case No. 99-23055 CA 06.
The action is a  professional  liability  action and  alleges  that  damages and
injuries were incurred by AUGI pursuant to improper  counsel from the defendant.
The case is  currently in the  discovery  stage,  and  although  there can be no
assurance of an award of damages in AUGI's favor,  we believe we will prevail in
the case.





                                     20
<PAGE>


                                   MANAGEMENT

Directors and Executive Officers

     The following table sets forth our directors and executive officers:

Name              Age   Position

Robert M. Rubin         61   Chairman of the Board of Directors, President and
                             Chief Executive Officer

C. Dean McLain          48   Director and Executive Vice President and Chief
                             Executive Officer of Western

David M. Barnes         59   Vice President of Finance, Chief Financial Officer
                             and Director

Howard Katz             59   Director

Seymour Kessler         69   Director

Allen Perres            49   Director

Michael Metter          44   Director

     ROBERT  M.  RUBIN.  Mr.Rubin  has  served as our  Chairman  of the Board of
Directors since May 1991, and was our Chief  Executive  Officer from May 1991 to
January 1, 1994.  Between  October 1990 and January 1, 1994, Mr. Rubin served as
the  Chairman  of the  Board  and  Chief  Executive  Officer  of  AUGI  and  its
subsidiaries;  from  January  1, 1994 to January  19,  1996,  he served  only as
Chairman of the Board of AUGI and its subsidiaries. From January 19, 1996 to the
present, Mr. Rubin has served as our Chairman of the Board,  President and Chief
Executive Officer. Mr. Rubin was the founder, President, Chief Executive Officer
and a Director of Superior Care,  Inc.  ("SCI") from its inception in 1976 until
May  1986.  Mr.  Rubin  continued  as a  director  of SCI (now  known as  Olsten
Corporation  ("Olsten") until the latter part of 1987.  Olsten, a New York Stock
Exchange  listed  Company,  is engaged in providing home care and  institutional
staffing services and health care management services. Mr. Rubin was Chairman of
the  Board  and  Chief  Executive  Officer  and is a  stockholder  of ERD  Waste
Technology,  Inc., a diversified waste management public Company specializing in
the management and disposal of municipal solid waste,  industrial and commercial
non-hazardous  waste and  hazardous  waste.  In  September  1997,  ERD filed for
protection under the provisions of Chapter 11 of the federal bankruptcy act. Mr.
Rubin is also a Director of Western. We own approximately 36% of the outstanding
common  stock of Western.  Mr.  Rubin is also a director of  Med-Emerg,  Inc., a
publicly-held  Canadian  management  company for  hospital  emergency  rooms and
out-patient  facilities.  Mr. Rubin was also a director of StyleSite  Marketing,
Inc.,  which  liquidated  its assets for the  benefit  of secured  creditors  in
January 2000. Mr. Rubin devotes  approximately 35 hours per week to the business
of AUGI.

     C. DEAN MCLAIN. Mr. McLain has served as our Executive Vice President since
March 1, 1993, as a director since March 7, 1994, and President of Western since
June 1, 1993.  From 1989 to 1993, Mr. McLain served as Manager of  Privatization
of Case Corporation.  From 1985 to 1989, Mr. McLain served as General Manager of
Lake State Equipment,  a distributor of John Deere construction  equipment.  Mr.
McLain holds a B.S. degree in Business and Economics, and a Master's of Business
Administration  from West Texas State  University.  Mr. McLain  devotes his full
professional  time to Western and  included in such time is time spent on AUGI's
business.


                                       21
<PAGE>


     DAVID M. BARNES.  Mr. Barnes has served our Chief  Financial  Officer since
May 15, 1996, and has been a director since November 8, 1996. Mr. Barnes is also
presently a member of the Advisory  Board of  Interactive  Imagination,  Inc., a
privately-held video game developer based in Seattle, WA. Mr. Barnes devotes the
majority of his professional time to the business of AUGI.

     HOWARD KATZ.  Mr. Katz has been a director since April 15, 1996, and was an
Executive Vice President from April 15, 1996 through July 31, 1998. Since August
1998 to the  present Mr.  Katz has been the Chief  Executive  Officer of Imagine
Networks,  LLC., a New York City based  privately  held company which engages in
advanced technology and software development.

     SEYMOUR KESSLER. Dr. Kessler has served as a Director since August 28, 2001
and has been a Director of Western since February 2, 2000.  From January 1999 to
the present Dr. Kessler has been co-Managing Director of RKP Capital Partners, a
holding company for publicly and privately-held companies.  Between 1996 and the
present  Dr.  Kessler  has been an  active  investor  in  various  publicly  and
privately-held  companies.  From 1992  through  1996 Dr.  Kessler was a founder,
Chief  Executive   Officer  and  a  director  of  Princeton  Dental   Management
Corporation.  Between 1982 and 1997 Dr.  Kessler served on the Board of Trustees
of University of Health Science Center, in Des Moines,  IA. Dr. Kessler also has
been a director of four  nationally-chartered  banks,  including serving as Vice
Chairman of the Board of Directors  of Peterson  Bank.  Dr.  Kessler is a former
podiatric  surgeon who since 1975 has held  majority and minority  interests and
actively  served  in over 85  partnerships,  privately-held  and  publicly-owned
companies and institutions.


     ALLEN PERRES. Mr. Perres has served as a Director since August 28, 2001 and
has been a director of Western since February 2, 2000.  From January 1999 to the
present Mr.  Perres has been  co-Managing  Director of RKP Capital  Partners,  a
holding  company for  publicly and  privately-held  companies.  Mr.  Perres is a
partner in RB Partners,  Inc., an investment banking firm for homebuilders,  and
has served in such capacity from 1994 to the present.  Mr. Perres co-founded and
managed that firm's  commercial and  residential  mortgage unit,  First Dearborn
Mortgage Company, Inc., during such period.

     MICHAEL  METTER.  Mr.  Metter has served as a Director  since  December 14,
2001. Since March 2001, Mr. Metter has been the President of RME  International,
Ltd., a holding company which has  controlling  interest in Flo Weinberg Ltd and
RSI Industries.  Mr. Metter also currently consults a broad range of businesses,
including IT  communications  and media  businesses,  on mergers,  acquisitions,
restructuring,  financing and other matters. From October 1998 to February 2001,
Mr. Metter was a principal of Security Capital Trading,  Inc, and a principal at
Madison Capital from September 1997 to October 1998.  Prior thereto,  Mr. Metter
was the  President  of First  Cambridge  Securities  from October 1994 to August
1997.


                                       22
<PAGE>


Committees of the Board

     At present,  the Board of Directors has three committees,  the Compensation
Committee, the Audit Committee, and the Corporate Governance Committee.

     The Compensation  Committee's duties include the review of the compensation
for all  employees and the granting of options under our stock option plans that
may  exist  and be in  effect  from  time to time.  The  Compensation  Committee
presently consists of Messrs. McLain, Kessler and Perres.

     The  Audit   Committee's   duties  include  the  review  of  our  financial
statements,  budget,  and its'  financing  arrangements  as well a review of its
internal financial  controls.  The Audit Committee presently consists of Messrs.
Kessler and Perres.

     The Corporate Governance Committee's duties include the review of corporate
governance  matters  including   proposed   amendments  to  the  Certificate  of
Incorporation and bylaws and the conduct of meetings of directors, committees of
the Board of Directors and of stockholders.  The Corporate  Governance Committee
consists of Messrs. Barnes and Rubin.



    SUMMARY COMPENSATION TABLE

     The following  table sets forth the amount of all  compensation  paid by us
for services  rendered during each of our previous three fiscal years ended July
31,  2001,  2000,  and 1999 to each of our  most  highly  compensated  executive
officers whose total compensation exceeded $100,000.

<TABLE>
<CAPTION>


                             ANNUAL COMPENSATION              LONG-TERM COMPENSATION
                             -------------------              ----------------------
                                                              AWARDS
                                                              ------       NUMBER OF
NAME AND           FISCAL    SALARY     BONUS    OTHER        RESTRICTED   SECURITIES     LTIP          ALL OTHER
PRINCIPAL          YEAR        ($)               ANNUAL       STOCK        UNDERLYING     PAYOUTS       COMPENSATION
POSITION                                         COMPENSATION AWARD(S)   OPTIONS/SARS#(3) ($)               ($)
--------          -----     -------   -------    ---------------------     --------       ---           ----------
                                                 ($)          ($)          SARS(#)
<S>               <C>      <C>         <C>      <C>          <C>         <C>            <C>            <C>

Robert M. Rubin    2001      425,000    -0-      -0-          -0-          -0-            -0-           -0-
Chairman,          2000      400,000    -0-      -0-          -0-          10,000         -0-           -0-
President and      1999      375,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Executive
Officer(1)

David M. Barnes    2001      150,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Financial    2000      140,000    -0-      -0-          -0-           4,000         -0-           -0-
Officer and        1999      125,000    -0-      2,000        -0-          -0-            -0-           -0-
Director

C. Dean McLain (2) 2001      390,000    -0-      -0-          -0-          -0-            -0-           -0-
Executive Vice     2000      200,000    -0-      -0-          -0-           2,260         -0-           -0-
President and      1999      290,000    -0-      -0-          -0-          -0-            -0-           -0-
Director;
President of
Western

</TABLE>

     (1)  Includes  $150,000 paid under Mr.  Rubin's  Consulting  Agreement with
          Western  during  Fiscal  1999 and Fiscal  2000 and  $200,000 in fiscal
          2001.

     (2)  All compensation paid by Western.

     (3)  Accounts for the 1-for-25 reverse stock split.







                                       23
<PAGE>

STOCK OPTION PLANS

OPTION GRANTS IN FISCAL 2001

     On October 3, 2000, the Board of Directors  cancelled our 2000 Stock Option
Plan and approved the 2001 Stock Option Plan,  which was authorized and ratified
by our stockholders at our annual meeting held on August 28, 2001. As of January
4, 2002, there are 124,400 options  currently  issued and outstanding  under the
2001 Plan,  such number of options  gives effect to our 1-for-25  reverse  stock
split, effective December 17, 2001.

       Option Grants to Named Executive Officers in Last Fiscal Year

     The  following  table sets forth  certain  information  with respect to all
outstanding stock options issued during 2001 to our executive  officers named in
the previous table.

<TABLE>
<CAPTION>
                                   Individual Grants


                                              Percent
                                              of Total
                                              Options                                             Potential
                           Number of          Granted                                         Realizable Value
                          Securities             to                                           At Assumed annual
                          Underlying         Employees                                         Rates of Price
                            Options          In Fiscal        Exercise    Expiration          Appreciation for
Name                        Granted(1)          Year           Price(1)      Date                Option Term
----                        -------             ----           -----         ----                -----------

                                                                                              5%            10%


<S>                         <C>              <C>             <C>          <C>             <C>         <C>
Robert M. Rubin               33,600           58.3%           $6.875       10/03/05        $67,536     $141,120

C. Dean McLain                12,000           20.8%           $6.875       10/03/05        $24,120      $50,400

David M. Barnes               12,000           20.8%           $6.875       10/03/05        $24,120      $50,400

</TABLE>

          (1)  Such  information  accounts for our 1-for-25  reverse stock split
               effective December 17, 2001.



     The following table provides  information  concerning the exercise of stock
options during the last completed fiscal year by each named executive  officers,
and the fiscal year-end value (as of July 31, 2001) of unexercised  options held
by each such person.  None of these options have been exercised as of January 4,
2002.
<TABLE>
<CAPTION>
                          Aggregated Options Exercised
                         in Last Fiscal Year and Fiscal
                             Year-End Option Values
                                                                  Value of
                                                Number of        Unexercised
                                               Unexercised      In-the-Money
                       Shares                  Options/SARs     Options/SARs
                     Acquired on    Value       at FY-End        at FY-End
Name                 Exercise (#)  Realized    Exercisable      Exercisable

<S>                       <C>       <C>       <C>               <C>
Robert Rubin               -0-       -0-        33,600            $0

David Barnes               -0-       -0-        12,000            $0

C. Dean McLain             -0-       -0-        12,000            $0

</TABLE>

                                       24

<PAGE>
THE 2001 STOCK OPTION PLAN

     The 2001 Plan was adopted by the Board of  Directors on October 3, 2000 and
as of such date 227,000  options  were  granted and on such date all  previously
issued  and  outstanding  options  granted  under the 2000 Plan were  cancelled.
112,000 of the options granted on October 3, 2000 were subsequently cancelled by
the Board if Directors.

     The 2001 Plan  replaces  the 2000 Plan which was  cancelled by the Board of
Directors on October 3, 2000. The 2000 Plan was previously  adopted by the Board
of  Directors  as of December 7, 1999,  and  replaced the 1996 Stock Option Plan
(the "1996  Plan") which had been adopted by the Board of Directors on April 25,
1996,  and amended on July 10, 1996. As of January 4, 2002,  options to purchase
124,400 shares of Common Stock in the  aggregate,  of which 71,600 are incentive
stock  options,  have been  granted  to our  employees,  directors  and  outside
consultants under the 2001 Plan.

     The  purpose of the 2001 Plan is to provide  additional  incentives  to our
directors, officers, employees and consultants who are primarily responsible for
the management  and growth of AUGI.  Each option shall be designated at the time
of grant as either an incentive stock option (an "ISO") or a non-qualified stock
option (a "NQSO").  The Board of  Directors  believes  that the ability to grant
stock  options  to  employees  which  qualify  for  ISO  treatment  provides  an
additional material incentive to certain key employees.

     The Company  previously had three other  employee  stock option plans,  the
1991 Stock Option Plan (the "1991 Plan"),  the 1996 Plan and the 2000 Plan.  All
options  granted under the 1991 Plan and 1996 Plan were cancelled prior to or as
of December 7, 1999.  All options  granted under the 2000 Plan were cancelled on
October 3, 2000.

ADMINISTRATION OF THE PLAN

     The 2001 Plan may be  administered by the full Board of Directors or by the
Compensation Committee,  which determines which eligible persons will be granted
options,  when  options  will be granted,  the number of shares to be subject to
options, the durations of options, any conditions to the exercise of options and
the manner in and price at which  options  may be  exercised.  The  Compensation
Committee is authorized to amend,  suspend or terminate the 2001 Plan.  However,
except  for   adjustments   resulting  from  changes  in   capitalization,   the
Compensation Committee requires shareholder approval to (i) increase the maximum
number of shares that may be issued  pursuant to the exercise of options granted
under the 2001 Plan;  (ii) grant an option with an exercise  price less than 85%
of the fair market  value of the  underlying  Common Stock at the time of grant;
(iii) change the eligibility  requirements  for  participation in the 2001 Plan;
(iv) extend the term of any option or the period  during which any option may be
granted under the 2001 Plan; or (v) decrease an option  exercise price (although
an option may be cancelled and a new option granted at a lower exercise price).

SHARES SUBJECT TO THE PLAN

     The 2001 Plan currently provides that options may be granted to purchase up
to 7,500,000 shares of Common Stock,  subject to adjustment upon certain changes
in capitalization  without receipt of consideration by AUGI. In addition,  if we
are involved in a merger, consolidation, dissolution or liquidation, the options
granted under the 2001 Plan will be adjusted or, under certain conditions,  will
terminate, subject to the right of the option holder to exercise his option or a
comparable  option  substituted  at our discretion  prior to such event.  If any
unexercised  option  expires or terminates  for any reason,  the non-  purchased
shares  subject  to such  unexercised  option  will be  available  again for the
purposes of the 2001 Plan.

PARTICIPATION

     Any employee,  director,  consultant, or representative of AUGI is eligible
to receive ISOs or NQSOs  granted under the 2001 Plan.  Non-employee  directors,
consultants or representatives may only receive NQSOs.

OPTION PRICE

     The exercise  price of each option shall be determined by the full Board of
Directors or by the Compensation Committee.  However, the exercise price of each
option on the date the  option is  granted  may not be less than (i) 100% of the
fair market value of the Common Stock  underlying  an incentive  stock option on
the date of grant,  or (ii) 85% of the fair  market  value of the  Common  Stock
underlying a  non-qualified  stock option on the date of grant.  If an incentive
stock  option is to be  granted to an  employee  who holds over 10% of the total
combined  voting power of all classes of the Company's  capital stock,  then the
exercise  price may not be less than 110% of the fair market value of the Common
Stock covered by the option on the date the option is granted.


                                       25
<PAGE>

TERMS OF OPTIONS

     The full Board of Directors or the  Compensation  Committee  shall,  in its
discretion,  fix the term of each option,  provided  that the maximum term of an
option  shall be 10 years.  ISOs granted to an employee who owns over 10% of the
total combined voting power of all classes of capital stock of AUGI shall expire
not more than five years after the date of grant. The 2001 Plan provides for the
earlier expiration of options in the event of certain terminations of employment
of the holder.

RESTRICTIONS ON GRANT AND EXERCISE

     An option may not be transferred  other than by will or the laws of descent
and distribution and, during the lifetime of the option holder, may be exercised
solely by him.  The  aggregate  fair market  value  (determined  at the time the
option is  granted) of the shares of Common  Stock as to which an  employee  may
exercise ISOs in any one calendar year may not exceed  $100,000.  The full Board
of Directors  or the  Compensation  Committee  may impose  other  conditions  to
exercise as it deems appropriate.

TERMINATION

     The 2001 Plan will terminate on October 3, 2010, unless terminated  earlier
by the Board of Directors or the Compensation Committee.


Employment, Incentive Compensation and Termination Agreements

     ROBERT M. RUBIN.  Mr.  Rubin is  employed  as our  Chairman of the Board of
Directors.  Mr.  Rubin  is so  employed  pursuant  to an  amended  and  restated
employment  agreement,  dated as of June 3, 1998 and as most recently amended as
of December 7, 1999 (the "Restated  Agreement") for a term expiring  December 7,
2004. The Restated  Agreement  provides for a minimum base salary payable to Mr.
Rubin of  $225,000,  incentive  bonuses  consisting  of 10% of the sale price in
excess of AUGI's basis,  up to a maximum  aggregate  bonus of $3,000,000,  to be
paid to Mr. Rubin  contingent upon our ability to dispose of our common stock of
either eGlobe,  Inc. or Western and receive net aggregate  proceeds in excess of
$3,000,000 from the sale of the shares of either eGlobe or Western  shares,  and
10,000 incentive stock options.  No incentive bonus was earned in fiscal 2001 or
2000. In December, 2001, Mr. Rubin agreed to waive the foregoing incentive bonus
clause in his contract.  Mr. Rubin was granted 33,600 incentive stock options on
October 3, 2000 under the 2001 Plan,  which options are immediately  exercisable
for five years at $6.875 per share.

     Mr. Rubin is also engaged by Western,  pursuant to a consulting  agreement,
which expires on July 31, 2007. Under the consulting agreement with Western, Mr.
Rubin is paid $200,000 annually plus reimbursement for his business expenses.

     C. DEAN MCLAIN.  C. Dean McLain serves as the President and Chief Executive
Officer of Western pursuant to a ten-year employment agreement expiring July 31,
2005.  Pursuant to such  agreement,  Mr. McLain  received an annual base salary,
payable monthly,  of $290,000 per annum in Fiscal 1999 and $300,000 per annum in
Fiscal 2000. For each of the fiscal years ending 2001 through 2005, Mr. McLain's
base salary shall be $390,000 plus a cost of living adjustment. In addition, Mr.
McLain is entitled to receive certain  incentive bonus payments equal to one and
one half percent (1 1/2 %) of each fiscal years  adjusted  consolidated  pre-tax
income of Western in excess of $1,750,000  provided,  that the maximum amount of
the Incentive  Bonus payable by Western to Mr. McLain shall not exceed  $150,000
in any such fiscal year.  Mr.  McLain was also granted  12,000  incentive  stock
options on October 3, 2000 under the 2001 Plan,  which  options are  immediately
exercisable for five years at $6.875 per share.

     HOWARD KATZ.  Howard Katz is a director of AUGI.  Mr. Katz received  salary
severance of $32,500 in Fiscal 2001 and $78,000 in Fiscal  2000,  and $91,738 in
salary  severance and other  compensation  during Fiscal 1999. Prior to July 31,
1998, Mr. Katz served as our Executive  Vice President  since April 15, 1996 and
received an annual base salary of $185,000  for Fiscal  1998.  In  addition,  on
October 3, 2000 Mr. Katz  received  14,000  stock  options  under the 2001 Plan,
which are immediately exercisable for five years at $6.875 per share.

     DAVID M. BARNES.  David M. Barnes is a director and Chief Financial Officer
of AUGI. In Fiscal 2001 Mr. Barnes received total  compensation of $150,000.  In
Fiscal 2000 Mr. Barnes received total  compensation of $140,000.  In Fiscal 1999
Mr.  Barnes  received a base salary of $125,000 and certain  executive  benefits
which brought his total Fiscal 1999 compensation to $127,000. In Fiscal 2002 Mr.
Barnes will  continue in these  capacities  with a base salary of $160,000  plus
certain  executive  benefits.  Between May 15, 1996 and July 31, 1998 Mr. Barnes
received an annual salary of $150,000. In addition on October 3, 2000 Mr. Barnes
received 12,000  incentive stock options under the 2001 Plan,  which options are
immediately exercisable for five years at $6.875 per share.

                                       26
<PAGE>

               COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During  Fiscal 2001 the Board of  Directors'  Compensation  Committee  (the
"Compensation Committee") met once.

     Mr. Rubin's  annual  compensation,  identified in the Summary  Compensation
Table,  was  determined  by his  employment  agreements  with  AUGI,  which were
approved by the Board of Directors. Mr. Rubin's employment agreement was amended
in December 1999 and is now for a five year term expiring  December 7, 2004. For
information   concerning  Mr.  Rubin's  Restated  Agreement,   see  "Employment,
Incentive Compensation and Termination  Agreements." Mr. Rubin also entered into
a consulting agreement with Western. Mr. McLain's annual compensation was set by
his amended  employment  agreement  with  Western.  See  "Employment,  Incentive
Compensation and Termination Agreements."

     No director of AUGI is paid to attend  Board  meetings,  although  they are
reimbursed for their actual expenses. While Mr. Rubin serves on the Compensation
Committees of the Boards of Directors of other  publicly held  corporations,  no
executive  officers or directors of such companies serve on AUGI's  Compensation
Committee. The Compensation Committee reviews the compensation for all employees
and the granting of options  under all of our  employee  stock option plans that
may exist and be in effect from time to time, and presently  consists of Messrs.
McLain, Kessler and Perres.

Compensation Committee Report On Executive Compensation

     The Board of Directors has been largely  responsible  for AUGI's  executive
compensation  policy in prior  years  and the  Compensation  Committee  met once
during  Fiscal 2001.  The Board  believes  that  offering  its senior  executive
officers  employment  agreements  is the best way to attract  and retain  highly
capable  employees on a basis that will  encourage them to perform at increasing
levels of effectiveness  and to use their best efforts to promote the growth and
profitability of AUGI and its  subsidiaries.  The Board believes this enabled it
to  concentrate  on  negotiating  particular  employment  contracts  rather than
establishing  more general  compensation  policies for all  management and other
personnel. AUGI believes that its compensation levels as to all of its employees
were  comparable  to industry  standards.  Currently,  Mr.  Rubin is AUGI's only
senior executive officer employed under a contract approved by the full Board of
Directors.  See "Executive  Compensation-Employment,  Incentive Compensation and
Termination Agreements."

     In setting levels of compensation  under such  employment  contracts and in
approving management's compensation of all other Company employees, the Board of
Directors  evaluates AUGI's overall  operations,  the contribution of particular
individuals  to  AUGI's  performance  and  industry  compensation  standards.  A
significant percentage of the compensation that could be paid to each of Messrs.
Rubin and McLain under their  respective  employment  agreements  is tied to the
achievement  of  prescribed  levels of pre-tax  income or  specific  performance
goals. See  "Employment,  Incentive  Compensation  and Termination  Agreements,"
above.

Limited Liability of Directors

     In accordance with the Delaware General  Corporation Law, AUGI has included
a provision in its Certificate of Incorporation to limit the personal  liability
of its  directors  for  violations  of their  fiduciary  duties.  The  provision
eliminates such directors'  liability to AUGI or its  stockholders  for monetary
damages,  except for any breach of the directors' duty of loyalty to AUGI or its
stockholders,  for  acts  or  omissions  not in  good  faith  or  which  involve
intentional  misconduct or a knowing  violation of law, for unlawful  payment of
dividends or unlawful stock  purchases or  redemptions,  or for any  transaction
from which any director derived an improper personal benefit.

     This provision  protects AUGI's directors  against  personal  liability for
monetary  damages arising from breaches of their duty of care.  Directors remain
liable for  breaches of their duty of loyalty to AUGI and its  stockholders  and
for the  specific  matters set forth  above,  as well as for  violations  of the
federal  securities  laws.  The provision has no effect on the  availability  of
equitable  remedies  such  as  injunction  or  rescission.  Additionally,  these
provisions do not protect a director from activities  undertaken in any capacity
other than that of director.

Indemnification of Officers and Directors

     AUGI's bylaws provide for  indemnification of its officers and directors to
the fullest extent permitted by the Delaware  General  Corporation Law in effect
at the time of a claim for indemnification.  Such indemnification applies to any
threatened, pending or contemplated suit or proceeding arising by reason of such
person acting as an officer or director of AUGI or its affiliates.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors,  officers or persons controlling AUGI pursuant to
the  foregoing  provisions,  AUGI has been  informed  that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

                                       27
<PAGE>


                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with ERD Waste Corp.

     We  incurred  a loss of  approximately  $5,000,000  as a result of  certain
transactions  entered  into with ERD Waste  Corp.  ("ERD")  in Fiscal  1997.  On
September 30, 1997, ERD filed for reorganization under Chapter 11 of the federal
bankruptcy laws. We have recorded a $5,000,000 net loss in connection with these
transactions,  which  included  making  available for ERD's benefit a $4,400,000
letter of credit and making an additional $500,000 loan, for Fiscal 1997.

     In June 1998 a  stockholder  class  action (the "Class  Action")  was filed
against AUGI's directors alleging breaches of fiduciary duty and loyalty to AUGI
and its stockholders in connection with a letter of credit guarantee by AUGI for
ERD  Waste  Corp.   ("ERD")  and  the  delisting  of  AUGI's  Common  Stock  and
publicly-traded  warrants from NASDAQ in February 1998.  During Fiscal 1997 AUGI
paid $4,400,000  pursuant to its guarantee for ERD, which sought protection from
creditors under Chapter 11 of the federal bankruptcy laws on September 30, 1997.
Final judicial approval of a settlement was received in August 1999, pursuant to
which  AUGI  has  paid  $2,500,000  (the  "Class  Payment")  to  members  of the
stockholder class.

     The Class Payment was paid in the form of $600,000 in cash  (consisting  of
proceeds from AUGI's  directors' and officers'  liability  insurance policy) and
$1,900,000   in  the  form  of  777,414   shares  of  common  stock  (valued  at
approximately  $2.44 per  share) of Western  owned by AUGI.  These  shares  were
distributed on or about  November 1, 2000 and thereupon  AUGI  recognized a loss
(accrued at July 31, 2000) of $1,434,000 representing the difference between the
book  value of the  transferred  shares  and their  market  value as  calculated
pursuant to the settlement  agreement.  AUGI presently owns approximately 36% of
the outstanding Western common stock.

TRANSACTIONS WITH OTHER AFFILIATES

     During  Fiscal  1999 and  Fiscal  2000 AUGI  provided  financing  to IDF, a
minority-owned subsidiary in the amounts of $992,000 and $364,000, respectively.
These funds were used for  working  capital,  the payment of certain  delinquent
taxes and other liabilities of Hayden/Wegman, Inc., an IDF subsidiary, and costs
related to the  discontinuation of operations of the TechStar  subsidiary.  AUGI
took a full  reserve  against  these  advances  at July  31,  2000  due to IDF's
significant  decrease in revenue and its inability to obtain further  financing.
In September 2000, IDF discontinued the operations of Hayden / Wegman.

     Mr. Rubin was a director of IDF until August 1999 and owned 874,659  shares
of IDF common stock, representing approximately 9.0% of the then outstanding IDF
common stock after giving effect to the IDF Merger,  and  including Mr.  Rubin's
conversion  of an $800,000  loan  previously  made to IDF into  preferred  stock
convertible into an additional  400,000 shares of IDF common stock, prior to his
transfer of such shares to the Rubin Family  Trust.  Subsequent  the IDF Merger,
Mr. Rubin served as Chairman of the Board of Directors of IDF until August 1999.

INTERTECH TRANSACTION

     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among AUGI, Intertech Capital, Inc. ("Intertech"), Jeffrey M.
Berman  ("Berman"),   Eric  Staffin  ("Staffin")  and  Peter  Gregory  Saridakis
("Saridakas") (Berman, Staffin and Saridakas are collectively referred to as the
"Purchasers"),  AUGI sold an  aggregate  of  500,000  shares of common  stock of
Intertech,   par  value  $.0001  per  share  (the  "Intertech  Shares")  to  the
Purchasers, which Intertech Shares constituted all of the issued and outstanding
capital stock of Intertech. In connection therewith,  AUGI issued to: (i) Berman
825,000  warrants to purchase  shares of AUGI's  common stock (the  "Warrants");
(ii) Staffin 166,667  Warrants;  and (iii) Saridakis 83,333 Warrants,  all which
are immediately vested,  expire on March 19, 2006, and are exercisable at $0.275
per share. As a result of the reverse stock split  effective  December 17, 2001,
each 25 Warrants is exercisable for one share of common stock. In  consideration
for the Intertech  Shares and the Warrants,  each of the  Purchasers  terminated
their  respective  employment  agreements  with  AUGI,  released  AUGI  from any
obligations  with respect to the employment  agreements,  including past due and
accrued  salaries,  and  terminated  and waived  all right to any stock  options
granted by AUGI.  In addition,  Berman and Staffin  resigned as officers  and/or
directors of the Company.

     Simultaneous  with the closing of the Intertech  transaction AUGI purchased
approximately  5.4% of Intertech's then issued and outstanding  capital stock in
consideration  for the  transfer of 79,895  shares of common  stock of New Media
Technology, Inc. owned by the AUGI.


                                       28
<PAGE>

                      BENEFICIAL OWNERSHIP OF COMMON STOCK

     The  table  below  sets  forth,  to  the  best  of our  knowledge,  certain
information regarding the beneficial ownership of shares of our Common Stock by:

          (1)  each beneficial owner of more than five percent (5%) of the total
               number of outstanding shares of the Common Stock;

          (2)  each of our directors;

          (3)  each of our executive officers; and

          (4)  all of our directors and executive officers as a group.

     Unless  otherwise  indicated,  the owners have sole  voting and  investment
power  with  respect to their  respective  shares.  The table  does not  include
options or SARs that have not yet vested or are not  exercisable  within 60 days
of the date hereof.
<TABLE>
<CAPTION>

Name and Address*                                              Number of Shares                Percentage of
of Beneficial Owner               Office(s)                    Beneficially Owned(1)           Common Stock (1)
-------------------               ---------                    ---------------------           ----------------
<S>                             <C>                                  <C>                         <C>
Robert M. Rubin                   Director, President, Chief            33,680(2)(6)                6.3
                                  Executive Officer and
                                  Chairman of the Board

C. Dean McLain                    Director, Executive                   12,000(3)                   2.4
4601 N.E. 77th Avenue             Vice-President and
Suite 200                         President of Western
Vancouver, WA 98662               Power and Equipment Corp.

Howard Katz                       Director                               14,000 (4)                  2.8

David M. Barnes                   Chief Financial Officer                12,000 (5)                  2.4
                                  Vice President of Finance
                                  and Director

Rubin Family Irrevocable                                                 49,831 (6)                 10.0
Stock Trust
25 Highland Blvd.
Dix Hills, NY 11746

Jeffrey Berman                                                           33,000 (7)                  6.2

Seymour Kessler                   Director                               10,000 (8)                  2.0

Allen Perres                      Director                               10,000 (9)                  2.0

Michael Metter                    Director                               10,000 (10)                 2.0

All Directors and Executive
Officers as a Group (7 persons)                                         101,680                     17.0
</TABLE>

          *    Unless otherwise  indicated,  the address of each such beneficial
               owner is 11108 N.E. 106th Place, Kirkland, Washington 98033.

          1)   Pursuant  to the  rules and  regulations  of the  Securities  and
               Exchange Commission, shares of Common Stock that an individual or
               group  has a right to  acquire  within  60 days  pursuant  to the
               exercise of options or warrants are deemed to be outstanding  for
               the  purposes  of  computing  the  percentage  ownership  of such
               individual or group, but are not deemed to be outstanding for the
               purposes  of  computing  the  percentage  ownership  of any other
               person  shown  in the  table.  All  stock  options  and  warrants
               mentioned in (2) through (10) below are immediately exercisable.

          (2)  Includes (a) 80 shares of Common Stock owned by Mr. Rubin and (b)
               incentive  stock options  issued to Mr. Rubin under the 2001 Plan
               on October 3, 2000 to acquire  33,600 shares for five years after
               issuance   at  an  exercise   price  of  $6.875  per  share.


                                       29
<PAGE>

          (3)  Includes  incentive  stock  options to acquire  12,000  shares of
               Common Stock granted to Mr. McLain under the 2001 Plan on October
               3, 2000 for five years after  issuance  at an  exercise  price of
               $6.875 per share. Mr. McLain's continuing  employment is governed
               by the terms of his employment agreement with Western.

          (4)  Includes  incentive  stock options  granted to Mr. Katz under the
               2001 Plan on October 3, 2000 to purchase  14,000 shares of Common
               Stock for five  years  after  issuance  at an  exercise  price of
               $6.875 per share.

          (5)  Includes  incentive stock options granted to Mr. Barnes under the
               2001 Plan on October 3, 2000 to purchase  12,000 shares of Common
               Stock for five  years  after  issuance  at an  exercise  price of
               $6.875 per share.

          (6)  Robert M. Rubin, a grantor of the Rubin Family  Irrevocable Stock
               Trust (the  "Trust"),  does not have any voting  power over,  and
               disclaims  beneficial  ownership  of, the shares of Common  Stock
               held by the Trust.

          (7)  Includes  a warrant  to  purchase  up to 33,000  shares of Common
               Stock  issued  to  Mr.  Berman  pursuant  to the  Share  Purchase
               Agreement between AUGI and Intertech Capital, Inc dated March 19,
               2001.   The   warrant  was  issued  in   consideration   for  the
               cancellation  of all options granted to Mr. Berman under the 2001
               Plan on October  3, 2000.  The  warrant is  exercisable  for five
               years at $6.875 per share.

          (8)  Includes 10,000  non-qualified  stock options,  which vested upon
               Dr.  Kessler's  election to the Board of  Directors on August 28,
               2001.  Such options are exercisable for five years after issuance
               for $6.875 per share.

          (9)  Includes 10,000  non-qualified  stock options,  which vested upon
               Mr.  Perres'  election  to the Board of  Directors  on August 28,
               2001.  Such options are exercisable for five years after issuance
               for $6.875 per share

          (10) Includes 10,000  non-qualified  stock options,  which vested upon
               Mr.  Metter's  appointment  to the Board of Directors on December
               14,  2001.  Such  options  are  exercisable  for five years after
               issuance for $1.25 per share







                                       30
<PAGE>
                            DESCRIPTION OF THE NOTES

     The following  summary of certain  provisions of the Notes does not purport
to be complete  and is subject to and is  qualified in its entirety by reference
to the form of Note, a copy of which is filed as an exhibit to the  registration
statement of which this prospectus is a part and is incorporated  herein by this
reference.

General

     The Notes are secured obligations of AUGI in an aggregate maximum principal
amount of $3,000,000  and mature on  _____________,  2007. The Notes bear simple
interest at the annual rate of 7.5%, payable quarterly in arrears,  on the first
day of each January,  April,  July and October  commencing on  __________,  2002
until  ________,  2007 unless earlier  re-paid in full by AUGI.  Interest on the
notes will be paid on the basis of a 360-day year of twelve 30-day months.

     Payment of principal  and interest on the Notes may be made by AUGI in cash
or check. Interest payments may also be made, in AUGI's sole discretion,  in the
form of common stock.  Interest  payments will be mailed to the holder's address
as furnished  to AUGI,  and  principal  payments  will be made upon  maturity or
earlier  repayment and surrender of the Note(s) to AUGI. If we decide to pay the
interest under the Notes by issuing common stock,  the price of the common stock
at which the  repayment  will be made shall be the greater of $0.50 per share or
the ten-day average closing price of the common stock, as reported on the OTCBB,
prior to the date of repayment.

Conversion Rights

     The Notes are  convertible  into common stock, at the option of the holder,
at any time  commencing  on July 31,  2003  until the close of  business  on the
business  day  preceding  the day the  Notes  are paid in full,  if not  earlier
prepaid by AUGI.  Each dollar of principal and interest due under the Notes,  at
the time of conversion,  is  convertible  into two (2) shares of common stock of
AUGI ("Conversion Rate").

The Conversion Rate is subject to adjustment on the occurrence of any of
the following events, each of which is called an adjustment event:

          -    the subdivision of its outstanding common stock,

          -    the  combination of its  outstanding  common stock into a smaller
               number of shares, and

          -    the   issuance   of  any   shares   of  its   capital   stock  by
               reclassification   of  its  common  stock,   including  any  such
               reclassification  in a  consolidation  or merger in which AUGI is
               the continuing  corporation,  unless in connection with a merger,
               consolidation  or similar  transaction,  the Notes are  converted
               into the equivalent kind and amount of securities,  cash or other
               assets, and with equivalent adjustments, as would have been owned
               if  the  note  had  been  converted   immediately  prior  to  the
               transaction.

      No adjustment need be made, however, if

          -    in each  case the  holder  is  permitted  to  participate  in the
               transaction on a basis no less favorable than any other party and
               at a  level  which  would  preserve  holder's  percentage  equity
               participation in the common stock upon conversion of the note, or

          -    the sales of  common  stock are  pursuant  to a company  plan for
               reinvestment  of dividends or interest,  the granting or exercise
               of options under existing stock option plans, the exercise of any
               other outstanding options or authorized warrants.

