<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB
                                   (Mark One)

[x] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934

For the Fiscal Year Ended June 30, 2000

[ ] Transition report under Section 13 or 15(d) of the Exchange Act of 1934

For the transition period from _____ to _____

                             SEC File Number 0-24725

                          GLOBAL ELECTION SYSTEMS INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

British Columbia, Canada                                 85-0394190
(State or Province of Incorporation)         (IRS Employer Identification No.)

                     1611 Wilmeth Road, McKinney, TX, 75069
                    (Address of Principal Executive Offices)

                                  972-542-6000
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Act:

COMMON STOCK, WITHOUT PAR VALUE

     Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [x] No [ ] (issuer not subject to filing requirements for past 90 days)



<PAGE>   2

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation 405 is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB.

         The issuer's revenues for its most recent fiscal year were $20,236,828.

         The aggregate market value of the voting stock held by non-affiliates
of the registrant at June 30, 2000 was C$19,141,182 (based on the closing sale
price on the Toronto Stock Exchange on June 30, 2000 of C$1.03). This
calculation does not reflect a determination that persons are affiliates for any
other purposes.

         At June 30, 2000, there were 18,583,672 of the registrant's voting
shares issued and outstanding.

         Documents incorporated by reference: None

         Transitional Small Business Disclosure Format (check one):
Yes [ ] No [x]


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                          GLOBAL ELECTION SYSTEMS INC.
                                   Form 10-KSB
                     For the Fiscal Year Ended June 30, 2000

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I
<S>               <C>
         ITEM 1.  DESCRIPTION OF BUSINESS
         ITEM 2.  DESCRIPTION OF PROPERTY
         ITEM 3.  LEGAL PROCEEDINGS
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                   HOLDERS

PART II

         ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED
                   STOCKHOLDER MATTERS
         ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
                   OF OPERATION
         ITEM 7.  FINANCIAL STATEMENTS
         ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                   ON ACCOUNTING AND FINANCIAL DISCLOSURE

PART III

         ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                   CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
                   OF THE EXCHANGE ACT
         ITEM 10. EXECUTIVE COMPENSATION
         ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                   AND MANAGEMENT
         ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
         SIGNATURES
</TABLE>


<PAGE>   4

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

Global Election Systems Inc. (the "Company") is a leading manufacturer and
distributor, through its wholly owned United States subsidiary, Global Election
Systems, Inc., ("Global USA") of state of the art computerized electronic
election management systems. The Company's signature products are the ES-2000
AccuVote optical scan voting system ("AccuVote - OS"), and the paperless
AccuVote touch screen voting system ("AccuVote - TS"), using a special voter
access card ("Smart Card"). The AccuVote - OS voting system and the AccuVote -
TS voting system are stand-alone voting systems. They are both classified as
precinct count and central accumulation systems and have functionality that
permits management control of the voting process from ballot preparation to
verification of results. The AccuVote - TS which is a "paperless DRE" (Direct
Record Equipment), was added to the Company's product line in 1997 when the
Company acquired all of the assets of I-Mark Systems, Inc.

The Company was formed on November 22, 1991, under the Company Act (British
Columbia, Canada) by way of a statutory amalgamation of North American
Professional Technologies B. C. Ltd. and Macrotrends International Ventures Inc.
Global USA was incorporated in Delaware in 1991. The address of the Company's
executive offices is 1611 Wilmeth Road, McKinney, TX 75069; and its telephone
number is (972) 542-6000. The Company's no par value common stock ("Common
Stock") is traded on the Toronto Exchange under the symbol GSM. Reference in
this document to the "Company" includes its wholly owned subsidiary, Global USA,
unless the context otherwise requires. All funds are reported in U.S. dollars
unless otherwise specified. Canadian funds are designated by "C$".

INDUSTRY OVERVIEW

Elections are held under the auspices of various governmental systems,
especially those in democratic countries. Until the 1960's, almost all elections
were conducted with manually counted paper ballots and lever-activated
mechanical voting machines. Lever machines, which were bulky, heavy and
consisted of over 800 moving parts, required significant maintenance and were
expensive to warehouse. This method of voting and tallying votes, in addition to
being cumbersome and inefficient, was susceptible to inaccuracies, significant
time delays, and other difficulties. In 1964, the Votomatic punch card voting
system was patented. While this system has not been actively manufactured since
the mid-1980's, it remains the most widely used system in North America. In the
early 1980's, optical scan voting systems were introduced and began to penetrate
the election equipment marketplace on a relatively small scale.

In recent years, the election industry has begun to computerize in response to
increased public acceptance and familiarity with using computers. Computers
offer the opportunity to count ballots accurately and quickly. Additionally,
computer technology has created the potential for more convenient methods of
voting and has provided avenues to encourage more voter participation. Service
and support have also become increasingly important components of the newer,
technologically advanced voting systems. Even though technology is being
accepted more readily, many voting systems being marketed continue to lag in the
application of state-of-the-art computer technology, and have lacked durability
and flexible functionality.

<PAGE>   5

GLOBAL ELECTION SYSTEMS' STRATEGY

As previously noted, the Company is a leading manufacturer and distributor of
state-of-the-art computerized electronic voting systems. Only three major
election system companies actively market and sell products in the United States
and Canada, and sales are a matter of public record. The Company capitalizes on
its highly acclaimed application software, its advanced product design, and its
customer support to market its election systems to voting jurisdictions
throughout North America. Its objective is to become a leading supplier of
comprehensive voter registration and election systems to governments in the
United States, Canada, and around the world. The Company believes that the
continuing need for accurate, efficient election systems and the increasingly
recognized need for the voting process to be highly voter accessible and simple
to use should provide numerous opportunities for the Company to expand the scope
of its activity.

* Expand Market Penetration Through Internal Growth

The Company has achieved growth in its market and has expanded its market
through continual innovation in and expansion of its product line and aggressive
marketing of its election systems to increasingly populous voting jurisdictions.
The Company has increased its market share by providing its proven voting
systems plus election-related products such as voter registration systems. It
also seeks avenues to apply its standard products to other governmental related
processes such as vehicle registration and welfare systems.

* Compliment Internal Growth Through Acquisition or Selling Arrangements

The Company has developed its business, in part, through acquisition of an
election products company. It has also entered into marketing agreements with
other companies that produce leading edge technology products that compliment
the Company's standard product line. These acquisitions and marketing agreements
have provided opportunities for the Company to expand its customer base into
more populous jurisdictions.

* Continued Technology Innovation and Integration

The Company maintains an active, on-going research and development program to
improve product performance and provide innovative solutions to the needs of the
voting jurisdictions and other governmental applications. For example, while
continually upgrading its existing products, the Company has developed a
comprehensive Windows NTR-based application software program to anchor its
product line. It is currently in the process of adapting biometric authorization
technology to increase voter security and pave the way for Internet voting. The
Company is also pursuing methods of providing unattended voting opportunities in
much the same manner as ATM's provide banking services to the general public.
All of the products offered by the Company are designed to integrate the entire
election process, from voter registration and election management through
tabulation and reporting of election results.

* International Sales

The Company seeks to sell its full line of election-related systems throughout
North America and globally. The Company believes, based on past experience, the
market for election systems in Central and South America is expanding.

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* Customer Support

Customer support is a significant part of the Company's marketing strategy and
its system sales. The Company intends to continue its commitment to, and to
enhance, its pre-election through post-election assistance to its customers. It
offers service contracts for all aspects of the election process, including
election management training, assistance with the conduct of elections,
programming services plus standard extended warranty and support agreements.

GLOBAL ELECTION SYSTEMS' PRODUCTS

The products currently offered by the Company include optical scan and touch
screen voting systems, plus related voter registration systems supplied through
cooperative marketing agreements with third party companies.

State-of-the-Art Computerized Electronic Voting Systems

The Company's signature product is its patented AccuVote ES-2000 Election
System. The AccuVote system, patented in Canada and the United States, automates
all facets of election administration from initial ballot layout through
certification of results. The ballot-processing unit optically scans marked
voted paper ballots and produces printed precinct level results immediately
after the polls close. Totals are captured on a memory card and transferred to
the counting center or sent from the precinct tabulator directly to the host
computer over a modem using common carrier lines. Designed for security and
integrity, the ballot-processing unit is compact and lightweight and is easily
transported to and from the polling place.

GEMS application software automates the entire election administration cycle
from ballot layout through certification of results. GEMS software is used to
define all election-specific parameters.

Direct Record Voting System. The Company offers additional, technologically
advanced election products with its innovative AccuVote - TS (touch screen)
system. The system is anchored by smart card technology that stores voter
identification information, allowing the automatic selection of any ballot style
for any voter at any polling place. The Voter Access Card can permit the
placement of voting stations in places where people assemble, like shopping
malls, rather than in specific precinct locations.

AccuVote - OS and AccuVote - TS can be used as a blended system, permitting
flexibility in solving the particular problems and requirements of a voting
jurisdiction. For instance, AccuVote - TS can be used for early voting, where
its capacity to store all ballot styles allows early voters from all precincts
to insert Smart Cards into the same unit to select their particular precinct
ballot. AccuVote systems can be used at the precinct level during the election.
The vote tallies from both the AccuVote - OS and AccuVote - TS units are then
sent to a host computer to be combined to determine the election result.

AccuVote - OS and AccuVote - TS units have a list price of approximately $6,500
per unit, to which quantity discounts and additional products may be applied,
depending upon the needs and size of the election district.

Other Product Arrangements. The Company occasionally makes arrangements with
companies producing other products that are complementary to and enhance the
Company's product offering to a particular voting jurisdiction. For instance, in
King County, Washington, the Company is providing, through a license, additional
voter registration software. These arrangements are generally made on a
case-by-case basis, depending on the need and size of a voting jurisdiction.


<PAGE>   7

Backlog. At fiscal year end June 30, 2000, the Company had a backlog of
approximately $225,000, of orders for its AccuVote - OS, AccuVote - TS and Smart
Card products. This backlog compared to a backlog of $2,280,000 on June 30,
1999. Backlogs are principally the result of customer-scheduled shipment dates,
which are usually a period of months after the contract date and which may also
be in installments. The decrease in the backlog is attributable primarily to the
timing of delivery schedules. All backlog orders are expected to be filled
during fiscal year 2001.

CUSTOMER SUPPORT SERVICES

The Company emphasizes continuing service support to its customers. These
services begin with initial equipment acceptance and testing and continue
through on-site Election Day and election night support. Some election-specific
services provided by the Company are pre-election consultation, ballot
design/layout programming assistance, precinct worker training, voter education
assistance, system testing and verification, and on-site Election Day and
election night support.

CUSTOMERS

The Company's customers include over 840 voting jurisdictions in the United
States and Canada. Recent contract awards include El Paso County, Colorado,
Fresno County, California and Brevard County, Florida. During the twelve months
ended June 30, 2000, Santa Barbara County, California, Cobb County, Georgia, El
Paso County, Texas and Marin County, California together accounted for
approximately 21% of Company revenues. During the fiscal year ended June 30,
1999, El Paso County, Colorado and Fresno County, California together, accounted
for approximately 20% of Company revenues. During the fiscal year ended June
30, 1998, King County, Washington accounted for approximately 20% of the
Company's revenues.