     In the case of each adjustment event, the Conversion Rate shall be adjusted
to reflect the dilutive effect of the adjustment  event on the Conversion  Rate.
Adjustments are made successively  whenever an adjustment event occurs,  and are
effective  immediately  after the effective  date in the case of a  subdivision,
combination  or  reclassification.  Any  adjustment  of  less  than  1%  of  the
Conversion  Rate will not be made,  but will be carried  forward  and taken into
account  in any  subsequent  adjustment.  AUGI  will  promptly  mail a notice of
adjustment  to all holders,  stating the facts  requiring  the  adjustment,  the
adjusted  Conversion  Rate, the manner of computing it and the effective date of
the adjustment.

     Upon a partial  conversion  of the  principal  amount of a Note,  shares of
common  stock will be issued in  accordance  with the  Conversion  Rate for that
portion of the principal amount of the Note so converted, and a new Note will be
issued for the balance of the principal amount.



                                       31
<PAGE>
Security Interest

     The Notes  are  secured  by a lien  granted  by AUGI on all of its  assets,
including 1,222,586 shares of Western.

     If at any time during the term of the Notes, we sell, or otherwise  dispose
of the Western  Shares,  any proceeds  received  from such  disposition  will be
allocated by us for the repayment of principal and interest due under the Notes.

Prepayment

     We may prepay  the Notes or any  portion  thereof,  together  with  accrued
interest  to the date  fixed  for  repayment,  at any time  after  notice to the
holders. Notice of such repayment shall be given to the holders not less than 10
days before the date fixed for  repayment.  No sinking  fund is provided for the
notes.  Notes called for repayment will be convertible in common stock until the
close of business on the day before the repayment date.

Rights upon an Event of Default

      An "event of default" consists of:

          1.   the  failure  by AUGI to make a timely  payment of  principal  or
               interest on the Note when due and payable,  which failure remains
               uncured for a period of 30 days after  notice has been given by a
               holder to AUGI,

          2.   AUGI's failure to be in material  compliance with its covenant to
               issue the common stock upon a holder's conversion of the Notes in
               accordance with their terms,

          3.   AUGI's  failure to be in material  compliance  with or neglect to
               perform any of the provisions of the Note,  which failure remains
               uncured for 30 days after  notice has been given by the holder to
               AUGI,

          4.   the commencement of any bankruptcy,  receivership,  winding up or
               liquidation  of the  affairs of AUGI or any of its  subsidiaries,
               which remains undismissed for a period of 90 consecutive days, or

          5.   the  institution of bankruptcy,  custodianship,  receivership  or
               similar action by or with the consent of AUGI.

     The  occurrence  of an event of  default  described  in 4 or 5 above  shall
result in all  obligations  due under the  Notes  becoming  immediately  due and
payable  without notice.  If an event of default  described in 1 through 3 above
shall occur, the holders of at least 51% in principal amount of the Notes may at
their option by notice to AUGI declare all unpaid  obligations  immediately  due
and payable.  In addition to the obligations  remaining  unpaid under the Notes,
all  reasonable  costs and expenses of collection  and  enforcement  of the Note
shall be payable by AUGI.

     AUGI's  ability  to pay the  obligations  due  under  the  Notes  upon  the
acceleration  of their  maturity will depend on the  availability  of sufficient
funds. Accordingly, AUGI may not be able to meet its obligations under the Notes
upon the occurrence of an event of default.

Form, Denomination and Transfer

     The Notes shall be issued in  denominations  of $666 or integral  multiples
thereof up to a total offering amount of $3,000,000.  No transfer shall be valid
unless  effected  on AUGI's  books by the  registered  holder in person or by an
attorney duly  authorized in writing,  and similarly noted on the Note. AUGI may
charge a holder a reasonable fee for any  re-registration,  transfer or exchange
of the Notes.

No Market for the Notes

     The  Notes  have  not  been  and will  not be  listed  for  trading  on any
recognized market.

Governing Law; Modification

     The Notes are construed in accordance  with,  and the rights of the parties
thereto  shall be governed by, the laws of the State of Delaware.  The Notes may
be modified  only by a writing  signed by the holder and AUGI,  and then only to
the extent set forth in such writing and only in the specific instance for which
it is given. No forbearance, delay or failure to exercise any right or remedy by
a holder of a note will operate as a waiver of or acquiescence in any default.

                                       32
<PAGE>

                            DESCRIPTION OF SECURITIES

     The  following  description  is  qualified  in all respects by reference to
AUGI's  Certificate  of  Incorporation  and all  amendments  thereto  and AUGI's
Bylaws,  copies of which are filed as exhibits to the registration  statement of
which this prospectus is a part.

GENERAL

     The Company is authorized by its Certificate of  Incorporation  to issue an
aggregate of 40,000,000  shares of Common  Stock,  $.01 par value per share (the
"Common Stock"),  and 2,700,000  shares of preferred  stock,  $.01 par value per
share (the "Preferred Stock"), of which Preferred Stock: (a) 1,200,000 shares of
Preferred  Stock are  designated  as Series A voting  and  redeemable  Preferred
Stock, $.01 par value per share (the "Series A Preferred Stock");  (b) 1,000,000
shares are designated as Series B-1 voting and convertible  Preferred Stock (the
"Series B-1 Preferred  Stock");  and (c) 500,000 shares are designated as Series
B-2  non-voting  and  convertible  Preferred  Stock (the  "Series B-2  Preferred
Stock").

     At our  annual  meeting  of  stockholders  held on  August  28,  2001,  our
stockholders  approved a reverse  stock split of 1-for-15,  1-for-20 or 1-for-25
with the precise ratio to be  determined by our Board of Directors.  On December
7, 2001,  our Board of Directors  declared a 1-for-25  reverse stock split.  The
reverse stock split became effective on December 17, 2001 (the "Effective Date")
and  each 25  shares  of our  common  stock  that  was  issued  and  outstanding
immediately  prior to the  Effective  Date was changed into one validly  issued,
fully paid and  non-assessable  share of our common  stock  without  any further
action by the holders of shares of our common stock.

COMMON STOCK

     Our Certificate of Incorporation  authorizes us to issue 40,000,0000 shares
of Common Stock, having a par value of $.01 per share.

     Holders of the Common Stock are entitled to one vote per share and, subject
to the rights of the  holders  of the  Preferred  Stock  (discussed  below),  to
receive  dividends  when and as  declared  by the Board of  Directors  and share
ratably in the our assets legally available for distribution in the event of the
liquidation, dissolution or winding up of AUGI.

     Holders of the Common Stock do not have  redemption or  conversion  rights,
nor do they have any  preemptive  rights.  In the event we were to elect to sell
additional  shares of its Common Stock  following  the date of this  Prospectus,
purchasers  of the  shares  offered  hereby  would  have no  right  to  purchase
additional  shares  of such  stock.  As a  result,  their  percentage  of equity
interest in AUGI would be diluted.

     The shares of common  stock  comprising  the Units will be, when issued and
paid for, fully paid and not liable for further call or assessment.

     Holders of the Common Stock do not have  cumulative  voting  rights,  which
means that the holders of more than half of the shares of Common Stock  (subject
to the  rights  of the  holders  of the  Preferred  Stock)  can elect all of the
Company's  Directors,  if they choose to do so. In such event the holders of the
remaining  shares  would  not be able to  elect  any  Directors.  The  Board  is
empowered  to fill any  vacancies  on the Board  created by the  resignation  of
Directors.

     Except as otherwise  required by the Delaware General  Corporation Law, all
shareholder  action is taken by vote of a majority of the shares of Common,  and
Series B-1  Preferred  Stock  voting as a single  class  present at a meeting of
shareholders at which a quorum (a majority of the issued and outstanding  shares
of the Company's  Common and Series B-1 Preferred Stock) is present in person or
by proxy.

PREFERRED STOCK

    THE SERIES A PREFERRED STOCK.

     Pursuant to our Certificate of Incorporation, AUGI is authorized to issue a
maximum of  1,200,000  shares of Series A  Preferred  Stock.  In July 1991,  the
company  issued  all of such  1,200,000  shares of Series A  Preferred  Stock to
Robert M. Rubin.  Mr.  Rubin  exchanged  all of his shares of Series A Preferred
Stock for a 10% $1,200,000 principal subordinated note of AUGI in February 1994.
There are currently no outstanding shares of Series A Preferred Stock.


                                       33
<PAGE>


    THE SERIES B PREFERRED STOCK.

     AUGI is authorized by its Certificate of  Incorporation  to issue a maximum
of  1,500,000  shares  of  Series  B  Preferred  Stock  in one or  more  series,
containing such rights,  privileges and  limitations,  including  voting rights,
conversion  privileges and/or  redemption  rights, as may, from time to time, be
determined  by the Board of  Directors.  The Board of Directors  has created two
series,  the Series B-1 and B-2. As of December  17,  2001,  there were  407,094
shares of Series B-1  Preferred  Stock issued and  outstanding  and no shares of
Series B-2 Preferred Stock issued and outstanding.

     SERIES  B-1  PREFERRED  STOCK.  Series B-1  Preferred  Stock does not pay a
dividend,  is not subject to redemption,  has a liquidation  preference of $3.50
per share over the common  stock and votes  together  with the common stock as a
single  class on a one share  for one vote  basis.  As a result of the  1-for-25
reverse stock split, each 25 shares of Series B-1 Preferred Stock is convertible
into one share of common stock at the holder's option.

     SERIES B-2 PREFERRED  STOCK.  On January 8, 1997,  the Company  completed a
private  placement (the "Series B-2  Placement") of 400,000 shares of Series B-2
Preferred Stock,  paying a 7% cumulative  quarterly  dividend with a liquidation
preference  of $25.00 per share over the common stock (the "Series B-2 Preferred
Stock").  All  Series  B-2  Preferred  Stock was  converted  into  approximately
2,616,000 shares  (pre-split) of Common Stock at conversion prices between $3.31
and $5.37 per share by September 1997. There are currently,  and since September
1997 have been, no outstanding shares of Series B-2 Preferred Stock.


    PUBLIC WARRANTS

     The Public Warrants were initially  issued pursuant to a Warrant  Agreement
between the AUGI and North American Transfer Company, as warrant agent, and were
in registered  form.  Corporate Stock Transfer & Trust Company is AUGI's current
warrant agent.  Each of the Public  Warrants  entitled the registered  holder to
purchase  one share of Common Stock at a price of $7.50 per share until June 30,
1997.  AUGI has extended  the  expiration  date on the Public  Warrants on three
occasions on May 21, 1997, July 21, 1999, and July 13, 2001. In addition, on
July 13, 2001 the exercise price was reduced to $1.00 per share. The Public
Warrants currently expire on July 31, 2003, unless  exercised, or the expiration
date is further extended by AUGI. As a result of the 1-for-25 reverse stock
split, each 25 Public Warrants is exercisable for one share of common stock.

     The Public Warrants are subject to redemption by AUGI at a redemption price
of $.10 per  warrant  upon 15 days'  prior  written  notice,  provided  that the
average  last trade  price of the Common  Stock as  reported  on the  NASDAQ-NMS
System (or the average  closing  bid price if the Common  Stock is not traded on
the  NASDAQ-NMS  System) equals or exceeds $8.75 per share for either (i) any 20
consecutive  trading days ending not more than 25 and not less than five trading
days prior to the date upon which notice of  redemption  is given,  or (ii) with
the  written  consent of the  Underwriter  of the public  offering  in which the
Public Warrants were issued,  Chatfield Dean,  Inc., any 10 consecutive  trading
days  ending not more than 15 and not less than five  trading  days prior to the
date upon which notice of redemption is given.

     The holders of the Public  Warrants have certain  anti-dilution  protection
upon the occurrence of certain events, including stock dividends,  stock splits,
and reclassifications.  The holders of the Public Warrants have no right to vote
on matters  submitted to the stock  holders of AUGI and have no right to receive
dividends.  The holders of the Public  Warrants are not entitled to share in the
assets of AUGI in the event of  liquidation,  dissolution  or the  winding up of
AUGI's affairs.

OTHER WARRANTS

     The  investors in the 1997 Private  Placement  received  Private  Placement
Warrants to purchase an aggregate of 350,000  Shares at an exercise  price equal
to the Closing Date Average Price of $8.58 per Share,  which  Private  Placement
Warrants  expire on January 11, 2002 to the extent  unexercised.  As a result of
the reverse stock split, every 25 Private Placement Warrants are exercisable for
one share of common stock.

     All  of  the  above  warrants  are  subject  to  anti-dilution   protection
(resulting  in  adjustments  to the exercise  price and the number of underlying
shares which may be acquired) upon the occurrence of certain  events,  including
stock dividends, stock splits and reclassifications.


Transfer Agent and Registrar

     The transfer  agent and registrar  for the common stock is Corporate  Stock
Transfer & Trust Co., Denver, Colorado.

                                       34

<PAGE>

                    CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

     The following  discussion has been prepared by AUGI to present the material
federal income tax considerations  under generally applicable current law of the
acquisition,  ownership,  conversion  and  disposition  of  the  notes  and  the
acquisition,  ownership and disposition of any common stock which is received as
part of the Unit or on the  conversion  of a Note,  for  persons who acquire the
Notes and hold those Notes and any such common stock as capital assets.  It does
not, however, discuss the effect of (1) special rules, such as those which apply
to  tax-exempt  organizations,   insurance  companies,  financial  institutions,
persons  who hold the notes or common  stock in  connection  with a straddle  or
dealers  or  (2)  any  foreign,  state  or  local  tax  law.  Accordingly,  each
prospective  purchaser  of Units  is  advised  to  consult  its own tax  advisor
regarding the matters discussed herein in light of its particular circumstances,
the  application  of state,  local and foreign tax laws,  and the fact that such
laws change from time to time.

     The following  statements are based upon the Internal Revenue Code of 1986,
as  amended,  existing  regulations  thereunder  and the  current  judicial  and
administrative interpretations thereof.

Ownership by U.S. Persons

     The  following  applies  to a person who is a citizen  or  resident  of the
United States,  a corporation or partnership  created or organized in the United
States  or any  state  thereof  or an  estate  or trust  the  income of which is
includible in income for United States federal income tax purposes regardless of
its source.

Interest on Notes

     The stated  interest  on a note will be taxable as  ordinary  income at the
time  interest  is paid or accrued in  accordance  with the  holder's  method of
accounting for United States federal income tax purposes.

     If a note is acquired at a "market  discount,"  gain  realized on a taxable
disposition  and  certain  nontaxable  dispositions  thereof  will be treated as
interest  income to the extent of the  theretofore  unrecognized  accrued market
discount. Subject to a de minimis exception, "market discount" with respect to a
Note is equal to the excess of (1) the stated  redemption  price at  maturity of
the note over (2) the holder's  initial basis in the note.  Any market  discount
accrues on a ratable basis or, at the election of the holder,  on the basis of a
constant  interest  rate,  and a holder of a market  discount  note may elect to
include the market discount in its income as that market discount accrues.  If a
holder  converts a market  discount  note into  common  stock,  the  theretofore
unrecognized  accrued  market  discount on that note will not,  in  general,  be
recognized,  but will be treated as ordinary income on the later  disposition of
that  common  stock to the  extent  of any gain  recognized  at that time on the
disposition of that common stock.

Conversion of Notes

     A holder  generally  will not recognize gain or loss on the conversion of a
note into common stock except that it will recognize a capital gain or loss as a
result of the receipt of cash in lieu of a fractional  share equal to the amount
of cash reduced by the basis of the portion of the note in respect of which that
cash was paid.  The basis of the common stock that is received on the conversion
will be the  adjusted  basis  of the note  which  was  converted  at the time of
conversion increased by any gain that is recognized,  decreased by any loss that
is recognized and decreased by any cash that is received.  The holding period of
that common stock will include the holding period of the converted note.


Sale or Exchange of Notes or Common Stock

     Gain or loss will be  recognized on the sale or exchange of the notes or of
common stock in an amount equal to the difference between

          (1)  the  amount  of cash  and the  fair  market  value  of any  other
               property  received by the holder,  excluding,  in the case of the
               notes, any amount  representing  accrued interest,  which will be
               taxable as such, and

          (2)  the holder's adjusted basis in the property sold or exchanged.

     Any such gain,  other than gain  characterized as interest under the market
discount rules, or loss with respect to a note or common stock will be a capital
gain or loss.

                                     35
<PAGE>


Dividends on Common Stock

     Distributions,  if any, on the common stock will be dividends to the extent
of the current or  accumulated  earnings and profits of AUGI,  then a nontaxable
return of capital reducing the holder's adjusted basis in the common stock until
such  adjusted  basis is  reduced  to zero and  finally  an amount  received  in
exchange  for the common  stock.  Dividends  paid to domestic  corporations  may
qualify for the dividends received deduction subject to the limiting  provisions
that apply thereto.  Dividends may only be issued at the discretion of the Board
of  Directors.  However,  for the  foreseeable  future,  we intend to retain any
earnings.

Ownership by Non-U.S. Holders

     The  following  applies  to a person  who is not a U.S.  holder  and to the
income  received  thereby,  such  as  interest,  dividends  and  gain or loss on
disposition,  with  respect to notes and common  stock which is not  effectively
connected with the conduct by the non-U.S.  holder of a trade or business within
the  United  States.  Any such  effectively  connected  items of income  will be
subject to the United  States  federal  income tax that applies to U.S.  holders
generally,  and,  in the  case  of such a  non-U.S.  holder  that  is a  foreign
corporation, those items also will be subject to the branch profits tax.

Interest on Notes

     Interest  paid on notes to a non-U.S.  holder will not be subject to United
States federal income tax or to withholding in respect thereof if:

          (1)  the beneficial owner, or if certain requirements are satisfied, a
               member of a class of  financial  institutions,  certifies,  under
               penalties  of perjury,  that the  beneficial  owner is not a U.S.
               holder and provides the beneficial owner's name and address,

          (2)  the non-U.S.  Holder does not actually or constructively  own 10%
               or more of the total voting power of all classes of stock of AUGI
               entitled to vote, common stock into which a note can be converted
               is constructively owned for these purposes,

          (3)  the non-U.S.  holder is not a controlled foreign corporation with
               respect to which AUGI is a "related person" within the meaning of
               Section 864(d)(4) of the Code, and

          (4)  the  non-U.S.  holder is not a bank holding the notes as a result
               of an  extension  of credit  made  pursuant  to a loan  agreement
               entered  into in the  ordinary  course of its trade or  business.
               Accrued  market  discount  on a note  is not  treated  for  these
               purposes as interest income. If the foregoing  conditions are not
               satisfied,  then the interest will generally be subject to United
               States  federal  income tax  withholding  at a rate of 30% or any
               lower rate that is provided by any applicable treaty.

Sale or Exchange of Notes or Common Stock; Conversion of Notes

     A non-U.S.  holder  generally  will not be subject to United States federal
income tax on gain  recognized  on the sale or exchange of notes or common stock
or on the conversion of a note unless

          (1)  the holder is an  individual  who is present in the United States
               for 183 or more  days  in the  taxable  year  and  certain  other
               conditions are satisfied or

          (2)  AUGI is a "United States real property  holding  corporation," as
               defined in Section 897 of the code, and certain exceptions do not
               apply.

Dividends on Common Stock

     Any  distribution  on common stock to a non-U.S.  holder will be subject to
United States federal income tax  withholding at a rate of 30% or any lower rate
which is provided by any applicable treaty.

Estate Tax

     An individual non-U.S. holder of a note will not be required to include the
value of such note in his gross  estate for  United  States  federal  estate tax
purposes,  provided  that such  holder did not at the time of death  actually or
constructively  own 10% or more of the  combined  voting power of all classes of
stock of AUGI and, at the time of such holder's  death,  payments of interest on
such note would not have been  effectively  connected  with the  conduct by such
holder of a trade or  business  in the United  States.  An  individual  non-U.S.
holder who is treated as the owner, or has made certain lifetime  transfers,  of
an interest in the common stock will be required to include the value thereof in
his gross  estate for United  States  federal  estate  tax  purposes  and may be
subject  to United  States  federal  estate  tax with  respect  thereto,  unless
otherwise provided by an applicable estate tax treaty.

                                       36
<PAGE>
Backup Withholding; Information Reporting

     A noncorporate  U.S.  holder holding notes or common stock and any non-U.S.
holder  failing to provide a  certificate  that it is not a U.S.  holder will be
subject to backup  withholding  at the rate of 31% with respect to interest paid
on the  notes,  dividends  paid on common  stock and the  proceeds  of any sale,
exchange  or  redemption  thereof  if the  payee  fails to  furnish  a  taxpayer
identification  number  and in  certain  other  circumstances.  Any  amounts  so
withheld  will be allowed as a refund or a credit  against the  holder's  United
States  federal  income tax  liability,  provided  that certain  information  is
furnished  to the  Internal  Revenue  Service.  Information  reporting  will  be
required  with  respect to a payment of  proceeds  from the sale or  exchange of
notes or common  stock  through a  foreign  office of a broker  that is a United
States person or of certain  foreign  brokers unless the broker has  documentary
evidence in its files that the owner is a non-U.S.  holder and the broker has no
actual knowledge to the contrary.

                              PLAN OF DISTRIBUTION

     We are offering rights to purchase the Units directly the our  shareholders
who own at least 100 shares of common stock as of the Record  Date.  We have not
employed any brokers,  dealers or  underwriters in connection with this offering
and no  commissions,  fees or  discounts  will be paid in  connection  with  it.
Certain of our officers and other employees may solicit  responses from you, but
such  officers  and  other   employees  will  not  receive  any  commissions  or
compensation for such services other than their normal employment compensation.

     On or about _________,  2002, we will distribute  copies of this prospectus
to those  shareholders  who owned at least 100 shares of our common stock on the
Record Date. The prospectus  will mailed via U.S. mail to each  shareholder,  at
the address  listed in the records of Corporate  Stock Transfer & Trust Company,
our transfer  agent, or delivered to ADP for  distribution to the  non-objecting
beneficial  owners of our  shares  of  common  stock.  We do not  undertake  any
responsibility for verifying or otherwise confirming such addresses. If you wish
to subscribe for the Units,  you should follow the  procedures  described  under
'Subscription Procedures.'

     Holders  may  sell  the  Common   Stock  and   Conversion   Shares  in  the
over-the-counter  market or otherwise at prices that represent or relate to then
prevailing  market prices or are negotiated,  by purchase by a broker-dealer  as
principal  and resale by such broker or dealer for its account  pursuant to this
prospectus.  Sales  may  also be made in  ordinary  brokerage  transactions  and
transactions in which a broker solicits purchasers,  and block trades in which a
broker-dealer  so engaged will attempt to sell the  securities  as agent but may
take a position and resell a portion of the block as principal to facilitate the
transaction.  In  addition,  any  securities  covered by this  prospectus  which
qualify for sale  pursuant to Rule 144 of the  Securities  Act may be sold under
Rule 144 rather than pursuant to this prospectus.

     We may suspend the use of this  prospectus  and any  supplements  hereto in
certain  circumstances  because of pending  corporate  developments or a need to
file a post-effective  amendment.  In any such event, we will use its reasonable
efforts  to ensure  that the use of the  prospectus  may be  resumed  as soon as
practicable.

                                  LEGAL MATTERS

     The  validity of the  issuance  of the  securities  offered  hereby will be
passed upon for us by Gersten, Savage & Kaplowitz, LLP, New York, New York.

                                     EXPERTS

     The  financial  statements  as of July 31,  2001 and 2000 and for the three
years in the period ended July 31, 2001 included in this registration statement,
have been so included in reliance on the report of  PricewaterhouseCoopers  LLP,
independent  accountants,  given on the  authority  of said firm as  experts  in
accounting and auditing.

                              AVAILABLE INFORMATION

     We have filed a registration statement on Form S-1 to register with the SEC
the Units,  and the Notes and common  stock  included  therein,  and  Conversion
Shares which may be issued upon the conversion of the Notes.  This prospectus is
part of that  registration  statement.  As  allowed  by the  SEC's  rules,  this
prospectus  does  not  contain  all of  the  information  you  can  find  in the
registration statement or the exhibits to the registration statement.

     We file annual,  quarterly and other information with the SEC. You may read
and copy any  reports,  statements  and other  information  we file at the SEC's
public  reference  rooms in  Washington,  D.C., New York, New York, and Chicago,
Illinois.  Please call 1 (800)  SEC-0330 for further  information  on the public
reference  rooms.  Our  filings  will  also  be  available  to the  public  from
commercial document retrieval services and at the web site maintained by the SEC
at http://www.sec.gov.

                                       37
<PAGE>

                          AMERICAN UNITED GLOBAL, INC.

                              FINANCIAL STATEMENTS


                                      INDEX



                                                                   Page

Report of Independent Accountants .......................           F-2

Consolidated Balance Sheets .............................           F-3

Consolidated Statements of Operations and
 Comprehensive Income (Loss).............................           F-4

Consolidated Statements of Shareholders' (Deficit)Equity.           F-5

Consolidated Statements of Cash Flows ...................           F-6

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



                                      F-1
<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and
Stockholders of American United Global, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of  operations  and  comprehensive  income  (loss),  of
shareholders' equity (deficit) and of cash flows present fairly, in all material
respects,  the  financial  position  of American  United  Global,  Inc.  and its
subsidiaries at July 31, 2001 and 2000, and the results of their  operations and
their cash flows for each of the three years in the period  ended July 31, 2001,
in conformity with accounting principles generally accepted in the United States
of America.  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 audits.  We conducted our audits of these statements in
accordance with auditing  standards  generally  accepted in the United States of
America  which  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,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company has incurred  losses from
operations  and has had a working  capital  deficit for each of the years ending
July 31, 1999, 2000 and 2001.  Further,  as discussed in Note 1 to the financial
statements,  the Company  requires  additional funds to continue its operations.
Such  factors  raise  doubt about the  Company's  ability to continue as a going
concern. Management's plans in regards to these matters are discussed in Note 1.
The financial  statements do not reflect any adjustments  that might result from
the outcome of this uncertainty.


PricewaterhouseCoopers LLP

Portland, Oregon November 5, 2001
except for the reverse stock split information
in Note 1 as to which the date is December 17, 2001







                                      F-2
<PAGE>

<TABLE>
<CAPTION>

                  AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                                                                                      JULY 31,
                                                                                                      --------
                                                                                                2001           2000
                                                                                                ----           ----
                                         ASSETS
<S>                                                                                     <C>             <C>

Current assets:
   Cash and cash equivalents............................................................  $      519,000  $   1,281,000
   Investment in marketable securities..................................................         226,000      3,629,000
   Trade accounts receivable, less allowance for doubtful accounts of $724,000..........            -        17,347,000
   Inventories (Note 4).................................................................            -        58,297,000
   Prepaid expenses and other receivables...............................................          27,000        478,000
   Deferred tax asset (Note 7)..........................................................            -         2,273,000
   Receivable from Chairman (Note 10)...................................................            -           299,000
   Notes receivable (Note 10)...........................................................            -         1,161,000
                                                                                               ---------      ---------

       Total current assets.............................................................         772,000     84,765,000

   Property and equipment, net (Note 5).................................................            -         9,450,000
   Rental equipment fleet, net (Note 5).................................................            -        26,076,000
   Leased equipment fleet, net (Note 5).................................................            -         4,975,000
   Intangibles and other assets, net of accumulated amortization of $683,000............            -         2,858,000
   Other assets.........................................................................         250,000        425,000
   Investment in Western Power & Equipment Co...........................................         702,000           -
                                                                                          --------------  -------------

                                                                                          $    1,724,000  $ 128,549,000
                                                                                          ==============  =============
                          LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

Current liabilities:
   Borrowings under floor financing lines (Note 6)......................................  $         -     $  14,768,000
   Short-term borrowings (Note 6).......................................................       1,500,000     69,171,000
   Current portion of capital lease obligations (Note 10)...............................            -            17,000
   Accounts payable.....................................................................          39,000     10,810,000
   Accrued liabilities..................................................................       1,370,000      5,097,000
   Income taxes payable (Note 7)........................................................            -           581,000
   Due to shareholders (Note 10)........................................................            -         1,900,000
                                                                                             -----------    -----------
       Total current liabilities........................................................       2,909,000    102,344,000

Long-term borrowings (Note 6)...........................................................            -            28,000
Capital lease obligations, net of current portion (Note 10).............................            -         4,786,000
Deferred taxes (Note 7).................................................................            -         2,273,000
Deferred gain...........................................................................            -              -
Deferred lease income...................................................................            -         5,982,000
                                                                                               ---------      ---------
       Total liabilities                                                                       2,909,000    115,413,000

Minority interest.......................................................................            -         5,763,000

Commitments and contingencies (Note 10)

Shareholders' (deficit) equity (Notes 8 and 11):

   Series B-1  preferred stock, convertible to common, $3.50 per share
     liquidation value, $.01 par value; 1,000,000 shares authorized; 407,843 and
     416,263 shares issued and outstanding, respectively................................           4,000          4,000
   Common stock, $.01 par value; 40,000,000 shares authorized; 497,572 and 485,735
     shares issued and outstanding, respectively........................................           5,000          5,000
   Common stock, Class B, non-voting, .01 par value, 25,000,000
     shares authorized, no shares issued and outstanding ...............................           -              -
   Additional contributed capital.......................................................      50,390,000     50,390,000
   Accumulated deficit..................................................................     (50,710,000)   (44,310,000)
   Accumulated other comprehensive (loss) income........................................        (874,000)     1,284,000
                                                                                          --------------   ------------
       Total shareholders's (deficit) equity...........................................      (1,185,000)     7,373,000
                                                                                          --------------   ------------
                                                                                          $    1,724,000   $128,549,000
                                                                                          ==============   ============

</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-3
<PAGE>



<TABLE>
<CAPTION>


                             AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES


                                 CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
<S>                                                                       <C>            <C>            <C>

Net sales................................................................  $        -     $  155,637,000 $  163,650,000
Cost of goods sold.......................................................           -        144,099,000    149,056,000
                                                                             -----------     -----------    -----------

       Gross profit......................................................           -         11,538,000     14,594,000

Selling, general and administrative expenses.............................      1,214,000      14,474,000     15,705,000
                                                                              ----------      ----------     ----------

       Operating loss....................................................     (1,214,000)     (2,936,000)    (1,111,000)


Gain on sale of patent...................................................           -            240,000           -
Loss on transfer of Western shares.......................................           -         (1,434,000)          -
Impairment of Investment of Western Power & Equipment Co.................     (1,771,000)           -              -
Loss on sale of marketable securities....................................     (1,395,000)           -              -
Other income.............................................................        506,000       1,646,000        530,000
Interest expense, net....................................................       (248,000)     (6,307,000)    (5,329,000)
                                                                               ---------       ---------      ---------

Loss from continuing operations before income taxes, equity
       in loss of unconsolidated subsidiary and minority interest........     (4,122,000)     (8,791,000)    (5,910,000)

(Provision) benefit for income taxes (Note 7)............................        545,000        (779,000)     1,101,000
Equity in loss of unconsolidated subsidiary (Note 3).....................     (2,823,000)       (364,000)      (961,000)
Minority interest in loss of consolidated subsidiaries...................           -          2,904,000        716,000
                                                                                 -------        --------       --------

       Loss from continuing operations ..................................     (6,400,000)     (7,030,000)    (5,054,000)


Discontinued operations, net of taxes (Note 9):

   Gain on disposal......................................................          -                -         1,989,000
                                                                           -------------  --------------  --------------

Net loss ................................................................     (6,400,000)     (7,030,000)    (3,065,000)
                                                                           =============  ============== ==============

Basic and diluted loss per share:
   Loss from continuing operations.......................................  $      (13.02) $       (14.71) $     (10.75)
   Gain from discontinued operations.....................................           -               -             4.23
                                                                           -------------  -------------   -------------

Basic and diluted loss per share.........................................  $      (13.02) $      (14.71)  $      (6.52)
                                                                           =============  =============    ============


Weighted average number of shares........................................        491,413         477,935        469,928
                                                                           =============  ==============   ============


Comprehensive loss:

     Net loss............................................................  $  (6,400,000) $  (7,030,000)  $  (3,065,000)

     Unrealized (loss) gain on marketable securities.....................       (874,000)     1,284,000          -
                                                                              -----------  -------------  --------------

     Comprehensive loss..................................................  $  (7,274,000) $  (5,746,000) $   (3,065,000)
                                                                            =============  ============== ==============


</TABLE>


             The accompanying notes are an integral part of this statement.


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                                       AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY

                                                                   PREFERRED STOCK                 COMMON STOCK
                                                                   ---------------                 ------------

                                                              NUMBER OF                      NUMBER OF
                                                               SHARES          AMOUNT         SHARES         AMOUNT
                                                               ------          ------         ------         ------
<S>                                                       <C>             <C>            <C>          <C>

Balance at July 31, 1998.................................      724,000        $ 7,000         465,000       $  5,000
Net loss ................................................
Conversion of preferred stock to common..................     (298,000)        (3,000)         12,000           -
                                                              --------         ------      ----------       --------

Balance at July 31, 1999.................................      426,000          4,000         477,000          5,000
Net loss ................................................
Issuance of common stock.................................                                       9,000           -
Stock option compensation................................
Accumulated unrealized gains, net........................
Conversion of preferred stock to common..................       (9,000)                          -
                                                                ------        --------    -----------    -----------

Balance at July 31, 2000.................................      417,000          4,000         486,000          5,000
Net loss ................................................
Accumulated unrealized gains, net........................
Additional shares issued in private placement............                                      11,000           -
Conversion of preferred stock to common..................       (9,000)                         1,000
                                                                ------        --------    -----------    -----------

Balance at July 31, 2001................................       408,000        $ 4,000         498,000    $     5,000
                                                               =======          =====      ==========    ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                           ACCUMULATED
                                            ADDITIONAL                        OTHER                            TOTAL
                                            CONTRIBUTED                   COMPREHENSIVE   ACCUMULATED      SHAREHOLDERS'
                                              CAPITAL          OTHER      INCOME (LOSS)     DEFICIT       (DEFICIT) EQUITY
                                              -------          -----      -------------    ---------       --------------
<S>                                         <C>             <C>          <C>            <C>                 <C>

Balance at July 31, 1998..................   $50,068,000     $   -        $       -       $(34,215,000)        $15,862,000
Net loss .................................                                                  (3,065,000)         (3,065,000)
                                             -----------     ---------    ------------    -- ----------          ----------

Balance at July 31, 1999..................    50,068,000          -                        (37,280,000)         12,797,000
Net loss .................................                                                  (7,030,000)         (7,030,000)
Issuance of common stock..................        85,000                                                            85,000
Stock option compensation.................       237,000                                                           237,000
Accumulated unrealized gains, net.........        -              -            1,284,000                          1,284,000
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------

Balance at July 31, 2000..................    50,390,000  $     -             1,284,000    (44,310,000)          7,373,000

Net loss .................................                                                  (6,400,000)         (6,400,000)
Accumulated unrealized gains, net.........        -              -           (2,158,000)                        (2,158,000)
Additional shares issued
 in private placement.....................          -
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------
Balance at July 31, 2001.................. $  50,390,000  $     -              (874,000) $ (50,710,000)       $ (1,185,000)
                                           =============  =============     ===========  =============        ============
</TABLE>

         The accompanying notes are an integral part of this statement.

                                      F-5
<PAGE>

<TABLE>
<CAPTION>
                                       AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
<S>                                                                       <C>            <C>             <C>
Cash flows from operating activities:
   Net loss from continuing operations...................................  $ (6,400,000)    $ (7,030,000)  $ (5,054,000)
   Net gain (loss) from discontinued operations .........................          -                -         1,989,000
Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization.......................................          -          11,712,000     11,779,000
     Loss on settlement..................................................          -                -           310,000
     Gain on disposal of business........................................          -                 -       (1,989,000)
     Gain on sale of fixed assets........................................          -             (59,000)       (45,000)
     (Loss) income applicable to minority interest.......................          -          (2,904,000)      (716,000)
     Undistributed loss of affiliate.....................................      2,823,000         364,000      1,553,000
     Stock option compensation...........................................           -            236,000          -
     Gain on sale of patent..............................................           -           (240,000)         -
     (Loss) gain on sale investments.....................................      1,395,000         (52,000)         -
     Impairment of investments...........................................      1,946,000            -             -
       Change in assets and liabilities, net of effects of acquisition
       and dispositions:
       Trade accounts receivable.........................................           -         (1,847,000)     8,208,000
       Inventories.......................................................           -          2,903,000      1,299,000
       Notes receivable..................................................           -            500,000       (500,000)
       Prepaid expenses and other receivable.............................        240,000        (192,000)         1,000
       Lease equipment, net..............................................           -            289,000     (2,504,000)
       Accounts payable..................................................         53,000      (2,416,000)    (5,295,000)
       Accrued liabilities...............................................     (1,213,000)      1,051,000     (1,290,000)
       Income taxes payable..............................................           -            817,000       (164,000)
       Change in deferred revenue........................................           -           (339,000)     2,707,000
                                                                              ----------    ------------   ------------

       Net cash provided by (used in) operating activities...............     (1,156,000)      2,793,000     10,289,000
                                                                               ---------      ----------    -----------
Cash flows from investing activities:
   Purchase of property and equipment....................................           -         (1,254,000)    (2,711,000)
   Purchase of rental equipment, ........................................           -         (9,531,000)   (27,984,000)
   Sales of rental equipment.............................................           -         10,574,000     14,669,000
   Sale of marketable securities.........................................      1,217,000       1,268,000      4,078,000
   Purchase of other assets..............................................           -            (18,000)         -
   Purchase of equity and debt investments...............................           -           (425,000)         -
   Net effect on cash from distribution of Western shares................       (823,000)           -             -
   Proceeds on sales of fixed assets.....................................           -            189,000      2,235,000
                                                                                 -------       ---------      ----------

       Net cash provided by (used in) investing activities...............        394,000         803,000     (9,713,000)
                                                                                 -------      ----------       ---------
Cash flows from financing activities
   Long term debt repayments.............................................           -            (20,000)    (1,068,000)
   Borrowings under term loans...........................................           -         (2,390,000)    (4,286,000)
    Inventory floor financing............................................           -         (3,192,000)     6,090,000
   Principal payments under capitalized lease obligations................           -             32,000        (60,000)
   Proceeds from sale of stock...........................................           -             85,000           -
   Subsidiary sale/purchase of treasury stock............................           -            256,000           -
   Increase in receivable from shareholder, net..........................           -              -         (1,700,000)
                                                                              -----------     ----------     ----------

       Net cash used in financing activities.............................           -         (5,229,000)    (1,024,000)
                                                                              ----------      ----------     ----------
Net decrease in cash and cash equivalents................................       (762,000)     (1,633,000)      (448,000)
Cash and cash equivalents beginning of year..............................      1,281,000       2,914,000      3,362,000
                                                                               ---------       ---------     ----------
Cash and cash equivalents end of year....................................  $     519,000  $    1,281,000  $   2,914,000
                                                                           =============  ==============  =============
</TABLE>

         The accompanying notes are an integral part of this statement.


                                      F-6
<PAGE>

                 AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       DESCRIPTION OF BUSINESS

     American United Global,  Inc., a Delaware  corporation (the "Company") owns
minority equity  positions in five entities.  The Company's  primary interest is
it's 36%  minority  ownership  of Western  Power &  Equipment  Corp.  (Western).
Western previously was a 59.6% majority owned subsidiary and on November 1, 2000
the Company  distributed  777,414  shares of Western  common  stock owned by the
Company pursuant to the final court approved settlement of the shareholder class
action.  Such  distribution  decreased  the  Company's  percentage  ownership of
Western to 36%.  All other  equity  positions  held by the Company are each less
than five percent.

     Western  is engaged in the sale,  rental and  service of light,  medium and
heavy  construction,  industrial and  agricultural  equipment and related parts.
These sales are  conducted  from 18 regional  distribution  operations  owned by
Western  located in the states of  Washington,  Oregon,  California,  Alaska and
Nevada.  A  majority  of this  equipment  is  manufactured  by Case  Corporation
("Case").

     The Company was also  previously  involved in the  engineering,  design and
construction  business through a minority owned subsidiary,  IDF  International,
Inc. ("IDF"). IDF ceased business operations in September 2000.

     Connectsoft  Communications  Corp.  ("CCC"),  a wholly owned subsidiary had
been  developing  a  telephony  server  product  that reads email and select web
content over the telephone which was marketed under the name "Vogo Server".  The
assets  of CCC  were  sold to an  unrelated  third  party  on June  15,  1999 as
discussed in Note 9. CCC has been accounted for as  discontinued  operations for
the year ending July 31, 1999.

     The Company has had a working  capital  deficit for each of the three years
ending July 31, 1999, 2000 and 2001. In addition, the cash, cash equivalents and
marketable securities of $745,000 as at July 31, 2001 are not sufficient to fund
current  levels of  operations  through the end of fiscal  2002.  The Company is
therefore actively pursuing various sources of financing.  Should such financing
not be obtained, the Company may not be able to continue in business.


     At the  Company's  stockholders'  meeting  held on  August  28,  2001,  the
stockholders  approved a reverse  split of  one-for-fifteen,  one-for-twenty  or
one-for-twenty-five  with the exact ratio to be determined at the  discretion of
the Board of Directors. The Board met on December 7, 2001 and approved the ratio
of one-for-twenty-five.  The effective date of the reverse split is December 17,
2001 and all  shareholders  of record on that  date  will  receive  one share of
common stock for every twenty-five shares that they hold.  Fractional  interests
will be rounded up to the next highest  share.  All share and per share  amounts
have been  restated  in all  periods  presented  to reflect  the  effects of the
reverse split. In addition, the Company's stock ticker symbol will be changed to
AUGB effective December 17, 2001 as a result of the reverse stock split.


2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  its  wholly  owned  and   majority-owned   subsidiaries.   All  significant
intercompany  balances and transactions  have been eliminated in  consolidation.
Due to a  distribution  of 777,414  shares of Western owned by the Company as at
November 1, 2000 the percentage  ownership of Western  decreased to 36% and thus
the  operations  of Western have been  accounted for using the equity method for
fiscal 2001.  Western was,  however,  included as a  consolidated  subsidiary in
fiscal  2000 and 1999 and  minority  interest  in  those  years  represents  the
minority  shareholders'  proportionate share of the equity of Western, which was
40.4% at July 31, 2000 and 39.4% in 1999.


                                      F-7
<PAGE>


         Cash Equivalents

     For financial reporting  purposes,  the Company considers all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents. Cash and cash equivalents consist of bank demand deposits with
three  financial  institutions.  At times,  demand  deposits may exceed  amounts
insured by the Federal Deposit Insurance Corporation.

         Restricted Cash

     In accordance with Western's  borrowing  agreement with Deutsche  Financial
Services ("DFS"),  Western has a cash account  restricted by DFS for the purpose
of paying down the line of credit. Restricted cash included in the cash balances
totaled $543,000 at July 31, 2000. (See note 6.)

         Inventory Valuation

     Inventories  are stated at the lower of cost or market.  Cost is determined
based upon the first-in,  first-out  method for parts inventory and the specific
identification for equipment inventories.

         Investment Securities

     Investments in marketable  securities  represent primarily common shares of
publicly  traded  companies and are carried at market value.  These  investments
have been classified as available for sale securities at July 31, 2001 and 2000.
Unrealized  gains and losses are  excluded  from  earnings and are included as a
component of  accumulated  other  comprehensive  (loss)income  in  shareholders'
(deficit) equity, net of applicable taxes, until realized.

         Property and Equipment

     Property,  plant, and equipment are owned by Western and are stated at cost
less accumulated depreciation.  Depreciation and amortization are computed using
the straight-line method over the estimated useful lives of the assets,  ranging
from 5 to 20 years.  Expenditures for  replacements  and major  improvements are
capitalized. Repairs and maintenance costs are expensed as incurred. The cost of
assets retired or otherwise disposed of and the related accumulated depreciation
are  eliminated  from the accounts;  any gain or loss thereon is included in the
results of operations.


         Intangible Assets

     Intangible assets include items with an indeterminate  useful life, such as
name recognition,  geographical location and market presence acquired by Western
in business  acquisitions.  Western  uses  estimates of the useful life of these
intangible  assets  ranging  from 20 to 40  years.  Such  lives are based on the
factors influencing the acquisition decision and on industry practice.

     The  carrying  value of  intangible  assets is  assessed by Western for any
permanent  impairment  by  evaluating  the  operating   performance  and  future
undiscounted  cash flows of the underlying  assets.  Adjustments are made if the
sum of the expected future net cash flows is less than book value.

         Income Taxes

     The Company accounts for income taxes using an asset and liability approach
which requires the  recognition of deferred tax  liabilities  and assets for the
expected  future  consequences  of  temporary  differences  between the carrying
amounts  for  financial  reporting  purposes  and the tax  bases of  assets  and
liabilities.

         Revenue Recognition

     Revenue on equipment and parts sales of Western is recognized upon shipment
of  products  and  passage of title.  Equipment  rental and  service  revenue is
generally recognized over the period such services are provided.

         Advertising Expense

     Western  expenses  all  advertising  costs as incurred.  Total  advertising
expense  for the years ended July 31, 2000 and 1999 was  $320,000  and  $311,000
respectively.


                                      F-8
<PAGE>
         Fair Value of Financial Instruments

     The recorded  amounts of cash and cash  equivalents,  accounts  receivable,
short term borrowings,  accounts payable and accrued liabilities as presented in
the  consolidated  financial  statements  approximate  fair  value  based on the
short-term  nature of these  instruments.  The recorded amount of long-term debt
approximates  fair  value  as the  actual  interest  rates  approximate  current
competitive rates. The recorded value of marketable  securities held at July 31,
2001 and 2000 is the market value as quoted on the respective  exchange on which
each security trades.

         Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions  that affect the reported amount of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses during the fiscal periods  presented.  Actual results could differ from
those estimates.

         Employee Stock Options

     The Company accounts for stock based employee  compensation plans under the
provisions of Statement of Financial  Accounting  Standards No. 123, "Accounting
for Stock-Based  Compensation."  This standard defines a fair value-based method
of accounting for these equity  instruments.  This method measures  compensation
cost based on the value of the award and  recognizes  that cost over the service
period.  The Company has elected to continue  using the rules of APB Opinion No.
25 and provides pro forma  disclosures of net income (loss) and earnings  (loss)
per share as if Statement No. 123 had been applied.

         Loss Per Share

     The following table sets forth the  computations of basic and fully diluted
loss per share for the years ended July 31, 2001, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED JULY 31,
                                                                          2001               2000            1999
                                                                          ----               ----            ----
<S>                                                                 <C>              <C>              <C>
Numerators:
  Net loss from continuing operations.............................   $    (6,400,000) $    (7,030,000)  $    (5,054,000)
  Discontinued operations.........................................            -                  -            1,989,000
                                                                          -----------       ---------        ----------
  Net loss .......................................................        (6,400,000)      (7,030,000)       (3,065,000)
                                                                          ==========       ==========        ==========
Denominator:
 Denominator for basic and diluted earnings per share -
  Weighted average outstanding shares.............................           491,413          477,935           469,928
                                                                          ==========       ==========        ==========
Basic and diluted earnings (loss) per share:

Loss from continuing operations...................................            (13.02)         (14.71)           (10.75)
Income from discontinued operations...............................              -                 -               4.23
                                                                          -----------      -----------       ----------
Basic and diluted net loss per share..............................   $        (13.02) $       (14.71)   $        (6.52)
                                                                          ===========      ===========       ===========
</TABLE>

     Diluted  and basic  loss per share are the  same,  since the  inclusion  of
common stock equivalents in the computation would be antidilutive.

3.       EQUITY IN LOSS OF UNCONSOLIDATED SUBSIDIARY

     Equity in loss of unconsolidated  subsidiary represents the Company's share
of Western's loss in fiscal 2001 and represents the Company's  share of the loss
of IDF International in fiscal 2000 and 1999.


4.       INVENTORIES

         Inventories consist of the following:
                                                              JULY 31,
                                                                2000
                                                             -----------
Equipment (net of allowances of $4,770,000):
New equipment..........................................  $    40,148,000
Used equipment.........................................        7,442,000
Parts  (net of allowances of $22,000)..................       10,707,000
                                                              ----------
                                                           $  58,297,000
                                                           =============
                                      F-9
<PAGE>

5.       FIXED ASSETS

         Fixed assets consist of the following:
                                                                 July 31,
                                                                   2000
                                                             --------------
Machinery and equipment...................................  $     4,030,000
Furniture and office equipment............................        2,360,000
Computer hardware and software............................        1,869,000
Land     .................................................          500,000
Building and leasehold improvements.......................        5,334,000
Leasehold improvements....................................          550,000
Vehicles .................................................        1,428,000
                                                                  ---------
                                                                 16,071,000
Less:  Accumulated depreciation...........................       (6,621,000)
                                                                 ----------
Property plant & equipment, net ..........................  $     9,450,000
                                                               ============

Rental equipment fleet....................................       32,493,000
Less:  Accumulated depreciation...........................       (6,417,000)
                                                                 ----------
 Rental equipment fleet, net..............................  $    26,076,000
                                                               ============

Leased equipment fleet....................................        5,481,000
Less:  Accumulated depreciation...........................         (506,000)
                                                                   --------
Leased equipment fleet, net...............................  $     4,975,000
                                                               ============

6.       BORROWINGS

     The Company is in default on an  uncollaterized  note payable in the amount
of $1,500,000 to an unrelated third party.  The note bore interest at 8% through
its  original  due date of April 30,  1999.  While in  default,  the note  bears
interest at 10%.

     Western has inventory  floor plan financing  arrangements  with Case Credit
Corporation,  an affiliate of Case,  for Case  inventory  and with other finance
companies  affiliated  with other  equipment  manufacturers.  The terms of these
agreements  generally  include  a  one-month  to  six-month  interest  free term
followed by a term during  which  interest is charged.  Principal  payments  are
generally due at the earlier of sale of the  equipment or twelve to  forty-eight
months from the invoice date.

     All floor plan debt is  classified  as current since the inventory to which
it relates is generally sold within twelve months of the invoice date.

     The following table  summarizes the debt and inventory floor plan financing
arrangements:

<TABLE>
<CAPTION>
                                                                 Maturity               July 31,
                                          Interest Rate          Date            2001            2000
                                          -------------          ----            ----            ----
<S>                                    <C>                     <C>          <C>                <C>

       Note Payable                     8%(10% default           4/30/99     $1,500,000         $1,500,000
                                            rate)


       Case Credit Corporation              Prime + 2%           8 - 48            -            14,768,000
                                              (10.00%)            months


       Deutsche Financial Services         Prime - 0.5%         12 - 36            -            67,671,000
                                              (7.50%)             months

                                                                            -----------        -----------
                                                                            $ 1,500,000        $83,939,000
                                                                            ===========        ===========
</TABLE>

                                      F-10
<PAGE>

     At July 31, 2000, Western was in technical default of the leverage covenant
and the minimum tangible net worth covenant in the Deutsche  Financial  Services
Loan Agreement.  Western asked for but did not obtain a waiver letter as of July
31, 2000.  The loan  agreement was amended in October,  2000 and such  amendment
included waivers of all prior defaults,  established revised financial covenants
and created mandatory periodic reductions in the permitted credit limit. At July
31, 2001,  Western was in technical default of the leverage and minimum tangible
net worth covenants and had requested a waiver letter from DFS.  Western has not
obtained the waiver  letter and there is no assurance  that  Deutsche  Financial
Services will not call this debt at any time after July 31, 2001. If DFS were to
call the debt, it would become  immediately  due and payable in full and Western
would not be able to  continue  operations.  Such  event  would  have a material
adverse impact on the financial statements of the Company.


7.       INCOME TAXES

          The provision  (benefit) for income taxes from  continuing  operations
     comprises the following:
<TABLE>
<CAPTION>

                                                          YEAR ENDED JULY 31,
                                                          -------------------

                                                2001              2000               1999
                                                ----              ----               ----
<S>                                     <C>              <C>               <C>
Current:

   Federal............................   $      (545,000) $       179,000   $      (978,000)
   State .............................              -              26,000          (156,000)
                                                --------          -------           -------

                                                (545,000)         205,000        (1,134,000)
Deferred:
   Federal............................              -             500,000            29,000
   State .............................              -              74,000             4,000
                                              ----------       ----------       -----------

                                                    -             574,000            33,000
                                              ----------       ----------       -----------

                                         $      (545,000) $       779,000   $    (1,101,000)
                                              ==========       ==========       ===========
</TABLE>

          The   principal   reasons  for  the   variation   from  the  customary
     relationship  between  income taxes at the statutory  federal rate and that
     shown in the consolidated statement of operations are as follows:
<TABLE>
<CAPTION>
                                                                              YEAR ENDED JULY 31,
                                                                              -------------------

                                                                  2001               2000            1999
                                                                  ----               ----            ----

<S>                                                         <C>              <C>               <C>
Statutory federal income tax rate..........................     $ (2,304,000)  $   (2,989,000)   $  (2,009,000)
Valuation allowance........................................        2,603,000        4,101,000        1,011,000
State income taxes, net of federal income tax benefit......         (299,000)        (334,000)        (152,000)
Other, primarily adjustments to prior year accruals........         (545,000)           1,000           49,000
                                                                  ----------      -----------    --------------

                                                                 $  (545,000) $       779,000     $  1,101,000
                                                                   ==========     ===========     =============
</TABLE>

                                      F-11
<PAGE>
          Temporary   differences  and  carryforwards   which  give  rise  to  a
     significant portion of deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                                             JULY 31,
                                                       2001            2000
                                                      ----            ----
<S>                                           <C>               <C>
Depreciation and amortization................  $          -      $    (2,273,000)
                                                    ----------        ----------

Gross deferred tax liabilities...............             -           (2,273,000)
                                                    ----------        ----------
Inventory reserve............................             -            1,739,000
Bad debt reserve.............................             -              219,000
Accrued vacation and bonuses.................             -              127,000
Other    ....................................             -              444,000
Loss carryforwards...........................        8,224,000         8,227,000
Loss on Western initial public offering......             -              131,000
Stock options................................             -              874,000
                                                       -------           -------

Gross Deferred Tax Assets....................        8,224,000        11,761,000
Less valuation allowance.....................       (8,224,000)       (9,488,000)
                                                     ---------         ---------
Net deferred tax asset                                    -            2,273,000
                                                     ---------         ---------
                                               $          -      $          -
                                                     =========         =========
</TABLE>

     At July 31, 2001 the Company had federal income tax loss  carryforwards  of
approximately  $22,900,000  which will begin to expire in 2011.  Utilization  of
such net operating losses will be subject to annual  limitations in the event of
a change in  ownership  of the Company of more than 50%.  As the Company  cannot
anticipate  future income with reasonable  certainty,  a valuation  allowance of
$8,224,000 has been recorded.


8.       SHAREHOLDERS' (DEFICIT) EQUITY


     On February 25, 1994,  the Company  completed a public  offering of 920,000
units at $5.25 per unit, each unit consisting of one share of common stock, $.01
par value,  and one  redeemable  common  stock  purchase  warrant.  Each warrant
entitled  the holder to purchase  one share of common stock until July 31, 1998,
at an exercise price of $7.50.  The exercise period for the 920,000 warrants was
subsequently  extended to July 31, 2001 and on July 13,  2001,  was  extended to
July 31, 2003 and the  exercise  price was reduced to $1.00.  The  warrants  are
subject to redemption  by the Company at a redemption  price of $.10 per warrant
under certain  circumstances.  Effective December 17, 2001,  pursuant to the one
for  twenty-five  common stock reverse split,  each 25 warrants can be exercised
for one common share.

     A total of 976,539 shares of the Company's Series B-1 convertible preferred
stock were  issued in  September  1996 in  connection  with the  acquisition  of
ConnectSoft,  Inc. Such shares have a $3.50 per share  liquidation value and are
convertible  into shares of the Company's  common stock at a conversion ratio of
one for one.  Through  the five  fiscal  years  ended  July 31,  2001 a total of
568,696  shares  were  converted  to  common  stock at the ratio of one for one,
leaving  407,843  shares  outstanding at July 31, 2001.  Effective  December 17,
2001,  pursuant to the one for twenty-five  common stock reverse split,  each 25
shares of Series B-1  convertible  preferred  can be  converted  into one common
share.

     During the fourth  quarter of fiscal 2000, the Company sold 8,500 shares of
common  stock at $10.00 per share  pursuant to a private  placement  memorandum.
During fiscal 2001,  additional  shares were issued  pursuant to an amendment to
the private  placement  resulting in the issuance of an additional 11,480 shares
of Company common stock.

9.       DISCONTINUED OPERATIONS

     On  July  10,  1998,  the  Company   entered  into  an  agreement  to  sell
substantially  all of the assets of its Connectsoft  Communications  subsidiary,
including the network operations center ("NOC") to eGlobe,  Inc., formerly known
as Executive TeleCard,  Ltd. ("eGlobe").  The agreement,  as amended June 17 and
September 1999 provided  consideration  for the assets  acquired to be paid with
eGlobe   Convertible   Preferred  Stock  initially  valued  by  the  Company  at
approximately  $2,000,000.  Such  Preferred  Stock was converted  into 1,923,077
shares of eGlobe  common  stock in Fiscal  2000.  In  addition,  eGlobe  assumed
approximately  $5,182,000  of  Connectsoft  liabilities  and  leases,  of  which
approximately  $2,900,000  of  lease  obligations  guaranteed  by  the  Company.
Although  eGlobe is responsible  for payment of those assumed  liabilities,  the
assumption of such  liabilities will not relieve the Company from its guarantees
until such  liabilities  have been paid in full.  The final gain on  disposal of
$1,989,000  was  recognized  in  the  accompanying   consolidated  statement  of
operations as discontinued operations for the year ended July 31, 1999.

                                      F-12
<PAGE>
10.      COMMITMENTS AND CONTINGENCIES

         LEASE COMMITMENTS

     Western leases certain  facilities under  non-cancelable  lease agreements.
The building portion of five of the Western's facility leases qualify under SFAS
13 as "capital  leases"  (i.e.,  an  acquisition of an asset and incurrence of a
liability).  The remaining  facility  lease  agreements  have terms ranging from
month-to-month to nine years.  Certain of the facility lease agreements  provide
for options to renew and  generally  require the Company to pay property  taxes,
insurance,  and  maintenance  and repair  costs.  Total rent  expense  under all
operating  leases  aggregated $0,  $2,129,000 and $2,000,000 for the years ended
July 31, 2001, 2000 and 1999, respectively.

Assets recorded under capital leases included in fixed assets are as follows:

                                                     July 31,
                                                       2000
                                                    ----------
Capitalized asset value....................   $     4,553,000
Less:  Accumulated amortization............          (667,000)
                                                    ---------
                                              $     3,886,000
                                                    =========

         Other Contingencies

     The Company is guarantor on the capital lease obligations assumed by eGlobe
as described in Note 9.

         Legal Proceedings

     There are no pending material legal proceedings in which the Company or any
of  its  subsidiaries  is a  defendant,  or to  which  any of  their  respective
properties are subject, which either individually or in the aggregate,  may have
a material adverse effect on the results of operations or financial  position of
the Company.

     In May 1998,  a lawsuit  was filed on behalf of the  Company in a purported
shareholder  derivative  action against Mr. Rubin and certain other directors of
the Company. In June 1998, a shareholder class action was filed against the same
directors.

     On June 1, 1999 an agreement  was entered  into by all parties  whereby the
class  action was settled for  $2,500,000  which is  payable,  net of costs,  to
approved  claimant  shareholders.  The settlement  consisted of $600,000 in cash
from insurance proceeds and $1,900,000 by 777,414 shares of Western common stock
owned by the Company.  The $600,000 was paid to the claims administrator for the
benefit of claimants  during  fiscal 2000 and the common  shares of Western were
distributed to the claimant  stockholders on November 1, 2000. As a result,  the
Company no longer  owns  greater  than 50% of  Western,  and has  accounted  for
Western using the equity method  effective  August 1, 2000. A loss of $1,434,000
was accrued at July 31, 2000 representing the difference  between the book value
of the  Western  shares  transferred  and their  market  value  pursuant  to the
settlement  agreement.  In addition,  on June 1, 1999 the derivative  action was
settled for $2,800,000 which amount was  subsequently  amended to $2,891,000 and
was paid in full by Mr. Rubin to the Company during fiscal 2000 and 2001.

11.      STOCK OPTION PLANS

     The 1991 and 1996 Stock Option Plans

     The 1991 Plan was approved by the Board of Directors  and  shareholders  in
June 1991 and the 1996 Plan was  approved  by the  Board of  Directors  in April
1996.  Both of these plans were  cancelled  in  December  1999 when the Board of
Directors  approved  the 2000  Employee  Incentive  Stock  Option Plan (The 2000
Plan).  All  outstanding  stock  options  under  the 1991 and  1996  Plans  were
cancelled  and  replaced  with the same number of stock  options  under the 2000
Plan.

     The 2000  Plan The 2000 Plan was  approved  by the  Board of  Directors  on
December 7, 1999 and 55,000 stock options were simultaneously granted to replace
those  cancelled  from the  1991 and 1996  Plans.  The  Company  granted  16,600
additional  stock options to certain Board members as well as 10,000  options to
each of two  nominees  for election to the Board and 400 options to a consultant
for services  rendered.  The exercise price of all 92,000 options  granted under
the 2000 Plan on December 7, 1999 was $5.25 per share (110% of the market  value
on such date).

     On April 27,  2000 the  Company  granted  66,000  stock  options to a newly
elected  director,  20,000,  4,000 and 2,000  respectively  to  certain  special
consultants to the Company,  10,000 to a third nominee for election to the Board
and 12,000 and 10,000 respectively to two law firms for services rendered and to
be rendered. The exercise price of all 124,000 options granted on April 27, 2000
was $8.71 per share (85% of the fair market value on such date). Compensation in
connection with these option grants has been accounted for by the  Black-Scholes
method where applicable.


The 2001 Plan

     On October  3, 2000,  the Board of  Directors  cancelled  the 2000 Plan and
approved the 2001 Stock  Option Plan.  All 216,000  options  previously  granted
under the 2000 Plan were cancelled and replaced by the same number of options in
the 2001 Plan.  The Company  also granted  4,000  options to each of two special
consultants,  2,000  additional  options  to a law  firm  and 400  options  to a
financial  consultant  and 20,000 options to a management  employee.  A total of
122,000 of the 2001 grants were subsequently canceled.


     On April 3, 2000 the FASB issued FASB  Interpretation  No. 44,  "Accounting
for Certain  Transactions  Involving Stock  Compensation - an  Interpretation of
Accounting  Principles  Board  Opinion No. 25" (FIN 44).  FIN 44  clarifies  the
application  of  Opinion  25  for  certain   issues   including  the  accounting
consequences of various  modifications  to the terms of a previously fixed stock
option or award.  In accordance  with FIN 44,  effective  July 31, 2000,  any of
these  options  which are not  exercised or  cancelled,  will be  accounted  for
pursuant to a variable stock option plan. Accordingly, compensation expense will
be recorded to the extent that the quoted market price of the  Company's  common
stock exceeds the revised exercise price of the repriced options.

    Summary Information

     The following table includes option information for the Company's plans:

<TABLE>
<CAPTION>
                                                                                WEIGHTED AVERAGE
                                                                                  FAIR VALUE OF
                                           NUMBER OF          WEIGHTED              OPTION
         STOCK OPTION ACTIVITY               SHARES        EXERCISE PRICE           GRANTED
         ---------------------               ------        --------------           -------
<S>                                       <C>               <C>                   <C>
         July 31, 1998                          75,000        113.75
           Options granted                        -              -                    -
           Options exercised                      -              -
           Options canceled                     (8,000)       137.50
                                           -----------
           July 31, 1999                        67,000        112.00
           Options granted                     214,000          7.25                 7.25
           Options exercised                     -               -
           Options canceled                    (56,000)       106.25
                                           -----------
           July 31, 2000                       225,000         19.00
           Options granted                     246,000          7.00                 7.00
           Options exercised                     -
           Options canceled                   (338,000)         7.50
                                           ------------
           July 31, 2001                       133,000         18.25
                                           ============
</TABLE>

     The following table  summarizes  stock options  outstanding and exercisable
for the Company at July 31, 2001:

<TABLE>
<CAPTION>
                                              OUTSTANDING                    EXERCISABLE
                                              -----------                    -----------
                             Weighted          Weighted                Weighted
                              Average           Average                 Average
                             Remaining         Exercise                Exercise
Exercise Price Range          Shares             Life       Price       Shares           Price
--------------------          ------             ----       -----       ------           -----
<S>                         <C>                <C>        <C>       <C>               <C>
$7.00 to 15.75                 124,000          4.2         $ 7.00      117,000         $  7.00
$80.00 to 80.00                  1,000          0.6          80.00        1,000           80.00
$153.25 to 162.50                8,000          0.8         160.25        8,000          160.25
                               -------                                  -------
$7.00 to 162.50                133,000          4.0          16.50      126,000         $ 17.50
                             =========                                =========


</TABLE>
                                      F-14
<PAGE>

     The Company has adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123.   "Accounting   for   Stock-Based
Compensation."  If  compensation  cost for the Company's  stock option plans had
been  determined  based on the fair value at the grant date for awards in fiscal
2001 and fiscal 2000 in  accordance  with the  provisions  of SFAS No. 123,  the
Company's  net loss per  share  would  have  changed  to the pro  forma  amounts
indicated below:

<TABLE>
<CAPTION>
                                                                      YEAR ENDED JULY 31,
                                                                     2001            2000
                                                                    ----            ----
<S>                                                         <C>               <C>

Net loss, as reported......................................  $    (6,400,000)  $    (7,030,000)
Net loss, pro forma........................................  $    (7,160,000)  $    (8,041,000)
Net basic and diluted loss per share, as reported..........  $       ( 13.02)  $        (14.71)
Net basic and diluted loss per share, pro forma............  $        (14.57)  $        (16.82)

</TABLE>


    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:

<TABLE>
<CAPTION>

                                                     YEAR ENDED JULY 31,

                                                   2001            2000
                                                   ----            ----
<S>                                               <C>            <C>
Expected volatility........................        1.54            3.82
Risk-free interest rate....................        4.50%           5.25%
Expected life of options in years..........         5.0             5.0
Expected dividend yield....................        0.00%           0.00%

</TABLE>

     The weighted average fair value of the options granted were $7.00 and $7.50
per share for the years ended July 31, 2001 and 2000, respectively.



12.      INTERTECH TRANSACTION


     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among the Company,  Intertech  Capital,  Inc.  ("Intertech"),
Jeffrey  M.  Berman  ("Berman"),  Eric  Staffin  ("Staffin")  and Peter  Gregory
Saridakis ("Saridakas") (Berman, Staffin and Saridakas are collectively referred
to as the  "Purchasers"),  the Company sold an  aggregate  of 500,000  shares of
common stock of Intertech,  par value $.0001 per share (the "Intertech  Shares")
to the  Purchasers,  which  Intertech  Shares  constituted all of the issued and
outstanding  capital stock of Intertech.  In connection  therewith,  the Company
issued to: (i) Berman 33,000 warrants to purchase shares of the Company's common
stock (the "Warrants");  (ii) Staffin 6,667 Warrants;  and (iii) Saridakis 3,333
Warrants,  all which are immediately  vested,  expire on March 19, 2006, and are
exercisable at $6.87 per share. In  consideration  for the Intertech  Shares and
the Warrants,  each of the Purchasers  terminated  their  respective  employment
agreements  with the Company,  released the Company  from any  obligations  with
respect to the employment  agreements,  including past due and accrued salaries,
and terminated and waived all right to any stock options granted by the Company.
In addition,  Berman and Staffin  resigned as officers  and/or  directors of the
Company.

     Simultaneous  with the  closing of the  Intertech  transaction  the Company
purchased  approximately 5.4% of Intertech's then issued and outstanding capital
stock in consideration  for the transfer of 79,895 shares of common stock of New
Media Technology, Inc. owned by the Company.

     13.  SUPPLEMENTAL  DISCLOSURES  OF CASH FLOW  INFORMATION  AND  SCHEDULE OF
NON-CASH INVESTING AND FINANCING ACTIVITIES

     The Company paid interest of $116,000, $5,922,000 and $5,482,000 during the
fiscal years 2001, 2000 and 1999  respectively.  The Company  received an income
tax refund of $834,000  during  fiscal 1999,  and paid $219,000 in income taxes,
net of refunds, during fiscal 2000.


                                      F-15
<PAGE>

14.      RELATED PARTIES

     Pursuant to an Agreement,  dated May 30, 1996 (the "ERD Agreement") between
the Company and ERD Waste Corp.  ("ERD"),  the Company agreed to provide certain
financial accommodation to ERD by making available a $4.4 million standby letter
of credit  expiring May 31, 1998 issued by  Citibank,  N.A. in favor of Chemical
Bank (the "Letter of Credit") on behalf of ERD.  Chemical Bank was the principal
lender to ERD and its  subsidiaries,  and upon  issuance  of the Letter of Chase
Bank (formerly  Chemical Bank) made available $4.4 million of additional funding
to ERD under ERD's existing lending facility.  The funding was used to refinance
certain  outstanding  indebtedness of  Environmental  Services of America,  Inc.
("ENSA"),  a wholly owned  subsidiary of ERD. Robert M. Rubin,  the Chairman and
Chief Executive Officer, and a principal stockholder of the Company was also the
Chairman,  Chief Executive  Officer,  a director and a principal  stockholder of
ERD, owning approximately 23.0% of the outstanding ERD Common Stock.

     In September  1996, a subsidiary of ERD which  operated a waste facility in
Nassau  County,  New  York  was  cited  by the  New  York  State  Department  of
Environmental  Conservation ("DEC") for violating certain DEC regulations.  Such
waste  facility  had  accounted  for  approximately  13% of  ERD's  consolidated
revenues.  The Company  was advised by ERD that under the terms of a  Settlement
Agreement  reached with the State of New York in November  1996,  all violations
alleged by the DEC had been resolved in  consideration  for, among other things,
ERD's  agreement  to  voluntarily  cease  incineration  operations  at the waste
facility on or before March 31, 1997.  Such  incineration  operations  ceased on
April 15, 1997.

     In February of 1997,  the Company  loaned  $500,000 to ERD Waste Corp.  The
loan was  collateralized  by a short term note bearing  interest at 2% above the
prime lending rate of the Company's commercial bank (8.5% at April 30, 1997) and
a second  collateral  and security  position on all accounts  receivable  of ERD
subject to the primary collateral position held by Chase Bank and was personally
guaranteed  by Mr.  Rubin.  Principal  together  with  accrued  interest was due
October 5, 1997.

     In September 1997 ERD filed for protection  from creditors under Chapter 11
of federal bankruptcy laws. In October, 1997 Chemical bank drew the $4.4 million
available on the standby letter of credit.  As a result,  the Company recorded a
loss of  approximately  $5.0  million,  related  to the  February  Note  and the
September letter of credit.  Mr. Rubin had personally  guaranteed  approximately
$1.6 million of the ERD loss. This amount was repaid to the Company  pursuant to
the shareholder litigation settlement as described in Note 10.

     On June 28, 1996 the Company entered into a collateralized credit agreement
with Mr.Rubin pursuant to which Mr. Rubin delivered a demand promissory note for
up to  $1,200,000  and payment in full was due no later than July 31, 1998.  The
due date was  subsequently  extended to July 31, 1999 and then to September  30,
2000 as part of the shareholder  litigation  settlement.  Mr. Rubin's payment of
$2,891,000 as described in Note 10 included amounts due under the note.


15. EMPLOYEE SAVINGS PLAN

     The Company has a voluntary  savings plan pursuant to Section 401(k) of the
Internal Revenue Code, whereby eligible participants may contribute a percentage
of compensation  subject to certain  limitations.  The Company has the option to
make  discretionary  qualified  contributions to the plan,  however,  no Company
contributions were made for fiscal 2001, 2000 or 1999.


                                      F-16
<PAGE>
16.      SEGMENT INFORMATION

     In fiscal 1999,  the Company  adopted  Statement  of  Financial  Accounting
Standards No. 131 (SFAS 131),  "Disclosures  about Segments of an Enterprise and
Related   Information,"  which  requires  the  reporting  of  certain  financial
information by business segment.  All such information  relates only to Western.
For the purpose of providing segment  information,  Western believes that all of
its operations consist of one segment.  However,  Western evaluates  performance
based on revenue and gross margin of three distinct business components. Revenue
and gross margin by component are summarized as follows:

    Business Component          Year Ended        Year Ended       Year Ended
       Net Revenues           July 31, 2001     July 31, 2000     July 31, 1999
---------------------------- ----------------- ----------------- --------------
Equipment Sales                      -0-       $   92,513        $     98,450
Equipment Rental                     -0-           26,334              25,771
Product Support                      -0-           36,790              39,429
                             ----------------- ----------------- -------------
    Totals                           -0-       $  155,637        $    163,650
                             ================= ================= =============

     Business Component         Year Ended        Year Ended       Year Ended
       Gross Margins           July 31, 2001    July 31, 2000     July 31, 1999
----------------------------- ---------------- ----------------- --------------
Equipment Sales                      -0-       $     (    66)   $       2,591
Equipment Rental                     -0-               5,556            5,017
Product Support                      -0-               6,048            6,986
                              ---------------- ----------------- --------------
    Totals                           -0-       $   11,538        $     14,594
                              ================ ================= ==============

17.  UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                  Quarter                                Total
                                            First         Second           Third         Fourth           Year
Fiscal 2001:                                -----         ------           -----         ------           ----
-----------
<S>                                      <C>            <C>            <C>            <C>           <C>
Net sales                                 $  -           $  -            $  -           $  -          $   -
Gross Profit                                 -              -               -              -              -
Net loss                                    (725)           (388)        (2,567)         (2,720)        (6,400)
Basic loss per share                       (1.50)          (0.76)         (5.25)          (5.50)        (13.02)
Diluted loss per share                     (1.50)          (0.76)         (5.25)          (5.50)        (13.02)

                                                                  Quarter                                Total
                                            First         Second           Third         Fourth           Year
                                            -----         ------           -----         ------           ----
Fiscal 2000:
------------
Net sales                                 $42,063        $33,988         $35,340        $44,246       $155,637
Gross Profit                                4,920          3,865           3,236           (483)        11,538
Net loss                                    (333)          (281)           (799)        (5,617)        (7,030)
Basic loss per share                       (0.74)          (0.50)         (1.75)         (11.73)        (14.71)
Diluted loss per share                     (0.74)          (0.50)         (1.75)         (11.73)        (14.71)

</TABLE>

18.      SUBSEQUENT EVENT

     On  September  18, 2001  Western  entered  into a Purchase  agreement  with
e*machinery.net,  Inc.  (OTCBB:EMAC) whereby EMAC would acquire the business and
substantially  all of the assets  and  liabilities  of  Western's  wholly  owned
operating  subsidiary,  Western Power & Equipment Corp. (Oregon) for $500,000 in
cash, a seven year interest  bearing  promissory note for $700,000 and 1,200,000
shares of EMAC common stock  valued at  approximately  $600,000.  The closing is
subject to a number of conditions,  including, but not limited to, due diligence
and approval by both Case Corporation and Deutsche Financial Services. There can
be no assurance that this transaction will be consummated.

     Pursuant  to  this  proposed   transaction,   management  has  recorded  an
impairment  loss in the amount of  $1,771,000  at July 31,  2001 to reflect  the
Company's investment in Western at its approximate fair value.

                                      F-17
<PAGE>



     SCHEDULE II

                          AMERICAN UNITED GLOBAL INC.

                       VALUATION AND QUALIFYING ACCOUNTS
             For the Fiscal Years Ended July 31, 2001, 2000 and 1999

<TABLE>
<CAPTION>



                                              Balance at      Charged to    Charged to                  Balance at
                                              Beginning       Costs and        Other                      End of
               Description                    of Period        Expenses      Accounts     Deductions      Period
               -----------                    ---------        --------      --------     ----------      ------

Income Tax Valuation Allowance:
<S>                                         <C>             <C>           <C>          <C>              <C>

  Fiscal year ended July 31, 1999          $4,377,000            -            -         $(276,000)      $4,101,000

  Fiscal year ended July 31, 2000          $4,401,000        $5,387,000       -              -          $9,488,000

  Fiscal year ended July 31, 2001          $9,488,000            -            -        $1,264,000       $8,224,000


Accounts Receivable Reserve:

  Fiscal year ended July 31, 1999            $670,000        $732,000         -         $(678,000)        $724,000

  Fiscal year ended July 31, 2000            $724,000        $690,000         -         $(851,000)        $563,000

  Fiscal year ended July 31, 2001                -               -            -              -                -


Inventory Reserve:

  Fiscal year ended July 31, 1999           $2,833,000     $  884,000         -       $(1,204,000)      $2,513,000

  Fiscal year ended July 31, 2000           $2,513,000     $2,188,000         -         $(591,000)      $5,292,000

  Fiscal year ended July 31, 2001                 -              -            -              -                -



</TABLE>

                                      F-18
<PAGE>


                      Report of Independant Accountants on
                          Financial Statement Schedules


To the Board of Directors
of American United Global, Inc.