SALES AND MARKETING

The Company markets its products both domestically and internationally to
governments. Because of the close involvement of the Company in the use of its
election systems by customer governments and the Company's desire to maintain a
high level of contact and service, sales are made by salaried, commissioned
salespersons employed by the Company and assigned to various territories.
Salespersons work directly with the election officials in each Territory to
close and implement sales. At June 30, 2000, the Company employed 18 of these
salespersons, who were assigned to specific territories in the United States and
Canada. The Company also has six resellers, which are established in the
election business and have contracts for specific territories. Sales outside the
United States and Canada are supervised by the Company's sales staff. The
Company plans to use in-country representatives in these countries, but
currently has none.

Payment for sales is typically made in United States and Canadian dollars. As a
result, the Company's actual receipts are subject to fluctuation based upon
currency exchange rates between the United States and Canada and, should the
Company accept payment in another currency, to the fluctuations in that
currency's exchange rate.


<PAGE>   8

The Company, because it sells election products and services, could tend to
operate on a two-year business cycle because in the United States, a
substantially larger number of elections for public office are held in
even-numbered years than in odd-numbered years. As a result, revenues and
underlying production and support activities for a majority of the Company's
Products and services could significantly increase or decrease in accordance
with the election cycle. However, because the Company's fiscal year ends June
30, and because many voting jurisdictions now attempt to purchase election
products and services following an election, the Company believes that it has to
some extent ameliorated the possible effect of the United States' biennial
election cycle. Also, in Canada, elections are conducted on an irregular
schedule, which differs in and among national, provincial and municipal
elections. Thus, the Company's Canadian business may also be expected to
ameliorate any United States cyclically.

RESEARCH AND DEVELOPMENT

The Company expended approximately $1,284,000 (including deferred development
costs), $857,000 and $483,000 for research and development during the fiscal
years ended June 30, 2000, June 30, 1999, and June 30, 1998 respectively. All of
the Company's in-house research efforts are conducted at its facilities in
Vancouver, Canada, and McKinney, Texas.

COMPETITION

The election system market is defined by the voting needs and specifications of
voting jurisdictions. In that regard, sales, and therefore competition, are
directed to Secretaries of State and election officials in each voting
jurisdiction who issue requests for proposals in which desired specifications
are set forth. Responsive bids are submitted to these officials and other
specified reviewers for their evaluation and the selection of the company
awarded the project. Competitive factors include accuracy, security and speed of
voting and tallying of votes, ease of use of the system, flexibility in ballot
preparation, cost and customer support. Because of its ability to offer a
complete, state of the art, integrated election system that can be tailored to
the customer's needs, the Company believes it is able to compete in all major
areas of the election systems market. See "Risk Factors: Global competes with
larger, well-established companies" for additional information on competitors.

In North America, the Company competes primarily with moderately sized companies
(some of which are affiliates of much larger companies) in the overall election
system market and with some small companies who offer some aspect otherwise
included in the overall system, such as voting equipment. The Company's largest
competitors in the North American election system market are Sequoia Pacific
Systems, Inc. ("Sequoia"), a subsidiary of Jefferson Smurfit, and ES&S ("ESS").
ESS and Sequoia offer local and state election management systems, optical scan
ballot tallying and reporting, and election information management software.
Microvote, Inc., of Indianapolis, offers a direct record voting system. The
Company also competes with a number of regional companies, including those
mentioned previously, which produce and sell products designed to provide
specific election-related functions.

MANUFACTURING

The Company assembles its AccuVote - OS and AccuVote - TS products at its plant
in McKinney, Texas. With the exception of its visible light optical reader
(which it obtains from another source but could replace with an in-house
product) and its ballot box (for which the Company owns the molds and could
obtain an alternate manufacturer), the Company obtains components for its
products largely from various off-the-shelf vendors of electronic components,
any of which could be replaced by another vendor should the need present itself.


<PAGE>   9


INTELLECTUAL PROPERTY

PATENTS

The Company holds the United States and Canadian patents, the rights to which it
purchased in 1991, on its AccuVote ES-2000 system ("Patent"). The United States
patent expires on April 24, 2006. Except for the Patent, the Company has not
sought patent protection for its technology, even though it believes that some
of its processes and equipment are proprietary to it. The Company has relied
upon industrial know-how, and trade secret laws. The Company cannot assure that
its proprietary processes and equipment will provide it with sufficient
competitive advantage to overcome its lack of patent protection, nor can it
assure that others will not independently develop equivalent or superior
products or technology. Also, the Company cannot assure that it will be able to
establish trade secret protection or those trade secret obligations will be
honored. To the extent that consultants, employees and other parties apply
technological information developed independently by them or others to Company
projects, disputes may arise as to the proprietary rights to that information,
which may not be resolved in favor of the Company. It is also possible that
litigation may be necessary to enforce the Company's proprietary rights, to
protect its trade secrets, to determine the validity and scope of the
intellectual property rights of others or to defend against claims of
infringement. Litigation of that nature could result in substantial costs and
diversion of resources and could have a material adverse effect on the Company's
business, financial condition and results of operation.

Patent applications in the United States are not disclosed until the patents
issue; therefore, patent applications could have been filed which relate to the
Company's processes and equipment. The Company does not believe that it
infringes any patents of which it is aware; however, it cannot assure that
patent infringement claims will not be asserted against the Company. These
claims, if asserted, could have a material adverse effect on the Company's
business, financial condition or results of operation. If infringement or
invalidity claims were to be asserted against the Company, litigation could
become necessary to defend the Company against those claims. In certain
circumstances, the Company might choose to seek to obtain a license under the
third party's intellectual property rights, which the Company cannot assure
would be available, if at all, on terms acceptable to the Company.

TRADEMARKS AND TRADENAMES

The Company has no registered trademarks or trade names, but claims proprietary
rights to AccuVote and Global Election Systems. Trademark registration
applications have been filed for AccuVote and Global Election Systems in the
United States, but no assurance can be given that these trademarks will issue.

GOVERNMENT REGULATION

The Company's products are sold almost exclusively to governmental units. The
Company's AccuVote - OS and AccuVote - TS election products meet or exceed
United States Federal Election Commission ("FEC") standards and are required to
be, and are, tested to FEC standards by Wylie Labs, the industry's designated
Independent Testing Authority. In the United States, election systems must also
be certified in each State where they are used. Currently, one or the other or
both of the Company's systems are certified in 35 States. Canada does not
require testing and certification.

<PAGE>   10

Each governmental unit to which the Company markets its products specifies its
own particular requirements for system operation. Without exception, the
Company's customers seek, and require, tamper-proof, efficient, confidential and
expeditious election equipment and systems. These requirements and others
typically are embodied in the customer's Request for Proposal ("RFP"), issued to
solicit bids from the Company and others. Because the Company must be able to
respond with complying bids to RFP's, the Company must continually monitor,
adapt to, anticipate and design for changes in specifications and in the
expectations that governmental units have for efficient systems. For example, in
the United States, promoting and increasing voter participation is a concern of
many jurisdictions. As a result, enhancing convenience and opportunity to vote
are increasingly important. The Company's products are a direct response to
these changing needs. To the extent that the Company is or becomes unable to
anticipate or respond to the concerns of jurisdictions, its ability to submit
responsive bids to RFP's will be impeded.

Because the Company is incorporated and does business in British Columbia and
its subsidiary, Global USA, is incorporated in the State of Delaware and does
business in the United States and internationally, the Company as a whole is
subject to both Canadian and United States tax laws. Additionally, the Company
must comply with the taxation, export and import, currency, and other laws of
each country in which it sells products or otherwise does Business. These laws
can be burdensome. To the extent that the Company is unable or unwilling to
comply, its business in a particular country may be expected to be materially
adversely affected.

WARRANTIES

Key to all elections is the reliability of the system, including the voting
equipment, accuracy of voting results, and accuracy of tallying of results. The
Company's equipment is designed to optimize this reliability. The Company
warrants its election systems for a period of one year from purchase, unless
another period is specified by the RFP from a voting jurisdiction. The Company
self-insures against warranty claims. The Company has never been the subject of
any material warranty claims and has generally repaired or replaced
malfunctioning equipment in the pre-election stage; however, if a claim were to
be made and to prevail, a lack or insufficiency of insurance coverage could have
a material adverse effect on the Company. However, all contracts with customers
require insurance to be in place before execution of the contract.


ENVIRONMENTAL COMPLIANCE

The Company operates a manufacturing plant in McKinney, Texas. Although its
manufacturing consists largely of parts assembly, the Company is required to
comply with United States and Texas environmental and Occupational Safety and
Health Act requirements applicable to electronics manufacturing operations in
general, including, for example, storage, marking, and disposal of various
products used for cleaning parts to be assembled. Although the Company takes
appropriate measures to comply with these requirements, violations can occur.
The New York Department of Environmental Conservation cited the Company once for
alleged violation of certain storage and marking, and disposal requirements
applicable to two of these substances used at its former New York manufacturing
facility. The Company responded immediately to correct the situation. The
Company believes that its compliance programs are adequate, but cannot assure
that no problems will arise in the future, some of which could have a material
adverse impact on the Company and its business.

<PAGE>   11

EMPLOYEES

As of June 30, 2000, the Company had approximately 70 employees, of whom all
were full-time, at its three locations in Canada and the United States. Of the
full-time employees, 13 were in executive and administrative positions, 18 were
in sales, marketing and customer relations, 5 were in research and development,
19 were in manufacturing, and 15 were in field customer support.

RISK FACTORS

In addition to the matters set forth in the foregoing discussion of the
Company's business, the operations and financial performance of the Company are
subject to the risks, among others, described below.

FLUCTUATIONS IN OPERATING RESULTS MAY AFFECT REVENUES IN NON-ELECTION YEARS.
Sales of election products and services tend to occur on a two-year business
cycle because in the United States a substantially larger number of elections
for public office are held in even-numbered years. As a result, revenues and
underlying production and support activities for a majority of Global's products
and services could significantly increase or decrease in accordance with these
cycles. Some of the reasons for these fluctuations, many of which are beyond
Global's control, include:

         The timing of customer orders;

         Delays in shipment due to component shortages or defects, which must be
         remedied;

         Production problems;

         Cancellation of orders; and

         Regulatory changes.

For additional reasons for certain fluctuations see "Description of Business
Sales and Marketing".

GLOBAL'S MANAGEMENT AND FINANCIAL CONTROLS, PERSONNEL AND OTHER CORPORATE
SUPPORT SYSTEMS MAY NOT BE ADEQUATE TO INTEGRATE FULLY ACQUIRED BUSINESSES AND
DISTRIBUTORSHIPS. One of the Company's strategies is to increase its scope of
business and the product lines it offers by acquiring other election businesses
and products or entering into distributorship or similar arrangements with other
producers. The company cannot assure that its management and financial controls,
personnel, and other corporate support systems will be adequate to manage the
increase in the size and diversity of scope of the Company's operations as a
result of any such acquisition or distributorship. Also, the Company cannot
assure that the acquisition or distributorship arrangement will be accretive to
earnings. By its nature, a distributorship does not give the Company complete
control over the distributed products' manufacturing, shipment or quality, all
of which are the responsibility of the manufacturer. Problems in any of these
areas should they occur, could materially adversely affect the Company and its
business.

If and when appropriate acquisition opportunities, some of which could be
material, arise, the Company intends to pursue them actively. No assurance can
be given that any acquisition by the Company will or will not occur, that if
such an acquisition does occur that it will not, despite the Company's efforts,
materially and adversely affect the Company, or that any such acquisition will
be successful in enhancing the Company's business.