Our audits of the financial statements referred to in our report dated November
5, 2001,  except for the reverse stock split  information in Note 1 as to which
date is December 17, 2001 appearing on page F-2 of this form S-1, also included
an audit of the financial statement schedules. In our opinion, these  financial
statement  schedules present fairly, in all material respects, the  information
set forth therein when read in conjunction with the related financial
statements.



PricewaterhouseCoopers LLP
Portland, Oregon

November 5, 2001, except for the reverse stock split
   information in Note 1, as to which date is
   December 17, 2001











<PAGE>



                                   $3,000,000


          UNITS CONSISTING OF ONE 7.5% CONVERTIBLE SECURED NOTE IN THE
            PRINCIPAL AMOUNT OF $666 AND 1332 SHARES OF COMMON STOCK



                          AMERICAN UNITED GLOBAL, INC.



                             -----------------------
                               P R O S P E C T U S
                             -----------------------


                                ___________, 2002

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

<PAGE>


                                     PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The Registrant estimates that expenses in connection with the offering
described in the Registration Statement will be as follows:


Securities and Exchange Commission Registration Fee ..............     $ 1,434
Accountants' Fees and Expenses ...................................     $15,000
Legal Fees and Expenses ..........................................     $30,000
Transfer Agent fees ..............................................     $ 5,000
Printing Expenses ................................................     $30,000
Miscellaneous ....................................................     $18,566
                                                                       -------
                                                                      $100,000
                                                                      ========

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section  145  of  the  Delaware   General   Corporation   Law  permits  the
indemnification  of  officers,  directors,  employees  and  agents  of  Delaware
corporations. The Certificate of Incorporation and Bylaws of the Company provide
that the corporation  shall,  to the fullest extent  permitted by Section 145 of
the General  Corporation  Law of the State of Delaware as it may be amended from
time to time,  indemnify  and hold harmless each person who was or is a party or
is  threatened  to be made a party  to or is  involved  in any  action,  suit or
proceeding,   whether   civil,   criminal,   administrative   or   investigative
(hereinafter a "proceeding"),  by reason of the fact that he or she, or a person
whom he or she is a legal representative, is or was a director or officer of the
Company or is or was serving at the request of the Company as director, officer,
employee or agent of another  corporation  or of a  partnership,  joint venture,
trust or other  enterprise,  including  service with respect to employee benefit
plans,  whether the basis of such proceeding is alleged action or inaction in an
official capacity or in any other capacity while serving as a director, officer,
employee or agent, against all costs, charges, expenses,  liabilities and losses
(including  attorney's fees,  judgments,  fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith,  and such indemnification shall continue as
to persons  who have  ceased to be a  director,  officer,  employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators.


<PAGE>

ITEM 16.  EXHIBITS
    Number      Description


3.1      Amended Certificate of Incorporation of American United Global, Inc.

3.2      By-laws of American United Global, Inc.

4.1      Form of Note between  Registrant and holders of 7.5%  Convertible
            Secured due  ___________,  2007

4.2      Form of Subscription Certificate

5.1      Opinion of Gersten, Savage & Kaplowitz, LLP, regarding
          legality of securities. *

23.1     Consent of PricewaterhouseCoopers LLP

23.2     Consent of Gersten, Savage & Kaplowitz, LLP (included in Exhibit 5.1).*

99.1     Form of Letter to Shareholders for Rights Offering

99.2     Form of Letter to Nominee Holders

99.3     Form of Letter to Nominee Holders to Beneficial Owners

99.4     Form of Notice of Guaranteed Delivery

99.5     Form of Instructions

99.6     Financial Statements of Western Power & Equipment Corp.

-----------------------------------------

* - to be filed


                                            II-1

<PAGE>

ITEM 17.  UNDERTAKINGS

     The undersigned registrant hereby undertakes:

     (1) To file during any period in which  offers or sales are being  made,  a
post effective amendment to this registration statement:

                (i)   To include any prospectus required by Section 10(a)(3)
         of the Securities Act;

                (ii) To reflect in the  prospectus  any facts or events  arising
         after the  effective  date of the  registration  statement (or the most
         recent post effective amendment thereof) which,  individually or in the
         aggregate represent  fundamental change in the information set forth in
         the registration statement;

                (iii) To include any  material  information  with respect to the
         plan of  distribution  not  previously  disclosed  in the  registration
         statement  or  any  material   change  to  such   information   in  the
         registration statement;

     (2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be initial bona fide offering
thereof.

     (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.





                                       II-2
<PAGE>


                                   SIGNATURES


     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this  Registration  Statement  to be signed on its behalf by the
undersigned,  thereunto duly  authorized,  in the City of New York, State of New
York, on January 4, 2002.

                            AMERICAN UNITED GLOBAL, INC.


                            By: /s/  Robert M. Rubin
                                ---------------------------------------
                                Robert M. Rubin
                                Chairman of the Board, President
                                     and Chief Executive Officer





     In accordance  with the  requirements  of the Securities Act of 1933,  this
Registration Statement has been signed by the following person in the capacities
and on the dates stated.

           Name                     Title                       Date
           ----                     -----                       ----

/s/ Robert M. Rubin     Chairman of the Board, Chief        January 4, 2002
--------------------    Executive Officer and Director
Robert M. Rubin




/s/ C. Dean McLain      Executive Vice President and        January 4, 2002
------------------      Director
C. Dean McLain



/s/ David M. Barnes     Vice President--Finance and Chief   January 4, 2002
--------------------    Financial and Chief Accounting
David M. Barnes         Officer



/s/ Howard Katz         Director                            January 4, 2002
-------------------
Howard Katz


/s/ Seymour Kessler     Director                            January 4, 2002
-------------------
Seymour Kessler


/s/ Allen Perres        Director                            January 4, 2002
-------------------
Allen Perres


/s/ Michael Metter      Director                            January 4, 2002
-------------------
Michael Metter
[{"type": "S-1", "sequence": "1", "filename": "augis1.txt", "description": "AMERICAN UNITED GLOBAL, INC. S-1", "secsgml_size_bytes": 252518}]
{"company-data": {"conformed-name": "AMERICAN UNITED GLOBAL INC", "cik": "0000859792", "assigned-sic": "5082", "irs-number": "954359228", "state-of-incorporation": "DE", "fiscal-year-end": "0731"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-76328", "film-number": "2502363"}, "business-address": {"street1": "AMERICAN UNITED GLOBAL INC", "street2": "2489 152ND AVENUE NE", "city": "RICHMOND", "state": "WA", "zip": "98052", "phone": "4258697410"}, "mail-address": {"street1": "AMERICAN UNITED GLOBAL INC", "street2": "11130 N E 33RD PLACE SUITE 250", "city": "BELLEVUE", "state": "WA", "zip": "98001"}, "former-company": {"former-conformed-name": "ALROM CORP", "date-changed": "19600201"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY __, 2002
                      REGISTRATION STATEMENT NO. 333-_____

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ------------------------------

                                    FORM S-1

                             REGISTRATION STATEMENT
                                     Under
                           THE SECURITIES ACT OF 1933
                         ------------------------------

                          AMERICAN UNITED GLOBAL, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                        5082                  95-4359228
       (State or other             (Primary Standard         (I.R.S. Employer
jurisdiction of incorporation  Industrial Classification Identification Number)
     or organization)                Code Number)

                  11108 NE 106th PLACE
                 KIRKLAND, WASHINGTON                98033
       (Address of principal executive offices)     Zip code

                              DAVID M. BARNES, CFO
                          AMERICAN UNITED GLOBAL, INC.
                              11108 NE 106TH PLACE
                           KIRKLAND, WASHINGTON 98033
                                 (425) 869-7410

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                   COPIES TO:

                                JAY M. KAPLOWITZ
                        GERSTEN, SAVAGE & KAPLOWITZ, LLP
                          101 E. 52ND STREET, 9TH FLOOR
                            NEW YORK, NEW YORK 10022
                                 (212) 752-9700

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
   As soon as practicable after this Registration Statement becomes effective.

                         ------------------------------

     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 registration statement for the same offering. [ ]

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
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 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

=============================================================================================================================
                                                                               PROPOSED           PROPOSED
                                                                               MAXIMUM            MAXIMUM         AMOUNT OF
     TITLE OF EACH CLASS OF SECURITIES TO BE                               OFFERING PRICE        AGGREGATE       REGISTRATION
                   REGISTERED                      AMOUNT TO BE REGISTERED PER UNIT/PER SHARE  OFFERING PRICE(1)     FEE
-----------------------------------------------------------------------------------------------------------------------------
Rights...........................................       4,500                   $0                   $0               $0

Units............................................       4,500                   $666            $3,000,000            $717

7.5% Convertible Secured Promissory Notes........       4,500                   (2)                 (2)               $0

Common Stock.....................................   6,000,000                   (2)                 (2)               $0

Common Stock issuable upon the conversion
of the Notes (3).................................   6,000,000                   $0.50           $3,000,000            $717
------------------------------

     (1)  Estimated  solely for purposes of  calculating  the  registration  fee
          pursuant to Rule 457.

     (2)  Units are comprised of one 7.5% Convertible Secured Promissory Note in
          the  principal  amount of $666  ("Notes"),  and 1,332 shares of common
          stock  ("Common  Stock").  The amount to be registered  includes up to
          4,500  Notes  for  an  approximate   aggregate   principal  amount  of
          $3,000,000, and up to approximately 6,000,000 shares of Common Stock.

     (3)  Holders of the Notes have the option to convert the  principal  amount
          of the Notes into Common  Stock.  Every dollar of principal  due under
          the Notes is convertible into 2 shares of Common Stock.

     THE REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES  ACT OF 1933, AS AMENDED,  OR UNTIL THIS  REGISTRATION  STATEMENT
SHALL  BECOME  EFFECTIVE  ON SUCH DATE AS THE  COMMISSION,  ACTING  PURSUANT  TO
SECTION 8(A), MAY DETERMINE.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
     INFORMATION IN THIS  PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY
NOT SELL  THESE  SECURITIES  UNTIL THE  REGISTRATION  STATEMENT  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO  SELL  THESE  SECURITIES  AND IT IS NOT  SOLICITING  AN  OFFER  TO BUY  THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                         ------------------------------

                  SUBJECT TO COMPLETION, DATED JANUARY __, 2002

                      AMERICAN UNITED GLOBAL, INC.

                                   4,500 Units

     This  Prospectus  relates to the  offering  of rights to our  shareholders.
Pursuant to this  offering our  shareholders  who own at least 100 shares of our
common stock as of the close of business on _________, 2002 (the "Record Date"),
will have the  opportunity to buy an aggregate of up to 4,500 Units  ($3,000,000
approximate aggregate dollar amount).  Every 100 shares of our common stock will
entitle the holder to receive  one right to  purchase  one Unit in the amount of
$666.

     Each Unit consists of a 7.5%  Convertible  Secured  Promissory  Note in the
principal  amount of $666 (the  "Notes"),  and 1,332 shares of our common stock.
The Notes have a term of five (5) years. Interest due under the Notes is payable
quarterly in arrears, on the first day of each January,  April, July and October
commencing on __________,  2002 until  ________,  2007 unless earlier re-paid in
full by American United Global,  Inc. ("AUGI").  The Notes are secured by a lien
granted by AUGI on all of its assets.  Those  shareholders who own less than 100
shares will not be eligible to participate in this offering.

     Shareholders may exercise the  subscription  rights for a period of fifteen
(15) days beginning on  __________,  2002 and ending at 5:00 p.m. New York time,
on ________,  2002,  unless such exercise  period is extended by us, in our sole
discretion, for up to an additional thirty (30) days.

     Purchasers  of the Units may offer the common  stock  received in the Units
and the common stock received upon  conversion of the Notes, if any, for sale by
use of  this  prospectus.  See  "Description  of the  Notes"  on page 31 of this
prospectus for a full  description of the terms of the Notes and "Description of
Securities" on page 33 for a full description of the underlying shares.

     AUGI will receive  total net proceeds,  after  deducting  various  offering
expenses, from the sale of the Units of approximately $2,900,000.  AUGI will not
receive  any  proceeds  from the sale of the common  stock or the  common  stock
received  upon any  conversion  of the Notes (the  "Conversion  Shares")  by the
selling holders thereof,  who may sell the common stock or the Conversion Shares
from time to time at prevailing market prices.  The Notes will not be listed for
trading.  The  Common  Stock  and the  Conversion  Shares  may be  traded on the
Over-the-Counter  Bulletin  Board  of the  National  Association  of  Securities
Dealers,  Inc.  ("OTCBB") under the symbol AUGB. On January 4, 2002, the closing
price of the common stock, as reported on OTCBB, was $1.95 per share.

                 These securities involve a high degree of risk.
                    See "Risk Factors" beginning on page 5.

                        ------------------------------

     Neither the  Securities and Exchange  Commission  nor any state  securities
commission has approved or disapproved of these securities or determined if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                Offering Price               Underwriting discounts and   Proceeds to the Company(1)
                                                             commissions
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Per Unit                        $666.00                      $0.00                        $666.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total                           $3,000,000.00                $0.00                        $3,000,000.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
(1)  Before deducting expenses of the offering payable by AUGI estimated at
          $100,000.

                The date of this prospectus is January ___, 2002
TABLE OF CONTENTS
                                                               Page

Prospectus Summary........................................       1

Risk Factors..............................................       5

Capitalization............................................       8

Dividend Policy...........................................       9

Use of Proceeds...........................................       9

The Offering..............................................      10

Price Range of Securities.................................      11

Selected Financial and Operating Data.....................      13

Management's Discussion and Analysis of
Financial Condition and Results of Operations.............      14

Business and Properties...................................      18

Management................................................      21

Compensation Committee Interlocks and
   Insider Participation..................................      27

Certain Relationships and Related
   Transactions...........................................      28

Beneficial Ownership of Common Stock......................      30

Description of the Notes..................................      31

Description of Securities.................................      33

Certain Federal Income Tax Considerations.................      35

Plan of Distribution......................................      37

Legal Matters.............................................      37

Experts...................................................      37

Available Information.....................................      37

Index to Financial Statements.............................      F-1
PROSPECTUS SUMMARY

     The  following  summary is qualified  in its entirety by the more  detailed
information and financial  statements and notes thereto  appearing  elsewhere in
this prospectus.

                          American United Global, Inc.

     We are American United Global, Inc. ("AUGI"),  a Delaware corporation which
owns minority equity positions in five companies. Our primary equity position is
our  ownership of 1,222,586  shares,  or  approximately  36% of Western  Power &
Equipment Corp. ("Western"), and we are Western's largest stockholder.  Prior to
November  1, 2000,  we owned 59.6% of  Western,  and  Western was our  operating
subsidiary,  engaged  primarily  in the  distribution,  rental and  servicing of
construction equipment.

     We intend to focus our business strategy on acquisitions of, joint ventures
with or  limited  investments  in,  operating  businesses  in  various  sectors,
although we have not yet identified any definitive opportunities.

     At our  annual  meeting  of  stockholders  held on  August  28,  2001,  our
stockholders  approved a reverse  stock split of 1-for-15,  1-for-20 or 1-for-25
with the precise ratio to be  determined by our Board of Directors.  On December
7, 2001,  our Board of Directors  declared a 1-for-25  reverse stock split.  The
reverse stock split became effective on December 17, 2001 (the "Effective Date")
and  each 25  shares  of our  common  stock  that  was  issued  and  outstanding
immediately  prior to the  Effective  Date was changed into one validly  issued,
fully paid and  non-assessable  share of our common  stock  without  any further
action  by the  holders  of  shares  of our  common  stock.  Where  appropriate,
references in this  registration  statement give effect to the 1-for-25  reverse
stock  split.  Such  change  was  also  effective  on  December  17,  2001,  see
"Description  of  Securities".   In  addition,  our  shareholders  approved  the
cancellation of 25 million shares of authorized,  unissued Class A Common Stock.
Such change was effective on August 28, 2001.

     Our  offices  are  located at 11108 NE 106th  Place,  Kirkland,  Washington
98033. Our telephone number is (425) 869-7410.

                                       1
The Offering
SECURITIES OFFERED                                           4,500 Units, at a purchase price of $666 per Unit. Each
                                                             Unit consists of a 7.5% Convertible Secured Promissory
                                                             Note for a principal amount of $666, and 1,332 shares
                                                             of our common stock.

SUBSCRIPTION RIGHTS                                          Each of our shareholders who own at least 100 shares of
                                                             common stock as of the close of business on _________,
                                                             2002 (the "Record Date")will be granted one
                                                             nontransferable right to purchase a Unit for every 100
                                                             shares of common stock owned on the Record Date.

STANDBY COMMITMENT                                           To the extent that the subscription rights are not
                                                             exercised by the shareholders, the Rubin Family
                                                             Irrevocable Stock Trust (the "Rubin Family Trust"), has
                                                             agreed to subscribe to purchase, in addition to those
                                                             Units purchased upon the exercise of its subscription
                                                             rights, any remaining Units, up to a total purchase
                                                             price of $1,000,000, or approximately 1,500 Units.  As
                                                             compensation for its standby commitment, the Rubin
                                                             Family Trust will receive a fee of $100,000 payable in
                                                             common stock.  If the Rubin Family Trust purchases such
                                                             number of Units under the standby commitment, the Rubin
                                                             Family Trust will become our majority and controlling
                                                             shareholder.

COMMON STOCK OUTSTANDING AS OF THE RECORD DATE               _____________ shares

COMMON STOCK OUTSTANDING AFTER THE OFFERING                  ______________, assuming the sale of all the Units
                                                             offered.  The number of shares of common stock
                                                             outstanding after the offering does not give effect to
                                                             the conversion of the Notes into common stock.

NO REVOCATION                                                If you exercise any rights, you are not allowed to
                                                             revoke or change the exercise or request a refund of
                                                             monies paid.

SUBSCRIPTION PERIOD                                          The offering will remain open for a fifteen (15) day
                                                             period from ____________, 2002 until__________, 2002, unless
                                                             such period is extended by us, in our sole discretion,
                                                             for up to an additional 30 days. Shareholders who wish
                                                             to exercise their subscription rights must return the
                                                             completed subscription certificates along with their
                                                             payment, as instructed in the subscription
                                                             certificates, to us at: PMB 549, 218 Main Street,
                                                             Kirkland, Washington 98033, Attn: David M. Barnes, CFO,
                                                             no later than 5:00 p.m., New York time, on __________,
                                                             2002, unless the subscription period is extended by us
                                                             as described above.

WITHDRAWAL, AMENDMENT AND TERMINATION                        We reserve the right to withdraw, amend or terminate
                                                             this offering at any time for any reason. In the event
                                                             that the offering is withdrawn or terminated, we will
                                                             return all funds received from such subscriptions
                                                             (without interest).

REPAYMENT OF PRINCIPAL                                       The Notes have a term of five years, expiring on
AND INTEREST UNDER THE NOTES                                 ______, 2007, or unless earlier re-paid in full by
                                                             AUGI.  Interest under the Notes is payable quarterly in
                                                             arrears, on the first day of each January, April, July
                                                             and October commencing on __________, 2002 until
                                                             ________, 2007 unless earlier re-paid in full by AUGI.
                                                             We may pay interest due under the Notes in cash or
                                                             common stock in our sole discretion.  In the event that
                                                             we decide to pay the interest due under the Notes in
                                                             common stock, the price of the common stock at which
                                                             the payment will be made shall be the greater of $0.50
                                                             per share or the ten-day average closing price of the
                                                             common stock, as reported on the OTCBB, prior to the
                                                             date of payment.

                                      2
CONVERSION                                                   Shareholders will have the option to convert the
                                                             principal and interest under the Notes into common
                                                             stock.  Each dollar of principal and interest will be
                                                             convertible into two (2) shares of our common stock
                                                             (the "Conversion Shares") at the option of the holder
                                                             at any time after July 31, 2003, and before maturity of
                                                             the Notes, unless previously repaid by AUGI.

SECURITY INTEREST                                            The Notes are secured by a lien granted by us on all of
                                                             our assets, including 1,222,586 shares of Western Power
                                                             & Equipment Corp. owned by us.

PREPAYMENT                                                   We may elect to prepay the principal amount of the
                                                             Notes at any time, plus accrued interest.

ACCELERATION OF PAYMENT BY HOLDERS                           If an event of default occurs, the holders of at least
                                                             51% in principal amount of the Notes may accelerate
                                                             maturity and demand payment in full of all unpaid
                                                             amounts, plus expenses.  No assurance can be given that
                                                             we will be able to pay the amounts due under the Notes
                                                             if an event of default occurs.

USE OF PROCEEDS                                              We intend to use the proceeds of the offering to pursue
                                                             our acquisition strategy, and for working capital and
                                                             general corporate purposes.

LISTING FOR TRADING                                          The Notes will not be listed for trading.  The Common
                                                             Stock and the Conversion Shares may be traded on the
                                                             OTCBB under the symbol AUGB.

RISK FACTORS                                                 The securities offered hereby involve a high degree of
                                                             risk and investors should carefully consider the
                                                             information set forth under "Risk Factors," as well as
                                                             the other information and data in this prospectus.
3
Summary Financial and Operating Data

     The following Summary Condensed Financial Data for each of the years in the
three-year  period  ended July 31,  2001,  are derived  from,  and  qualified by
reference to our audited financial  statements and should be read in conjunction
with the audited financial statements and "Management's  Discussion and Analysis
of Financial  Condition and Results of Operations"  appearing  elsewhere herein.
The  financial  statements  for the three year  period  ended July 31,  2001 are
included elsewhere in this prospectus.  The unaudited  financial  statements for
the fiscal  quarters  ended  October  31, 2001 and 2000 are  derived  from,  and
qualified by reference to our unaudited financial  statements for these periods.
Such unaudited  financial  statements  have been prepared in conformity with the
accounting  principles  generally  accepted  in the  United  States  of  America
reflected  in the  consolidated  financial  statements  for the  preceding  year
included  in the annual  report on Form  10-K/A for the year ended July 31, 2001
filed with the  Securities and Exchange  Commission.  All  adjustments  are of a
normal recurring  nature and are, in the opinion of management,  necessary for a
fair statement of the consolidated results for the interim periods.

                        Summary Condensed Financial Data

INCOME STATEMENT DATA:
QUARTER ENDED OCTOBER 31,                      YEAR ENDED JULY 31,
                                                      2001           2000                2001            2000           1999

                                                    -----          ------               -----           -----         ------
Net sales....................................         -              -                   -          $155,637,000    $163,650,000

Loss from continuing operations.....            $ (272,000)     $(1,217,000)        $(6,400,000)      (7,030,000)     (5,054,000)

Net loss per share:                                  (0.55)           (2.51)             (13.02)          (14.71)         (10.75)

Gain from discontinued operations...                  -               -                     -               -           1,989,000

Per Share                                             -               -                     -               -                4.23

Net loss ..........................               (272,000)      (1,217,000)         (6,400,000)      (7.030,000)      (3,065,000)

Net loss per share                              $    (0.55)     $     (2.51)        $    (13.02)    $     (14.71)    $      (6.52)
BALANCE SHEET DATA:
                                                       OCTOBER 31                                        JULY 31,

                                                  2001              2000                    2001         2000            1999
                                                ------             ------                  ------        -----           -----
Total assets..........................       $   1,629,000       $6,344,000             $1,724,000    $128,549,000   $142,909,000

Total liabilities......................          2,922,000        4,051,000              2,909,000     115,413,000    121,700,000

Working capital (deficit)...............        (2,374,000)       1,868,000             (2,137,000)    (17,579,000)   (16,751,000)

Shareholders' (deficit) equity..........     $  (1,293,000)      $2,293,000            $(1,185,000)   $  7,373,000    $12,797,000
Ratio of Earnings to Fixed Charges

     The ratio of earnings to fixed charges,  (interest expense and one-third of
real estate and vehicle lease payments, the assumed interest expense portion) is
expressed as the ratio of: (1) fixed charges plus income from operations, to (2)
fixed charges. The ratio was deficient for all periods listed below.
QUARTER ENDED
                              OCTOBER 31,                                         YEAR ENDED JULY 31,
                        2001            2000                2001           2000           1999         1998         1997
                        ----            ----                ----           ----           ----         ----         ----
Ratio                    <1              <1                  <1             <1            <1          <1             <1

Deficiency           $ 34,000       $ 149,000          $  248,000     $ 7,042,000    $ 6,260,000  $ 5,525,000   $ 4,296,000
4
RISK FACTORS

     This prospectus contains forward-looking statements, including among others
(i) anticipated trends in AUGI's financial  condition and results of operations,
and (ii) AUGI's business strategy.  These  forward-looking  statements are based
largely on our  current  expectations  and are  subject to a number of risks and
uncertainties. Actual results could differ materially from these forward-looking
statements.  In  addition  to other  risks  described  elsewhere  in this  "Risk
Factors"   discussion,   important   factors  to  consider  in  evaluating  such
forward-looking  statements  include (a) changes in external  competitive market
factors or in AUGI's  internal  budgeting  process  which might impact trends in
AUGI's results of  operations;  (b)unanticipated  working  capital or other cash
requirements; (c) changes in AUGI's business strategy or an inability to execute
its strategy due to  unanticipated  changes in the  operations in companies AUGI
has/or will acquire;  and (d) various  competitive factors that may prevent AUGI
from  competing  successfully  in the  marketplace.  In light of these risks and
uncertainties,   there  can  be  no  assurance  that  the  events  predicted  in
forward-looking  statements will, in fact, transpire. An investment in the Units
involves  a high  degree of risk.  You should not  acquire  them  unless you can
afford the loss of your entire investment.  As a prospective investor you should
carefully  consider  all  of  the  information  contained  in  this  prospectus,
including the following risk factors:

Risks Associated with AUGI

     NO SIGNIFICANT  OPERATIONS;  WORKING CAPITAL  DEFICIT.  We currently do not
have any significant business operations.  We have had a working capital deficit
for each of the three years  ending July 31, 1999,  2000 and 2001.  In addition,
the cash, cash equivalents and marketable  securities of $745,000 as at July 31,
2001 are not sufficient to fund current levels of operations  through the end of
fiscal 2002.

     OUR INABILITY TO SUCCESSFULLY COMPLETE THIS OFFERING AND RAISE THE EXPECTED
PROCEEDS WOULD POTENTIALLY LEAVE US WITHOUT ADEQUATE WORKING CAPITAL WHICH COULD
MATERIALLY  IMPAIR OUR BUSINESS AND OPERATIONS.  We are not generating  adequate
revenues to fund our  operations  and are  experiencing  operating  losses.  The
amount  of our  cash,  cash  equivalents  and  marketable  securities  generally
available  to  fund  our  working  capital  requirements,  has  diminished  from
$4,086,000  as of July 31, 2000, to $745,000 as of July 31, 2001 due to sales of
marketable securities, most of which were at a loss, in order to provide working
capital;  and a  significant  decrease  in the  market  value  of the  remaining
marketable  securities  held by AUGI. In addition,  cash,  cash  equivalents and
marketable  securities  decreased by an additional $232,000 in the quarter ended
October 31, 2001.

     POTENTIAL NEED FOR ADDITIONAL FINANCING.  We may require additional capital
in order to finance our current  business  strategy and  operations.  Sources of
funds may include  the  issuance of common  stock or  preferred  stock sold in a
public  offering or in private  placements,  debt  securities or bank financing.
There can be no  assurance  that we will be able to obtain  capital  on a timely
basis, on favorable terms, or at all. If we are unable to obtain such financing,
or generate funds from operations sufficient to meet our needs, we may be unable
to implement our business strategy or may be required to cease all operations.

     DEPENDENCE ON KEY  PERSONNEL.  We depend to a  significant  degree upon the
continuing  contributions  of our  management.  The loss of the  services of our
management  could have a material  adverse  effect on our business and financial
condition.

     CERTAIN  PROVISIONS IN THE  CERTIFICATE OF  INCORPORATION;  OBSTRUCTIONS TO
CHANGE IN CONTROL. Our Certificate of Incorporation  contains certain provisions
that could  have the effect of  delaying  or  preventing  a change of control of
AUGI, which could limit  shareholders'  ability to dispose of their common stock
at a premium in such transactions.  The Certificate of Incorporation  authorizes
the Board of Directors to issue one or more series of  preferred  stock  without
stockholder  approval,  which stock could have voting and conversion rights that
adversely affect the voting power of the holders of Common Stock.  Moreover,  we
are  subject to the  anti-takeover  provisions  of Section  203 of the  Delaware
General  Corporation  Law. In general,  this Section  prohibits a publicly  held
Delaware corporation from engaging in a "business combination" (as defined) with
an "interested  stockholder"  (as defined) for a period of three years after the
date of the  transaction  in which the person became an interested  stockholder,
unless the business combination is approved in a prescribed manner. This section
may render more  difficult or discourage  an attempt to obtain  control of us by
means of a proxy contest, tender offer, merger or otherwise, and thereby protect
the continuity of our management.  In addition,  in certain cases,  this section
may prevent our  shareholders  from  realizing a premium  upon the sale of their
shares in any tender offer or merger opposed by our management.

     BROAD  DISCRETION IN APPLICATION OF PROCEEDS.  If all of the Units are sold
in this offering,  we will receive proceeds of approximately  $2,900,000,  after
deducting  offering  expenses.  We intend to use such  proceeds to implement our
business  strategy  and for  general  corporate  and working  capital  purposes.
However,  all proceeds received in connection with this offering may be expended
at the discretion of our management. See "USE OF PROCEEDS."

                                       5
NO  DIVIDENDS.  We have not paid any  dividends to date on our common stock
and do not expect to declare or pay any dividends in the foreseeable  future. We
intend to retain future  earnings for  investment  in our  business.  Any future
determination  to pay cash  dividends  will be at the discretion of the Board of
Directors  and  will be  dependent  upon our  financial  condition,  results  of
operations,  capital  requirements  and  such  other  factors  as the  Board  of
Directors  deems  relevant.  Investors  should,  therefore,  be aware that it is
highly  unlikely that any cash dividends will be paid on our common stock in the
foreseeable future.

     DILUTIVE EFFECT OF POSSIBLE ISSUANCE OF ADDITIONAL  OPTIONS.  On October 3,
2000, the Board of Directors approved and adopted the 2001 Employee Stock Option
Plan (the "2001 Plan"), which was authorized and ratified by our shareholders at
our annual meeting on August 28, 2001. The 2001 Plan provides  7,500,000  shares
of common stock  underlying  stock options  available for grant  thereunder,  of
which an aggregate of 124,400  options are issued and  outstanding.  Such issued
options are exercisable for five years after issuance for $6.875 per share.  The
exercise of any such options may further  dilute the net tangible  book value of
the common stock.

Risks Associated with this Offering

     WE MAY PAY  INTEREST IN COMMON  STOCK.  We  currently  have no  significant
operations or revenue.  As a result,  we may not be able to pay the interest due
under the Notes in cash. In such event, we may pay the interest in common stock.
If we decide to pay the  Interest due under the Notes by issuing  common  stock,
the price of the  common  stock at which the  payment  will be made shall be the
greater of $0.50 per share or the ten-day  average  closing  price of the common
stock, as reported on the OTCBB, prior to the date of payment.  As of January 4,
2002, the last reported sales price of the common stock was $1.95.

     ASSETS  UNDERLYING  SECURITY  INTEREST  WILL NOT SATISFY  REPAYMENT  OF THE
NOTES.  At  October  31,  2001 our total  assets  are  valued  at  approximately
$1,629,000. In the event that all of the Units are sold in this offering, and we
issue  Notes in an  aggregate  dollar  amount  of  $3,000,000,  our  assets,  as
currently valued, would not satisfy our obligations under the Notes.

     NO  REVOCATION.  You are not allowed to revoke or change  your  exercise of
rights after you send in your subscription  forms and payment.  If we cancel the
offering,  we are obligated only to refund payments actually  received,  without
interest.

     FAILURE TO SUBSCRIBE WILL DILUTE YOUR OWNERSHIP INTEREST. If you choose not
to exercise your subscription  rights in full, your relative  ownership interest
will be diluted.

     STANDBY SUBSCRIPTION COMMITMENT. To the extent that the subscription rights
are not  exercised  by the  shareholders,  the Rubin  Family Trust has agreed to
subscribe to purchase,  in addition to the Units  purchased upon the exercise of
its rights, any remaining Units, up to a total purchase price of $1,000,000,  or
approximately  1,500 Units.  If the Rubin Family Trust  purchases such number of
Units,  the  Rubin  Family  Trust  will  become  our  majority  and  controlling
shareholder.  In such event, the Rubin Family Trust could exert  significant and
controlling  influence  over all matters  requiring  approval  by  shareholders,
including  the election or removal of  directors  and the approval of mergers or
other business combination  transactions.  This concentration of ownership could
have the effect of  delaying  or  preventing  a change in  control or  otherwise
discouraging  a potential  acquirer from  attempting to obtain  control of AUGI.
This in turn could  decrease the market price of our common stock or prevent our
shareholders  from realizing a premium over the market price for their shares of
common stock.

     NEED TO ACT PROMPTLY AND FOLLOW SUBSCRIPTION INSTRUCTIONS. Shareholders who
desire to purchase  Units in the  offering  must act promptly to ensure that all
required forms and payments are actually  received by us prior to the expiration
date, ________, 2002. If you fail to complete and sign the required subscription
forms,  send an  incorrect  payment  amount,  or  otherwise  fail to follow  the
subscription  procedures  that  apply  to  your  desired  transaction,  we  may,
depending on the  circumstances,  reject your  subscription  or accept it to the
extent of the payment received. We will not undertake to contact you concerning,
or to attempt to correct, an incomplete or incorrect  subscription form. We have
the sole  discretion  to  determine  whether a  subscription  exercise  properly
follows the subscription procedures.

     DEFAULT AND ACCELERATION.  If we default,  the Notes may be accelerated and
our  funds may be  insufficient  for their  payment.  If we fail to make  timely
payment of  principal  or interest on the Notes,  fail to issue the common stock
upon  conversion of the Notes,  or fail in certain other respects to comply with
the  technical  provisions  of the Notes,  the  holders  may  declare all unpaid
obligations  immediately due and payable.  The Notes also become immediately due
and payable if we file an action for  bankruptcy,  liquidation,  reorganization,
dissolution  or winding up. Our ability to pay the amount due under the notes if
they are accelerated  will depend on the  availability  of sufficient  funds. No
assurance can be given that we will be able to pay the notes upon the occurrence
of an event of default.

                                       6
NO MARKET FOR THE NOTES.  There is no market for the Notes.  The Notes will
not be listed for trading on any stock exchange, or otherwise.

     DILUTIVE  EFFECT OF SHARES  ELIGIBLE FOR FUTURE SALE.  The number of shares
eligible for future sale will potentially  dilute the price of our common stock.
At January 4, 2002,  497,602  shares of our common stock,  and 407,094 shares of
Series  B-1  Preferred  Stock  were  outstanding  (each 25  shares  of which are
convertible into one common share.), of which 445,771 shares of common stock and
no shares of Series B-1 Preferred Stock were freely tradeable.  51,831 shares of
common stock, and 407,094 shares of Preferred Stock were "restricted securities"
as that term is defined in Rule 144 under the  Securities  Act. At that date, we
also had  outstanding  options and warrants to acquire  227,000 shares of common
stock. Beginning July 31, 2003, the Notes are convertible into common stock at a
conversion  rate of $1.00 of principal and interest for two (2) shares of common
stock.  If all  4,500  Units  are sold and if all of the  holders  of the  Notes
convert their Notes into common stock, approximately 6,000,000 additional shares
would be issuable  upon  conversion  of the Notes.  The issuance of  substantial
additional  shares or sales of  substantial  amounts of the common  stock in the
public market could adversely  affect the market price of the common stock.  See
"Description of Securities."

     FOR ALL OF THE FOREGOING  REASONS AND OTHERS SET FORTH IN THIS  PROSPECTUS,
THE  SECURITIES  OFFERED  HEREBY  INVOLVE  A HIGH  DEGREE  OF RISK.  ANY  PERSON
CONSIDERING  AN INVESTMENT IN THE  SECURITIES  OFFERED HEREBY SHOULD BE AWARE OF
THESE AND OTHER FACTORS SET FORTH IN THIS  PROSPECTUS.  THE  SECURITIES  OFFERED
HEREBY SHOULD BE PURCHASED  ONLY BY PERSONS WHO CAN AFFORD A TOTAL LOSS OF THEIR
INVESTMENT IN THE COMPANY.

                                       7
CAPITALIZATION

     The  following  table  sets  for the  actual  capitalization  of AUGI as of
October 31, 2001,  (after giving  effect to the 1-for-25  reverse stock split of
our common  stock),  and as adjusted to give effect to the  issuance and sale of
the all of the Units offered hereby at an offering price of $666 per Unit.  This
table should be read in conjunction with the Financial  Statements and the notes
thereto included elsewhere in this Prospectus.
Actual              As Adjusted
                                                                      ------              -----------
7.5% Convertible Notes, net of discount                                                      1,450,000

Series A Preferred Stock, $0.01 par value, 1,200,000
authorized, 0 issued and outstanding....................         $       -               $        -

Series B-1 Preferred Stock, $0.01 par value, 1,000,000                   4,000                  4,000
authorized, 407,043  issued and outstanding.............

Series B-2 Preferred Stock, $0.01 par value,500,000                          0                      0
authorized, 0 issued and outstanding....................

Common Stock, $0.01 par value, 40,000,000 authorized;                    5,000                 65,000
497,572 shares issued and outstanding; 6,497,572 shares
issued and outstanding as adjusted......................

Additional paid in capital..............................            50,390,000             51,780,000

Accumulated other comprehensive loss....................             (710,000)              (710,000)

Accumulated deficit.....................................          (50,982,000)           (50,982,000)
                                                                  -----------             ----------

   Total capitalization                                            (1,293,000)             1,607,000
                                                                   ==========             ==========
(1)  The proceeds from the Rights Offering,  reduced by issuance costs estimated
     by AUGI to be $100,000 will be credited to the 7.5% Convertible  Notes, net
     of discounts and Common Stock and  Additional  paid in capital as reflected
     in the above table.