<PAGE>   12

GLOBAL'S PRODUCTS ARE DEPENDENT UPON SATISFACTORY TESTING AND CERTIFICATION
BEFORE SALES MAY BE MADE IN A VOTING JURISDICTION. In the United States, the
Company's ability to respond to RFP's from voting jurisdictions and to make
sales to those jurisdictions is dependent upon satisfactory completion of
testing of the AccuVote - OS and AccuVote - TS (and similar future products or
variations) by Wyle Labs, the industry's designated Independent Testing
Authority and upon certification by each State. If for some reason not now known
or anticipated, a product did not test satisfactorily, the Company's business
could be materially adversely affected to the extent it was unable to offer and
sell that product. Similarly, the failure of a product to be certified in a
State would prevent the sale of the product in that State and the voting
jurisdictions in that State.

Because the Company deals with governmental authorities in making offers and
sales of its products, it can also be adversely affected by changes in those
authorities, revisions to or promulgation of new requirements and standards in a
State, and unanticipated or unforeseen impediments in the bidding, award and
implementation process.

INTERNATIONAL SALES MAY SUBJECT THE COMPANY TO CERTAIN POLITICAL, ECONOMIC AND
OTHER UNCERTAINTIES. The Company sells its election systems primarily in the
United States and Canada, but intends to market actively to other countries
throughout the world, particularly in Latin America. Sales of the Company's
election systems will subject it to various governmental regulations, exports
controls, and the normal risks involved in international sales. Sales of
products and services in Latin America and elsewhere are subject to political,
economic and other uncertainties, including, among others, risk of war,
revolution, expropriation, renegotiation or modification of existing contracts,
election laws and regulations, standards and tariffs, and taxation policies, as
well as international monetary fluctuations which may make payment in United
States dollars more expensive for foreign customers, and other uncertainties and
trade barriers.

DECLINES IN THE VALUE OF OTHER CURRENCIES AGAINST THE U.S. DOLLAR WILL DECREASE
EARNINGS FROM SALES IN THOSE CURRENCIES WHEN STATED IN U.S. DOLLARS.
Substantially all of the Company's revenues to date have been received in United
States and Canadian dollars; however, some sales in the future may be in other
currencies. Any decline in the value of other currencies in which the Company
makes sales against the United States dollar will have the effect of decreasing
the Company's earnings when stated in United States dollars. The Company does
not engage in any hedging transactions that might have the effect of minimizing
the consequences of currency fluctuations (which are not currently material) and
does not intend to do so in the immediate future.

GLOBAL AND GLOBAL USA MAY BE SUBJECT TO VARIOUS TAX PENALTIES BECAUSE OF
TRANSFER PRICE ARRANGEMENTS. The Company and Global USA have entered into
various agreements between themselves with respect to the transfer of
technology, services and manufactured product. Because the Company is generally
subject only to Canadian taxation and Global USA is generally subject only to
U.S. taxation, issues of transfer pricing arise. Both the Canadian and U.S. tax
authorities generally require that pricing arrangements between the Company and
Global USA be entered into on a fair market basis. Further, Canada now requires
that contemporaneous documentation be completed evidencing the arrangements.
While the Company is attempting to meet its obligations in this regard, the
Company could be subject to various penalties, and increased tax, if the taxing
authorities take issue with the transfer pricing arrangements reached between
the Company and Global USA. Because appropriate transfer prices cannot be
arrived at with certainty, there is no assurance that the taxing authorities
would agree with the Company's transfer pricing arrangements.

POLITICAL INSTABILITY COULD MATERIALLY ADVERSELY AFFECT GLOBAL'S INTERNATIONAL
BUSINESS. The political and economic instability in some countries in Latin
America and elsewhere could result in the adoption of new trade policies or lead
to trade disputes, which could materially adversely affect the Company and its
business. The Company has no insurance against political instability.


<PAGE>   13




GLOBAL COMPETES WITH LARGER, WELL-ESTABLISHED COMPANIES. These companies have
financial, and could develop technological and marketing, resources that are
significantly greater than the Company's and may have established relationships
with customers or potential customers that afford them a competitive advantage.
The Company cannot assure that it will be able to compete effectively in its
future markets or that competitive pressures will not adversely affect its
business, financial condition or results of operations. Please see
"--Competition" above for more information.

GLOBAL DOES NOT HAVE PATENT PROTECTION FOR ITS PROPRIETARY INTELLECTUAL PROPERTY
OTHER THAN THE ACCUVOTE - OS, AND, THEREFORE, DISPUTES COULD ARISE AS TO ITS
OWNERSHIP OF AND THE SCOPE OF ITS RIGHTS TO THAT INTELLECTUAL PROPERTY. These
disputes, as well as any that might arise as to the patented technology, may not
be resolved in the Company's favor and could be very expensive to resolve.
Please see "--Intellectual Property" above for more information.

The success of the Company is dependent upon the services of its President, Mr.
Urosevich, its Vice President of Operations, Mr. Dix, its Vice President of
Sales/Marketing, Mr. Herron, and its Vice President of Acquisitions and
Mergers, Mr. Ensminger. The Company has an employment agreement only with Mr.
Urosevich. The Company has no key man insurance with respect to any of these
persons. The loss of the services of any one of them for any reason could
materially impede the Company's marketing effort and strategic planning.

EXERCISE OF OUTSTANDING WARRANTS AND OPTIONS COULD DILUTE EARNINGS. As of June
30, 2000 the Company had 1,300,000 options and 166,667 warrants for Common Stock
outstanding. To the extent that any outstanding options and warrants for Common
Stock are exercised, there will be additional dilution in excess of that
resulting from use of common and common equivalent shares in earnings
calculations.

GLOBAL HAS NO ACTIVE MARKET FOR ITS COMMON STOCK IN THE UNITED STATES AND ONE
MAY NOT DEVELOP. THE MARKET PRICE MAY ALSO BE VOLATILE. The Company's Common
Stock is traded on the Toronto (Canada) Exchange and is expected to trade on the
Nasdaq electronic bulletin board. While a public market for the Company's Common
Stock currently exists in Canada, no such market exists in the United States as
yet, even though the Common Stock has been registered under Section 12(g) of the
Securities Exchange Act of 1934, and the Company cannot assure that any market
for the Common Stock will develop in the United States. The number of freely
traded shares in the Canadian market is 12,306,518, and the number of shares
expected to be in the United States market is 6,277,154, about 33.8 % of the
18,583,672 shares of Common Stock outstanding at June 30, 2000. However, trading
volume in the four weeks ended June 30, 2000 in Canada averaged 20,062 shares
traded per day. Thus, even though a substantial percentage of the Company's
outstanding shares could be traded, trading of relatively small blocks of stock
can have a significant impact on the price at which the stock is traded. In
addition, the Nasdaq electronic bulletin board has experienced, and is likely to
experience in the future, significant price and volume fluctuations, which could
adversely affect the market price of he Common Stock without regard to the
operating performance of the Company. The Company believes that factors such as
quarterly and annual fluctuations in financial results, announcements by
competitors, or changes in securities analysts' recommendations may cause the
market price to fluctuate, perhaps substantially. These fluctuations, as well as
general economic conditions, such as recessions or high interest rates, may
adversely affect the market price of the Common Stock. Please see "Part II.
Item 5. "Market For Common Equity and Related Stockholder Matters" for more
information.


<PAGE>   14

FUTURE SALES BY EXISTING SHAREHOLDERS COULD ADVERSELY AFFECT THE PREVAILING
MARKET PRICE OF THE COMMON STOCK. At June 30, 2000, the Company had 18,583,672
shares of Common Stock outstanding, and an additional 1,300,000 shares that
could be issued under an employee option plan.

In addition, the authorized capital of the Company includes 20,000,000 shares of
Preferred Stock, none of which had been issued as of June 30, 2000. However, the
Board of Directors may determine at any time and from time to time to set the
terms and preferences of the Preferred Stock, or a series of it, and to issue
it, subject to approval of the Toronto Stock Exchange.

GLOBAL HAS NEVER PAID CASH DIVIDENDS ON ITS COMMON STOCK AND DOES NOT EXPECT TO
DO SO FOR THE FORESEEABLE FUTURE. The Company intends to retain future earnings,
if any, to provide funds for business operations and, accordingly, does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future.

ITEM 2.  DESCRIPTION OF PROPERTY

The Company leases office and manufacturing facilities in McKinney, Texas, in
Omaha, Nebraska and Vancouver, British Columbia. The Company's standard practice
is to lease its facilities, and to insure the facilities and their contents
under an insurance plan.

The McKinney, Texas, leased facility consists of about 13,050 square feet in a
stand-alone, one-story building. This facility includes the Company's
manufacturing operations and its United States corporate headquarters. The
current capacity utilization of the manufacturing area is about 100%. The lease
term commenced on August 1, 1997 and continues for a period of five years, with
two five-year options to renew. A new facility consisting of approximately
13,000 square feet in a stand-alone, one-story building is under construction
adjacent to the current facility. The new facility is expected to be occupied on
October 1, 2000.

The Vancouver, British Columbia leased facility consists of about 2,785 square
feet in an office building. This facility houses the Company's Canadian
corporate headquarters and most of its research and development activities. The
lease term commenced on January 1, 1998 and continues for a period of five
years, with a five-year option to renew at an annual rent to be negotiated.

The Omaha, Nebraska leased facility consists of approximately 610 square feet.
The facility is used for field support. The lease term has been extended
commencing on September 1, 1999 and continues for a period of two years.

ITEM 3.  LEGAL PROCEEDINGS

At June 30, 2000, the end of the last fiscal year, no material legal proceeding
was pending, or to the knowledge of the Company, threatened by any governmental
agency, against the Company.

The Company is subject to various claims that arise in the ordinary course of
its business. In the opinion of management, the amount of ultimate liability
with respect to these actions will not materially affect the financial position
of the Company.

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

The Company did not submit any matter to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.


<PAGE>   15


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE OF THE REGISTRANT'S COMMON EQUITY

The Company's Common Stock is traded on the Toronto Stock Exchange under the
symbol "GSM". The Company's Common Stock is not traded on an established public
trading market in the United States. The following table sets forth for the
periods indicated the high and low closing prices of the Company's Common Stock
as reported by the Toronto Stock Exchange, in Canadian funds.

<TABLE>
<CAPTION>
                                                  HIGH      LOW
                                                  ----      ---
<S>                                               <C>       <C>
Fiscal Year 1999
       Quarter ended September 30, 1998           3.90      2.01
       Quarter ended December 31, 1998            3.48      1.93
       Quarter ended March 31, 1999               3.50      2.10
       Quarter ended June 30, 1999                2.85      2.00

Fiscal Year 2000
       Quarter ended September 30, 1999           2.60      1.75
       Quarter ended December 31, 1999            2.55      1.40
       Quarter ended March 31, 2000               2.15      1.56
       Quarter ended June 30, 2000                1.85       .95
</TABLE>

The last sale price of the Company's Common Stock on September 20, 2000 as
reported on the Toronto [Canada] Stock Exchange was C$1.85 per share. As of June
30, 2000, there were approximately 636 holders of record of the Company's Common
Stock, of whom approximately 56.1 % were in the United States. At that date,
approximately 33.8 % of the outstanding 18,583,672 shares of Common Stock were
held in the United States. The Company has no issued and outstanding Preferred
Stock.

ABSENCE OF DIVIDENDS

Since its inception, the Company has not paid cash dividends on it Common Stock.
The Company intends to retain future earnings, if any, to provide funds for
business operations and, accordingly, does not anticipate paying any cash
dividends on its Common Stock in the foreseeable future. The Company is not
subject to any restrictions (not imposed by law on corporations generally) that
limit its ability to pay dividends on its Common Stock.