                                       8
DIVIDEND POLICY

     For the foreseeable future, we intend to retain earnings, if any, to assist
in financing our business  strategy.  In the future, the payment of dividends by
us on our common stock will also depend on our financial  condition,  results of
operations  and such  other  factors  as the  Board of  Directors  may  consider
relevant.

                                 USE OF PROCEEDS

     We estimate that the net proceeds from the sale all of the 4,500 Units will
be  approximately  $2,900,000,   after  deducting  estimated  expenses  of  this
offering. We intend to apply the proceeds of the offering, as follows:

Application                    Approximate Dollar Amount        Percentage
-----------                    -------------------------        ----------

Expansion and Acquisitions           $1,975,000                     68%

Working Capital                      $  925,000                     32%
                                        -------                     --

Total                                $2,900,000                    100%
                                     ==========                    ===

     Until  applied as set forth above,  all  proceeds  will be invested in U.S.
Government obligations and securities or deposited in federally insured accounts
of banks.

     Although we do not  presently  have any  agreements  or  understandings  to
acquire  any  businesses,  we  intend  to  actively  seek and  investigate  such
opportunities  as they  become  available.  We  would  likely  finance  any such
transaction with cash, the issuance of equity or debt securities,  incurrence of
indebtedness  or any  combination of the foregoing.  To the extent that any such
transaction  would be paid for by us in cash,  we intend to use a portion of the
net proceeds from this offering.

     This  discussion of Use of Proceeds  represents our present  intentions and
best  estimate  with respect to the  allocation of the proceeds of this offering
based upon its present plans and business  condition.  We may require additional
financing in the future to make acquisitions,  continue our business strategy or
finance and  maintain  businesses  acquired by us.  There is no  assurance  that
unforeseen events or changed business  conditions will not result in a different
application of the proceeds of this offering.

DETERMINATION OF SUBSCRIPTION PRICE

     The  subscription  price  of the  Units  was  determined  by our  Board  of
Directors  without any  independent  valuation  or appraisal of the value of our
common stock. The subscription  price is not necessarily  related to the assets,
book value or net worth of AUGI or any other  established  criteria of value and
may  not  be  indicative  of  the  fair  value  of the  securities  offered.  In
determining the  subscription  price, the Board of Directors  considered,  among
other things,  the historic and current  market price of the common stock on the
OTCBB  (approximately  $1.95 per share at January 4, 2002), our need for working
capital, and the lack of alternative sources of capital available to us within a
time frame reasonable to meet our financial needs.

                                       9
THE OFFERING

GENERAL

     Our shareholders, who own at least 100 shares of our common stock as of the
close of  business  on  _________,  2002  (the  "Record  Date"),  will  have the
opportunity to purchase  Units in this offering.  Every 100 shares of our common
stock will entitle the holder to receive one subscription  right to purchase one
Unit in the amount of $666.  Each Unit  consists of a 7.5%  Convertible  Secured
Promissory Note in the principal  amount of $666, and 1,332 shares of our common
stock.  We have not  engaged  an  underwriter  in  connection  with this  rights
offering.  We intend to  distribute  on  ____________,  2002,  the  subscription
documents and copies of this prospectus to our shareholders,  promptly following
the effectiveness of the registration statement of which this prospectus forms a
part.  If the  offering  is fully  subscribed,  we expect to raise  proceeds  of
approximately three million dollars ($3,000,000),  before deducting costs of the
offering.

     Our   employees,   officers  and  directors  may  solicit   responses  from
shareholders  receiving  rights to purchase,  but these persons will not receive
any  commissions  or  compensation  for their  services  other than their normal
employment or director compensation.

PURPOSE OF THE RIGHTS OFFERING

     Completion  of this  offering  will enable us to raise up to  approximately
three million  dollars($3,000,000),  before deducting the costs of the offering.
The primary purpose of this rights offering is to alleviate  potentially serious
liquidity and capital  adequacy  concerns.  We do not currently have significant
operations and currently own minor equity  positions in five (5)  companies.  We
are not generating adequate revenues to fund our operations and are experiencing
operating  losses.  The  amount of our cash,  cash  equivalents  and  marketable
securities  generally  available to fund our working capital  requirements,  has
diminished  from $4,086,000 as of July 31, 2000, to $745,000 as of July 31, 2001
due to sales of marketable securities, most of which were at a loss, in order to
provide working capital;  and a significant  decrease in the market value of the
remaining  marketable   securities  held  by  AUGI.  In  addition,   cash,  cash
equivalents and marketable securities decreased by $232,000 in the quarter ended
October 31, 2001. This lack of available cash has created increased  operational
and capital adequacy  problems which we hope to alleviate through this offering.
Our inability to complete this  offering and raise the expected  proceeds  would
potentially  leave us without  adequate  working capital which could  materially
impair our future business and operations.

DESCRIPTION OF THE RIGHTS OFFERING

  Subscription Rights

     We are granting to each of our  shareholders,  who own at least 100 shares,
one nontransferable subscription right for each 100 shares of common stock owned
by the  shareholder  on the  Record  Date.  Each  right  entitles  the holder to
purchase a Unit in the amount of $666. If all such  shareholders  fully exercise
their  subscription  rights,  we will issue  Notes in an  approximate  aggregate
principal  amount  of three  million  dollars  ($3,000,000)  and an  approximate
aggregate  of 6,000,000  shares of common  stock.  We will not issue  fractional
shares.  A  shareholder  who does not  participate  in the rights  offering will
experience ownership dilution. Our officers and directors,  in their capacity as
shareholders,  will  have the same  rights  to  purchase  shares  in the  rights
offering as other shareholders.

     Shareholders  cannot  revoke their rights  subscription  certificates  once
submitted.  Our board  reserves the right to modify,  withdraw or terminate  the
rights offering at any time prior to its consummation if it determines that such
modification, withdrawal or termination is in our best interests.

DELIVERY OF SHARE CERTIFICATES

     As soon as  practicable  after  receipt of funds from the  exercise  of the
subscription  rights, we will mail certificates for shares to shareholders whose
rights subscription certificate have been accepted.

  How to Subscribe for Rights

     You may subscribe to purchase  shares by completing  and signing the rights
subscription  certificate  which  accompanies  this  prospectus  and  mailing or
delivering it to us,  together with the required  payment set forth  pursuant to
the  instructions  regarding  use of the  subscription  certificate.  You should
carefully  read and follow such  instructions.  To be accepted,  we must receive
your rights  subscription  certificate before the expiration of the subscription
period.  Shareholders cannot revoke their rights subscription  certificates once
submitted to us.

     Funds should be remitted directly to us. You should make checks payable to:
American  United  Global,  Inc. You should mail or deliver  checks and completed
rights subscription  certificates to us at: PMB 549, 218 Main Street,  Kirkland,
Washington, 98033, Attn: David M. Barnes, CFO.

                                       10
Any  shareholder  who has not submitted a properly  completed  subscription
certificate  along with payment for the  subscription  price to us by 5:00 p.m.,
New York  time,  on  ____________,  2002,  unless  such  subscription  period is
extended by us, in our sole  discretion,  for up to an additional 30 days, shall
forfeit their rights to subscribe in the rights offering.

     If you wish to exercise your subscription rights, but you or your broker do
not have sufficient time to deliver the subscription certificate before the time
your rights expire,  you may exercise your rights by delivering  your payment in
full along with the notice of guaranteed  delivery form included as part of your
subscription documents.

  Acceptance of Subscriptions

     In addition to any rights  subscriptions  we do not accept because they are
incomplete or otherwise not properly  submitted,  we may in our sole  discretion
elect to accept or  reject  all of the  subscriptions  in this  rights  offering
before its expiration. We also reserve the right to amend the terms of, postpone
or  cancel  the  rights  offering  at any time  prior to the  expiration  of the
subscription period.

     We are  entitled  to  resolve  all  questions  concerning  the  timeliness,
validity,  form and eligibility of any exercise of rights.  Our determination of
these questions will be final and binding. In our sole discretion,  we may waive
any defect or  irregularity,  or permit a defect or irregularity to be corrected
within such time as we may  determine,  or reject the purported  exercise of any
right because of any defect or irregularity.

     Subscription certificates will not be considered received or accepted until
all irregularities have been waived or cured within such time as we determine in
our sole  discretion.  We have no duty to give  notification  of any  defect  or
irregularity in connection  with the submission of subscription  certificates or
any other required document. We will not incur any liability for failure to give
such notification.

     We reserve the right to reject any exercise of  subscription  rights if the
exercise  does not fully comply with the terms of the rights  offering or is not
in proper form or if the exercise of rights would be unlawful.

                                       11
PRICE RANGE OF SECURITIES

     On February 4, 1998, The Nasdaq Stock Market,  Inc. ("Nasdaq") delisted our
common stock and warrants (the "Public Warrants") from Nasdaq.  Since such date,
the principal  market for trading our securities is the National  Association of
Securities  Dealers  Over-the-Counter  Bulletin Board  ("OTCBB").  The following
table lists the high and low bid  information  for shares of our common stock on
the OTCBB during the periods identified:
Common Stock
                           ------------
                       High               Low
                       ----               ---
Fiscal 2000
-----------
First Quarter             $7.75          $6.00

Second Quarter            18.00           4.50

Third Quarter             37.50          10.00

Fourth Quarter            21.875          5.3375

Fiscal 2001
----------

First Quarter             17.50           5.50

Second Quarter            14.845          3.125

Third Quarter              5.25           3.25

Fourth Quarter             4.50           2.25

Fiscal 2002
----------

First Quarter              3.50           1.75

Second Quarter
through January 4, 2002    2.50           1.125
Since the Public Warrants were delisted from Nasdaq,  they have been thinly
traded on the  OTCBB.  It is our  opinion  that  since  February  4, 1998  price
information  for the Public Warrants is either  unreliable or  unavailable,  and
that trading activity since such date has been extremely sporadic,  and that for
such reasons any such price information may either be misleading, inaccurate, or
not indicative of the true market price of the Public  Warrants since such date.
However,  according  to the most recent  price  information  provided to us, the
Public  Warrants  had a  bid/ask  price on  January  4,  2002 of $4.00 and $8.00
respectively.

     In July 2001, we extended the exercise  period of the Public  Warrants from
July 31, 2001 to July 31, 2003 and reduced  the  exercise  price to $1.00.  As a
result of the reverse stock split  effective  December 17, 2001,  each 25 Public
Warrants are exercisable for 1 share of common stock.

     At January 4, 2002,  497,602 shares of our common stock, and 407,094 shares
of  Series  B-1  Convertible  Preferred  Stock  (each 25  shares  of  which  are
convertible into one common share.) were outstanding, of which 445,771 shares of
common stock and no shares of Series B-1 Preferred Stock were freely  tradeable.
51,831  shares of common  stock,  and  407,094  shares of  Preferred  Stock were
"restricted securities" as that term is defined in Rule 144 under the Securities
Act.  At that date,  we also had  outstanding  options  and  warrants to acquire
227,000 shares of common stock.

     At January  4, 2002 the last sale  price of the Common  Stock was $1.95 per
share.  Also at such date,  AUGI had  approximately  114  record  holders of its
Common Stock,  approximately  1579 beneficial  holders of its Common Stock and 6
beneficial holders of its Public Warrants.

                                       12
SELECTED FINANCIAL AND OPERATING DATA

     The following  Selected  Financial and Operating Data for each of the years
in the five-year  period ended July 31, 2001, are derived from, and qualified by
reference to our audited financial  statements and should be read in conjunction
with the audited financial statements and "Management's  Discussion and Analysis
of Financial  Condition and Results of Operations"  appearing  elsewhere herein.
The  financial  statements  for the three year  period  ended July 31,  2001 are
included elsewhere in this prospectus.  The unaudited  financial  statements for
the fiscal  quarters  ended  October  31, 2001 and 2000 are  derived  from,  and
qualified by reference to our unaudited financial  statements for these periods.
Such unaudited  financial  statements  have been prepared in conformity with the
accounting  principles  generally  accepted  in the  United  States  of  America
reflected  in the  consolidated  financial  statements  for the  preceding  year
included  in the annual  report on Form  10-K/A for the year ended July 31, 2001
filed with the  Securities and Exchange  Commission.  All  adjustments  are of a
normal recurring  nature and are, in the opinion of management,  necessary for a
fair statement of the consolidated results for the interim periods.

    Income Statement Data (all figures in thousands, except per share data):
Quarter ended
                              October 31,                              Year ended July 31,

                            2001      2000       2001      2000     1999(1,2)  1998(1)    1997
                            ----      ----       ----      ----     ----       ----       ----
Net sales                 $   -     $  -       $   -     $155,637   $163,650  $163,478  $152,021

Loss from
continuing operations      (272)    (1,217)     (6,400)   (7,030)    (5,054)  (5,121)    (7,944)

Net loss                   (272)    (1,217)     (6,400)   (7,030)    (3,065)  (9,615)   (27,257)

Basic and Diluted Loss
 Per Share:

Loss from
continuing operations     (0.55)     (2.51)     (13.02)   (14.71)   (10.75)   (10.75)    (26.25)

Net loss                  (0.55)     (2.51)     (13.02)   (14.71)    (6.52)   (21.25)    (68.75)
Balance Sheet Data (all figures in thousands):
October 31,                        July 31,
                                 2001    2000       2001     2000     1999     1998       1997
                                 ----    ----       ----     ----     -----    ----       ----
Total assets                   $ 1,629  $6,344     $1,724  $128,549 $142,409  $146,904   $144,723

Total liabilities                2,922   4,051      2,909  $115,413 $121,700  $121,914   $110,742

Working capital (deficit)       (2,374)  1,868     (2,137)  (17,579) (18,751)  (5,972)      2,467

Stockholders'(deficiency)equity (1,293)  2,293     (1,185)    7,373   12,797    15,862     24,101
(1)  Includes loss from discontinued operations of the Technology Companies
     (2)  Includes a gain on disposal of $1,989.
     (3)  For 2001,  Western  has been  accounted  for under the equity  method,
          whereas in 1997 through 2000 Western was included in the  consolidated
          financial statements of the Company.

                                       13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

     You  should  read the  following  discussion  together  with the  financial
statements and related notes included elsewhere in this Prospectus.  The results
discussed below are not necessarily  indicative of the results to be expected in
any  future  periods.  To the  extent  that the  information  presented  in this
discussion  addresses financial  projections,  information or expectations about
AUGI or otherwise  makes  statements  about future events,  such  statements are
forward-looking  and are  subject  to a number of risks and  uncertainties  that
could cause actual results to differ  materially  from the statements  made. See
"Risk  Factors-  Forward-Looking   Statements"  for  further  information  about
forward-looking statements.

         General Overview

     We  own  equity  interests  in  five  (5)  operating  entities.   Our  most
significant  interest  is our 36%  interest in Western  Power & Equipment  Corp.
("Western")  which engages in the sale,  rental and servicing of light,  medium-
sized and heavy construction,  agricultural and industrial equipment,  parts and
related  products.  The major  supplier to Western is Case  Corporation  and the
items sold,  rented and serviced include backhoes,  excavators,  crawler dozers,
compactors,  log loaders,  street  sweepers and forklifts.  Western  operates 18
facilities in Nevada,  Oregon,  Washington,  California  and Alaska and sells to
contractors,  governmental agencies and other customers primarily for use in the
construction  of residential  and commercial  buildings,  roads,  levees,  dams,
underground power projects and municipal construction.

     Prior to November 1, 2000, we were the majority shareholder of Western with
a  59.6%  ownership.  The  results  of  operations  of  Western  were  therefore
consolidated  with those of AUGI in all prior fiscal years.  On November 1, 2000
we distributed  777,414 shares of Western common stock owned by AUGI pursuant to
the final court  approved  settlement  of the  shareholder  class  action.  As a
result,  our ownership in Western  became 36% and our  investment in Western has
been accounted for under the equity method effective August 1, 2000.

     Our  ownership in each of the other four entities is less than five percent
and is not material to the financial statements.

     In previous  years we engaged in other  additional  businesses  such as the
Technology  Business and the  Telecommunications  and  Construction  Businesses,
which have all since been  discontinued.  We were formerly a stockholder  of the
majority of the  outstanding  common stock of IDF  International,  Inc.  through
which it engaged in the Telecommunication and Construction Businesses,  however,
since early  fiscal  1998 have been only a minority  stockholder.  TechStar  and
Hayden-Wegman,  IDF's two operating subsidiaries, ceased operations in June 1999
and September 2000 respectively. During Fiscal 1998 and 1999, we either divested
of all assets of, or otherwise  discontinued  all  operations of, the Technology
Businesses.  Consequently,  our operations during Fiscal 2000 consisted entirely
of the Distribution  Business which we engaged in through Western.  Accordingly,
the following  discussion relative to fiscal 2000 and 1999 consists primarily of
a discussion of Western.

Results of Operations

     The Three Months ended  October 31, 2001 compared to the Three Months Ended
October 31, 2000

     General and  Administrative  expenses totaled $175,000 for the three months
ended  October 31, 2001  compared to $853,000 for the three months ended October
31, 2000. The net decrease of $678,000 is primarily  attributable to $532,000 of
stock option compensation recorded in the fiscal 2000 quarter for which there is
no  comparable  expense in the current year.  The  remaining  decrease is due to
reduced headcount and lower administrative expenses in the current year.

     Loss on sale of marketable  securities  was $192,000 for the current year's
quarter,  a decrease of $191,000  from  $383,000 in the prior year's  comparable
period.  The decrease is due to lower cash  requirements  in the current quarter
than in the prior year resulting in fewer sales of securities at losses.

     Net interest expense of $34,000 in the quarter ended October 31, 2001 was a
decrease of $115,000  from  $149,000 in the prior year.  The  decrease is due to
interest  expense  of  $115,000  in  the  prior  years  quarter  related  to the
shareholder  settlement agreement,  as amended in August 2000 for which there is
no comparable expense in the current year.

     The Company has recorded a full  valuation  allowance  against the deferred
tax benefit for net operating losses  generated,  since in management's  opinion
the net  operating  losses do not meet the more  likely  than not  criteria  for
future realization.

                                       14
Fiscal Year 2001, as compared to fiscal 2000

     Our share of  Western's  fiscal  2001 loss was  $2,823,000  while in fiscal
2000, our share of Western's  loss was  $4,294,000.  Western  recorded a loss of
$7,842,000 in fiscal 2001 and a loss of $7,198,000 in Fiscal 2000, however,  the
decrease  in our  proportionate  share  is due to the  lower  percentage  of our
ownership of Western.

     Selling,   general  and   administrative   expenses  in  fiscal  2001  were
$1,214,000,  an increase of $274,000  over fiscal 2000 which was $940,000 net of
Western.  The  increase  is  primarily  due to a bad debt  reserve  of  $175,000
recorded in the current year for a note receivable from Ego  Magazine.com,  Inc.
The note was issued to AUGI in January 2000 pursuant to a loan agreement and the
borrower  defaulted  upon such note in April 2001.  In addition,  there were two
additional employees during the first half of fiscal 2001.

     Interest  expense in Fiscal  2001 was  $248,000,  slightly  higher than the
$238,000,  net of  Western's  interest,  recorded in fiscal  2000.  Such amounts
consist primarily of interest accrued on short term borrowings.

     Other income of $506,000 in 2001 is comprised  of gains on  settlements  of
$415,000 and an adjustment to the valuation of the final shareholder  litigation
settlement in the amount of $91,000 which was paid by Mr. Rubin during the third
quarter of fiscal  2001.  Other  income in prior  years  consisted  of net gains
related to asset dispositions by Western.

                                       15
Fiscal Year 2000, as Compared with Fiscal Year 1999

     Western reported net revenue for Fiscal 2000 of $155,637,000  compared with
net revenue of $163,650,000 for Fiscal 1999. Stores opened longer than 12 months
showed an overall  revenue  decrease  of 4.9  percent  from  prior year  revenue
reflecting a general  softening in economic  conditions in the  northwest  along
with  increased  competitive   pressures.   Western  consolidated  five  of  its
facilities  during fiscal 2000 into larger  facilities in the region in order to
reduce costs and leverage existing, larger facilities in the region to cover the
territories previously served by the closed facilities.

     Western  had a net loss for Fiscal  2000 of  $7,198,000  or $2.18 per share
compared  with a net loss of  $1,815,000  or $0.55 per share in Fiscal 1999.  In
Fiscal  2000,   Western   recognized  a  fourth  quarter   inventory  charge  of
approximately  $2,547,000 to provide  allowances to recognize  decreasing market
prices on aged  equipment in the last half of fiscal 2000. In addition,  Western
recorded a valuation  allowance of $2,956,000 related to its deferred tax asset.
Other income  consists  primarily of net gains related to asset  dispositions by
Western.

     Our share of Western's  Fiscal 2000 loss was $4,294,000.  We also accrued a
loss of $1,434,000 on the transfer of 777,414 common shares of Western  pursuant
to the  settlement  of  shareholder  litigation  (see note 10);  recorded a full
reserve of $364,000 in  connection  with  advances to and  investment in IDF and
sold a patent  having to do with  certain  technology  previously  developed  by
eXodus for a gain of $240,000.  Exclusive of Western,  we also incurred $940,000
of selling,  general and administrative expenses (primarily salaries,  taxes and
professional fees) and $238,000 of net interest expense.

     Western's  gross margin was 7.4 percent  during  Fiscal 2000 which is lower
than its 8.9 percent  gross  margin  during  Fiscal 1999.  Margins  decreased in
Fiscal 2000 due mainly to competitive pressures and the fourth quarter equipment
reserve.  Management  continues to place a high  priority on  improving  overall
gross margins by working to increase  higher margin service,  parts,  and rental
revenues,  focusing more sales efforts on specialty and niche product lines, and
by obtaining higher prices for new and used equipment.

     Selling,  general,  and  administrative  expenses were  $14,474,000  or 9.3
percent of revenues for Fiscal 2000  compared to $ 15,705,000  or 9.6 percent of
sales  for  Fiscal  1999.  The  decrease  was  primarily  due to a  decrease  of
approximately  $938,000 in expenses  relative to shareholder  litigation and bad
debts in 2000 as well as generally  lower expense levels at AUGI compared to the
amount  incurred in 1999  somewhat  offset by higher  expenses at Western  which
primarily were due to the costs of closing stores during the year.

     Net interest expense for Fiscal 2000 was $6,307,000,  up from $5,329,000 in
Fiscal 1999  primarily  due to an  increase  in interest  rates at Western and a
decrease in interest income due to lesser principle amounts having been invested
during  fiscal  2000.  In June 1997,  Western  obtained a $75 million  inventory
flooring  and  operating  line of credit  facility  through  Deutsche  Financial
Services ("DFS").  The facility is a three year, floating rate facility at rates
as low as 50 basis  points  under the prime  rate.  Prime  interest  rates  have
increased  from  those in  Fiscal  1999.  Management  of  Western  has used this
facility to allow Western to take  advantage of more  purchase  discounts and to
lower overall interest expense.

                                       16
Liquidity and Capital Resources

         General

     During Fiscal 2001 our cash,  cash  equivalents  and marketable  securities
decreased  by  $3,341,000,  from  $4,086,000  to  $745,000  net of the  decrease
attributable to no longer consolidating Western. This decrease was primarily due
to sales of  marketable  securities,  most of which were at a loss,  in order to
provide  working  capital and a significant  decrease in the market value of the
remaining marketable securities held by AUGI.

     During the quarter ended October 31, 2001, our cash,  cash  equivalents and
marketable  securities  decreased by another $232,000 due to sales of marketable
securities  to fund  operations  as well  as a  decrease  in  value  of  certain
securities held.

     Our cash,  cash  equivalents  and  marketable  securities of $513,000 as of
October 31, 2001 are not  sufficient to fund current levels of operation for the
next twelve  months.  In order to continue to operate  through the end of fiscal
2002 and on into  fiscal  2003,  we will have to  receive  minimum  proceeds  of
approximately  $1,000,000  from the  rights  offering.  In the  event  that such
proceeds are not raised,  we will have to obtain other financing or sell some or
all of our share ownership in Western.  In addition to the rights  offering,  we
are actively pursuing other financing sources but have not obtained a commitment
or agreement for any financing.

     In prior years, we invested  substantially all cash and cash equivalents in
money market funds, United States Treasury  securities and similar  instruments.
We had sought to provide a high current  return on its  investments  of cash and
cash equivalents  while  preserving both liquidity and capital.  The established
policy guidelines for its investment portfolio included investments that include
United States Treasury securities,  United States government agency obligations,
deposit-type  obligations  of United  States  banking  institutions,  repurchase
agreements,  United States denominated A1 grade commercial paper,  United States
money market funds and interests in mutual funds that invest in the above listed
instruments.  Concentration of the portfolio was limited to not more than 20% of
the  investment  portfolio in the  securities  of any one bank,  corporation  or
non-government issuer.

                                       17
BUSINESS AND PROPERTIES

General

     We own minority equity positions in five companies. Our primary interest is
our 36%  ownership  of Western  Power & Equipment  Corp.  ("Western").  Prior to
November 1, 2000,  Western was our 59.6%  majority owned  operating  subsidiary,
engaged  primarily in the  distribution,  rental and  servicing of  construction
equipment.  On November 1, 2000, we distributed 777,414 shares of Western common
stock  owned by us  pursuant  to the  final  court  approved  settlement  of the
shareholder class action. Due to the distribution of the Western shares, Western
is no longer a majority owned  subsidiary of ours.  However,  we are the largest
stockholder of Western. We no longer consolidate the results of Western with our
operations  and  effective  as of August 1, 2000 account for our  investment  in
Western using the equity method.  All other equity positions held by us are each
less than 5% and are  recorded in the  financial  statements  under the captions
Investment in marketable securities and Other assets.

STRATEGIC GOALS

     We intend to focus our business  strategy on  acquisitions of businesses in
various sectors. A portion of the proceeds from this offering will be used by us
to implement our acquisition  strategy.  However, we have not yet identified any
definitive acquisition candidates.

HISTORY

     AUGI was  initially  organized as a New York  corporation  on June 22, 1988
under the name  Alrom  Corp.,  and  completed  an  initial  public  offering  of
securities in August 1990. The Company  effected a statutory  merger in December
1991,  pursuant to which the Company was reincorporated in the State of Delaware
under the name American United Global, Inc. ("AUGI").

Western

     Western  commenced  operations in November 1992 with the  acquisition  from
Case of seven retail  distribution  facilities located in Oregon and Washington.
Western  became  our  subsidiary  simultaneous  with such  acquisition.  We held
approximately 59.6% of the outstanding shares of Western common stock as of July
31,  2000.  Pursuant to the final  settlement  of a  shareholder  class  action,
777,414 shares of Western common stock owned by us were transferred to the class
on November 1, 2000 and since that date we have  continued to own  approximately
36% of Western's  outstanding common stock. We will grant a security interest in
the shares of Western  common  stock owned by us to secure the  repayment of the
Notes.

 National O-Ring and Stillman Seal

     In  January  1996,  we sold all of the  assets of our  National  O-Ring and
Stillman Seal  businesses,  comprising  the  manufacturing  business of AUGI, to
Hutchinson   Corporation   ("Hutchinson")   for  $24,500,000   (the  "Hutchinson
Transaction"),  of  which  $20,825,000  was  paid  in  cash  and  the  aggregate
$3,675,000  balance was paid by delivery of two  24-month  non-interest  bearing
promissory notes due and paid in January 1998.

                                     18
The Technology Companies

Connectsoft

     Effective  as of July 31,  1996,  we  acquired,  through  a merger  with an
acquisition  subsidiary  of AUGI  consummated  in August 1996 (the  "Connectsoft
Merger"),  all of the  outstanding  capital  stock of  Connectsoft,  Inc. for an
aggregate of 976,539 shares of AUGI's Series B-1 Preferred Stock (the "Preferred
Stock").  Such  Preferred  Stock  does not pay a  dividend,  is not  subject  to
redemption,  has a liquidation  preference of $3.50 per share over AUGI's Common
Stock and votes  together  with AUGI's  Common  Stock as a single class on a one
vote for one share basis.  Each share of Preferred  Stock was  convertible  into
either one, two or three  shares of Common  Stock of AUGI if certain  benchmarks
for pre-tax  income were achieved.  As such  benchmarks  were not achieved,  the
Preferred  Stock  has  been  and is only  convertible  into  Common  Stock  on a
one-for-one  basis.  To date,  568,646  shares  of  Preferred  Stock  have  been
converted into an equal number of shares of Common Stock,  and 407,893 shares of
Preferred  Stock  remain  outstanding.  As a result of the  reverse  stock split
effected  December 17, 2001, each 25 shares of Preferred  Stock  outstanding are
convertible into one share of common stock.

     On July 10, 1998, we entered into an agreement to sell substantially all of
the assets of our Connectsoft Communications  Corporation subsidiary,  including
the  network   operations   center  ("NOC"),   to  eGlobe,   Inc.   (eGlobe)  As
consideration,  eGlobe  issued  approximately  $2,000,000  (as  valued)  of  its
convertible  preferred  stock  to us and  assumed  approximately  $5,182,000  of
Connectsoft  liabilities  and  leases,  of  which  about  $2,900,000  are  lease
obligations  guaranteed by AUGI.  Although  eGlobe is responsible for payment of
the assumed  liabilities,  the assumption of such  liabilities  will not relieve
AUGI from its  guarantees  until such  liabilities  have been paid.  The sale to
eGlobe was consummated in June 1999.  Thereafter,  in August 1999, the agreement
with eGlobe was amended to reduce the  conversion  price of their  preferred  in
return for AUGI's  agreement to cancel the redemption  feature of the preferred.
This increased the number of eGlobe common shares into which the preferred could
be converted from  1,000,000 to 1,923,000.  We  subsequently  sold all shares of
eGlobe owned by us.

Interglobe

     In September 1996, we acquired Interglobe for a purchase price of $400,000,
and 32,000 shares of our Common  Stock.  The former  stockholders  of Interglobe
also received four-year employment  agreements with Interglobe and AUGI pursuant
to which they  received  seven-year  options to  purchase an  additional  32,000
shares of our Common  Stock at an  exercise  price of $6.00 per share.  All such
options have since been canceled. In August 1998, we discontinued the operations
of Interglobe.

 Exodus

     AUGI's Exodus  subsidiary,  had developed a proprietary  software  program,
marketed as NTERPRISE,  which allowed users to run WindowsTM  application server
software  programs  designed for the Microsoft TM Windows NT TM operating system
developed by Microsoft on (i) users' existing Unix TM workstations,  X-terminals
and other X-windows devices which would otherwise not be Windows compatible, and
(ii) on older versions of Windows  compatible  workstations  which are otherwise
incapable of running the then newer versions of Microsoft  compatible  software.
AUGI  discontinued its Exodus  operations in January 1998 following  Microsoft's
decision not to renew its license with Exodus.

 Seattle OnLine

     In November 1996, we acquired the assets of Seattle OnLine,  Inc. ("Seattle
OnLine"),   a  company   engaged  in  providing  a  regional   Internet/Intranet
telecommunication  service in the form of high bandwidth  Internet  connectivity
and hosting for  businesses in the Pacific  Northwest.  We purchased the Seattle
OnLine assets for the sum of $147,000 in cash and 640 shares of our Common Stock
which were used to settle certain creditor claims.  We also issued to the former
stockholders  of such  corporation  warrants to purchase an  aggregate of 13,333
shares of our Common Stock.  Seattle OnLine ceased operations in August 1997 and
its  remaining  assets  were sold to a  privately  held  company for $25,000 and
shares of  preferred  stock of the  acquiring  company  valued at  approximately
$50,000 on the closing date.

                                     19
Other Acquisitions

 TechStar and IDF

     Effective  December 11, 1996,  we acquired  TechStar  Communications  Corp.
("TechStar").   In  connection  therewith  we  issued  to  the  former  TechStar
stockholders  an aggregate of 20,290 shares of our Common Stock,  paid $780,000
in cash and delivered three year promissory  notes  aggregating  $600,000.  In a
related transaction, in April 1997 we also acquired Arcadia Consulting,  Inc., a
company  formed by Solon L.  Kandel  for the  purpose  of  providing  consulting
services  to  clients  in the  wireless  telecommunications  industry.  We  paid
$220,000 and issued 7,710 shares of Common Stock to Mr. Kandel.

     In August 1997, we sold TechStar to IDF,  pursuant to an agreement and plan
of  merger,  dated  July 31,  1997 (the "IDF  Merger  Agreement"),  among  AUGI,
TechStar,  IDF and an acquisition  subsidiary of IDF. Upon  consummation  of the
transaction,  we received  6,171,553  shares of IDF common  stock,  representing
approximately  58% of the fully diluted  outstanding IDF common stock,  and as a
result, for accounting purposes, AUGI was deemed to have acquired IDF.

     Robert M. Rubin,  the Chief Executive  Officer and Chairman of the Board of
AUGI, was also a principal stockholder and a member of the board of directors of
IDF. Prior to  consummation of the  transactions  contemplated by the IDF Merger
Agreement,  Mr. Rubin  converted an $800,000  loan  previously  made to IDF into
preferred stock convertible into 400,000 shares of IDF common stock.

     During Fiscal 1998, additional IDF preferred shares were issued pursuant to
a private  placement and  subsequently,  the holders of all IDF preferred shares
converted to IDF common shares.  As a result,  our ownership of IDF common stock
was reduced to  approximately  39%.  Therefore,  effective  August 1, 1998,  the
results of operations of IDF were accounted for using the equity method.

     During  Fiscal  2000 and 1999,  we  advanced  IDF a total of  $364,000  and
$992,000, respectively. However, IDF throughout all of Fiscal 2000 experienced a
significant decrease in revenue and was unable to obtain further financing.  Due
to these  circumstances  and the  uncertainty  of  recovery,  we recorded a full
reserve in July 2000 against all advances to and investments in IDF.

     In April 1999, IDF discontinued the operations of TechStar and in September
2000 also discontinued the operations of  Hayden/Wegman,  Inc., its other wholly
owned operating subsidiary, which was based in New York City.

Office Facilities

     We  maintain  an  executive  office  at  11108 NE  106th  Place,  Kirkland,
Washington 98033.

Employees

     As of January 4, 2002, we had two employees, both in management.

Legal Proceedings

     There are no pending material legal proceedings in which AUGI or any of its
subsidiaries is a defendant,  or to which any of their respective properties are
subject,  which  either  individually  or in the  aggregate  may have a material
adverse effect on the results of operations or financial position of AUGI.

     See "Transactions with ERD" as regards the 1998 shareholder  litigation and
settlement thereof.

     AUGI is the plaintiff in a lawsuit  entitled  American United Global,  Inc.
vs.  Greenberg  Traurig  LLP which was  filed in the  circuit  court of the 11th
Judicial Circuit in and for Miami-Dade County, Florida, Case No. 99-23055 CA 06.
The action is a  professional  liability  action and  alleges  that  damages and
injuries were incurred by AUGI pursuant to improper  counsel from the defendant.
The case is  currently in the  discovery  stage,  and  although  there can be no
assurance of an award of damages in AUGI's favor,  we believe we will prevail in
the case.

                                     20
MANAGEMENT

Directors and Executive Officers

     The following table sets forth our directors and executive officers:

Name              Age   Position

Robert M. Rubin         61   Chairman of the Board of Directors, President and
                             Chief Executive Officer

C. Dean McLain          48   Director and Executive Vice President and Chief
                             Executive Officer of Western

David M. Barnes         59   Vice President of Finance, Chief Financial Officer
                             and Director

Howard Katz             59   Director

Seymour Kessler         69   Director

Allen Perres            49   Director

Michael Metter          44   Director

     ROBERT  M.  RUBIN.  Mr.Rubin  has  served as our  Chairman  of the Board of
Directors since May 1991, and was our Chief  Executive  Officer from May 1991 to
January 1, 1994.  Between  October 1990 and January 1, 1994, Mr. Rubin served as
the  Chairman  of the  Board  and  Chief  Executive  Officer  of  AUGI  and  its
subsidiaries;  from  January  1, 1994 to January  19,  1996,  he served  only as
Chairman of the Board of AUGI and its subsidiaries. From January 19, 1996 to the
present, Mr. Rubin has served as our Chairman of the Board,  President and Chief
Executive Officer. Mr. Rubin was the founder, President, Chief Executive Officer
and a Director of Superior Care,  Inc.  ("SCI") from its inception in 1976 until
May  1986.  Mr.  Rubin  continued  as a  director  of SCI (now  known as  Olsten
Corporation  ("Olsten") until the latter part of 1987.  Olsten, a New York Stock
Exchange  listed  Company,  is engaged in providing home care and  institutional
staffing services and health care management services. Mr. Rubin was Chairman of
the  Board  and  Chief  Executive  Officer  and is a  stockholder  of ERD  Waste
Technology,  Inc., a diversified waste management public Company specializing in
the management and disposal of municipal solid waste,  industrial and commercial
non-hazardous  waste and  hazardous  waste.  In  September  1997,  ERD filed for
protection under the provisions of Chapter 11 of the federal bankruptcy act. Mr.
Rubin is also a Director of Western. We own approximately 36% of the outstanding
common  stock of Western.  Mr.  Rubin is also a director of  Med-Emerg,  Inc., a
publicly-held  Canadian  management  company for  hospital  emergency  rooms and
out-patient  facilities.  Mr. Rubin was also a director of StyleSite  Marketing,
Inc.,  which  liquidated  its assets for the  benefit  of secured  creditors  in
January 2000. Mr. Rubin devotes  approximately 35 hours per week to the business
of AUGI.

     C. DEAN MCLAIN. Mr. McLain has served as our Executive Vice President since
March 1, 1993, as a director since March 7, 1994, and President of Western since
June 1, 1993.  From 1989 to 1993, Mr. McLain served as Manager of  Privatization
of Case Corporation.  From 1985 to 1989, Mr. McLain served as General Manager of
Lake State Equipment,  a distributor of John Deere construction  equipment.  Mr.
McLain holds a B.S. degree in Business and Economics, and a Master's of Business
Administration  from West Texas State  University.  Mr. McLain  devotes his full
professional  time to Western and  included in such time is time spent on AUGI's
business.

                                       21
DAVID M. BARNES.  Mr. Barnes has served our Chief  Financial  Officer since
May 15, 1996, and has been a director since November 8, 1996. Mr. Barnes is also
presently a member of the Advisory  Board of  Interactive  Imagination,  Inc., a
privately-held video game developer based in Seattle, WA. Mr. Barnes devotes the
majority of his professional time to the business of AUGI.