<PAGE>   16


RECENT SALES OF UNREGISTERED SECURITIES

From July 1, 1999 to June 30, 2000, the Registrant issued the following
securities without registration under the Securities Act of 1933, pursuant to
exemptions from registration under that Act:

<TABLE>
<CAPTION>
DATE           ISSUANCE                                          EXEMPTION
                                                                 RELIED UPON
<S>            <C>                                               <C>
02/08/2000     Options for 50,000 shares issued to 1 Director    Section 4(2):
                                                                 Employees had
                                                                 All information
                                                                 required to make an
                                                                 informed investment
                                                                 decision.
</TABLE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATION

The discussion and analysis of the operating results and the financial position
of the Company should be read in conjunction with the Company's Consolidated
Financial Statements and the notes to them. See "Consolidated Financial
Statements". The financial statements have been prepared in United States
dollars in accordance with Canadian GAAP. See Note 16 of the Notes to
Consolidated Financial Statements for an explanation of differences between
Canadian GAAP and United States GAAP. Certain of the information discussed in
this report contains forward-looking statements regarding future events or the
future financial performance of the Company, and is subject to a number of risks
and other factors which could cause the actual results to differ materially from
those contained in any forward-looking statements. Among those factors are:
general business and economic conditions; customer acceptance and demand for the
company's products; the Company's overall ability to design, test and introduce
new products on a timely basis; the nature of the markets addressed by the
Company's products; the interaction with governmental entities in the United
States and world-wide which purchase the Company's products; and other risk
factors listed from time to time in documents filed by the Company with the
Securities and Exchange Commission.

RESULTS OF OPERATIONS

Fiscal 2000 Compared with 1999

YEAR ENDED JUNE 30, 2000 COMPARED TO YEAR ENDED JUNE 30, 1999

SALES AND OPERATING INCOME

Sales and other income for the year ended June 30, 2000 increased 10.5% or
$1,927,000, to $20,237,000 from $18,310,000 for the year ended June 30, 1999.
The sales increase was largely attributable to increased voter registration and
service revenue.

COST OF SALES AND OPERATING EXPENSES

Cost of sales and operating expenses for fiscal year 2000 increased 14.9%, or
$1,339,000, to $10,337,000 from $8,998,000 for fiscal year 1999. In fiscal year
2000, cost of sales and operating expense as a percentage of gross revenues
increased to 51.1% from 49.1% in fiscal year 1999. This increase resulted
primarily from higher product cost for the AccuVote - 0S system whose
contribution to sales was greater in fiscal year 2000 than in fiscal year 1999.

<PAGE>   17



SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

Selling, administrative and general expenses for fiscal year 2000 increased
6.2%, or $381,000, to $6,511,000 from $6,130,000 for fiscal year 1999. The
increase was due largely to an increase in manpower and associated costs in the
sales, field support and administrative areas required to support current and
anticipated growth.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses for fiscal year 2000 increased by 49.8%, or
$427,000, to $1,284,000 from $857,000 for fiscal year 1999. The fiscal year 2000
expenses include $588,000 of development costs deferred under Canadian generally
accepted accounting principles (see Note 16 to the consolidated financial
statements for a reconciliation of this item for United States generally
accepted accounting principles). The Company continues to fund research and
development in order to offer leading edge products to the market place.

AMORTIZATION

Amortization for fiscal year 2000 decreased 4.1%, or $16,000, to $372,000 from
$388,000 in fiscal year 1999. This decrease was due primarily to capital assets
fully amortized during fiscal year 1999.

INTEREST

Interest expense for fiscal year 2000 increased 66.8%, or $218,000, to $544,000
from $326,000 in fiscal year 1999. The increase was within the Company's
operating plan of funding current accounts receivable and resulted from interest
on increased U.S. bank loans used to finance operations.

REVALUATION OF USED EQUIPMENT

Trade-in inventory write off for fiscal year 2000 decreased to $525,000 from
$873,000 in fiscal year 1999 as a result of management writing down trade-in
inventory. The trade-in inventory write down has now been completed and its
value is considered to be nil.

EARNINGS PER SHARE

The Company's earnings for fiscal year 2000 were $1,777,000 or $0.10 per share
before a write down of $525,000 for trade-in inventory. The after tax earnings
for fiscal year 2000 after the trade-in inventory write down was $1,107,000 or
$0.06 per share compared to a profit of $716,000 or $0.04 per share for the same
period for fiscal year 1999. The increase in earnings per share for the 2000
fiscal period as compared to the 1999 fiscal period was due to an increase in
sales, and increases in cost of sales and operating expenses, selling,
administrative and general expense and interest expense and enhanced by a
decrease in research and development expense, amortization and the write down of
the trade-in inventory.

<PAGE>   18


Fiscal 1999 Compared with 1998

YEAR ENDED JUNE 30, 1999 COMPARED TO YEAR ENDED JUNE 30, 1998

SALES AND OPERATING INCOME

Sales and other income for the year ended June 30, 1999 decreased 10.3% or
$2,111,000, to $18,310,000 from $20,421,000 for the year ended June 30, 1998.
The sales decrease was largely attributable to a shorter U. S. selling season in
a general election year. The U.S. market comprises, and has comprised, 95% or
more of the Company's sales. During a general election year, new voting systems
generally are not installed for several months prior to a general election and
usually for several months after a general election; therefore, the selling
season is shorter during general election years.

COST OF SALES AND OPERATING EXPENSES

Cost of sales and operating expenses for fiscal year 1999 decreased 5.7%, or
$547,000, to $8,998,000 from $9,545,000 for fiscal year 1998. In fiscal year
1999, cost of sales and operating expense as a percentage of gross revenues
increased to 49.1% from 46.7% in fiscal year 1998. This increase resulted
primarily from higher product cost for the AccuVote - TS system whose
contribution to sales was greater in fiscal year 1999 than in fiscal year 1998.

SELLING, ADMINISTRATIVE AND GENERAL EXPENSES

Selling, administrative and general expenses for fiscal year 1999 increased
17.5%, or $912,000, to $6,130,000 from $5,218,000 for fiscal year 1998. The
increase was due largely to election support provided in the second quarter and
an increase in manpower and associated costs in the sales, field support and
administrative areas. In addition, expenses relating to the I-Mark asset
acquisition were incurred for the whole 1999 fiscal period, whereas in the 1998
fiscal period expenses were incurred for only eleven months.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses for fiscal year 1999 increased by 77.3%, or
$374,000, to $857,000 from $483,000 for fiscal year 1998. The increase was due
to developing enhancements to software for the AccuVote - TS system. The Company
continues to fund research and development in order to offer leading edge
products to the market place.

AMORTIZATION

Amortization for fiscal year 1999 increased 40.6%, or $112,000, to $388,000
from $276,000 in fiscal year 1998. This increase was due primarily to
amortization associated with the acquisition of I-Mark in 1997. During the 1999
fiscal year Lynro Manufacturing Corporation goodwill was fully written off.

INTEREST

Interest expense for fiscal year 1999 increased 110.1%, or $171,000, to
$326,000 from $155,000 in fiscal year 1998. The increase was within the
Company's operating plan of funding current accounts receivable and resulted
from interest on increased U.S. bank loans used to finance operations.

<PAGE>   19

REVALUATION OF USED EQUIPMENT

Trade-in inventory write off for fiscal year 1999 increased to $873,000 from
$706,000 in fiscal year 1998 as a result of management writing down trade-in
inventory. The trade-in inventory write down will continue for the next four
consecutive quarters. At that time the value of the trade-in inventory is
anticipated to be nil.

EARNINGS PER SHARE

The Company's earnings for fiscal year 1999 were $1,611,000 or $0.09 per share
before a write down of $873,000 for trade-in inventory. The after tax earnings
for fiscal year 1999 after the trade-in inventory write down was $716,000 or
$0.04 per share compared to a profit of $4,038,000 or $0.24 per share for the
same period for fiscal year 1998. The decrease in earnings per share for the
1999 fiscal period as compared to the 1998 fiscal period was due to a decrease
in sales, and increases in selling, administrative and general expense, research
and development expense, amortization and interest expense, along with the write
down of the trade-in inventory.

LIQUIDITY AND CAPITAL RESOURCES

The Company used a combination of internally generated funds and bank borrowings
to finance its acquisitions, working capital requirements, capital expenses and
operations.

During the period ended June 30, 2000, the Company generated most of its funding
through cash flow from operations.

At June 30, 2000, the Company's cash totaled $1,446,613, an increase of $825,393
from June 30, 1999. Accounts and contracts receivable decreased to $12,717,000
at June 30, 2000 from $13,906,000 at June 30, 1999. Due to the nature of the
Company's business, the timing of payments on large contracts may vary
significantly, and cause significant variances from period to period in the mix
of cash, other liquid funds, accounts receivable and contracts receivable.
Inventory figures may vary significantly, depending upon delivery dates for
voting systems. At June 30, 2000, inventory amounted to $5,352,000, an increase
of $745,000 from June 30, 1999. Inventory has increased due to the addition of
the AccuVote - TS system.

The Company has contractual arrangements with customers whereby credit terms may
be extended for the amounts due for voting systems. At June 30, 2000, agreements
receivable less current portion amounted to $16,000, a decrease of $190,000 from
June 30, 1999. These agreements are repaid at varying terms and with varying
interest rates determined on a case-by-case basis. Historically, the Company has
not experienced any default in connection with agreements due from customers.

<PAGE>   20
 The Company currently has four loans and one promissory note outstanding, three
loans and the promissory note are with Compass Bank, Albuquerque, New Mexico and
a line of credit with Hibernia National Bank of Texas, McKinney, Texas. One loan
in the amount of $250,113 is secured by an agreement receivable amounting to
$80,608. This loan bears interest at Compass Bank, Albuquerque Prime Rate plus
1% and is due November 15, 2000. A second loan in the amount of $904,950 is
secured by a specific Global USA contract in the amount of $1,360,590. This loan
bears interest at Compass Bank, Albuquerque Prime Rate plus 1 % and is due
November 22, 2000. A third loan in the amount of $133,310 is secured by a
specific Global USA contract in the amount of $178,782. This loan bears interest
at Compass Bank, Albuquerque Prime Rate plus 1% and is due November 27, 2000.
The line of credit with Hibernia National Bank of Texas in the amount of
$3,600,000 is secured by a blanket assignment of accounts receivable, and bears
interest at The Wall Street Journal Prime Rate and is due July 18, 2001. The
promissory note in the amount of $480,000 is with Compass Bank, Albuquerque, New
Mexico is secured by three specific contracts receivable with a combined balance
receivable of $332,078. The promissory note loan bears interest at Compass Bank,
Albuquerque Prime Rate plus 1% and is due January 19, 2001.

Subsequent to the fiscal 2000 year end the Company has renegotiated a revolving
line of credit with Hibernia National Bank of Texas to a maximum of $5,000,000.

Management believes that financial resources, including internally generated
funds and available bank line of credit and borrowings would be sufficient to
finance the Company's current operations and capital expenditures, excluding
acquisitions, for the next twelve months.

         The following table sets out the exchange rates, based on the noon
buying rates in Toronto, Ontario, Canada, for cable transfers in foreign
currencies as certified for customs purposes by the Bank of Canada, for the
conversion of Canadian dollars into United States dollars in effect at the end
of the following periods, and the average exchange rates (based on the average
of the exchange rates on the last day of each month in those periods) and the
Range of high and low exchange rates for those periods.

<TABLE>
<CAPTION>
                      YEAR END     YEAR END     YEAR END
                      JUNE 30      JUNE 30      JUNE 30
                       2000         1999         1998
<S>                   <C>          <C>          <C>
END OF PERIOD          1.4806       1.4630       1.4678

AVERAGE FOR PERIOD     1.4731       1.5103       1.4177

HIGH FOR PERIOD        1.5063       1.5685       1.4678

LOW FOR PERIOD         1.4433       1.4570       1.3783
</TABLE>


On June 30, 2000, the noon rate of exchange as reported by the Bank of Canada
for the conversion of United States dollars into Canadian dollars was $0.67600
(US$1.00=C$1.4793).


<PAGE>   21
ITEM 7.  FINANCIAL STATEMENTS


                          GLOBAL ELECTION SYSTEMS INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                              30 JUNE 2000 and 1999

                                   U.S. Funds


                         STALEY, OKADA, CHANDLER & SCOTT

                              Chartered Accountants



<PAGE>   22


MANAGEMENT'S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

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

The accompanying consolidated financial statements and all information in the
annual report are the responsibility of management. The consolidated financial
statements have been prepared by management in accordance with the accounting
policies outlined in the notes to the consolidated financial statements. Where
necessary, management has made informed judgements and estimates in accounting
for transactions which were not complete at the balance sheet date. In the
opinion of management, the consolidated financial statements have been prepared
within acceptable limits of materiality and are in accordance with Canadian
generally accepted accounting principles. The financial information contained
elsewhere in the annual report has been reviewed to ensure consistency with that
in the consolidated financial statements.

Management maintains appropriate systems of internal control. Policies and
procedures are designed to give reasonable assurances that transactions are
appropriately authorized, assets are safeguarded and financial records are
properly maintained to provide reliable information for the preparation of
financial statements.

Staley, Okada, Chandler & Scott, an independent firm of chartered accountants,
has been engaged, as approved by a vote of the shareholders at the company's
most recent annual general meeting, to examine the consolidated financial
statements in accordance with generally accepted auditing standards in Canada
and provide an independent professional opinion.

The audit committee has met with the auditors and management in order to
determine that management has fulfilled its responsibilities in the preparation
of the consolidated financial statements. The audit committee has reported its
findings to the Board of Directors who have approved the consolidated financial
statements.


Robert J. Urosevich                                         Maurice E. Sokulski
President                                                             Treasurer

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

<PAGE>   23

AUDITORS' REPORT

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

TO THE DIRECTORS OF GLOBAL ELECTION SYSTEMS INC.:

We have audited the consolidated balance sheet of Global Election Systems Inc.
as at 30 June 2000 and 1999 and the consolidated statements of changes in
shareholders' equity, income and cash flows for the years ended 30 June 2000,
1999 and 1998. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at 30 June 2000 and
1999 and the results of its operations and its cash flows for the years ended 30
June 2000, 1999 and 1998 in accordance with generally accepted accounting
principles. As required by the Company Act of British Columbia, we report that,
in our opinion, these principles have been applied on a basis consistent with
that of the preceding year.



Burnaby, B.C.                                   STALEY, OKADA, CHANDLER & SCOTT
6 September 2000                                          CHARTERED ACCOUNTANTS

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

<PAGE>   24

GLOBAL ELECTION SYSTEMS INC.                                        Statement 1

CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE

U.S. Funds

<TABLE>
<CAPTION>
ASSETS                                                                          2000            1999
                                                                            -----------     -----------
<S>                                                                                 <C>             <C>
CURRENT
   Cash and short-term deposits                                             $ 1,446,613     $   621,220
   Accounts receivable                                                        6,204,048       4,341,403
   Contracts receivable                                                       6,512,549       9,564,678
   Work-in-progress                                                             822,211         717,044
   Deposits and prepaid expenses                                                286,248         291,298
   Inventory (Note 3)                                                         5,352,216       4,606,923
   Current portion of agreements receivable                                     178,808         285,965
                                                                            -----------     -----------
                                                                             20,802,693      20,428,531
AGREEMENTS RECEIVABLE (Note 4)                                                   15,876         205,539
DEFERRED COSTS (Note 5)                                                         587,852              --
CAPITAL ASSETS (Note 6)                                                         540,293         376,081
OTHER ASSETS (Note 7)                                                           549,750         776,250
                                                                            -----------     -----------
                                                                            $22,496,464     $21,786,401
                                                                            ===========     ===========

LIABILITIES

CURRENT
   Accounts payable and accrued liabilities                                 $ 3,953,980     $ 2,287,467
   Deferred revenue                                                             348,692       1,027,718
   Current portion of loans payable                                           1,768,373       6,738,500
                                                                            -----------     -----------
                                                                              6,071,045      10,053,685
FUTURE INCOME TAXES (Note 10b)                                                  145,000              --
LOANS PAYABLE (Note 8)                                                        3,600,000         250,113
                                                                            -----------     -----------
                                                                              9,816,045      10,303,798
                                                                            -----------     -----------
COMMITMENTS (Note 11)

SHAREHOLDERS' EQUITY

SHARE CAPITAL (Note 9)
   Authorized:
     100,000,000 common voting shares, without par value
      20,000,000 convertible voting preferred shares, without par value
   Issued and fully paid:
      18,583,672 (18,483,672) common shares                                  10,217,262      10,126,865
RETAINED EARNINGS - Statement 2                                               2,463,157       1,355,738
                                                                            -----------     -----------
                                                                             12,680,419      11,482,603
                                                                            -----------     -----------
                                                                            $22,496,464     $21,786,401
                                                                            ===========     ===========
</TABLE>


ON BEHALF OF THE BOARD:

"Robert J. Urosevich", Director
--------------------

"Clinton H. Rickards", Director
--------------------

                           - See Accompanying Notes -


<PAGE>   25


GLOBAL ELECTION SYSTEMS INC.                                       Statement 2

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

U.S. Funds

<TABLE>
<CAPTION>
                                                                Common Shares              Retained
                                                            Shares          Amount         Earnings          Total
                                                          -----------     -----------     -----------     -----------
<S>                                                       <C>             <C>             <C>             <C>
Balance - 30 June 1997                                     14,689,440     $ 9,374,197     $(3,397,853)    $ 5,976,344
  Issuance of shares for name and operating assets of
    I-Mark Systems, Inc. ($0.55 per share)                  1,000,000         548,148              --         548,148
  Issuance of performance shares from escrow ($0.06
    per share)                                              2,738,000         155,562              --         155,562
  Issuance of shares on exercise of options ($0.89
    per share)                                                 30,000          26,632              --          26,632
  Issuance of shares on exercise of options ($0.85
    per share)                                                 25,000          21,328              --          21,328
  Net income for the year - Statement 3                            --              --       4,037,546       4,037,546
                                                          -----------     -----------     -----------     -----------
Balance - 30 June 1998                                     18,482,440      10,125,867         639,693      10,765,560
  Issuance of shares on exercise of options ($0.81
    per share)                                                  1,232             998              --             998
  Net income for the year - Statement 3                            --              --         716,045         716,045
                                                          -----------     -----------     -----------     -----------
Balance - 30 June 1999                                     18,483,672      10,126,865       1,355,738      11,482,603
  Issuance of shares on exercise of options ($0.90
    per share)                                                100,000          90,397              --          90,397
  Net income for the year - Statement 3                            --              --       1,107,419       1,107,419
                                                          -----------     -----------     -----------     -----------
Balance - 30 June 2000                                     18,583,672     $10,217,262     $ 2,463,157     $12,680,419
                                                          ===========     ===========     ===========     ===========
</TABLE>

                           - See Accompanying Notes -

<PAGE>   26

GLOBAL ELECTION SYSTEMS INc.                                        Statement 3

CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED 30 JUNE

U.S. Funds

<TABLE>
<CAPTION>
                                                              2000               1999               1998
                                                          ------------       ------------       ------------
<S>                                                       <C>                <C>                <C>
REVENUE
   Sales and operating income (Note 13)                   $ 20,195,209       $ 18,198,041       $ 20,320,155
   Other income                                                 41,618            112,106            101,123
                                                          ------------       ------------       ------------
                                                            20,236,828         18,310,147         20,421,278
                                                          ------------       ------------       ------------
COSTS AND EXPENSES
   Cost of sales and operating expenses                     10,336,767          8,997,955          9,544,781
   Selling, administrative and general expenses              6,510,887          6,129,777          5,218,472
   Research and development expenses                           696,042            857,057            483,437
   Amortization                                                372,480            388,400            276,294
   Interest                                                    543,535            325,748            155,041
                                                          ------------       ------------       ------------
                                                            18,459,711         16,698,937         15,678,025
                                                          ------------       ------------       ------------

INCOME BEFORE THE UNDERNOTED                                 1,777,117          1,611,210          4,743,253
    Revaluation of used equipment (Note 14)                   (524,698)          (873,101)          (705,707)
                                                          ------------       ------------       ------------
INCOME BEFORE INCOME TAXES                                   1,252,419            738,109          4,037,546
    Provision for income taxes (Note 10a)                           --            (22,064)                --
    Provision for future income taxes (Note 10b)              (145,000)                --                 --
                                                          ------------       ------------       ------------
NET INCOME FOR THE YEAR                                   $  1,107,419       $    716,045       $  4,037,546
                                                          ============       ============       ============

EARNINGS PER SHARE - U.S. FUNDS
   Basic                                                  $       0.06       $       0.04       $       0.24
   Fully diluted                                          $       0.06       $       0.04       $       0.22
                                                          ============       ============       ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING        18,550,521         18,483,264         16,773,928
                                                          ============       ============       ============
</TABLE>


                          - See Accompanying Notes -


<PAGE>   27

GLOBAL ELECTION SYSTEMS INC.                                        Statement 4

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED 30 JUNE

U.S. Funds

<TABLE>
<CAPTION>
                                                                        2000             1999              1998
                                                                    -----------       -----------       -----------
<S>                                                                 <C>               <C>               <C>
OPERATING ACTIVITIES
   Net income for the year                                          $ 1,107,419       $   716,045       $ 4,037,546
   Items not affecting cash
     Amortization                                                       372,480           388,400           276,294
     Amortization of deferred costs                                      71,983                --                --
     Revaluation of used equipment                                      524,698           873,101           705,707
     Provision for future income taxes                                  145,000                --                --
                                                                    -----------       -----------       -----------
                                                                      2,221,580         1,977,546         5,019,547
   Changes in non-cash working capital
     Accounts receivable                                             (1,862,645)       (2,028,540)         (209,527)
     Contracts receivable                                             3,052,129        (1,586,071)       (5,319,524)
     Work-in-progress                                                  (105,167)         (717,044)               --
     Deposits and prepaid expenses                                        5,050           (44,209)         (192,180)
     Inventory                                                       (1,269,991)       (1,812,150)       (2,741,214)
     Accounts payable and accrued liabilities                         1,666,513        (2,419,735)        3,543,644
     Customer deposits                                                       --                --           (36,219)
     Deferred revenue                                                  (679,026)          822,918          (120,122)
                                                                    -----------       -----------       -----------
                                                                      3,028,443        (5,807,285)          (55,595)
                                                                    -----------       -----------       -----------
INVESTING ACTIVITIES
   Deferred costs                                                      (659,835)               --                --
   Capital assets acquired                                             (310,192)          (82,018)         (414,961)
   Other assets acquired                                                     --                --          (514,104)
   Proceeds on sale of capital assets                                        --                --            62,685
   Agreements receivable                                                296,820           462,261           357,664
                                                                    -----------       -----------       -----------
                                                                       (673,207)          380,243          (508,716)
                                                                    -----------       -----------       -----------
FINANCING ACTIVITIES
   Loans payable                                                     (1,620,240)        5,707,639           622,584
   Common shares issued                                                  90,397               998           203,522
                                                                    -----------       -----------       -----------
                                                                     (1,529,843)        5,708,637           826,106
                                                                    -----------       -----------       -----------