     HOWARD KATZ.  Mr. Katz has been a director since April 15, 1996, and was an
Executive Vice President from April 15, 1996 through July 31, 1998. Since August
1998 to the  present Mr.  Katz has been the Chief  Executive  Officer of Imagine
Networks,  LLC., a New York City based  privately  held company which engages in
advanced technology and software development.

     SEYMOUR KESSLER. Dr. Kessler has served as a Director since August 28, 2001
and has been a Director of Western since February 2, 2000.  From January 1999 to
the present Dr. Kessler has been co-Managing Director of RKP Capital Partners, a
holding company for publicly and privately-held companies.  Between 1996 and the
present  Dr.  Kessler  has been an  active  investor  in  various  publicly  and
privately-held  companies.  From 1992  through  1996 Dr.  Kessler was a founder,
Chief  Executive   Officer  and  a  director  of  Princeton  Dental   Management
Corporation.  Between 1982 and 1997 Dr.  Kessler served on the Board of Trustees
of University of Health Science Center, in Des Moines,  IA. Dr. Kessler also has
been a director of four  nationally-chartered  banks,  including serving as Vice
Chairman of the Board of Directors  of Peterson  Bank.  Dr.  Kessler is a former
podiatric  surgeon who since 1975 has held  majority and minority  interests and
actively  served  in over 85  partnerships,  privately-held  and  publicly-owned
companies and institutions.

     ALLEN PERRES. Mr. Perres has served as a Director since August 28, 2001 and
has been a director of Western since February 2, 2000.  From January 1999 to the
present Mr.  Perres has been  co-Managing  Director of RKP Capital  Partners,  a
holding  company for  publicly and  privately-held  companies.  Mr.  Perres is a
partner in RB Partners,  Inc., an investment banking firm for homebuilders,  and
has served in such capacity from 1994 to the present.  Mr. Perres co-founded and
managed that firm's  commercial and  residential  mortgage unit,  First Dearborn
Mortgage Company, Inc., during such period.

     MICHAEL  METTER.  Mr.  Metter has served as a Director  since  December 14,
2001. Since March 2001, Mr. Metter has been the President of RME  International,
Ltd., a holding company which has  controlling  interest in Flo Weinberg Ltd and
RSI Industries.  Mr. Metter also currently consults a broad range of businesses,
including IT  communications  and media  businesses,  on mergers,  acquisitions,
restructuring,  financing and other matters. From October 1998 to February 2001,
Mr. Metter was a principal of Security Capital Trading,  Inc, and a principal at
Madison Capital from September 1997 to October 1998.  Prior thereto,  Mr. Metter
was the  President  of First  Cambridge  Securities  from October 1994 to August
1997.

                                       22
Committees of the Board

     At present,  the Board of Directors has three committees,  the Compensation
Committee, the Audit Committee, and the Corporate Governance Committee.

     The Compensation  Committee's duties include the review of the compensation
for all  employees and the granting of options under our stock option plans that
may  exist  and be in  effect  from  time to time.  The  Compensation  Committee
presently consists of Messrs. McLain, Kessler and Perres.

     The  Audit   Committee's   duties  include  the  review  of  our  financial
statements,  budget,  and its'  financing  arrangements  as well a review of its
internal financial  controls.  The Audit Committee presently consists of Messrs.
Kessler and Perres.

     The Corporate Governance Committee's duties include the review of corporate
governance  matters  including   proposed   amendments  to  the  Certificate  of
Incorporation and bylaws and the conduct of meetings of directors, committees of
the Board of Directors and of stockholders.  The Corporate  Governance Committee
consists of Messrs. Barnes and Rubin.

    SUMMARY COMPENSATION TABLE

     The following  table sets forth the amount of all  compensation  paid by us
for services  rendered during each of our previous three fiscal years ended July
31,  2001,  2000,  and 1999 to each of our  most  highly  compensated  executive
officers whose total compensation exceeded $100,000.
ANNUAL COMPENSATION              LONG-TERM COMPENSATION
                             -------------------              ----------------------
                                                              AWARDS
                                                              ------       NUMBER OF
NAME AND           FISCAL    SALARY     BONUS    OTHER        RESTRICTED   SECURITIES     LTIP          ALL OTHER
PRINCIPAL          YEAR        ($)               ANNUAL       STOCK        UNDERLYING     PAYOUTS       COMPENSATION
POSITION                                         COMPENSATION AWARD(S)   OPTIONS/SARS#(3) ($)               ($)
--------          -----     -------   -------    ---------------------     --------       ---           ----------
                                                 ($)          ($)          SARS(#)
Robert M. Rubin    2001      425,000    -0-      -0-          -0-          -0-            -0-           -0-
Chairman,          2000      400,000    -0-      -0-          -0-          10,000         -0-           -0-
President and      1999      375,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Executive
Officer(1)

David M. Barnes    2001      150,000    -0-      -0-          -0-          -0-            -0-           -0-
Chief Financial    2000      140,000    -0-      -0-          -0-           4,000         -0-           -0-
Officer and        1999      125,000    -0-      2,000        -0-          -0-            -0-           -0-
Director

C. Dean McLain (2) 2001      390,000    -0-      -0-          -0-          -0-            -0-           -0-
Executive Vice     2000      200,000    -0-      -0-          -0-           2,260         -0-           -0-
President and      1999      290,000    -0-      -0-          -0-          -0-            -0-           -0-
Director;
President of
Western
(1)  Includes  $150,000 paid under Mr.  Rubin's  Consulting  Agreement with
          Western  during  Fiscal  1999 and Fiscal  2000 and  $200,000 in fiscal
          2001.

     (2)  All compensation paid by Western.

     (3)  Accounts for the 1-for-25 reverse stock split.

                                       23
STOCK OPTION PLANS

OPTION GRANTS IN FISCAL 2001

     On October 3, 2000, the Board of Directors  cancelled our 2000 Stock Option
Plan and approved the 2001 Stock Option Plan,  which was authorized and ratified
by our stockholders at our annual meeting held on August 28, 2001. As of January
4, 2002, there are 124,400 options  currently  issued and outstanding  under the
2001 Plan,  such number of options  gives effect to our 1-for-25  reverse  stock
split, effective December 17, 2001.

       Option Grants to Named Executive Officers in Last Fiscal Year

     The  following  table sets forth  certain  information  with respect to all
outstanding stock options issued during 2001 to our executive  officers named in
the previous table.
Individual Grants

                                              Percent
                                              of Total
                                              Options                                             Potential
                           Number of          Granted                                         Realizable Value
                          Securities             to                                           At Assumed annual
                          Underlying         Employees                                         Rates of Price
                            Options          In Fiscal        Exercise    Expiration          Appreciation for
Name                        Granted(1)          Year           Price(1)      Date                Option Term
----                        -------             ----           -----         ----                -----------

                                                                                              5%            10%
Robert M. Rubin               33,600           58.3%           $6.875       10/03/05        $67,536     $141,120

C. Dean McLain                12,000           20.8%           $6.875       10/03/05        $24,120      $50,400

David M. Barnes               12,000           20.8%           $6.875       10/03/05        $24,120      $50,400
(1)  Such  information  accounts for our 1-for-25  reverse stock split
               effective December 17, 2001.

     The following table provides  information  concerning the exercise of stock
options during the last completed fiscal year by each named executive  officers,
and the fiscal year-end value (as of July 31, 2001) of unexercised  options held
by each such person.  None of these options have been exercised as of January 4,
2002.
Aggregated Options Exercised
                         in Last Fiscal Year and Fiscal
                             Year-End Option Values
                                                                  Value of
                                                Number of        Unexercised
                                               Unexercised      In-the-Money
                       Shares                  Options/SARs     Options/SARs
                     Acquired on    Value       at FY-End        at FY-End
Name                 Exercise (#)  Realized    Exercisable      Exercisable
Robert Rubin               -0-       -0-        33,600            $0

David Barnes               -0-       -0-        12,000            $0

C. Dean McLain             -0-       -0-        12,000            $0
24
THE 2001 STOCK OPTION PLAN

     The 2001 Plan was adopted by the Board of  Directors on October 3, 2000 and
as of such date 227,000  options  were  granted and on such date all  previously
issued  and  outstanding  options  granted  under the 2000 Plan were  cancelled.
112,000 of the options granted on October 3, 2000 were subsequently cancelled by
the Board if Directors.

     The 2001 Plan  replaces  the 2000 Plan which was  cancelled by the Board of
Directors on October 3, 2000. The 2000 Plan was previously  adopted by the Board
of  Directors  as of December 7, 1999,  and  replaced the 1996 Stock Option Plan
(the "1996  Plan") which had been adopted by the Board of Directors on April 25,
1996,  and amended on July 10, 1996. As of January 4, 2002,  options to purchase
124,400 shares of Common Stock in the  aggregate,  of which 71,600 are incentive
stock  options,  have been  granted  to our  employees,  directors  and  outside
consultants under the 2001 Plan.

     The  purpose of the 2001 Plan is to provide  additional  incentives  to our
directors, officers, employees and consultants who are primarily responsible for
the management  and growth of AUGI.  Each option shall be designated at the time
of grant as either an incentive stock option (an "ISO") or a non-qualified stock
option (a "NQSO").  The Board of  Directors  believes  that the ability to grant
stock  options  to  employees  which  qualify  for  ISO  treatment  provides  an
additional material incentive to certain key employees.

     The Company  previously had three other  employee  stock option plans,  the
1991 Stock Option Plan (the "1991 Plan"),  the 1996 Plan and the 2000 Plan.  All
options  granted under the 1991 Plan and 1996 Plan were cancelled prior to or as
of December 7, 1999.  All options  granted under the 2000 Plan were cancelled on
October 3, 2000.

ADMINISTRATION OF THE PLAN

     The 2001 Plan may be  administered by the full Board of Directors or by the
Compensation Committee,  which determines which eligible persons will be granted
options,  when  options  will be granted,  the number of shares to be subject to
options, the durations of options, any conditions to the exercise of options and
the manner in and price at which  options  may be  exercised.  The  Compensation
Committee is authorized to amend,  suspend or terminate the 2001 Plan.  However,
except  for   adjustments   resulting  from  changes  in   capitalization,   the
Compensation Committee requires shareholder approval to (i) increase the maximum
number of shares that may be issued  pursuant to the exercise of options granted
under the 2001 Plan;  (ii) grant an option with an exercise  price less than 85%
of the fair market  value of the  underlying  Common Stock at the time of grant;
(iii) change the eligibility  requirements  for  participation in the 2001 Plan;
(iv) extend the term of any option or the period  during which any option may be
granted under the 2001 Plan; or (v) decrease an option  exercise price (although
an option may be cancelled and a new option granted at a lower exercise price).

SHARES SUBJECT TO THE PLAN

     The 2001 Plan currently provides that options may be granted to purchase up
to 7,500,000 shares of Common Stock,  subject to adjustment upon certain changes
in capitalization  without receipt of consideration by AUGI. In addition,  if we
are involved in a merger, consolidation, dissolution or liquidation, the options
granted under the 2001 Plan will be adjusted or, under certain conditions,  will
terminate, subject to the right of the option holder to exercise his option or a
comparable  option  substituted  at our discretion  prior to such event.  If any
unexercised  option  expires or terminates  for any reason,  the non-  purchased
shares  subject  to such  unexercised  option  will be  available  again for the
purposes of the 2001 Plan.

PARTICIPATION

     Any employee,  director,  consultant, or representative of AUGI is eligible
to receive ISOs or NQSOs  granted under the 2001 Plan.  Non-employee  directors,
consultants or representatives may only receive NQSOs.

OPTION PRICE

     The exercise  price of each option shall be determined by the full Board of
Directors or by the Compensation Committee.  However, the exercise price of each
option on the date the  option is  granted  may not be less than (i) 100% of the
fair market value of the Common Stock  underlying  an incentive  stock option on
the date of grant,  or (ii) 85% of the fair  market  value of the  Common  Stock
underlying a  non-qualified  stock option on the date of grant.  If an incentive
stock  option is to be  granted to an  employee  who holds over 10% of the total
combined  voting power of all classes of the Company's  capital stock,  then the
exercise  price may not be less than 110% of the fair market value of the Common
Stock covered by the option on the date the option is granted.

                                       25
TERMS OF OPTIONS

     The full Board of Directors or the  Compensation  Committee  shall,  in its
discretion,  fix the term of each option,  provided  that the maximum term of an
option  shall be 10 years.  ISOs granted to an employee who owns over 10% of the
total combined voting power of all classes of capital stock of AUGI shall expire
not more than five years after the date of grant. The 2001 Plan provides for the
earlier expiration of options in the event of certain terminations of employment
of the holder.

RESTRICTIONS ON GRANT AND EXERCISE

     An option may not be transferred  other than by will or the laws of descent
and distribution and, during the lifetime of the option holder, may be exercised
solely by him.  The  aggregate  fair market  value  (determined  at the time the
option is  granted) of the shares of Common  Stock as to which an  employee  may
exercise ISOs in any one calendar year may not exceed  $100,000.  The full Board
of Directors  or the  Compensation  Committee  may impose  other  conditions  to
exercise as it deems appropriate.

TERMINATION

     The 2001 Plan will terminate on October 3, 2010, unless terminated  earlier
by the Board of Directors or the Compensation Committee.

Employment, Incentive Compensation and Termination Agreements

     ROBERT M. RUBIN.  Mr.  Rubin is  employed  as our  Chairman of the Board of
Directors.  Mr.  Rubin  is so  employed  pursuant  to an  amended  and  restated
employment  agreement,  dated as of June 3, 1998 and as most recently amended as
of December 7, 1999 (the "Restated  Agreement") for a term expiring  December 7,
2004. The Restated  Agreement  provides for a minimum base salary payable to Mr.
Rubin of  $225,000,  incentive  bonuses  consisting  of 10% of the sale price in
excess of AUGI's basis,  up to a maximum  aggregate  bonus of $3,000,000,  to be
paid to Mr. Rubin  contingent upon our ability to dispose of our common stock of
either eGlobe,  Inc. or Western and receive net aggregate  proceeds in excess of
$3,000,000 from the sale of the shares of either eGlobe or Western  shares,  and
10,000 incentive stock options.  No incentive bonus was earned in fiscal 2001 or
2000. In December, 2001, Mr. Rubin agreed to waive the foregoing incentive bonus
clause in his contract.  Mr. Rubin was granted 33,600 incentive stock options on
October 3, 2000 under the 2001 Plan,  which options are immediately  exercisable
for five years at $6.875 per share.

     Mr. Rubin is also engaged by Western,  pursuant to a consulting  agreement,
which expires on July 31, 2007. Under the consulting agreement with Western, Mr.
Rubin is paid $200,000 annually plus reimbursement for his business expenses.

     C. DEAN MCLAIN.  C. Dean McLain serves as the President and Chief Executive
Officer of Western pursuant to a ten-year employment agreement expiring July 31,
2005.  Pursuant to such  agreement,  Mr. McLain  received an annual base salary,
payable monthly,  of $290,000 per annum in Fiscal 1999 and $300,000 per annum in
Fiscal 2000. For each of the fiscal years ending 2001 through 2005, Mr. McLain's
base salary shall be $390,000 plus a cost of living adjustment. In addition, Mr.
McLain is entitled to receive certain  incentive bonus payments equal to one and
one half percent (1 1/2 %) of each fiscal years  adjusted  consolidated  pre-tax
income of Western in excess of $1,750,000  provided,  that the maximum amount of
the Incentive  Bonus payable by Western to Mr. McLain shall not exceed  $150,000
in any such fiscal year.  Mr.  McLain was also granted  12,000  incentive  stock
options on October 3, 2000 under the 2001 Plan,  which  options are  immediately
exercisable for five years at $6.875 per share.

     HOWARD KATZ.  Howard Katz is a director of AUGI.  Mr. Katz received  salary
severance of $32,500 in Fiscal 2001 and $78,000 in Fiscal  2000,  and $91,738 in
salary  severance and other  compensation  during Fiscal 1999. Prior to July 31,
1998, Mr. Katz served as our Executive  Vice President  since April 15, 1996 and
received an annual base salary of $185,000  for Fiscal  1998.  In  addition,  on
October 3, 2000 Mr. Katz  received  14,000  stock  options  under the 2001 Plan,
which are immediately exercisable for five years at $6.875 per share.

     DAVID M. BARNES.  David M. Barnes is a director and Chief Financial Officer
of AUGI. In Fiscal 2001 Mr. Barnes received total  compensation of $150,000.  In
Fiscal 2000 Mr. Barnes received total  compensation of $140,000.  In Fiscal 1999
Mr.  Barnes  received a base salary of $125,000 and certain  executive  benefits
which brought his total Fiscal 1999 compensation to $127,000. In Fiscal 2002 Mr.
Barnes will  continue in these  capacities  with a base salary of $160,000  plus
certain  executive  benefits.  Between May 15, 1996 and July 31, 1998 Mr. Barnes
received an annual salary of $150,000. In addition on October 3, 2000 Mr. Barnes
received 12,000  incentive stock options under the 2001 Plan,  which options are
immediately exercisable for five years at $6.875 per share.

                                       26
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During  Fiscal 2001 the Board of  Directors'  Compensation  Committee  (the
"Compensation Committee") met once.

     Mr. Rubin's  annual  compensation,  identified in the Summary  Compensation
Table,  was  determined  by his  employment  agreements  with  AUGI,  which were
approved by the Board of Directors. Mr. Rubin's employment agreement was amended
in December 1999 and is now for a five year term expiring  December 7, 2004. For
information   concerning  Mr.  Rubin's  Restated  Agreement,   see  "Employment,
Incentive Compensation and Termination  Agreements." Mr. Rubin also entered into
a consulting agreement with Western. Mr. McLain's annual compensation was set by
his amended  employment  agreement  with  Western.  See  "Employment,  Incentive
Compensation and Termination Agreements."

     No director of AUGI is paid to attend  Board  meetings,  although  they are
reimbursed for their actual expenses. While Mr. Rubin serves on the Compensation
Committees of the Boards of Directors of other  publicly held  corporations,  no
executive  officers or directors of such companies serve on AUGI's  Compensation
Committee. The Compensation Committee reviews the compensation for all employees
and the granting of options  under all of our  employee  stock option plans that
may exist and be in effect from time to time, and presently  consists of Messrs.
McLain, Kessler and Perres.

Compensation Committee Report On Executive Compensation

     The Board of Directors has been largely  responsible  for AUGI's  executive
compensation  policy in prior  years  and the  Compensation  Committee  met once
during  Fiscal 2001.  The Board  believes  that  offering  its senior  executive
officers  employment  agreements  is the best way to attract  and retain  highly
capable  employees on a basis that will  encourage them to perform at increasing
levels of effectiveness  and to use their best efforts to promote the growth and
profitability of AUGI and its  subsidiaries.  The Board believes this enabled it
to  concentrate  on  negotiating  particular  employment  contracts  rather than
establishing  more general  compensation  policies for all  management and other
personnel. AUGI believes that its compensation levels as to all of its employees
were  comparable  to industry  standards.  Currently,  Mr.  Rubin is AUGI's only
senior executive officer employed under a contract approved by the full Board of
Directors.  See "Executive  Compensation-Employment,  Incentive Compensation and
Termination Agreements."

     In setting levels of compensation  under such  employment  contracts and in
approving management's compensation of all other Company employees, the Board of
Directors  evaluates AUGI's overall  operations,  the contribution of particular
individuals  to  AUGI's  performance  and  industry  compensation  standards.  A
significant percentage of the compensation that could be paid to each of Messrs.
Rubin and McLain under their  respective  employment  agreements  is tied to the
achievement  of  prescribed  levels of pre-tax  income or  specific  performance
goals. See  "Employment,  Incentive  Compensation  and Termination  Agreements,"
above.

Limited Liability of Directors

     In accordance with the Delaware General  Corporation Law, AUGI has included
a provision in its Certificate of Incorporation to limit the personal  liability
of its  directors  for  violations  of their  fiduciary  duties.  The  provision
eliminates such directors'  liability to AUGI or its  stockholders  for monetary
damages,  except for any breach of the directors' duty of loyalty to AUGI or its
stockholders,  for  acts  or  omissions  not in  good  faith  or  which  involve
intentional  misconduct or a knowing  violation of law, for unlawful  payment of
dividends or unlawful stock  purchases or  redemptions,  or for any  transaction
from which any director derived an improper personal benefit.

     This provision  protects AUGI's directors  against  personal  liability for
monetary  damages arising from breaches of their duty of care.  Directors remain
liable for  breaches of their duty of loyalty to AUGI and its  stockholders  and
for the  specific  matters set forth  above,  as well as for  violations  of the
federal  securities  laws.  The provision has no effect on the  availability  of
equitable  remedies  such  as  injunction  or  rescission.  Additionally,  these
provisions do not protect a director from activities  undertaken in any capacity
other than that of director.

Indemnification of Officers and Directors

     AUGI's bylaws provide for  indemnification of its officers and directors to
the fullest extent permitted by the Delaware  General  Corporation Law in effect
at the time of a claim for indemnification.  Such indemnification applies to any
threatened, pending or contemplated suit or proceeding arising by reason of such
person acting as an officer or director of AUGI or its affiliates.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors,  officers or persons controlling AUGI pursuant to
the  foregoing  provisions,  AUGI has been  informed  that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

                                       27
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with ERD Waste Corp.

     We  incurred  a loss of  approximately  $5,000,000  as a result of  certain
transactions  entered  into with ERD Waste  Corp.  ("ERD")  in Fiscal  1997.  On
September 30, 1997, ERD filed for reorganization under Chapter 11 of the federal
bankruptcy laws. We have recorded a $5,000,000 net loss in connection with these
transactions,  which  included  making  available for ERD's benefit a $4,400,000
letter of credit and making an additional $500,000 loan, for Fiscal 1997.

     In June 1998 a  stockholder  class  action (the "Class  Action")  was filed
against AUGI's directors alleging breaches of fiduciary duty and loyalty to AUGI
and its stockholders in connection with a letter of credit guarantee by AUGI for
ERD  Waste  Corp.   ("ERD")  and  the  delisting  of  AUGI's  Common  Stock  and
publicly-traded  warrants from NASDAQ in February 1998.  During Fiscal 1997 AUGI
paid $4,400,000  pursuant to its guarantee for ERD, which sought protection from
creditors under Chapter 11 of the federal bankruptcy laws on September 30, 1997.
Final judicial approval of a settlement was received in August 1999, pursuant to
which  AUGI  has  paid  $2,500,000  (the  "Class  Payment")  to  members  of the
stockholder class.

     The Class Payment was paid in the form of $600,000 in cash  (consisting  of
proceeds from AUGI's  directors' and officers'  liability  insurance policy) and
$1,900,000   in  the  form  of  777,414   shares  of  common  stock  (valued  at
approximately  $2.44 per  share) of Western  owned by AUGI.  These  shares  were
distributed on or about  November 1, 2000 and thereupon  AUGI  recognized a loss
(accrued at July 31, 2000) of $1,434,000 representing the difference between the
book  value of the  transferred  shares  and their  market  value as  calculated
pursuant to the settlement  agreement.  AUGI presently owns approximately 36% of
the outstanding Western common stock.

TRANSACTIONS WITH OTHER AFFILIATES

     During  Fiscal  1999 and  Fiscal  2000 AUGI  provided  financing  to IDF, a
minority-owned subsidiary in the amounts of $992,000 and $364,000, respectively.
These funds were used for  working  capital,  the payment of certain  delinquent
taxes and other liabilities of Hayden/Wegman, Inc., an IDF subsidiary, and costs
related to the  discontinuation of operations of the TechStar  subsidiary.  AUGI
took a full  reserve  against  these  advances  at July  31,  2000  due to IDF's
significant  decrease in revenue and its inability to obtain further  financing.
In September 2000, IDF discontinued the operations of Hayden / Wegman.

     Mr. Rubin was a director of IDF until August 1999 and owned 874,659  shares
of IDF common stock, representing approximately 9.0% of the then outstanding IDF
common stock after giving effect to the IDF Merger,  and  including Mr.  Rubin's
conversion  of an $800,000  loan  previously  made to IDF into  preferred  stock
convertible into an additional  400,000 shares of IDF common stock, prior to his
transfer of such shares to the Rubin Family  Trust.  Subsequent  the IDF Merger,
Mr. Rubin served as Chairman of the Board of Directors of IDF until August 1999.

INTERTECH TRANSACTION

     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among AUGI, Intertech Capital, Inc. ("Intertech"), Jeffrey M.
Berman  ("Berman"),   Eric  Staffin  ("Staffin")  and  Peter  Gregory  Saridakis
("Saridakas") (Berman, Staffin and Saridakas are collectively referred to as the
"Purchasers"),  AUGI sold an  aggregate  of  500,000  shares of common  stock of
Intertech,   par  value  $.0001  per  share  (the  "Intertech  Shares")  to  the
Purchasers, which Intertech Shares constituted all of the issued and outstanding
capital stock of Intertech. In connection therewith,  AUGI issued to: (i) Berman
825,000  warrants to purchase  shares of AUGI's  common stock (the  "Warrants");
(ii) Staffin 166,667  Warrants;  and (iii) Saridakis 83,333 Warrants,  all which
are immediately vested,  expire on March 19, 2006, and are exercisable at $0.275
per share. As a result of the reverse stock split  effective  December 17, 2001,
each 25 Warrants is exercisable for one share of common stock. In  consideration
for the Intertech  Shares and the Warrants,  each of the  Purchasers  terminated
their  respective  employment  agreements  with  AUGI,  released  AUGI  from any
obligations  with respect to the employment  agreements,  including past due and
accrued  salaries,  and  terminated  and waived  all right to any stock  options
granted by AUGI.  In addition,  Berman and Staffin  resigned as officers  and/or
directors of the Company.

     Simultaneous  with the closing of the Intertech  transaction AUGI purchased
approximately  5.4% of Intertech's then issued and outstanding  capital stock in
consideration  for the  transfer of 79,895  shares of common  stock of New Media
Technology, Inc. owned by the AUGI.

                                       28
BENEFICIAL OWNERSHIP OF COMMON STOCK

     The  table  below  sets  forth,  to  the  best  of our  knowledge,  certain
information regarding the beneficial ownership of shares of our Common Stock by:

          (1)  each beneficial owner of more than five percent (5%) of the total
               number of outstanding shares of the Common Stock;

          (2)  each of our directors;

          (3)  each of our executive officers; and

          (4)  all of our directors and executive officers as a group.

     Unless  otherwise  indicated,  the owners have sole  voting and  investment
power  with  respect to their  respective  shares.  The table  does not  include
options or SARs that have not yet vested or are not  exercisable  within 60 days
of the date hereof.
Name and Address*                                              Number of Shares                Percentage of
of Beneficial Owner               Office(s)                    Beneficially Owned(1)           Common Stock (1)
-------------------               ---------                    ---------------------           ----------------
Robert M. Rubin                   Director, President, Chief            33,680(2)(6)                6.3
                                  Executive Officer and
                                  Chairman of the Board

C. Dean McLain                    Director, Executive                   12,000(3)                   2.4
4601 N.E. 77th Avenue             Vice-President and
Suite 200                         President of Western
Vancouver, WA 98662               Power and Equipment Corp.

Howard Katz                       Director                               14,000 (4)                  2.8

David M. Barnes                   Chief Financial Officer                12,000 (5)                  2.4
                                  Vice President of Finance
                                  and Director

Rubin Family Irrevocable                                                 49,831 (6)                 10.0
Stock Trust
25 Highland Blvd.
Dix Hills, NY 11746

Jeffrey Berman                                                           33,000 (7)                  6.2

Seymour Kessler                   Director                               10,000 (8)                  2.0

Allen Perres                      Director                               10,000 (9)                  2.0

Michael Metter                    Director                               10,000 (10)                 2.0

All Directors and Executive
Officers as a Group (7 persons)                                         101,680                     17.0
*    Unless otherwise  indicated,  the address of each such beneficial
               owner is 11108 N.E. 106th Place, Kirkland, Washington 98033.

          1)   Pursuant  to the  rules and  regulations  of the  Securities  and
               Exchange Commission, shares of Common Stock that an individual or
               group  has a right to  acquire  within  60 days  pursuant  to the
               exercise of options or warrants are deemed to be outstanding  for
               the  purposes  of  computing  the  percentage  ownership  of such
               individual or group, but are not deemed to be outstanding for the
               purposes  of  computing  the  percentage  ownership  of any other
               person  shown  in the  table.  All  stock  options  and  warrants
               mentioned in (2) through (10) below are immediately exercisable.

          (2)  Includes (a) 80 shares of Common Stock owned by Mr. Rubin and (b)
               incentive  stock options  issued to Mr. Rubin under the 2001 Plan
               on October 3, 2000 to acquire  33,600 shares for five years after
               issuance   at  an  exercise   price  of  $6.875  per  share.

                                       29
(3)  Includes  incentive  stock  options to acquire  12,000  shares of
               Common Stock granted to Mr. McLain under the 2001 Plan on October
               3, 2000 for five years after  issuance  at an  exercise  price of
               $6.875 per share. Mr. McLain's continuing  employment is governed
               by the terms of his employment agreement with Western.

          (4)  Includes  incentive  stock options  granted to Mr. Katz under the
               2001 Plan on October 3, 2000 to purchase  14,000 shares of Common
               Stock for five  years  after  issuance  at an  exercise  price of
               $6.875 per share.

          (5)  Includes  incentive stock options granted to Mr. Barnes under the
               2001 Plan on October 3, 2000 to purchase  12,000 shares of Common
               Stock for five  years  after  issuance  at an  exercise  price of
               $6.875 per share.

          (6)  Robert M. Rubin, a grantor of the Rubin Family  Irrevocable Stock
               Trust (the  "Trust"),  does not have any voting  power over,  and
               disclaims  beneficial  ownership  of, the shares of Common  Stock
               held by the Trust.

          (7)  Includes  a warrant  to  purchase  up to 33,000  shares of Common
               Stock  issued  to  Mr.  Berman  pursuant  to the  Share  Purchase
               Agreement between AUGI and Intertech Capital, Inc dated March 19,
               2001.   The   warrant  was  issued  in   consideration   for  the
               cancellation  of all options granted to Mr. Berman under the 2001
               Plan on October  3, 2000.  The  warrant is  exercisable  for five
               years at $6.875 per share.

          (8)  Includes 10,000  non-qualified  stock options,  which vested upon
               Dr.  Kessler's  election to the Board of  Directors on August 28,
               2001.  Such options are exercisable for five years after issuance
               for $6.875 per share.

          (9)  Includes 10,000  non-qualified  stock options,  which vested upon
               Mr.  Perres'  election  to the Board of  Directors  on August 28,
               2001.  Such options are exercisable for five years after issuance
               for $6.875 per share

          (10) Includes 10,000  non-qualified  stock options,  which vested upon
               Mr.  Metter's  appointment  to the Board of Directors on December
               14,  2001.  Such  options  are  exercisable  for five years after
               issuance for $1.25 per share

                                       30
DESCRIPTION OF THE NOTES

     The following  summary of certain  provisions of the Notes does not purport
to be complete  and is subject to and is  qualified in its entirety by reference
to the form of Note, a copy of which is filed as an exhibit to the  registration
statement of which this prospectus is a part and is incorporated  herein by this
reference.

General

     The Notes are secured obligations of AUGI in an aggregate maximum principal
amount of $3,000,000  and mature on  _____________,  2007. The Notes bear simple
interest at the annual rate of 7.5%, payable quarterly in arrears,  on the first
day of each January,  April,  July and October  commencing on  __________,  2002
until  ________,  2007 unless earlier  re-paid in full by AUGI.  Interest on the
notes will be paid on the basis of a 360-day year of twelve 30-day months.

     Payment of principal  and interest on the Notes may be made by AUGI in cash
or check. Interest payments may also be made, in AUGI's sole discretion,  in the
form of common stock.  Interest  payments will be mailed to the holder's address
as furnished  to AUGI,  and  principal  payments  will be made upon  maturity or
earlier  repayment and surrender of the Note(s) to AUGI. If we decide to pay the
interest under the Notes by issuing common stock,  the price of the common stock
at which the  repayment  will be made shall be the greater of $0.50 per share or
the ten-day average closing price of the common stock, as reported on the OTCBB,
prior to the date of repayment.

Conversion Rights

     The Notes are  convertible  into common stock, at the option of the holder,
at any time  commencing  on July 31,  2003  until the close of  business  on the
business  day  preceding  the day the  Notes  are paid in full,  if not  earlier
prepaid by AUGI.  Each dollar of principal and interest due under the Notes,  at
the time of conversion,  is  convertible  into two (2) shares of common stock of
AUGI ("Conversion Rate").

The Conversion Rate is subject to adjustment on the occurrence of any of
the following events, each of which is called an adjustment event:

          -    the subdivision of its outstanding common stock,

          -    the  combination of its  outstanding  common stock into a smaller
               number of shares, and

          -    the   issuance   of  any   shares   of  its   capital   stock  by
               reclassification   of  its  common  stock,   including  any  such
               reclassification  in a  consolidation  or merger in which AUGI is
               the continuing  corporation,  unless in connection with a merger,
               consolidation  or similar  transaction,  the Notes are  converted
               into the equivalent kind and amount of securities,  cash or other
               assets, and with equivalent adjustments, as would have been owned
               if  the  note  had  been  converted   immediately  prior  to  the
               transaction.

      No adjustment need be made, however, if

          -    in each  case the  holder  is  permitted  to  participate  in the
               transaction on a basis no less favorable than any other party and
               at a  level  which  would  preserve  holder's  percentage  equity
               participation in the common stock upon conversion of the note, or

          -    the sales of  common  stock are  pursuant  to a company  plan for
               reinvestment  of dividends or interest,  the granting or exercise
               of options under existing stock option plans, the exercise of any
               other outstanding options or authorized warrants.

     In the case of each adjustment event, the Conversion Rate shall be adjusted
to reflect the dilutive effect of the adjustment  event on the Conversion  Rate.
Adjustments are made successively  whenever an adjustment event occurs,  and are
effective  immediately  after the effective  date in the case of a  subdivision,
combination  or  reclassification.  Any  adjustment  of  less  than  1%  of  the
Conversion  Rate will not be made,  but will be carried  forward  and taken into
account  in any  subsequent  adjustment.  AUGI  will  promptly  mail a notice of
adjustment  to all holders,  stating the facts  requiring  the  adjustment,  the
adjusted  Conversion  Rate, the manner of computing it and the effective date of
the adjustment.

     Upon a partial  conversion  of the  principal  amount of a Note,  shares of
common  stock will be issued in  accordance  with the  Conversion  Rate for that
portion of the principal amount of the Note so converted, and a new Note will be
issued for the balance of the principal amount.

                                       31
Security Interest

     The Notes  are  secured  by a lien  granted  by AUGI on all of its  assets,
including 1,222,586 shares of Western.

     If at any time during the term of the Notes, we sell, or otherwise  dispose
of the Western  Shares,  any proceeds  received  from such  disposition  will be
allocated by us for the repayment of principal and interest due under the Notes.

Prepayment

     We may prepay  the Notes or any  portion  thereof,  together  with  accrued
interest  to the date  fixed  for  repayment,  at any time  after  notice to the
holders. Notice of such repayment shall be given to the holders not less than 10
days before the date fixed for  repayment.  No sinking  fund is provided for the
notes.  Notes called for repayment will be convertible in common stock until the
close of business on the day before the repayment date.

Rights upon an Event of Default

      An "event of default" consists of:

          1.   the  failure  by AUGI to make a timely  payment of  principal  or
               interest on the Note when due and payable,  which failure remains
               uncured for a period of 30 days after  notice has been given by a
               holder to AUGI,

          2.   AUGI's failure to be in material  compliance with its covenant to
               issue the common stock upon a holder's conversion of the Notes in
               accordance with their terms,

          3.   AUGI's  failure to be in material  compliance  with or neglect to
               perform any of the provisions of the Note,  which failure remains
               uncured for 30 days after  notice has been given by the holder to
               AUGI,

          4.   the commencement of any bankruptcy,  receivership,  winding up or
               liquidation  of the  affairs of AUGI or any of its  subsidiaries,
               which remains undismissed for a period of 90 consecutive days, or

          5.   the  institution of bankruptcy,  custodianship,  receivership  or
               similar action by or with the consent of AUGI.

     The  occurrence  of an event of  default  described  in 4 or 5 above  shall
result in all  obligations  due under the  Notes  becoming  immediately  due and
payable  without notice.  If an event of default  described in 1 through 3 above
shall occur, the holders of at least 51% in principal amount of the Notes may at
their option by notice to AUGI declare all unpaid  obligations  immediately  due
and payable.  In addition to the obligations  remaining  unpaid under the Notes,
all  reasonable  costs and expenses of collection  and  enforcement  of the Note
shall be payable by AUGI.

     AUGI's  ability  to pay the  obligations  due  under  the  Notes  upon  the
acceleration  of their  maturity will depend on the  availability  of sufficient
funds. Accordingly, AUGI may not be able to meet its obligations under the Notes
upon the occurrence of an event of default.

Form, Denomination and Transfer

     The Notes shall be issued in  denominations  of $666 or integral  multiples
thereof up to a total offering amount of $3,000,000.  No transfer shall be valid
unless  effected  on AUGI's  books by the  registered  holder in person or by an
attorney duly  authorized in writing,  and similarly noted on the Note. AUGI may
charge a holder a reasonable fee for any  re-registration,  transfer or exchange
of the Notes.

No Market for the Notes

     The  Notes  have  not  been  and will  not be  listed  for  trading  on any
recognized market.

Governing Law; Modification

     The Notes are construed in accordance  with,  and the rights of the parties
thereto  shall be governed by, the laws of the State of Delaware.  The Notes may
be modified  only by a writing  signed by the holder and AUGI,  and then only to
the extent set forth in such writing and only in the specific instance for which
it is given. No forbearance, delay or failure to exercise any right or remedy by
a holder of a note will operate as a waiver of or acquiescence in any default.

                                       32
DESCRIPTION OF SECURITIES

     The  following  description  is  qualified  in all respects by reference to
AUGI's  Certificate  of  Incorporation  and all  amendments  thereto  and AUGI's
Bylaws,  copies of which are filed as exhibits to the registration  statement of
which this prospectus is a part.