NET INCREASE IN CASH                                                    825,393           281,595           261,795
   Cash position - Beginning of year                                    621,220           339,625            77,730
                                                                    -----------       -----------       -----------
CASH POSITION - END OF YEAR                                         $ 1,446,613       $   621,220       $   339,625
                                                                    ===========       ===========       ===========

SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
    Issuance of shares for name and operating assets of I-Mark
       Systems, Inc.                                                $        --       $        --       $   548,148
                                                                    ===========       ===========       ===========
</TABLE>


                           - See Accompanying Notes -


<PAGE>   28

GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds


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

1.   SIGNIFICANT ACCOUNTING POLICIES

     These consolidated financial statements have been prepared using generally
     accepted accounting principles of Canada as follows:

     a)   NATURE OF OPERATIONS

          The company markets a complete electronic voting system which includes
          vote tally and voter registration software.

     b)  CONSOLIDATION

          These consolidated financial statements include the accounts of the
          company and its wholly-owned subsidiary, Global Election Systems,
          Inc., a company incorporated in Delaware and operating in Texas,
          U.S.A. The purchase method of accounting has been applied to this
          acquisition.

          On 26 April 2000, the company's wholly-owned U.S. subsidiary
          incorporated a wholly-owned subsidiary, integrivote.com., Ltd., a
          company incorporated in Nevada, U.S.A. The new subsidiary remains
          inactive to date and is accounted under the purchase method of
          accounting.

     c)   FOREIGN CURRENCY TRANSLATION

          The accounts of the company are prepared in U.S. funds and the
          company's Canadian operations are translated into U.S. dollars as
          follows:

          o    Monetary assets and liabilities at year-end rates,

          o    All other assets and liabilities at historical rates, and

          o    Revenue and expense items at the average rate of exchange
               prevailing during the year.

          Exchange gains and losses arising from these transactions are
          reflected in income or expense in the year.

     d)   INVENTORY

          Inventory of finished goods is valued at the lower of cost and net
          realizable value as estimated by management. Raw materials, which
          consist of parts and components, are valued at the lower of average
          cost and net realizable value, less any allowances for obsolescence.
          Inventory of goods taken in trade are treated as additional discounts
          granted to complete sales agreements and no value is recognized in
          inventory.

     e)   AMORTIZATION

          Capital assets are recorded at cost and the company provides for
          amortization on the following basis:

          Demonstration and computer equipment - 20% to 30% declining balance
          method
          Manufacturing equipment - 20% declining balance method
          Furniture and equipment - 20% declining balance method
          Leasehold improvements - straight-line over 5 years

          One-half of the rate is applied in the year of acquisition and
          disposition.

     f)   PATENTS

          Patents are recorded at cost and the company provides for amortization
          on a straight-line basis over 10 years.


<PAGE>   29


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds


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

1.   SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     g)   GOODWILL

          Goodwill is recorded at cost and the company provides for amortization
          on a straight-line basis over 5 years.

     h)   REVENUE RECOGNITION

          Revenue from sales of products is recognized at the time of shipment
          of products to customers. Revenue from sales of services is recognized
          on the basis of the percentage completion of the related services. The
          company defers a portion of revenue received related to contracted
          future services to match against management's estimate of the future
          costs of providing these services to customers. Receivables with
          extended payment terms less than one year are recorded as contracts
          receivable and those over one year are recorded as agreements
          receivable.

     i)   WORK-IN-PROGRESS

          Amounts related to revenues recognized in the fiscal period which
          remain unbilled to the customer at the end of the fiscal period are
          presented as work-in-progress in these consolidated financial
          statements.

     j)   WARRANTY RESERVE

          Provisions for future estimated warranty costs are recorded in the
          accounts based upon historical maintenance records. Management
          periodically reviews the warranty reserve to determine the adequacy of
          the provision.

     k)   RESEARCH AND DEVELOPMENT

          New product development costs and existing product enhancement costs
          are deferred to future periods when the product or process is clearly
          defined, the costs can be identified, the technical feasibility has
          been established, management intends to market the product or process,
          a market exists for the product or process and adequate resources
          exist to complete the project. The company provides for amortization
          on a straight-line basis over 10 years. Research costs and development
          costs which do not meet the preceding criteria are expensed in the
          period incurred. Research and development tax credits are applied
          against either the deferred costs or expense, as applicable, in the
          period in which the tax credit is received.

     l)   SHARE CAPITAL

          i)   The proceeds from the exercise of stock options, warrants and
               escrow shares are recorded as share capital in the amount for
               which the option, warrant or escrow share enabled the holder to
               purchase a share in the company.

          ii)  Share capital issued for non-monetary consideration is recorded
               at an amount based on fair market value reduced by an estimate of
               transaction costs normally incurred when issuing shares for cash,
               as determined by the board of directors of the company.

     m)   EARNINGS PER SHARE

          Basic earnings per share computations are based on the weighted
          average number of shares outstanding during the period. Fully diluted
          earnings per share are based on the actual number of shares
          outstanding at the end of the period plus performance shares, and
          share purchase options and warrants as if they had been issued as at
          the beginning of the period.


<PAGE>   30

GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

1.   SIGNIFICANT ACCOUNTING POLICIES - Continued

     n)   MANAGEMENT'S ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         dates of the financial statements and the reported amounts of revenues
         and expenses during the reported periods. Actual results could differ
         from those estimates.

     o)  FUTURE INCOME TAXES

         During the year, the company adopted the asset and liability method of
         accounting for income taxes as prescribed by the CICA Handbook. The
         major impact of this change is the use of current income tax rates in
         the determination of future income taxes. This change in accounting
         policy had no impact on the prior year income tax expense or future
         income tax liability, and has therefore been applied for prospectively.

         Under the asset and liability method, the change in the net future tax
         asset or liability is included in income. The income tax effects of
         temporary differences in the time when income and expenses are
         recognized in accordance with company accounting practices, and the
         time they are recognized for income tax purposes, are reflected as
         future income tax assets or liabilities. Future income tax assets and
         liabilities are measured using statutory rates that are expected to
         apply to taxable income in the years in which temporary differences are
         expected to be recovered or settled.

     p)  RECLASSIFICATION

         Certain of the comparative figures have been reclassified to conform
         with the current year presentation.

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

2.   FAIR VALUE OF FINANCIAL INSTRUMENTS

          The carrying value of cash and short term deposits, accounts
          receivable, contracts receivable, work-in-progress, deposits,
          agreements receivable, accounts payable and accrued liabilities and
          loans payable approximates their fair value due to their short term
          maturity or capacity of prompt liquidation.

          Concentration of credit risk may arise from exposure to a single
          debtor or to a group of debtors having similar characteristics such
          that their ability to meet their obligations to the company is
          expected to be affected similarly by changes in economic or other
          conditions.

          The company's counterparty concentration is with its authorized
          resellers and state, county, city and municipal election customers in
          the United States and Canada and arises in the normal course of the
          company's business.

          Included in the 30 June 2000 current accounts receivable of
          $6,204,048, are three authorized resellers and one election customer
          which together account for $3,881,764 or 62.6% of this balance. To 6
          September 2000, the company has collected $856,384 from these
          customers and the balance is due on specific terms.

          Included in the 30 June 2000 current contracts receivable of
          $6,512,549 is one election customer which accounts for $1,360,590 or
          20.9% of this balance. To 6 September 2000, the company has collected
          $39,096 from this customer and the balance is due at specific dates
          within one year from 30 June 2000.

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


<PAGE>   31


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

3.   INVENTORY

     Details are as follows:

<TABLE>
<CAPTION>
                                     2000            1999
                                  ----------      ----------
<S>                               <C>             <C>
     Supplies and parts           $3,115,792      $2,061,974
     Trade-in goods                       --         524,698
     Finished goods                2,236,424       2,020,251
                                  ----------      ----------
                                  $5,352,216      $4,606,923
                                  ----------      ----------
</TABLE>

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

4.   AGREEMENTS RECEIVABLE

     Details of agreements receivable from customers are as follows:

<TABLE>
<CAPTION>
                                                                             2000          1999
                                                                          ---------    ---------
<S>                                                                       <C>          <C>
     Sales agreement receivable with interest at 5% per annum,
         repayable in 60 equal monthly payments of principal and
         interest commencing 15 December 1995, secured by the
         underlying products and supplies (i)                             $  80,608    $ 267,364

     Sales agreement receivable with interest at 4.4% per annum
         commencing 27 January 1998, repayable at $22,455 of
         principal and interest by 1 July 1998, $21,759 of principal
         and interest by 1 July 1999 and the balance by 1 July 2000,
         secured by the underlying goods                                     20,751       44,485

     Sales agreement receivable with interest at 5.4% per annum
         commencing 15 July 1998, repayable at $22,738 per annum for
         principal and interest on 15 July 1998 to 15 July 2001,
         secured by the underlying goods                                     36,926       63,150

     Sales agreement receivable, non-interest bearing, repayable
         at $60,000 in July 1999 and the balance in July 2000,
         secured by the underlying goods                                     56,399      116,505
                                                                          ---------    ---------
                                                                            194,684      491,504
     Less:  Current portion                                                (178,808)    (285,965)
                                                                          ---------    ---------
                                                                          $  15,876    $ 205,539
                                                                          ---------    ---------
</TABLE>

     (i)  The sales agreement receivable has been pledged as security for a loan
          payable (Note 8).

     Scheduled principal repayments on the sales agreements receivable are as
     follows:

<TABLE>
<S>                      <C>
     2001                $178,808
     2002                  15,876
                         --------
                         $194,684
                         --------
</TABLE>

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


<PAGE>   32


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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


5.   DEFERRED COSTS

     Details are as follows:

<TABLE>
<CAPTION>
                                                                            2000          1999
                                                       Accumulated      NET BOOK      Net Book
                                        Costs         Amortization         VALUE         Value
                                       --------       ------------      --------      --------
<S>                                   <C>             <C>               <C>           <C>
     Deferred costs                    $659,835          $71,983        $587,852      $     --
                                       --------          -------        --------      --------
</TABLE>


6.   CAPITAL ASSETS

     Details are as follows:

<TABLE>
<CAPTION>
                                                                            2000            1999
                                                     Accumulated        NET BOOK        Net Book
                                         Cost        Amortization          VALUE           Value
                                      ----------     ------------       --------        --------
<S>                                   <C>            <C>                <C>             <C>
    Demonstration and computer
        equipment                     $  858,222       $439,328         $418,894        $235,693
    Manufacturing equipment               88,954         61,870           27,084          22,116
    Furniture and equipment              263,322        179,303           84,019         104,216
    Leasehold improvements                39,360         29,064           10,296          14,056
                                      ----------       --------         --------        --------
                                      $1,249,858       $709,565         $540,293        $376,081
                                      ----------       --------         --------        --------
</TABLE>


7.   OTHER ASSETS

     Details are as follows:
<TABLE>
<CAPTION>
                                                                            2000            1999
                                                     Accumulated        NET BOOK        Net Book
                                         Cost        Amortization          VALUE           Value
                                      ----------     ------------       --------        --------
<S>                                   <C>            <C>                <C>             <C>
    Patents                           $  165,000       $140,250         $ 24,750        $ 41,250
    Goodwill                           1,300,960        775,960          525,000         735,000
                                      ----------       --------         --------        --------
                                      $1,465,960       $916,210         $549,750        $776,250
                                      ----------       --------         --------        --------
</TABLE>


--------------------------------------------------------------------------------
<PAGE>   33


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds


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

8.   LOANS PAYABLE

     Details are as follows:
<TABLE>
<CAPTION>

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

     Line of credit, bearing interest at bank prime plus 1% per annum (interest
         rate floor of 9%), interest payments due quarterly, due in full by 15
         November 2000 (ii), secured by the $80,608 sales agreement receivable
         (Note 4)                                                                     $   250,113       $   250,113

     Line of credit, bearing interest at bank prime plus 1% per annum (interest
         rate floor of 10%), interest payments due quarterly, due in full by 22
         November 2000, secured by a contract receivable with a balance
         receivable of $1,360,590 as at 30 June 2000                                      904,950         1,508,500

     Line of credit, bearing interest at bank prime plus 1% per annum (interest
         rate floor of 9%), interest payments due quarterly, due in full by 27
         November 2000, secured by a contract receivable with a balance
         receivable of $178,782 as at 30 June 2000                                        133,310         1,330,000

     Line of credit, bearing interest at The Wall Street Journal prime rate,
         interest payments due quarterly, balance due in full by 18 July 2001
         (i), secured by a commercial security agreement covering all assets of
         the company                                                                    3,600,000         3,600,000

     Promissory note payable, due to a director of the company, bearing interest
         at 10% per annum payable monthly                                                      --           300,000

     Promissory note payable, bearing interest at bank prime rate plus 1%
         (interest rate floor of 10%), interest payments due quarterly, due
         on demand or by 19 January 2001, secured by three specific contracts
         receivable with a combined balance receivable of $332,078 as at
         30 June 2000                                                                     480,000                --
                                                                                      -----------       -----------
                                                                                        5,368,373         6,988,613
     Less:  Current portion                                                            (1,768,373)       (6,738,500)
                                                                                      -----------       -----------
                                                                                      $ 3,600,000       $   250,113
                                                                                      -----------       -----------
</TABLE>

     (i)   Subsequently extended to a $5,000,000 revolving line of credit.

     (ii)  Subsequently repaid in full 5 September 2000.

     Scheduled principal repayments on the loans payable are as follows:

<TABLE>
<S>             <C>
     2001       $1,768,373
     2002        3,600,000
                ----------
                $5,368,373
                ----------
</TABLE>

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

<PAGE>   34


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds
--------------------------------------------------------------------------------


9.   SHARE CAPITAL

     a)  STOCK OPTION PLAN

         The company has a stock option plan which covers its officers and
         directors. The options are granted for varying terms ranging from three
         to five years. Options granted prior to 30 June 1998, were immediately
         vested upon grant. Options granted subsequent to 30 June 1998, vest
         over the term of the option. The following is a schedule of the
         activity pursuant to this stock option plan:

<TABLE>
<CAPTION>
                                                 Number of          Price per Share
                                                   Shares               (CDN $)        Expiration Date
                                                -----------         ---------------    ---------------
<S>                                             <C>                 <C>                <C>
        Balance - 30 June 1997                    250,000           $ 1.33 to $ 3.10
            New options granted                 1,075,000               $ 1.25         22 August 2002
            New options granted                    50,000               $ 1.49         17 December 2002
            New options granted                   100,000               $ 1.60         13 February 2003
            Options cancelled                     (20,000)              $ 3.10         15 November 1998
            Options cancelled                    (130,000)              $ 1.89         20 September 1999
            Options exercised                     (55,000)              $ 1.25         22 August 2002
--------------------------------------------------------------------------------------------------------
        Balance - 30 June 1998                  1,270,000           $ 1.25 to $1.80
            New options granted                   205,000               $ 2.05         15 October 2001
            Options exercised                      (1,232)              $ 1.25         22 August 2002
--------------------------------------------------------------------------------------------------------
        Balance - 30 June 1999                  1,473,768           $ 1.25 to $2.05
            Options expired                      (100,000)              $ 1.60        13 February 2003
            Options expired                       (23,768)              $ 1.25        22 August 2002
            Options exercised                    (100,000)              $ 1.33         1 November 1999
            Options granted                        50,000               $ 1.69         7 February 2005
--------------------------------------------------------------------------------------------------------
                                                                                      15 October 2001 to
        Balance - 30 June 2000                  1,300,000           $ 1.25  to $2.05   7 February 2005
--------------------------------------------------------------------------------------------------------
</TABLE>


     b)  STOCK PURCHASE WARRANTS

         The following is a schedule of the activity pursuant to stock purchase
         warrants:

<TABLE>
<CAPTION>
                                                 Number of          Price per Share
                                                   Shares               (CDN $)        Expiration Date
                                                -----------         ---------------    ---------------
<S>                                             <C>                 <C>                <C>
                                                  166,667               $1.88           31 March 2001
</TABLE>

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


<PAGE>   35


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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



10.  INCOME TAXES

     a)   A summary of the taxable income of the company for the year ended 30
          June 2000 is as follows:

<TABLE>
<CAPTION>
                                                       Canadian Parent    U.S. Subsidiary     Total
                                                       ---------------    ---------------   -----------
<S>                                                    <C>                <C>               <C>
         Net income (loss) before taxes per financial
             statements                                   $(133,072)       $ 1,385,491      $ 1,252,419
         Application of losses carried forward                   --           (797,639)        (797,639)
         Timing differences on capital assets               (21,651)                --          (21,651)
         Recapture of scientific research and
             experimental development deductions             38,230                 --           38,230
         Other timing differences                            17,014           (587,852)        (570,838)
                                                          ---------        -----------      -----------
                                                            (99,479)                --          (99,479)
         Benefit of current tax loss not recorded            99,479                 --           99,479

         Current Taxable Income                           $      --        $        --      $        --
                                                          ---------        -----------      -----------
         Current Income Tax Provision                     $      --        $        --      $        --
                                                          ---------        -----------      -----------
</TABLE>

     b)  A summary of the future taxable income and future income tax provision
         for the year ended 30 June 2000 is as follows:

<TABLE>
<CAPTION>
                                                       Canadian Parent    U.S. Subsidiary     Total
                                                       ---------------    ---------------   -----------
<S>                                                    <C>                <C>               <C>
         Timing differences on capital assets             $ 21,651           $      --      $  21,651
         Other timing differences                          (17,014)            587,852        570,838
         Eliminate Canadian differences against
             current year loss                              (4,637)                 --         (4,637)
         Recognize benefit of U.S. losses carried
             forward                                            --            (173,394)      (173,394)

         Future Taxable Income                            $     --           $ 414,458      $ 414,458
                                                          --------           ---------      ---------

         Statutory tax rate                                     --                35.0           35.0
                                                          --------           ---------      ---------
         Future Income Tax Provision                      $     --           $ 145,000      $ 145,000
                                                          --------           ---------      ---------
</TABLE>

     c)  The company has unclaimed investment tax credits, for Canadian tax
         purposes, arising from its research and development activities in the
         amount of $317,000 which may be carried forward to be applied against
         future federal taxes payable. The future tax benefits, if any, of these
         tax credits have not been recognized in the accounts and expire as
         follows:
<TABLE>
<S>                 <C>
         2002        $103,000
         2004          34,000
         2005          63,000
         2006         117,000
                     --------
                     $317,000
                     --------
</TABLE>

     d)   As at 30 June 2000, the company has tax losses, for Canadian tax
          purposes, of approximately $99,000, which may be carried forward to be
          applied against future taxable income. The future benefits, if any, of
          these tax losses have not been recognized in the accounts of the
          company and expire in 2007.


<PAGE>   36


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

10.  INCOME TAXES - CONTINUED

     e)  As at 30 June 2000, the company's subsidiary has tax losses, for U.S.
         tax purposes, of approximately $174,000 which may be carried forward to
         be applied against future taxable income. The future benefits, if any,
         of these tax losses has been recognized in the accounts of the company
         as a reduction of the future income tax provision. These losses expire
         in 2011.

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

11.  COMMITMENTS

     a)  By way of an employment agreement, the company has secured the services
         of a key employee for a three year term which expired 31 July 2000. The
         contract contained fixed annual compensation totaling $180,000 per
         annum plus a bonus of 3% of earnings before taxes not to exceed
         $200,000 per annum. Subsequent to 30 June 2000, the parties reached a
         mutual agreement to not extend the contract past the 31 July 2000
         expiry date. Severance of $162,000 was negotiated and will be expensed
         in the 2001 fiscal year.

     b)  By way of an employment agreement, the company has secured the services
         of a key employee for a three year term which expired 31 July 2000. The
         contract contained fixed annual compensation totalling $115,000 per
         annum. The contract is currently in the process of renegotiation.

     c)  Under the terms of a lease agreement dated 8 December 1998, the company
         is committed to minimum annual lease payments which increased from CDN
         $25,529 in the first year to CDN $35,741 by the final year, plus its
         share of common area costs. The lease is for a five year term to
         30 April 2004 representing a minimum lease commitment of:

<TABLE>
<CAPTION>
                      CDN $
                    --------
<S>                 <C>
         2001       $ 28,508
         2002         31,060
         2003         33,614
         2004         29,784
                    --------
                    $122,966
                    --------
</TABLE>

     d)  By an agreement dated 4 March 1997, the company's United States
         subsidiary has agreed to lease 13,050 square feet of general office and
         warehouse space in McKinney, Texas for five years from 1 July 1997. The
         annual lease amount of $110,272 represents a minimum lease commitment
         of:

<TABLE>
<S>                  <C>
         2001        $110,272
         2002         110,272
                     --------
                     $220,544
                     --------
</TABLE>

         The lease may be extended for two additional terms of five years with
         the rate to be the current base rent plus the lesser of a consumer
         price adjustment or a fair rental value adjustment.


<PAGE>   37


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

--------------------------------------------------------------------------------
11.  COMMITMENTS - CONTINUED

     e)  By an agreement dated 9 December 1999, the company's United States
         subsidiary has agreed to lease an additional 13,050 square feet of
         general office and warehouse space in McKinney, Texas, immediately
         adjacent to its existing facilities, for five years from 1 July 2000.
         The annual lease amount of $110,268 represents a minimum lease
         commitment of:


<TABLE>
<S>                  <C>
         2001        $110,268
         2002         110,268
         2003         110,268
         2004         110,268
         2005         110,268
                     --------
                     $551,340
                     --------
</TABLE>

         The lease may be extended for two additional terms of five years with
         the rate to be the current base rent plus the lesser of a consumer
         price adjustment or a fair rental value adjustment. The leasehold
         improvements which were completed after 30 June 2000, amounted to
         $264,804 of which $189,709 was paid by the landlord and subsequent to
         30 June 2000 the balance of $75,096 was paid by the company.