GENERAL

     The Company is authorized by its Certificate of  Incorporation  to issue an
aggregate of 40,000,000  shares of Common  Stock,  $.01 par value per share (the
"Common Stock"),  and 2,700,000  shares of preferred  stock,  $.01 par value per
share (the "Preferred Stock"), of which Preferred Stock: (a) 1,200,000 shares of
Preferred  Stock are  designated  as Series A voting  and  redeemable  Preferred
Stock, $.01 par value per share (the "Series A Preferred Stock");  (b) 1,000,000
shares are designated as Series B-1 voting and convertible  Preferred Stock (the
"Series B-1 Preferred  Stock");  and (c) 500,000 shares are designated as Series
B-2  non-voting  and  convertible  Preferred  Stock (the  "Series B-2  Preferred
Stock").

     At our  annual  meeting  of  stockholders  held on  August  28,  2001,  our
stockholders  approved a reverse  stock split of 1-for-15,  1-for-20 or 1-for-25
with the precise ratio to be  determined by our Board of Directors.  On December
7, 2001,  our Board of Directors  declared a 1-for-25  reverse stock split.  The
reverse stock split became effective on December 17, 2001 (the "Effective Date")
and  each 25  shares  of our  common  stock  that  was  issued  and  outstanding
immediately  prior to the  Effective  Date was changed into one validly  issued,
fully paid and  non-assessable  share of our common  stock  without  any further
action by the holders of shares of our common stock.

COMMON STOCK

     Our Certificate of Incorporation  authorizes us to issue 40,000,0000 shares
of Common Stock, having a par value of $.01 per share.

     Holders of the Common Stock are entitled to one vote per share and, subject
to the rights of the  holders  of the  Preferred  Stock  (discussed  below),  to
receive  dividends  when and as  declared  by the Board of  Directors  and share
ratably in the our assets legally available for distribution in the event of the
liquidation, dissolution or winding up of AUGI.

     Holders of the Common Stock do not have  redemption or  conversion  rights,
nor do they have any  preemptive  rights.  In the event we were to elect to sell
additional  shares of its Common Stock  following  the date of this  Prospectus,
purchasers  of the  shares  offered  hereby  would  have no  right  to  purchase
additional  shares  of such  stock.  As a  result,  their  percentage  of equity
interest in AUGI would be diluted.

     The shares of common  stock  comprising  the Units will be, when issued and
paid for, fully paid and not liable for further call or assessment.

     Holders of the Common Stock do not have  cumulative  voting  rights,  which
means that the holders of more than half of the shares of Common Stock  (subject
to the  rights  of the  holders  of the  Preferred  Stock)  can elect all of the
Company's  Directors,  if they choose to do so. In such event the holders of the
remaining  shares  would  not be able to  elect  any  Directors.  The  Board  is
empowered  to fill any  vacancies  on the Board  created by the  resignation  of
Directors.

     Except as otherwise  required by the Delaware General  Corporation Law, all
shareholder  action is taken by vote of a majority of the shares of Common,  and
Series B-1  Preferred  Stock  voting as a single  class  present at a meeting of
shareholders at which a quorum (a majority of the issued and outstanding  shares
of the Company's  Common and Series B-1 Preferred Stock) is present in person or
by proxy.

PREFERRED STOCK

    THE SERIES A PREFERRED STOCK.

     Pursuant to our Certificate of Incorporation, AUGI is authorized to issue a
maximum of  1,200,000  shares of Series A  Preferred  Stock.  In July 1991,  the
company  issued  all of such  1,200,000  shares of Series A  Preferred  Stock to
Robert M. Rubin.  Mr.  Rubin  exchanged  all of his shares of Series A Preferred
Stock for a 10% $1,200,000 principal subordinated note of AUGI in February 1994.
There are currently no outstanding shares of Series A Preferred Stock.

                                       33
THE SERIES B PREFERRED STOCK.

     AUGI is authorized by its Certificate of  Incorporation  to issue a maximum
of  1,500,000  shares  of  Series  B  Preferred  Stock  in one or  more  series,
containing such rights,  privileges and  limitations,  including  voting rights,
conversion  privileges and/or  redemption  rights, as may, from time to time, be
determined  by the Board of  Directors.  The Board of Directors  has created two
series,  the Series B-1 and B-2. As of December  17,  2001,  there were  407,094
shares of Series B-1  Preferred  Stock issued and  outstanding  and no shares of
Series B-2 Preferred Stock issued and outstanding.

     SERIES  B-1  PREFERRED  STOCK.  Series B-1  Preferred  Stock does not pay a
dividend,  is not subject to redemption,  has a liquidation  preference of $3.50
per share over the common  stock and votes  together  with the common stock as a
single  class on a one share  for one vote  basis.  As a result of the  1-for-25
reverse stock split, each 25 shares of Series B-1 Preferred Stock is convertible
into one share of common stock at the holder's option.

     SERIES B-2 PREFERRED  STOCK.  On January 8, 1997,  the Company  completed a
private  placement (the "Series B-2  Placement") of 400,000 shares of Series B-2
Preferred Stock,  paying a 7% cumulative  quarterly  dividend with a liquidation
preference  of $25.00 per share over the common stock (the "Series B-2 Preferred
Stock").  All  Series  B-2  Preferred  Stock was  converted  into  approximately
2,616,000 shares  (pre-split) of Common Stock at conversion prices between $3.31
and $5.37 per share by September 1997. There are currently,  and since September
1997 have been, no outstanding shares of Series B-2 Preferred Stock.

    PUBLIC WARRANTS

     The Public Warrants were initially  issued pursuant to a Warrant  Agreement
between the AUGI and North American Transfer Company, as warrant agent, and were
in registered  form.  Corporate Stock Transfer & Trust Company is AUGI's current
warrant agent.  Each of the Public  Warrants  entitled the registered  holder to
purchase  one share of Common Stock at a price of $7.50 per share until June 30,
1997.  AUGI has extended  the  expiration  date on the Public  Warrants on three
occasions on May 21, 1997, July 21, 1999, and July 13, 2001. In addition, on
July 13, 2001 the exercise price was reduced to $1.00 per share. The Public
Warrants currently expire on July 31, 2003, unless  exercised, or the expiration
date is further extended by AUGI. As a result of the 1-for-25 reverse stock
split, each 25 Public Warrants is exercisable for one share of common stock.

     The Public Warrants are subject to redemption by AUGI at a redemption price
of $.10 per  warrant  upon 15 days'  prior  written  notice,  provided  that the
average  last trade  price of the Common  Stock as  reported  on the  NASDAQ-NMS
System (or the average  closing  bid price if the Common  Stock is not traded on
the  NASDAQ-NMS  System) equals or exceeds $8.75 per share for either (i) any 20
consecutive  trading days ending not more than 25 and not less than five trading
days prior to the date upon which notice of  redemption  is given,  or (ii) with
the  written  consent of the  Underwriter  of the public  offering  in which the
Public Warrants were issued,  Chatfield Dean,  Inc., any 10 consecutive  trading
days  ending not more than 15 and not less than five  trading  days prior to the
date upon which notice of redemption is given.

     The holders of the Public  Warrants have certain  anti-dilution  protection
upon the occurrence of certain events, including stock dividends,  stock splits,
and reclassifications.  The holders of the Public Warrants have no right to vote
on matters  submitted to the stock  holders of AUGI and have no right to receive
dividends.  The holders of the Public  Warrants are not entitled to share in the
assets of AUGI in the event of  liquidation,  dissolution  or the  winding up of
AUGI's affairs.

OTHER WARRANTS

     The  investors in the 1997 Private  Placement  received  Private  Placement
Warrants to purchase an aggregate of 350,000  Shares at an exercise  price equal
to the Closing Date Average Price of $8.58 per Share,  which  Private  Placement
Warrants  expire on January 11, 2002 to the extent  unexercised.  As a result of
the reverse stock split, every 25 Private Placement Warrants are exercisable for
one share of common stock.

     All  of  the  above  warrants  are  subject  to  anti-dilution   protection
(resulting  in  adjustments  to the exercise  price and the number of underlying
shares which may be acquired) upon the occurrence of certain  events,  including
stock dividends, stock splits and reclassifications.

Transfer Agent and Registrar

     The transfer  agent and registrar  for the common stock is Corporate  Stock
Transfer & Trust Co., Denver, Colorado.

                                       34
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

     The following  discussion has been prepared by AUGI to present the material
federal income tax considerations  under generally applicable current law of the
acquisition,  ownership,  conversion  and  disposition  of  the  notes  and  the
acquisition,  ownership and disposition of any common stock which is received as
part of the Unit or on the  conversion  of a Note,  for  persons who acquire the
Notes and hold those Notes and any such common stock as capital assets.  It does
not, however, discuss the effect of (1) special rules, such as those which apply
to  tax-exempt  organizations,   insurance  companies,  financial  institutions,
persons  who hold the notes or common  stock in  connection  with a straddle  or
dealers  or  (2)  any  foreign,  state  or  local  tax  law.  Accordingly,  each
prospective  purchaser  of Units  is  advised  to  consult  its own tax  advisor
regarding the matters discussed herein in light of its particular circumstances,
the  application  of state,  local and foreign tax laws,  and the fact that such
laws change from time to time.

     The following  statements are based upon the Internal Revenue Code of 1986,
as  amended,  existing  regulations  thereunder  and the  current  judicial  and
administrative interpretations thereof.

Ownership by U.S. Persons

     The  following  applies  to a person who is a citizen  or  resident  of the
United States,  a corporation or partnership  created or organized in the United
States  or any  state  thereof  or an  estate  or trust  the  income of which is
includible in income for United States federal income tax purposes regardless of
its source.

Interest on Notes

     The stated  interest  on a note will be taxable as  ordinary  income at the
time  interest  is paid or accrued in  accordance  with the  holder's  method of
accounting for United States federal income tax purposes.

     If a note is acquired at a "market  discount,"  gain  realized on a taxable
disposition  and  certain  nontaxable  dispositions  thereof  will be treated as
interest  income to the extent of the  theretofore  unrecognized  accrued market
discount. Subject to a de minimis exception, "market discount" with respect to a
Note is equal to the excess of (1) the stated  redemption  price at  maturity of
the note over (2) the holder's  initial basis in the note.  Any market  discount
accrues on a ratable basis or, at the election of the holder,  on the basis of a
constant  interest  rate,  and a holder of a market  discount  note may elect to
include the market discount in its income as that market discount accrues.  If a
holder  converts a market  discount  note into  common  stock,  the  theretofore
unrecognized  accrued  market  discount on that note will not,  in  general,  be
recognized,  but will be treated as ordinary income on the later  disposition of
that  common  stock to the  extent  of any gain  recognized  at that time on the
disposition of that common stock.

Conversion of Notes

     A holder  generally  will not recognize gain or loss on the conversion of a
note into common stock except that it will recognize a capital gain or loss as a
result of the receipt of cash in lieu of a fractional  share equal to the amount
of cash reduced by the basis of the portion of the note in respect of which that
cash was paid.  The basis of the common stock that is received on the conversion
will be the  adjusted  basis  of the note  which  was  converted  at the time of
conversion increased by any gain that is recognized,  decreased by any loss that
is recognized and decreased by any cash that is received.  The holding period of
that common stock will include the holding period of the converted note.

Sale or Exchange of Notes or Common Stock

     Gain or loss will be  recognized on the sale or exchange of the notes or of
common stock in an amount equal to the difference between

          (1)  the  amount  of cash  and the  fair  market  value  of any  other
               property  received by the holder,  excluding,  in the case of the
               notes, any amount  representing  accrued interest,  which will be
               taxable as such, and

          (2)  the holder's adjusted basis in the property sold or exchanged.

     Any such gain,  other than gain  characterized as interest under the market
discount rules, or loss with respect to a note or common stock will be a capital
gain or loss.

                                     35
Dividends on Common Stock

     Distributions,  if any, on the common stock will be dividends to the extent
of the current or  accumulated  earnings and profits of AUGI,  then a nontaxable
return of capital reducing the holder's adjusted basis in the common stock until
such  adjusted  basis is  reduced  to zero and  finally  an amount  received  in
exchange  for the common  stock.  Dividends  paid to domestic  corporations  may
qualify for the dividends received deduction subject to the limiting  provisions
that apply thereto.  Dividends may only be issued at the discretion of the Board
of  Directors.  However,  for the  foreseeable  future,  we intend to retain any
earnings.

Ownership by Non-U.S. Holders

     The  following  applies  to a person  who is not a U.S.  holder  and to the
income  received  thereby,  such  as  interest,  dividends  and  gain or loss on
disposition,  with  respect to notes and common  stock which is not  effectively
connected with the conduct by the non-U.S.  holder of a trade or business within
the  United  States.  Any such  effectively  connected  items of income  will be
subject to the United  States  federal  income tax that applies to U.S.  holders
generally,  and,  in the  case  of such a  non-U.S.  holder  that  is a  foreign
corporation, those items also will be subject to the branch profits tax.

Interest on Notes

     Interest  paid on notes to a non-U.S.  holder will not be subject to United
States federal income tax or to withholding in respect thereof if:

          (1)  the beneficial owner, or if certain requirements are satisfied, a
               member of a class of  financial  institutions,  certifies,  under
               penalties  of perjury,  that the  beneficial  owner is not a U.S.
               holder and provides the beneficial owner's name and address,

          (2)  the non-U.S.  Holder does not actually or constructively  own 10%
               or more of the total voting power of all classes of stock of AUGI
               entitled to vote, common stock into which a note can be converted
               is constructively owned for these purposes,

          (3)  the non-U.S.  holder is not a controlled foreign corporation with
               respect to which AUGI is a "related person" within the meaning of
               Section 864(d)(4) of the Code, and

          (4)  the  non-U.S.  holder is not a bank holding the notes as a result
               of an  extension  of credit  made  pursuant  to a loan  agreement
               entered  into in the  ordinary  course of its trade or  business.
               Accrued  market  discount  on a note  is not  treated  for  these
               purposes as interest income. If the foregoing  conditions are not
               satisfied,  then the interest will generally be subject to United
               States  federal  income tax  withholding  at a rate of 30% or any
               lower rate that is provided by any applicable treaty.

Sale or Exchange of Notes or Common Stock; Conversion of Notes

     A non-U.S.  holder  generally  will not be subject to United States federal
income tax on gain  recognized  on the sale or exchange of notes or common stock
or on the conversion of a note unless

          (1)  the holder is an  individual  who is present in the United States
               for 183 or more  days  in the  taxable  year  and  certain  other
               conditions are satisfied or

          (2)  AUGI is a "United States real property  holding  corporation," as
               defined in Section 897 of the code, and certain exceptions do not
               apply.

Dividends on Common Stock

     Any  distribution  on common stock to a non-U.S.  holder will be subject to
United States federal income tax  withholding at a rate of 30% or any lower rate
which is provided by any applicable treaty.

Estate Tax

     An individual non-U.S. holder of a note will not be required to include the
value of such note in his gross  estate for  United  States  federal  estate tax
purposes,  provided  that such  holder did not at the time of death  actually or
constructively  own 10% or more of the  combined  voting power of all classes of
stock of AUGI and, at the time of such holder's  death,  payments of interest on
such note would not have been  effectively  connected  with the  conduct by such
holder of a trade or  business  in the United  States.  An  individual  non-U.S.
holder who is treated as the owner, or has made certain lifetime  transfers,  of
an interest in the common stock will be required to include the value thereof in
his gross  estate for United  States  federal  estate  tax  purposes  and may be
subject  to United  States  federal  estate  tax with  respect  thereto,  unless
otherwise provided by an applicable estate tax treaty.

                                       36
Backup Withholding; Information Reporting

     A noncorporate  U.S.  holder holding notes or common stock and any non-U.S.
holder  failing to provide a  certificate  that it is not a U.S.  holder will be
subject to backup  withholding  at the rate of 31% with respect to interest paid
on the  notes,  dividends  paid on common  stock and the  proceeds  of any sale,
exchange  or  redemption  thereof  if the  payee  fails to  furnish  a  taxpayer
identification  number  and in  certain  other  circumstances.  Any  amounts  so
withheld  will be allowed as a refund or a credit  against the  holder's  United
States  federal  income tax  liability,  provided  that certain  information  is
furnished  to the  Internal  Revenue  Service.  Information  reporting  will  be
required  with  respect to a payment of  proceeds  from the sale or  exchange of
notes or common  stock  through a  foreign  office of a broker  that is a United
States person or of certain  foreign  brokers unless the broker has  documentary
evidence in its files that the owner is a non-U.S.  holder and the broker has no
actual knowledge to the contrary.

                              PLAN OF DISTRIBUTION

     We are offering rights to purchase the Units directly the our  shareholders
who own at least 100 shares of common stock as of the Record  Date.  We have not
employed any brokers,  dealers or  underwriters in connection with this offering
and no  commissions,  fees or  discounts  will be paid in  connection  with  it.
Certain of our officers and other employees may solicit  responses from you, but
such  officers  and  other   employees  will  not  receive  any  commissions  or
compensation for such services other than their normal employment compensation.

     On or about _________,  2002, we will distribute  copies of this prospectus
to those  shareholders  who owned at least 100 shares of our common stock on the
Record Date. The prospectus  will mailed via U.S. mail to each  shareholder,  at
the address  listed in the records of Corporate  Stock Transfer & Trust Company,
our transfer  agent, or delivered to ADP for  distribution to the  non-objecting
beneficial  owners of our  shares  of  common  stock.  We do not  undertake  any
responsibility for verifying or otherwise confirming such addresses. If you wish
to subscribe for the Units,  you should follow the  procedures  described  under
'Subscription Procedures.'

     Holders  may  sell  the  Common   Stock  and   Conversion   Shares  in  the
over-the-counter  market or otherwise at prices that represent or relate to then
prevailing  market prices or are negotiated,  by purchase by a broker-dealer  as
principal  and resale by such broker or dealer for its account  pursuant to this
prospectus.  Sales  may  also be made in  ordinary  brokerage  transactions  and
transactions in which a broker solicits purchasers,  and block trades in which a
broker-dealer  so engaged will attempt to sell the  securities  as agent but may
take a position and resell a portion of the block as principal to facilitate the
transaction.  In  addition,  any  securities  covered by this  prospectus  which
qualify for sale  pursuant to Rule 144 of the  Securities  Act may be sold under
Rule 144 rather than pursuant to this prospectus.

     We may suspend the use of this  prospectus  and any  supplements  hereto in
certain  circumstances  because of pending  corporate  developments or a need to
file a post-effective  amendment.  In any such event, we will use its reasonable
efforts  to ensure  that the use of the  prospectus  may be  resumed  as soon as
practicable.

                                  LEGAL MATTERS

     The  validity of the  issuance  of the  securities  offered  hereby will be
passed upon for us by Gersten, Savage & Kaplowitz, LLP, New York, New York.

                                     EXPERTS

     The  financial  statements  as of July 31,  2001 and 2000 and for the three
years in the period ended July 31, 2001 included in this registration statement,
have been so included in reliance on the report of  PricewaterhouseCoopers  LLP,
independent  accountants,  given on the  authority  of said firm as  experts  in
accounting and auditing.

                              AVAILABLE INFORMATION

     We have filed a registration statement on Form S-1 to register with the SEC
the Units,  and the Notes and common  stock  included  therein,  and  Conversion
Shares which may be issued upon the conversion of the Notes.  This prospectus is
part of that  registration  statement.  As  allowed  by the  SEC's  rules,  this
prospectus  does  not  contain  all of  the  information  you  can  find  in the
registration statement or the exhibits to the registration statement.

     We file annual,  quarterly and other information with the SEC. You may read
and copy any  reports,  statements  and other  information  we file at the SEC's
public  reference  rooms in  Washington,  D.C., New York, New York, and Chicago,
Illinois.  Please call 1 (800)  SEC-0330 for further  information  on the public
reference  rooms.  Our  filings  will  also  be  available  to the  public  from
commercial document retrieval services and at the web site maintained by the SEC
at http://www.sec.gov.

                                       37
AMERICAN UNITED GLOBAL, INC.

                              FINANCIAL STATEMENTS

                                      INDEX

                                                                   Page

Report of Independent Accountants .......................           F-2

Consolidated Balance Sheets .............................           F-3

Consolidated Statements of Operations and
 Comprehensive Income (Loss).............................           F-4

Consolidated Statements of Shareholders' (Deficit)Equity.           F-5

Consolidated Statements of Cash Flows ...................           F-6

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

                                      F-1
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of American United Global, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated  statements of  operations  and  comprehensive  income  (loss),  of
shareholders' equity (deficit) and of cash flows present fairly, in all material
respects,  the  financial  position  of American  United  Global,  Inc.  and its
subsidiaries at July 31, 2001 and 2000, and the results of their  operations and
their cash flows for each of the three years in the period  ended July 31, 2001,
in conformity with accounting principles generally accepted in the United States
of America.  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 audits.  We conducted our audits of these statements in
accordance with auditing  standards  generally  accepted in the United States of
America  which  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,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company has incurred  losses from
operations  and has had a working  capital  deficit for each of the years ending
July 31, 1999, 2000 and 2001.  Further,  as discussed in Note 1 to the financial
statements,  the Company  requires  additional funds to continue its operations.
Such  factors  raise  doubt about the  Company's  ability to continue as a going
concern. Management's plans in regards to these matters are discussed in Note 1.
The financial  statements do not reflect any adjustments  that might result from
the outcome of this uncertainty.

PricewaterhouseCoopers LLP

Portland, Oregon November 5, 2001
except for the reverse stock split information
in Note 1 as to which the date is December 17, 2001

                                      F-2
AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                                                                                      JULY 31,
                                                                                                      --------
                                                                                                2001           2000
                                                                                                ----           ----
                                         ASSETS
Current assets:
   Cash and cash equivalents............................................................  $      519,000  $   1,281,000
   Investment in marketable securities..................................................         226,000      3,629,000
   Trade accounts receivable, less allowance for doubtful accounts of $724,000..........            -        17,347,000
   Inventories (Note 4).................................................................            -        58,297,000
   Prepaid expenses and other receivables...............................................          27,000        478,000
   Deferred tax asset (Note 7)..........................................................            -         2,273,000
   Receivable from Chairman (Note 10)...................................................            -           299,000
   Notes receivable (Note 10)...........................................................            -         1,161,000
                                                                                               ---------      ---------

       Total current assets.............................................................         772,000     84,765,000

   Property and equipment, net (Note 5).................................................            -         9,450,000
   Rental equipment fleet, net (Note 5).................................................            -        26,076,000
   Leased equipment fleet, net (Note 5).................................................            -         4,975,000
   Intangibles and other assets, net of accumulated amortization of $683,000............            -         2,858,000
   Other assets.........................................................................         250,000        425,000
   Investment in Western Power & Equipment Co...........................................         702,000           -
                                                                                          --------------  -------------

                                                                                          $    1,724,000  $ 128,549,000
                                                                                          ==============  =============
                          LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY

Current liabilities:
   Borrowings under floor financing lines (Note 6)......................................  $         -     $  14,768,000
   Short-term borrowings (Note 6).......................................................       1,500,000     69,171,000
   Current portion of capital lease obligations (Note 10)...............................            -            17,000
   Accounts payable.....................................................................          39,000     10,810,000
   Accrued liabilities..................................................................       1,370,000      5,097,000
   Income taxes payable (Note 7)........................................................            -           581,000
   Due to shareholders (Note 10)........................................................            -         1,900,000
                                                                                             -----------    -----------
       Total current liabilities........................................................       2,909,000    102,344,000

Long-term borrowings (Note 6)...........................................................            -            28,000
Capital lease obligations, net of current portion (Note 10).............................            -         4,786,000
Deferred taxes (Note 7).................................................................            -         2,273,000
Deferred gain...........................................................................            -              -
Deferred lease income...................................................................            -         5,982,000
                                                                                               ---------      ---------
       Total liabilities                                                                       2,909,000    115,413,000

Minority interest.......................................................................            -         5,763,000

Commitments and contingencies (Note 10)

Shareholders' (deficit) equity (Notes 8 and 11):

   Series B-1  preferred stock, convertible to common, $3.50 per share
     liquidation value, $.01 par value; 1,000,000 shares authorized; 407,843 and
     416,263 shares issued and outstanding, respectively................................           4,000          4,000
   Common stock, $.01 par value; 40,000,000 shares authorized; 497,572 and 485,735
     shares issued and outstanding, respectively........................................           5,000          5,000
   Common stock, Class B, non-voting, .01 par value, 25,000,000
     shares authorized, no shares issued and outstanding ...............................           -              -
   Additional contributed capital.......................................................      50,390,000     50,390,000
   Accumulated deficit..................................................................     (50,710,000)   (44,310,000)
   Accumulated other comprehensive (loss) income........................................        (874,000)     1,284,000
                                                                                          --------------   ------------
       Total shareholders's (deficit) equity...........................................      (1,185,000)     7,373,000
                                                                                          --------------   ------------
                                                                                          $    1,724,000   $128,549,000
                                                                                          ==============   ============
The accompanying notes are an integral part of this statement.

                                      F-3
AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
Net sales................................................................  $        -     $  155,637,000 $  163,650,000
Cost of goods sold.......................................................           -        144,099,000    149,056,000
                                                                             -----------     -----------    -----------

       Gross profit......................................................           -         11,538,000     14,594,000

Selling, general and administrative expenses.............................      1,214,000      14,474,000     15,705,000
                                                                              ----------      ----------     ----------

       Operating loss....................................................     (1,214,000)     (2,936,000)    (1,111,000)

Gain on sale of patent...................................................           -            240,000           -
Loss on transfer of Western shares.......................................           -         (1,434,000)          -
Impairment of Investment of Western Power & Equipment Co.................     (1,771,000)           -              -
Loss on sale of marketable securities....................................     (1,395,000)           -              -
Other income.............................................................        506,000       1,646,000        530,000
Interest expense, net....................................................       (248,000)     (6,307,000)    (5,329,000)
                                                                               ---------       ---------      ---------

Loss from continuing operations before income taxes, equity
       in loss of unconsolidated subsidiary and minority interest........     (4,122,000)     (8,791,000)    (5,910,000)

(Provision) benefit for income taxes (Note 7)............................        545,000        (779,000)     1,101,000
Equity in loss of unconsolidated subsidiary (Note 3).....................     (2,823,000)       (364,000)      (961,000)
Minority interest in loss of consolidated subsidiaries...................           -          2,904,000        716,000
                                                                                 -------        --------       --------

       Loss from continuing operations ..................................     (6,400,000)     (7,030,000)    (5,054,000)

Discontinued operations, net of taxes (Note 9):

   Gain on disposal......................................................          -                -         1,989,000
                                                                           -------------  --------------  --------------

Net loss ................................................................     (6,400,000)     (7,030,000)    (3,065,000)
                                                                           =============  ============== ==============

Basic and diluted loss per share:
   Loss from continuing operations.......................................  $      (13.02) $       (14.71) $     (10.75)
   Gain from discontinued operations.....................................           -               -             4.23
                                                                           -------------  -------------   -------------

Basic and diluted loss per share.........................................  $      (13.02) $      (14.71)  $      (6.52)
                                                                           =============  =============    ============

Weighted average number of shares........................................        491,413         477,935        469,928
                                                                           =============  ==============   ============

Comprehensive loss:

     Net loss............................................................  $  (6,400,000) $  (7,030,000)  $  (3,065,000)

     Unrealized (loss) gain on marketable securities.....................       (874,000)     1,284,000          -
                                                                              -----------  -------------  --------------

     Comprehensive loss..................................................  $  (7,274,000) $  (5,746,000) $   (3,065,000)
                                                                            =============  ============== ==============
The accompanying notes are an integral part of this statement.

                                      F-4
AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY

                                                                   PREFERRED STOCK                 COMMON STOCK
                                                                   ---------------                 ------------

                                                              NUMBER OF                      NUMBER OF
                                                               SHARES          AMOUNT         SHARES         AMOUNT
                                                               ------          ------         ------         ------
Balance at July 31, 1998.................................      724,000        $ 7,000         465,000       $  5,000
Net loss ................................................
Conversion of preferred stock to common..................     (298,000)        (3,000)         12,000           -
                                                              --------         ------      ----------       --------

Balance at July 31, 1999.................................      426,000          4,000         477,000          5,000
Net loss ................................................
Issuance of common stock.................................                                       9,000           -
Stock option compensation................................
Accumulated unrealized gains, net........................
Conversion of preferred stock to common..................       (9,000)                          -
                                                                ------        --------    -----------    -----------

Balance at July 31, 2000.................................      417,000          4,000         486,000          5,000
Net loss ................................................
Accumulated unrealized gains, net........................
Additional shares issued in private placement............                                      11,000           -
Conversion of preferred stock to common..................       (9,000)                         1,000
                                                                ------        --------    -----------    -----------

Balance at July 31, 2001................................       408,000        $ 4,000         498,000    $     5,000
                                                               =======          =====      ==========    ===========
ACCUMULATED
                                            ADDITIONAL                        OTHER                            TOTAL
                                            CONTRIBUTED                   COMPREHENSIVE   ACCUMULATED      SHAREHOLDERS'
                                              CAPITAL          OTHER      INCOME (LOSS)     DEFICIT       (DEFICIT) EQUITY
                                              -------          -----      -------------    ---------       --------------
Balance at July 31, 1998..................   $50,068,000     $   -        $       -       $(34,215,000)        $15,862,000
Net loss .................................                                                  (3,065,000)         (3,065,000)
                                             -----------     ---------    ------------    -- ----------          ----------

Balance at July 31, 1999..................    50,068,000          -                        (37,280,000)         12,797,000
Net loss .................................                                                  (7,030,000)         (7,030,000)
Issuance of common stock..................        85,000                                                            85,000
Stock option compensation.................       237,000                                                           237,000
Accumulated unrealized gains, net.........        -              -            1,284,000                          1,284,000
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------

Balance at July 31, 2000..................    50,390,000  $     -             1,284,000    (44,310,000)          7,373,000

Net loss .................................                                                  (6,400,000)         (6,400,000)
Accumulated unrealized gains, net.........        -              -           (2,158,000)                        (2,158,000)
Additional shares issued
 in private placement.....................          -
Conversion of preferred stock to common...
                                             -----------    -----------       ---------    ------------      -------------
Balance at July 31, 2001.................. $  50,390,000  $     -              (874,000) $ (50,710,000)       $ (1,185,000)
                                           =============  =============     ===========  =============        ============
The accompanying notes are an integral part of this statement.

                                      F-5
AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                        YEAR ENDED JULY 31,
                                                                                        -------------------

                                                                                2001           2000           1999
                                                                                ----           ----           ----
Cash flows from operating activities:
   Net loss from continuing operations...................................  $ (6,400,000)    $ (7,030,000)  $ (5,054,000)
   Net gain (loss) from discontinued operations .........................          -                -         1,989,000
Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization.......................................          -          11,712,000     11,779,000
     Loss on settlement..................................................          -                -           310,000
     Gain on disposal of business........................................          -                 -       (1,989,000)
     Gain on sale of fixed assets........................................          -             (59,000)       (45,000)
     (Loss) income applicable to minority interest.......................          -          (2,904,000)      (716,000)
     Undistributed loss of affiliate.....................................      2,823,000         364,000      1,553,000
     Stock option compensation...........................................           -            236,000          -
     Gain on sale of patent..............................................           -           (240,000)         -
     (Loss) gain on sale investments.....................................      1,395,000         (52,000)         -
     Impairment of investments...........................................      1,946,000            -             -
       Change in assets and liabilities, net of effects of acquisition
       and dispositions:
       Trade accounts receivable.........................................           -         (1,847,000)     8,208,000
       Inventories.......................................................           -          2,903,000      1,299,000
       Notes receivable..................................................           -            500,000       (500,000)
       Prepaid expenses and other receivable.............................        240,000        (192,000)         1,000
       Lease equipment, net..............................................           -            289,000     (2,504,000)
       Accounts payable..................................................         53,000      (2,416,000)    (5,295,000)
       Accrued liabilities...............................................     (1,213,000)      1,051,000     (1,290,000)
       Income taxes payable..............................................           -            817,000       (164,000)
       Change in deferred revenue........................................           -           (339,000)     2,707,000
                                                                              ----------    ------------   ------------

       Net cash provided by (used in) operating activities...............     (1,156,000)      2,793,000     10,289,000
                                                                               ---------      ----------    -----------
Cash flows from investing activities:
   Purchase of property and equipment....................................           -         (1,254,000)    (2,711,000)
   Purchase of rental equipment, ........................................           -         (9,531,000)   (27,984,000)
   Sales of rental equipment.............................................           -         10,574,000     14,669,000
   Sale of marketable securities.........................................      1,217,000       1,268,000      4,078,000
   Purchase of other assets..............................................           -            (18,000)         -
   Purchase of equity and debt investments...............................           -           (425,000)         -
   Net effect on cash from distribution of Western shares................       (823,000)           -             -
   Proceeds on sales of fixed assets.....................................           -            189,000      2,235,000
                                                                                 -------       ---------      ----------

       Net cash provided by (used in) investing activities...............        394,000         803,000     (9,713,000)
                                                                                 -------      ----------       ---------
Cash flows from financing activities
   Long term debt repayments.............................................           -            (20,000)    (1,068,000)
   Borrowings under term loans...........................................           -         (2,390,000)    (4,286,000)
    Inventory floor financing............................................           -         (3,192,000)     6,090,000
   Principal payments under capitalized lease obligations................           -             32,000        (60,000)
   Proceeds from sale of stock...........................................           -             85,000           -
   Subsidiary sale/purchase of treasury stock............................           -            256,000           -
   Increase in receivable from shareholder, net..........................           -              -         (1,700,000)
                                                                              -----------     ----------     ----------

       Net cash used in financing activities.............................           -         (5,229,000)    (1,024,000)
                                                                              ----------      ----------     ----------
Net decrease in cash and cash equivalents................................       (762,000)     (1,633,000)      (448,000)
Cash and cash equivalents beginning of year..............................      1,281,000       2,914,000      3,362,000
                                                                               ---------       ---------     ----------
Cash and cash equivalents end of year....................................  $     519,000  $    1,281,000  $   2,914,000
                                                                           =============  ==============  =============
The accompanying notes are an integral part of this statement.

                                      F-6
AMERICAN UNITED GLOBAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       DESCRIPTION OF BUSINESS

     American United Global,  Inc., a Delaware  corporation (the "Company") owns
minority equity  positions in five entities.  The Company's  primary interest is
it's 36%  minority  ownership  of Western  Power &  Equipment  Corp.  (Western).
Western previously was a 59.6% majority owned subsidiary and on November 1, 2000
the Company  distributed  777,414  shares of Western  common  stock owned by the
Company pursuant to the final court approved settlement of the shareholder class
action.  Such  distribution  decreased  the  Company's  percentage  ownership of
Western to 36%.  All other  equity  positions  held by the Company are each less
than five percent.

     Western  is engaged in the sale,  rental and  service of light,  medium and
heavy  construction,  industrial and  agricultural  equipment and related parts.
These sales are  conducted  from 18 regional  distribution  operations  owned by
Western  located in the states of  Washington,  Oregon,  California,  Alaska and
Nevada.  A  majority  of this  equipment  is  manufactured  by Case  Corporation
("Case").

     The Company was also  previously  involved in the  engineering,  design and
construction  business through a minority owned subsidiary,  IDF  International,
Inc. ("IDF"). IDF ceased business operations in September 2000.

     Connectsoft  Communications  Corp.  ("CCC"),  a wholly owned subsidiary had
been  developing  a  telephony  server  product  that reads email and select web
content over the telephone which was marketed under the name "Vogo Server".  The
assets  of CCC  were  sold to an  unrelated  third  party  on June  15,  1999 as
discussed in Note 9. CCC has been accounted for as  discontinued  operations for
the year ending July 31, 1999.

     The Company has had a working  capital  deficit for each of the three years
ending July 31, 1999, 2000 and 2001. In addition, the cash, cash equivalents and
marketable securities of $745,000 as at July 31, 2001 are not sufficient to fund
current  levels of  operations  through the end of fiscal  2002.  The Company is
therefore actively pursuing various sources of financing.  Should such financing
not be obtained, the Company may not be able to continue in business.

     At the  Company's  stockholders'  meeting  held on  August  28,  2001,  the
stockholders  approved a reverse  split of  one-for-fifteen,  one-for-twenty  or
one-for-twenty-five  with the exact ratio to be determined at the  discretion of
the Board of Directors. The Board met on December 7, 2001 and approved the ratio
of one-for-twenty-five.  The effective date of the reverse split is December 17,
2001 and all  shareholders  of record on that  date  will  receive  one share of
common stock for every twenty-five shares that they hold.  Fractional  interests
will be rounded up to the next highest  share.  All share and per share  amounts
have been  restated  in all  periods  presented  to reflect  the  effects of the
reverse split. In addition, the Company's stock ticker symbol will be changed to
AUGB effective December 17, 2001 as a result of the reverse stock split.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  its  wholly  owned  and   majority-owned   subsidiaries.   All  significant
intercompany  balances and transactions  have been eliminated in  consolidation.
Due to a  distribution  of 777,414  shares of Western owned by the Company as at
November 1, 2000 the percentage  ownership of Western  decreased to 36% and thus
the  operations  of Western have been  accounted for using the equity method for
fiscal 2001.  Western was,  however,  included as a  consolidated  subsidiary in
fiscal  2000 and 1999 and  minority  interest  in  those  years  represents  the
minority  shareholders'  proportionate share of the equity of Western, which was
40.4% at July 31, 2000 and 39.4% in 1999.

                                      F-7
Cash Equivalents

     For financial reporting  purposes,  the Company considers all highly liquid
investments  purchased  with an original  maturity of three months or less to be
cash equivalents. Cash and cash equivalents consist of bank demand deposits with
three  financial  institutions.  At times,  demand  deposits may exceed  amounts
insured by the Federal Deposit Insurance Corporation.

         Restricted Cash

     In accordance with Western's  borrowing  agreement with Deutsche  Financial
Services ("DFS"),  Western has a cash account  restricted by DFS for the purpose
of paying down the line of credit. Restricted cash included in the cash balances
totaled $543,000 at July 31, 2000. (See note 6.)

         Inventory Valuation

     Inventories  are stated at the lower of cost or market.  Cost is determined
based upon the first-in,  first-out  method for parts inventory and the specific
identification for equipment inventories.

         Investment Securities

     Investments in marketable  securities  represent primarily common shares of
publicly  traded  companies and are carried at market value.  These  investments
have been classified as available for sale securities at July 31, 2001 and 2000.
Unrealized  gains and losses are  excluded  from  earnings and are included as a
component of  accumulated  other  comprehensive  (loss)income  in  shareholders'
(deficit) equity, net of applicable taxes, until realized.

         Property and Equipment

     Property,  plant, and equipment are owned by Western and are stated at cost
less accumulated depreciation.  Depreciation and amortization are computed using
the straight-line method over the estimated useful lives of the assets,  ranging
from 5 to 20 years.  Expenditures for  replacements  and major  improvements are
capitalized. Repairs and maintenance costs are expensed as incurred. The cost of
assets retired or otherwise disposed of and the related accumulated depreciation
are  eliminated  from the accounts;  any gain or loss thereon is included in the
results of operations.

         Intangible Assets

     Intangible assets include items with an indeterminate  useful life, such as
name recognition,  geographical location and market presence acquired by Western
in business  acquisitions.  Western  uses  estimates of the useful life of these
intangible  assets  ranging  from 20 to 40  years.  Such  lives are based on the
factors influencing the acquisition decision and on industry practice.

     The  carrying  value of  intangible  assets is  assessed by Western for any
permanent  impairment  by  evaluating  the  operating   performance  and  future
undiscounted  cash flows of the underlying  assets.  Adjustments are made if the
sum of the expected future net cash flows is less than book value.

         Income Taxes

     The Company accounts for income taxes using an asset and liability approach
which requires the  recognition of deferred tax  liabilities  and assets for the
expected  future  consequences  of  temporary  differences  between the carrying
amounts  for  financial  reporting  purposes  and the tax  bases of  assets  and
liabilities.

         Revenue Recognition

     Revenue on equipment and parts sales of Western is recognized upon shipment
of  products  and  passage of title.  Equipment  rental and  service  revenue is
generally recognized over the period such services are provided.

         Advertising Expense

     Western  expenses  all  advertising  costs as incurred.  Total  advertising
expense  for the years ended July 31, 2000 and 1999 was  $320,000  and  $311,000
respectively.

                                      F-8
Fair Value of Financial Instruments

     The recorded  amounts of cash and cash  equivalents,  accounts  receivable,
short term borrowings,  accounts payable and accrued liabilities as presented in
the  consolidated  financial  statements  approximate  fair  value  based on the
short-term  nature of these  instruments.  The recorded amount of long-term debt
approximates  fair  value  as the  actual  interest  rates  approximate  current
competitive rates. The recorded value of marketable  securities held at July 31,
2001 and 2000 is the market value as quoted on the respective  exchange on which
each security trades.

         Use of Estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions  that affect the reported amount of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the  financial  statements  and the reported  amounts of revenue and
expenses during the fiscal periods  presented.  Actual results could differ from
those estimates.

         Employee Stock Options

     The Company accounts for stock based employee  compensation plans under the
provisions of Statement of Financial  Accounting  Standards No. 123, "Accounting
for Stock-Based  Compensation."  This standard defines a fair value-based method
of accounting for these equity  instruments.  This method measures  compensation
cost based on the value of the award and  recognizes  that cost over the service
period.  The Company has elected to continue  using the rules of APB Opinion No.
25 and provides pro forma  disclosures of net income (loss) and earnings  (loss)
per share as if Statement No. 123 had been applied.

         Loss Per Share

     The following table sets forth the  computations of basic and fully diluted
loss per share for the years ended July 31, 2001, 2000 and 1999:
YEAR ENDED JULY 31,
                                                                          2001               2000            1999
                                                                          ----               ----            ----
Numerators:
  Net loss from continuing operations.............................   $    (6,400,000) $    (7,030,000)  $    (5,054,000)
  Discontinued operations.........................................            -                  -            1,989,000
                                                                          -----------       ---------        ----------
  Net loss .......................................................        (6,400,000)      (7,030,000)       (3,065,000)
                                                                          ==========       ==========        ==========
Denominator:
 Denominator for basic and diluted earnings per share -
  Weighted average outstanding shares.............................           491,413          477,935           469,928
                                                                          ==========       ==========        ==========
Basic and diluted earnings (loss) per share:

Loss from continuing operations...................................            (13.02)         (14.71)           (10.75)
Income from discontinued operations...............................              -                 -               4.23
                                                                          -----------      -----------       ----------
Basic and diluted net loss per share..............................   $        (13.02) $       (14.71)   $        (6.52)
                                                                          ===========      ===========       ===========
Diluted  and basic  loss per share are the  same,  since the  inclusion  of
common stock equivalents in the computation would be antidilutive.

3.       EQUITY IN LOSS OF UNCONSOLIDATED SUBSIDIARY

     Equity in loss of unconsolidated  subsidiary represents the Company's share
of Western's loss in fiscal 2001 and represents the Company's  share of the loss
of IDF International in fiscal 2000 and 1999.

4.       INVENTORIES

         Inventories consist of the following:
                                                              JULY 31,
                                                                2000
                                                             -----------
Equipment (net of allowances of $4,770,000):
New equipment..........................................  $    40,148,000
Used equipment.........................................        7,442,000
Parts  (net of allowances of $22,000)..................       10,707,000
                                                              ----------
                                                           $  58,297,000
                                                           =============
                                      F-9
5.       FIXED ASSETS

         Fixed assets consist of the following:
                                                                 July 31,
                                                                   2000
                                                             --------------
Machinery and equipment...................................  $     4,030,000
Furniture and office equipment............................        2,360,000
Computer hardware and software............................        1,869,000
Land     .................................................          500,000
Building and leasehold improvements.......................        5,334,000
Leasehold improvements....................................          550,000
Vehicles .................................................        1,428,000
                                                                  ---------
                                                                 16,071,000
Less:  Accumulated depreciation...........................       (6,621,000)
                                                                 ----------
Property plant & equipment, net ..........................  $     9,450,000
                                                               ============

Rental equipment fleet....................................       32,493,000
Less:  Accumulated depreciation...........................       (6,417,000)
                                                                 ----------
 Rental equipment fleet, net..............................  $    26,076,000
                                                               ============

Leased equipment fleet....................................        5,481,000
Less:  Accumulated depreciation...........................         (506,000)
                                                                   --------
Leased equipment fleet, net...............................  $     4,975,000
                                                               ============

6.       BORROWINGS

     The Company is in default on an  uncollaterized  note payable in the amount
of $1,500,000 to an unrelated third party.  The note bore interest at 8% through
its  original  due date of April 30,  1999.  While in  default,  the note  bears
interest at 10%.

     Western has inventory  floor plan financing  arrangements  with Case Credit
Corporation,  an affiliate of Case,  for Case  inventory  and with other finance
companies  affiliated  with other  equipment  manufacturers.  The terms of these
agreements  generally  include  a  one-month  to  six-month  interest  free term
followed by a term during  which  interest is charged.  Principal  payments  are
generally due at the earlier of sale of the  equipment or twelve to  forty-eight
months from the invoice date.

     All floor plan debt is  classified  as current since the inventory to which
it relates is generally sold within twelve months of the invoice date.

     The following table  summarizes the debt and inventory floor plan financing
arrangements:
Maturity               July 31,
                                          Interest Rate          Date            2001            2000
                                          -------------          ----            ----            ----
Note Payable                     8%(10% default           4/30/99     $1,500,000         $1,500,000
                                            rate)

       Case Credit Corporation              Prime + 2%           8 - 48            -            14,768,000
                                              (10.00%)            months

       Deutsche Financial Services         Prime - 0.5%         12 - 36            -            67,671,000
                                              (7.50%)             months

                                                                            -----------        -----------
                                                                            $ 1,500,000        $83,939,000
                                                                            ===========        ===========
F-10
At July 31, 2000, Western was in technical default of the leverage covenant
and the minimum tangible net worth covenant in the Deutsche  Financial  Services
Loan Agreement.  Western asked for but did not obtain a waiver letter as of July
31, 2000.  The loan  agreement was amended in October,  2000 and such  amendment
included waivers of all prior defaults,  established revised financial covenants
and created mandatory periodic reductions in the permitted credit limit. At July
31, 2001,  Western was in technical default of the leverage and minimum tangible
net worth covenants and had requested a waiver letter from DFS.  Western has not
obtained the waiver  letter and there is no assurance  that  Deutsche  Financial
Services will not call this debt at any time after July 31, 2001. If DFS were to
call the debt, it would become  immediately  due and payable in full and Western
would not be able to  continue  operations.  Such  event  would  have a material
adverse impact on the financial statements of the Company.

7.       INCOME TAXES

          The provision  (benefit) for income taxes from  continuing  operations
     comprises the following:
YEAR ENDED JULY 31,
                                                          -------------------

                                                2001              2000               1999
                                                ----              ----               ----
Current:

   Federal............................   $      (545,000) $       179,000   $      (978,000)
   State .............................              -              26,000          (156,000)
                                                --------          -------           -------

                                                (545,000)         205,000        (1,134,000)
Deferred:
   Federal............................              -             500,000            29,000
   State .............................              -              74,000             4,000
                                              ----------       ----------       -----------

                                                    -             574,000            33,000
                                              ----------       ----------       -----------

                                         $      (545,000) $       779,000   $    (1,101,000)
                                              ==========       ==========       ===========
The   principal   reasons  for  the   variation   from  the  customary
     relationship  between  income taxes at the statutory  federal rate and that
     shown in the consolidated statement of operations are as follows:
YEAR ENDED JULY 31,
                                                                              -------------------

                                                                  2001               2000            1999
                                                                  ----               ----            ----
Statutory federal income tax rate..........................     $ (2,304,000)  $   (2,989,000)   $  (2,009,000)
Valuation allowance........................................        2,603,000        4,101,000        1,011,000
State income taxes, net of federal income tax benefit......         (299,000)        (334,000)        (152,000)
Other, primarily adjustments to prior year accruals........         (545,000)           1,000           49,000
                                                                  ----------      -----------    --------------

                                                                 $  (545,000) $       779,000     $  1,101,000
                                                                   ==========     ===========     =============
F-11
Temporary   differences  and  carryforwards   which  give  rise  to  a
     significant portion of deferred tax assets and liabilities are as follows:
JULY 31,
                                                       2001            2000
                                                      ----            ----
Depreciation and amortization................  $          -      $    (2,273,000)
                                                    ----------        ----------

Gross deferred tax liabilities...............             -           (2,273,000)
                                                    ----------        ----------
Inventory reserve............................             -            1,739,000
Bad debt reserve.............................             -              219,000
Accrued vacation and bonuses.................             -              127,000
Other    ....................................             -              444,000
Loss carryforwards...........................        8,224,000         8,227,000
Loss on Western initial public offering......             -              131,000
Stock options................................             -              874,000
                                                       -------           -------

Gross Deferred Tax Assets....................        8,224,000        11,761,000
Less valuation allowance.....................       (8,224,000)       (9,488,000)
                                                     ---------         ---------
Net deferred tax asset                                    -            2,273,000
                                                     ---------         ---------
                                               $          -      $          -
                                                     =========         =========
At July 31, 2001 the Company had federal income tax loss  carryforwards  of
approximately  $22,900,000  which will begin to expire in 2011.  Utilization  of
such net operating losses will be subject to annual  limitations in the event of
a change in  ownership  of the Company of more than 50%.  As the Company  cannot
anticipate  future income with reasonable  certainty,  a valuation  allowance of
$8,224,000 has been recorded.

8.       SHAREHOLDERS' (DEFICIT) EQUITY

     On February 25, 1994,  the Company  completed a public  offering of 920,000
units at $5.25 per unit, each unit consisting of one share of common stock, $.01
par value,  and one  redeemable  common  stock  purchase  warrant.  Each warrant
entitled  the holder to purchase  one share of common stock until July 31, 1998,
at an exercise price of $7.50.  The exercise period for the 920,000 warrants was
subsequently  extended to July 31, 2001 and on July 13,  2001,  was  extended to
July 31, 2003 and the  exercise  price was reduced to $1.00.  The  warrants  are
subject to redemption  by the Company at a redemption  price of $.10 per warrant
under certain  circumstances.  Effective December 17, 2001,  pursuant to the one
for  twenty-five  common stock reverse split,  each 25 warrants can be exercised
for one common share.

     A total of 976,539 shares of the Company's Series B-1 convertible preferred
stock were  issued in  September  1996 in  connection  with the  acquisition  of
ConnectSoft,  Inc. Such shares have a $3.50 per share  liquidation value and are
convertible  into shares of the Company's  common stock at a conversion ratio of
one for one.  Through  the five  fiscal  years  ended  July 31,  2001 a total of
568,696  shares  were  converted  to  common  stock at the ratio of one for one,
leaving  407,843  shares  outstanding at July 31, 2001.  Effective  December 17,
2001,  pursuant to the one for twenty-five  common stock reverse split,  each 25
shares of Series B-1  convertible  preferred  can be  converted  into one common
share.

     During the fourth  quarter of fiscal 2000, the Company sold 8,500 shares of
common  stock at $10.00 per share  pursuant to a private  placement  memorandum.
During fiscal 2001,  additional  shares were issued  pursuant to an amendment to
the private  placement  resulting in the issuance of an additional 11,480 shares
of Company common stock.

9.       DISCONTINUED OPERATIONS

     On  July  10,  1998,  the  Company   entered  into  an  agreement  to  sell
substantially  all of the assets of its Connectsoft  Communications  subsidiary,
including the network operations center ("NOC") to eGlobe,  Inc., formerly known
as Executive TeleCard,  Ltd. ("eGlobe").  The agreement,  as amended June 17 and
September 1999 provided  consideration  for the assets  acquired to be paid with
eGlobe   Convertible   Preferred  Stock  initially  valued  by  the  Company  at
approximately  $2,000,000.  Such  Preferred  Stock was converted  into 1,923,077
shares of eGlobe  common  stock in Fiscal  2000.  In  addition,  eGlobe  assumed
approximately  $5,182,000  of  Connectsoft  liabilities  and  leases,  of  which
approximately  $2,900,000  of  lease  obligations  guaranteed  by  the  Company.
Although  eGlobe is responsible  for payment of those assumed  liabilities,  the
assumption of such  liabilities will not relieve the Company from its guarantees
until such  liabilities  have been paid in full.  The final gain on  disposal of
$1,989,000  was  recognized  in  the  accompanying   consolidated  statement  of
operations as discontinued operations for the year ended July 31, 1999.

                                      F-12
10.      COMMITMENTS AND CONTINGENCIES

         LEASE COMMITMENTS

     Western leases certain  facilities under  non-cancelable  lease agreements.
The building portion of five of the Western's facility leases qualify under SFAS
13 as "capital  leases"  (i.e.,  an  acquisition of an asset and incurrence of a
liability).  The remaining  facility  lease  agreements  have terms ranging from
month-to-month to nine years.  Certain of the facility lease agreements  provide
for options to renew and  generally  require the Company to pay property  taxes,
insurance,  and  maintenance  and repair  costs.  Total rent  expense  under all
operating  leases  aggregated $0,  $2,129,000 and $2,000,000 for the years ended
July 31, 2001, 2000 and 1999, respectively.

Assets recorded under capital leases included in fixed assets are as follows:

                                                     July 31,
                                                       2000
                                                    ----------
Capitalized asset value....................   $     4,553,000
Less:  Accumulated amortization............          (667,000)
                                                    ---------
                                              $     3,886,000
                                                    =========

         Other Contingencies

     The Company is guarantor on the capital lease obligations assumed by eGlobe
as described in Note 9.

         Legal Proceedings

     There are no pending material legal proceedings in which the Company or any
of  its  subsidiaries  is a  defendant,  or to  which  any of  their  respective
properties are subject, which either individually or in the aggregate,  may have
a material adverse effect on the results of operations or financial  position of
the Company.

     In May 1998,  a lawsuit  was filed on behalf of the  Company in a purported
shareholder  derivative  action against Mr. Rubin and certain other directors of
the Company. In June 1998, a shareholder class action was filed against the same
directors.

     On June 1, 1999 an agreement  was entered  into by all parties  whereby the
class  action was settled for  $2,500,000  which is  payable,  net of costs,  to
approved  claimant  shareholders.  The settlement  consisted of $600,000 in cash
from insurance proceeds and $1,900,000 by 777,414 shares of Western common stock
owned by the Company.  The $600,000 was paid to the claims administrator for the
benefit of claimants  during  fiscal 2000 and the common  shares of Western were
distributed to the claimant  stockholders on November 1, 2000. As a result,  the
Company no longer  owns  greater  than 50% of  Western,  and has  accounted  for
Western using the equity method  effective  August 1, 2000. A loss of $1,434,000
was accrued at July 31, 2000 representing the difference  between the book value
of the  Western  shares  transferred  and their  market  value  pursuant  to the
settlement  agreement.  In addition,  on June 1, 1999 the derivative  action was
settled for $2,800,000 which amount was  subsequently  amended to $2,891,000 and
was paid in full by Mr. Rubin to the Company during fiscal 2000 and 2001.

11.      STOCK OPTION PLANS

     The 1991 and 1996 Stock Option Plans

     The 1991 Plan was approved by the Board of Directors  and  shareholders  in
June 1991 and the 1996 Plan was  approved  by the  Board of  Directors  in April
1996.  Both of these plans were  cancelled  in  December  1999 when the Board of
Directors  approved  the 2000  Employee  Incentive  Stock  Option Plan (The 2000
Plan).  All  outstanding  stock  options  under  the 1991 and  1996  Plans  were
cancelled  and  replaced  with the same number of stock  options  under the 2000
Plan.

     The 2000  Plan The 2000 Plan was  approved  by the  Board of  Directors  on
December 7, 1999 and 55,000 stock options were simultaneously granted to replace
those  cancelled  from the  1991 and 1996  Plans.  The  Company  granted  16,600
additional  stock options to certain Board members as well as 10,000  options to
each of two  nominees  for election to the Board and 400 options to a consultant
for services  rendered.  The exercise price of all 92,000 options  granted under
the 2000 Plan on December 7, 1999 was $5.25 per share (110% of the market  value
on such date).

     On April 27,  2000 the  Company  granted  66,000  stock  options to a newly
elected  director,  20,000,  4,000 and 2,000  respectively  to  certain  special
consultants to the Company,  10,000 to a third nominee for election to the Board
and 12,000 and 10,000 respectively to two law firms for services rendered and to
be rendered. The exercise price of all 124,000 options granted on April 27, 2000
was $8.71 per share (85% of the fair market value on such date). Compensation in
connection with these option grants has been accounted for by the  Black-Scholes
method where applicable.

The 2001 Plan

     On October  3, 2000,  the Board of  Directors  cancelled  the 2000 Plan and
approved the 2001 Stock  Option Plan.  All 216,000  options  previously  granted
under the 2000 Plan were cancelled and replaced by the same number of options in
the 2001 Plan.  The Company  also granted  4,000  options to each of two special
consultants,  2,000  additional  options  to a law  firm  and 400  options  to a
financial  consultant  and 20,000 options to a management  employee.  A total of
122,000 of the 2001 grants were subsequently canceled.

     On April 3, 2000 the FASB issued FASB  Interpretation  No. 44,  "Accounting
for Certain  Transactions  Involving Stock  Compensation - an  Interpretation of
Accounting  Principles  Board  Opinion No. 25" (FIN 44).  FIN 44  clarifies  the
application  of  Opinion  25  for  certain   issues   including  the  accounting
consequences of various  modifications  to the terms of a previously fixed stock
option or award.  In accordance  with FIN 44,  effective  July 31, 2000,  any of
these  options  which are not  exercised or  cancelled,  will be  accounted  for
pursuant to a variable stock option plan. Accordingly, compensation expense will
be recorded to the extent that the quoted market price of the  Company's  common
stock exceeds the revised exercise price of the repriced options.

    Summary Information

     The following table includes option information for the Company's plans:
WEIGHTED AVERAGE
                                                                                  FAIR VALUE OF
                                           NUMBER OF          WEIGHTED              OPTION
         STOCK OPTION ACTIVITY               SHARES        EXERCISE PRICE           GRANTED
         ---------------------               ------        --------------           -------
July 31, 1998                          75,000        113.75
           Options granted                        -              -                    -
           Options exercised                      -              -
           Options canceled                     (8,000)       137.50
                                           -----------
           July 31, 1999                        67,000        112.00
           Options granted                     214,000          7.25                 7.25
           Options exercised                     -               -
           Options canceled                    (56,000)       106.25
                                           -----------
           July 31, 2000                       225,000         19.00
           Options granted                     246,000          7.00                 7.00
           Options exercised                     -
           Options canceled                   (338,000)         7.50
                                           ------------
           July 31, 2001                       133,000         18.25
                                           ============
The following table  summarizes  stock options  outstanding and exercisable
for the Company at July 31, 2001:
OUTSTANDING                    EXERCISABLE
                                              -----------                    -----------
                             Weighted          Weighted                Weighted
                              Average           Average                 Average
                             Remaining         Exercise                Exercise
Exercise Price Range          Shares             Life       Price       Shares           Price
--------------------          ------             ----       -----       ------           -----
$7.00 to 15.75                 124,000          4.2         $ 7.00      117,000         $  7.00
$80.00 to 80.00                  1,000          0.6          80.00        1,000           80.00
$153.25 to 162.50                8,000          0.8         160.25        8,000          160.25
                               -------                                  -------
$7.00 to 162.50                133,000          4.0          16.50      126,000         $ 17.50
                             =========                                =========
F-14
The Company has adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123.   "Accounting   for   Stock-Based
Compensation."  If  compensation  cost for the Company's  stock option plans had
been  determined  based on the fair value at the grant date for awards in fiscal
2001 and fiscal 2000 in  accordance  with the  provisions  of SFAS No. 123,  the
Company's  net loss per  share  would  have  changed  to the pro  forma  amounts
indicated below:
YEAR ENDED JULY 31,
                                                                     2001            2000
                                                                    ----            ----
Net loss, as reported......................................  $    (6,400,000)  $    (7,030,000)
Net loss, pro forma........................................  $    (7,160,000)  $    (8,041,000)
Net basic and diluted loss per share, as reported..........  $       ( 13.02)  $        (14.71)
Net basic and diluted loss per share, pro forma............  $        (14.57)  $        (16.82)
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:
YEAR ENDED JULY 31,

                                                   2001            2000
                                                   ----            ----
Expected volatility........................        1.54            3.82
Risk-free interest rate....................        4.50%           5.25%
Expected life of options in years..........         5.0             5.0
Expected dividend yield....................        0.00%           0.00%
The weighted average fair value of the options granted were $7.00 and $7.50
per share for the years ended July 31, 2001 and 2000, respectively.

12.      INTERTECH TRANSACTION

     On March 19, 2001,  pursuant to a share purchase  agreement (the "Intertech
Agreement") by and among the Company,  Intertech  Capital,  Inc.  ("Intertech"),
Jeffrey  M.  Berman  ("Berman"),  Eric  Staffin  ("Staffin")  and Peter  Gregory
Saridakis ("Saridakas") (Berman, Staffin and Saridakas are collectively referred
to as the  "Purchasers"),  the Company sold an  aggregate  of 500,000  shares of
common stock of Intertech,  par value $.0001 per share (the "Intertech  Shares")
to the  Purchasers,  which  Intertech  Shares  constituted all of the issued and
outstanding  capital stock of Intertech.  In connection  therewith,  the Company
issued to: (i) Berman 33,000 warrants to purchase shares of the Company's common
stock (the "Warrants");  (ii) Staffin 6,667 Warrants;  and (iii) Saridakis 3,333
Warrants,  all which are immediately  vested,  expire on March 19, 2006, and are
exercisable at $6.87 per share. In  consideration  for the Intertech  Shares and
the Warrants,  each of the Purchasers  terminated  their  respective  employment
agreements  with the Company,  released the Company  from any  obligations  with
respect to the employment  agreements,  including past due and accrued salaries,
and terminated and waived all right to any stock options granted by the Company.
In addition,  Berman and Staffin  resigned as officers  and/or  directors of the
Company.

     Simultaneous  with the  closing of the  Intertech  transaction  the Company
purchased  approximately 5.4% of Intertech's then issued and outstanding capital
stock in consideration  for the transfer of 79,895 shares of common stock of New
Media Technology, Inc. owned by the Company.

     13.  SUPPLEMENTAL  DISCLOSURES  OF CASH FLOW  INFORMATION  AND  SCHEDULE OF
NON-CASH INVESTING AND FINANCING ACTIVITIES

     The Company paid interest of $116,000, $5,922,000 and $5,482,000 during the
fiscal years 2001, 2000 and 1999  respectively.  The Company  received an income
tax refund of $834,000  during  fiscal 1999,  and paid $219,000 in income taxes,
net of refunds, during fiscal 2000.

                                      F-15
14.      RELATED PARTIES

     Pursuant to an Agreement,  dated May 30, 1996 (the "ERD Agreement") between
the Company and ERD Waste Corp.  ("ERD"),  the Company agreed to provide certain
financial accommodation to ERD by making available a $4.4 million standby letter
of credit  expiring May 31, 1998 issued by  Citibank,  N.A. in favor of Chemical
Bank (the "Letter of Credit") on behalf of ERD.  Chemical Bank was the principal
lender to ERD and its  subsidiaries,  and upon  issuance  of the Letter of Chase
Bank (formerly  Chemical Bank) made available $4.4 million of additional funding
to ERD under ERD's existing lending facility.  The funding was used to refinance
certain  outstanding  indebtedness of  Environmental  Services of America,  Inc.
("ENSA"),  a wholly owned  subsidiary of ERD. Robert M. Rubin,  the Chairman and
Chief Executive Officer, and a principal stockholder of the Company was also the
Chairman,  Chief Executive  Officer,  a director and a principal  stockholder of
ERD, owning approximately 23.0% of the outstanding ERD Common Stock.

     In September  1996, a subsidiary of ERD which  operated a waste facility in
Nassau  County,  New  York  was  cited  by the  New  York  State  Department  of
Environmental  Conservation ("DEC") for violating certain DEC regulations.  Such
waste  facility  had  accounted  for  approximately  13% of  ERD's  consolidated
revenues.  The Company  was advised by ERD that under the terms of a  Settlement
Agreement  reached with the State of New York in November  1996,  all violations
alleged by the DEC had been resolved in  consideration  for, among other things,
ERD's  agreement  to  voluntarily  cease  incineration  operations  at the waste
facility on or before March 31, 1997.  Such  incineration  operations  ceased on
April 15, 1997.

     In February of 1997,  the Company  loaned  $500,000 to ERD Waste Corp.  The
loan was  collateralized  by a short term note bearing  interest at 2% above the
prime lending rate of the Company's commercial bank (8.5% at April 30, 1997) and
a second  collateral  and security  position on all accounts  receivable  of ERD
subject to the primary collateral position held by Chase Bank and was personally
guaranteed  by Mr.  Rubin.  Principal  together  with  accrued  interest was due
October 5, 1997.

     In September 1997 ERD filed for protection  from creditors under Chapter 11
of federal bankruptcy laws. In October, 1997 Chemical bank drew the $4.4 million
available on the standby letter of credit.  As a result,  the Company recorded a
loss of  approximately  $5.0  million,  related  to the  February  Note  and the
September letter of credit.  Mr. Rubin had personally  guaranteed  approximately
$1.6 million of the ERD loss. This amount was repaid to the Company  pursuant to
the shareholder litigation settlement as described in Note 10.

     On June 28, 1996 the Company entered into a collateralized credit agreement
with Mr.Rubin pursuant to which Mr. Rubin delivered a demand promissory note for
up to  $1,200,000  and payment in full was due no later than July 31, 1998.  The
due date was  subsequently  extended to July 31, 1999 and then to September  30,
2000 as part of the shareholder  litigation  settlement.  Mr. Rubin's payment of
$2,891,000 as described in Note 10 included amounts due under the note.

15. EMPLOYEE SAVINGS PLAN

     The Company has a voluntary  savings plan pursuant to Section 401(k) of the
Internal Revenue Code, whereby eligible participants may contribute a percentage
of compensation  subject to certain  limitations.  The Company has the option to
make  discretionary  qualified  contributions to the plan,  however,  no Company
contributions were made for fiscal 2001, 2000 or 1999.

                                      F-16
16.      SEGMENT INFORMATION

     In fiscal 1999,  the Company  adopted  Statement  of  Financial  Accounting
Standards No. 131 (SFAS 131),  "Disclosures  about Segments of an Enterprise and
Related   Information,"  which  requires  the  reporting  of  certain  financial
information by business segment.  All such information  relates only to Western.
For the purpose of providing segment  information,  Western believes that all of
its operations consist of one segment.  However,  Western evaluates  performance
based on revenue and gross margin of three distinct business components. Revenue
and gross margin by component are summarized as follows:

    Business Component          Year Ended        Year Ended       Year Ended
       Net Revenues           July 31, 2001     July 31, 2000     July 31, 1999
---------------------------- ----------------- ----------------- --------------
Equipment Sales                      -0-       $   92,513        $     98,450
Equipment Rental                     -0-           26,334              25,771
Product Support                      -0-           36,790              39,429
                             ----------------- ----------------- -------------
    Totals                           -0-       $  155,637        $    163,650
                             ================= ================= =============

     Business Component         Year Ended        Year Ended       Year Ended
       Gross Margins           July 31, 2001    July 31, 2000     July 31, 1999
----------------------------- ---------------- ----------------- --------------
Equipment Sales                      -0-       $     (    66)   $       2,591
Equipment Rental                     -0-               5,556            5,017
Product Support                      -0-               6,048            6,986
                              ---------------- ----------------- --------------
    Totals                           -0-       $   11,538        $     14,594
                              ================ ================= ==============

17.  UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA
Quarter                                Total
                                            First         Second           Third         Fourth           Year
Fiscal 2001:                                -----         ------           -----         ------           ----
-----------
Net sales                                 $  -           $  -            $  -           $  -          $   -
Gross Profit                                 -              -               -              -              -
Net loss                                    (725)           (388)        (2,567)         (2,720)        (6,400)
Basic loss per share                       (1.50)          (0.76)         (5.25)          (5.50)        (13.02)
Diluted loss per share                     (1.50)          (0.76)         (5.25)          (5.50)        (13.02)

                                                                  Quarter                                Total
                                            First         Second           Third         Fourth           Year
                                            -----         ------           -----         ------           ----
Fiscal 2000:
------------
Net sales                                 $42,063        $33,988         $35,340        $44,246       $155,637
Gross Profit                                4,920          3,865           3,236           (483)        11,538
Net loss                                    (333)          (281)           (799)        (5,617)        (7,030)
Basic loss per share                       (0.74)          (0.50)         (1.75)         (11.73)        (14.71)
Diluted loss per share                     (0.74)          (0.50)         (1.75)         (11.73)        (14.71)
18.      SUBSEQUENT EVENT

     On  September  18, 2001  Western  entered  into a Purchase  agreement  with
e*machinery.net,  Inc.  (OTCBB:EMAC) whereby EMAC would acquire the business and
substantially  all of the assets  and  liabilities  of  Western's  wholly  owned
operating  subsidiary,  Western Power & Equipment Corp. (Oregon) for $500,000 in
cash, a seven year interest  bearing  promissory note for $700,000 and 1,200,000
shares of EMAC common stock  valued at  approximately  $600,000.  The closing is
subject to a number of conditions,  including, but not limited to, due diligence
and approval by both Case Corporation and Deutsche Financial Services. There can
be no assurance that this transaction will be consummated.

     Pursuant  to  this  proposed   transaction,   management  has  recorded  an
impairment  loss in the amount of  $1,771,000  at July 31,  2001 to reflect  the
Company's investment in Western at its approximate fair value.

                                      F-17
SCHEDULE II

                          AMERICAN UNITED GLOBAL INC.

                       VALUATION AND QUALIFYING ACCOUNTS
             For the Fiscal Years Ended July 31, 2001, 2000 and 1999
Balance at      Charged to    Charged to                  Balance at
                                              Beginning       Costs and        Other                      End of
               Description                    of Period        Expenses      Accounts     Deductions      Period
               -----------                    ---------        --------      --------     ----------      ------

Income Tax Valuation Allowance:
Fiscal year ended July 31, 1999          $4,377,000            -            -         $(276,000)      $4,101,000

  Fiscal year ended July 31, 2000          $4,401,000        $5,387,000       -              -          $9,488,000

  Fiscal year ended July 31, 2001          $9,488,000            -            -        $1,264,000       $8,224,000

Accounts Receivable Reserve:

  Fiscal year ended July 31, 1999            $670,000        $732,000         -         $(678,000)        $724,000

  Fiscal year ended July 31, 2000            $724,000        $690,000         -         $(851,000)        $563,000

  Fiscal year ended July 31, 2001                -               -            -              -                -

Inventory Reserve:

  Fiscal year ended July 31, 1999           $2,833,000     $  884,000         -       $(1,204,000)      $2,513,000

  Fiscal year ended July 31, 2000           $2,513,000     $2,188,000         -         $(591,000)      $5,292,000

  Fiscal year ended July 31, 2001                 -              -            -              -                -
F-18
Report of Independant Accountants on
                          Financial Statement Schedules

To the Board of Directors
of American United Global, Inc.

Our audits of the financial statements referred to in our report dated November
5, 2001,  except for the reverse stock split  information in Note 1 as to which
date is December 17, 2001 appearing on page F-2 of this form S-1, also included
an audit of the financial statement schedules. In our opinion, these  financial
statement  schedules present fairly, in all material respects, the  information
set forth therein when read in conjunction with the related financial
statements.

PricewaterhouseCoopers LLP
Portland, Oregon

November 5, 2001, except for the reverse stock split
   information in Note 1, as to which date is
   December 17, 2001
$3,000,000

          UNITS CONSISTING OF ONE 7.5% CONVERTIBLE SECURED NOTE IN THE
            PRINCIPAL AMOUNT OF $666 AND 1332 SHARES OF COMMON STOCK

                          AMERICAN UNITED GLOBAL, INC.

                             -----------------------
                               P R O S P E C T U S
                             -----------------------

                                ___________, 2002

================================================================================
PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The Registrant estimates that expenses in connection with the offering
described in the Registration Statement will be as follows:

Securities and Exchange Commission Registration Fee ..............     $ 1,434
Accountants' Fees and Expenses ...................................     $15,000
Legal Fees and Expenses ..........................................     $30,000
Transfer Agent fees ..............................................     $ 5,000
Printing Expenses ................................................     $30,000
Miscellaneous ....................................................     $18,566
                                                                       -------
                                                                      $100,000
                                                                      ========

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section  145  of  the  Delaware   General   Corporation   Law  permits  the
indemnification  of  officers,  directors,  employees  and  agents  of  Delaware
corporations. The Certificate of Incorporation and Bylaws of the Company provide
that the corporation  shall,  to the fullest extent  permitted by Section 145 of
the General  Corporation  Law of the State of Delaware as it may be amended from
time to time,  indemnify  and hold harmless each person who was or is a party or
is  threatened  to be made a party  to or is  involved  in any  action,  suit or
proceeding,   whether   civil,   criminal,   administrative   or   investigative
(hereinafter a "proceeding"),  by reason of the fact that he or she, or a person
whom he or she is a legal representative, is or was a director or officer of the
Company or is or was serving at the request of the Company as director, officer,
employee or agent of another  corporation  or of a  partnership,  joint venture,
trust or other  enterprise,  including  service with respect to employee benefit
plans,  whether the basis of such proceeding is alleged action or inaction in an
official capacity or in any other capacity while serving as a director, officer,
employee or agent, against all costs, charges, expenses,  liabilities and losses
(including  attorney's fees,  judgments,  fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith,  and such indemnification shall continue as
to persons  who have  ceased to be a  director,  officer,  employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators.
ITEM 16.  EXHIBITS
    Number      Description

3.1      Amended Certificate of Incorporation of American United Global, Inc.

3.2      By-laws of American United Global, Inc.

4.1      Form of Note between  Registrant and holders of 7.5%  Convertible
            Secured due  ___________,  2007

4.2      Form of Subscription Certificate

5.1      Opinion of Gersten, Savage & Kaplowitz, LLP, regarding
          legality of securities. *

23.1     Consent of PricewaterhouseCoopers LLP

23.2     Consent of Gersten, Savage & Kaplowitz, LLP (included in Exhibit 5.1).*

99.1     Form of Letter to Shareholders for Rights Offering

99.2     Form of Letter to Nominee Holders

99.3     Form of Letter to Nominee Holders to Beneficial Owners

99.4     Form of Notice of Guaranteed Delivery

99.5     Form of Instructions

99.6     Financial Statements of Western Power & Equipment Corp.

-----------------------------------------

* - to be filed

                                            II-1
ITEM 17.  UNDERTAKINGS

     The undersigned registrant hereby undertakes:

     (1) To file during any period in which  offers or sales are being  made,  a
post effective amendment to this registration statement:

                (i)   To include any prospectus required by Section 10(a)(3)
         of the Securities Act;

                (ii) To reflect in the  prospectus  any facts or events  arising
         after the  effective  date of the  registration  statement (or the most
         recent post effective amendment thereof) which,  individually or in the
         aggregate represent  fundamental change in the information set forth in
         the registration statement;

                (iii) To include any  material  information  with respect to the
         plan of  distribution  not  previously  disclosed  in the  registration
         statement  or  any  material   change  to  such   information   in  the
         registration statement;

     (2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be initial bona fide offering
thereof.

     (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

                                       II-2
SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
has duly caused this  Registration  Statement  to be signed on its behalf by the
undersigned,  thereunto duly  authorized,  in the City of New York, State of New
York, on January 4, 2002.

                            AMERICAN UNITED GLOBAL, INC.

                            By: /s/  Robert M. Rubin
                                ---------------------------------------
                                Robert M. Rubin
                                Chairman of the Board, President
                                     and Chief Executive Officer

     In accordance  with the  requirements  of the Securities Act of 1933,  this
Registration Statement has been signed by the following person in the capacities
and on the dates stated.

           Name                     Title                       Date
           ----                     -----                       ----

/s/ Robert M. Rubin     Chairman of the Board, Chief        January 4, 2002
--------------------    Executive Officer and Director
Robert M. Rubin

/s/ C. Dean McLain      Executive Vice President and        January 4, 2002
------------------      Director
C. Dean McLain

/s/ David M. Barnes     Vice President--Finance and Chief   January 4, 2002
--------------------    Financial and Chief Accounting
David M. Barnes         Officer

/s/ Howard Katz         Director                            January 4, 2002
-------------------
Howard Katz

/s/ Seymour Kessler     Director                            January 4, 2002
-------------------
Seymour Kessler

/s/ Allen Perres        Director                            January 4, 2002
-------------------
Allen Perres

/s/ Michael Metter      Director                            January 4, 2002
-------------------
Michael Metter