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

12.  RELATED PARTY TRANSACTIONS

     In addition to items disclosed elsewhere in these consolidated financial
     statements, the company conducted the following transactions with related
     parties:

     a)  EXPENDITURES

         Details are as follows:
<TABLE>
<CAPTION>
                                                                2000         1999         1998
                                                                ----         ----         ----
<S>                                                           <C>          <C>          <C>
         Paid/accrued salaries and fees to officers and
            directors                                         $625,392     $629,036     $459,736

         Paid rent (at fair market value) to a company
            controlled by a former director                         --           --       75,000

         Paid interest to a director (i)                         6,625           --           --
                                                              --------     --------     --------
                                                              $632,017     $629,036     $534,736
                                                              --------     --------     --------
</TABLE>

         (i)  The interest was paid directly to the underlying financial
              institution from which the director borrowed the $300,000 to lend
              to the company (Note 8).

     b)  SHARE CAPITAL

         During 2000, the company granted a director 50,000 share purchase
         options with an exercise price of CDN $1.69 per share and an expiry
         date of 7 February 2005.

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

<PAGE>   38


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

13.  SALES AND OPERATING INCOME

     Details of sales and operating income generated from customers which
     individually account for approximately 10% or more of that year's
     consolidated sales and operating income are as follows:

<TABLE>
<CAPTION>
                                                             2000          1999           1998
                                                         -----------    -----------   -----------
<S>                                                      <C>            <C>            <C>
     Number of Large Customers                                    --              2              2
                                                         -----------    -----------    -----------
     Amount of Sales to Large Customers                  $        --    $ 3,620,295    $ 6,351,000
                                                         -----------    -----------    -----------
     Total Consolidated Sales and Operating Income       $20,195,209    $18,198,041    $20,320,155
                                                         -----------    -----------    -----------
     Total Percentage of Consolidated Sales and
         Operating Income Generated from Large
         Customers                                               0.0%          19.9%          31.3%
                                                         -----------    -----------    -----------
</TABLE>

     Due to the nature of the company's business, large sales to individual
     customers are generated on a non-recurring basis. As a result, the company
     is not dependent on any single customer or small group of customers such
     that the loss of any of these would have a material adverse effect on the
     future results of the company.

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

14.  REVALUATION OF USED EQUIPMENT

     During the year ended 30 June 2000, management re-evaluated the carrying
     value of equipment taken as trade-ins on sales made prior to 1 July 1998. A
     write-down in the amount of $524,698 resulted as management determined to
     carry trade-in inventory at no value in inventory. A similar re-evaluation
     was conducted in fiscal 1999 and resulted in a write-down of $873,101 and
     $705,707 in 1998.

     The fiscal 2000 write-down completed the full write-down of the trade-in
     inventory to a nil balance at 30 June 2000 (Note 3).

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


<PAGE>   39


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

15.  SEGMENT INFORMATION

     The company operated in only one industry segment in Canada and the United
     States as follows:

<TABLE>
<CAPTION>
                                         Canada        United States    Elimination     Consolidation
                                       -----------     -------------    -----------     -------------
                                              2000             2000            2000             2000
                                       -----------      -----------     -----------      -----------
<S>                                    <C>              <C>             <C>              <C>
     Sales to customers                $ 1,584,899      $18,610,310     $        --      $20,195,209
     Sales between the segments            282,168          839,373      (1,121,541)              --
                                       -----------      -----------     -----------      -----------
     Total sales revenue               $ 1,867,067      $19,449,683     $(1,121,541)     $20,195,209
                                       -----------      -----------     -----------      -----------
     Operating profits                 $ 1,001,256      $ 8,898,805     $        --      $ 9,900,061
                                       -----------      -----------     -----------
     General corporate expenses                                                           (7,579,409)
     Interest                                                                               (543,535)
     Revaluation of used equipment                                                          (524,698)
     Income taxes                                                                                 --
     Future income taxes                                                                    (145,000)
                                                                                         -----------
     Net income (loss)                                                                   $ 1,107,419
                                       -----------      -----------     -----------      -----------
     Identifiable assets               $ 1,838,040      $20,681,031     $   (22,607)     $22,496,464
                                       -----------      -----------     -----------      -----------
     Capital expenditures              $    12,964      $   297,228     $        --      $   310,192
                                       -----------      -----------     -----------      -----------
     Amortization of capital
       assets                          $    18,279      $   354,201     $        --      $   372,480
                                       -----------      -----------     -----------      -----------

<CAPTION>
                                         Canada        United States    Elimination     Consolidation
                                       -----------     -------------    -----------     -------------
                                              1999             1999            1999             1999
                                       -----------      -----------     -----------      -----------
<S>                                    <C>              <C>             <C>              <C>
     Sales to customers                $   824,232      $17,373,809     $        --      $18,198,041
     Sales between the segments            957,198          550,677      (1,507,875)              --
                                       -----------      -----------     -----------      -----------
     Total sales revenue               $ 1,781,430      $17,924,486     $(1,507,875)     $18,198,041
                                       -----------      -----------     -----------      -----------
     Operating profits                 $ 1,266,249      $ 8,045,943     $        --      $ 9,312,192
                                       -----------      -----------     -----------
     General corporate expenses                                                           (7,374,234)
     Interest                                                                               (325,748)
     Revaluation of used equipment                                                          (873,101)
     Income taxes                                                                            (22,064)
     Future income taxes                                                                          --
                                                                                         -----------
     Net income (loss)                                                                   $   716,045
                                       -----------      -----------     -----------      -----------
     Identifiable assets               $   518,440      $21,290,568     $   (22,607)     $21,786,401
                                       -----------      -----------     -----------      -----------
     Capital expenditures              $    12,672      $    69,346     $        --      $    82,018
                                       -----------      -----------     -----------      -----------
     Amortization of capital
       assets                          $    19,912      $   368,488     $        --      $   388,400
                                       -----------      -----------     -----------      -----------
</TABLE>


<PAGE>   40

GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds


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

16.  DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED
     ACCOUNTING PRINCIPLES

     These consolidated financial statements are prepared in accordance with
     accounting principles generally accepted in Canada. Any differences in
     United States accounting principles as they pertain to the accompanying
     consolidated financial statements are not material except as follows:

     a)  COMPENSATION EXPENSE

         Under accounting principles generally accepted in the United States,
         there is a compensation expense associated with the release of escrowed
         shares of the company, as those shares become eligible for release. No
         compensation expense is applied under accounting principles generally
         accepted in Canada.

     b)  DEFERRED COSTS

         Under accounting principles generally accepted in the United States,
         expenditures related to research and development projects are expensed
         in the period incurred. Under accounting principles generally accepted
         in Canada, research expenditures are expensed as incurred and
         development expenses, which meet certain prescribed criteria (Note 1k),
         may be deferred and amortized against future income.

     c)  FINANCIAL STATEMENT RECONCILIATION

<TABLE>
<CAPTION>
                                                                      2000          1999           1998
                                                                  -----------    -----------   -----------
<S>                                                               <C>            <C>            <C>
         i)   Deferred costs - Canadian basis                     $   587,852    $        --   $        --
              Less: Deferred costs expensed - current year          (587,852)             --            --
                                                                  -----------    -----------   -----------
              Deferred costs - U.S. basis                         $        --    $        --   $        --
                                                                  -----------    -----------   -----------
         ii)  Share capital - Canadian basis                      $10,217,262    $10,126,865   $10,125,867
              Add: Escrow share compensation expense
                - prior years                                       3,194,621      3,194,621     3,194,621
                                                                  -----------    -----------   -----------
              Share capital - U.S. basis                          $13,411,883    $13,321,486   $13,320,488
                                                                  -----------    -----------   -----------
         iii) Retained earnings - Canadian basis                  $ 2,463,157    $ 1,355,738   $   639,693
              Less: Deferred costs expensed - current year           (587,852)            --            --
              Less: Escrow share compensation expense
                 - prior years                                     (3,194,621)    (3,194,621)   (3,194,621)
                                                                  -----------    -----------   -----------
              Deficit - U.S. basis                                $(1,319,316)   $(1,838,883)  $(2,554,928)
                                                                  -----------    -----------   -----------
         iv)  Net income for the year - Canadian basis            $ 1,107,419    $   716,045   $ 4,037,546
              Less: Deferred costs expensed - current year           (587,852)            --            --
                                                                  -----------    -----------   -----------
              Net income for the year - U.S basis                 $   519,567    $   716,045   $ 4,037,546
                                                                  -----------    -----------   -----------
</TABLE>



<PAGE>   41


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

16.  DIFFERENCES BETWEEN UNITED STATES AND CANADIAN GENERALLY ACCEPTED
     ACCOUNTING PRINCIPLES - CONTINUED

     c)  FINANCIAL STATEMENT RECONCILIATION - CONTINUED

         v)   U.S. GAAP consolidated statement of shareholders' equity

<TABLE>
<CAPTION>
                                                                 Common Shares
                                                            Shares           Amount        Deficit           Total
                                                          ----------     -----------     -----------      -----------
        <S>                                              <C>            <C>             <C>              <C>
         Balance - 30 June 1997 - U.S. basis              14,689,440     $12,568,818     $(6,592,474)     $ 5,976,344
            Issuance of share for name and
              operating assets of I-Mark Systems,
              Inc. ($0.55 per share)                       1,000,000         548,148              --          548,148
            Issuance of performance shares from
               escrow ($0.06 per share)                    2,738,000         155,562              --          155,562
            Issuance of shares on exercise of
               options ($0.87 per share)                      55,000          47,960              --           47,960
            Net income for the year                               --              --       4,037,546        4,037,546
                                                          ----------     -----------     -----------      -----------
         Balance - 30 June 1998 - U.S. basis              18,482,440      13,320,488      (2,554,928)      10,765,560
            Issuance of shares on exercise of
               options ($0.81 per share)                       1,232             998              --              998
            Net income for the year                               --              --         716,045          716,045
                                                          ----------     -----------     -----------      -----------
         Balance - 30 June 1999 - U.S. basis              18,483,672      13,321,486      (1,838,883)      11,482,603
            Issuance of shares on exercise of
               options ($0.90 per share)                     100,000          90,397              --           90,397
           Net income for the year                                --              --         519,567          519,567
                                                          ----------     -----------     -----------      -----------
         Balance - 30 June 2000 - U.S. basis              18,583,672     $13,411,883     $(1,319,316)     $12,092,567
                                                          ----------     -----------     -----------      -----------
</TABLE>

   d)    EARNINGS PER SHARE - BASIC OR PRIMARY

         Under accounting principles generally accepted in the United States,
         stock options and stock warrants are treated as common stock
         equivalents in the determination of basic or primary earnings per share
         if they would have a dilutive effect. Stock options and stock warrants
         are not treated as common stock equivalents in the determination of
         basic or primary earnings per share in Canada.

         Reconciliation of Canadian to U.S. basis - Basic Earnings per Share


<TABLE>
<CAPTION>
                                                                      2000           1999            1998
                                                                  -----------     -----------     -----------
<S>                                                               <C>             <C>             <C>
         Weighted average number of common shares outstanding
             - Canadian basis                                      18,550,521      18,483,264      16,773,928
         Add:  Dilutive stock options and warrants                  1,466,667       1,640,435       1,436,667
                                                                  -----------     -----------     -----------
         Weighted average number of common shares outstanding
             - U.S. basis                                          20,017,188      20,123,699      18,210,595
                                                                  -----------     -----------     -----------
         Net income for the year - U.S. basis                     $   519,567     $   716,045     $ 4,037,546
                                                                  -----------     -----------     -----------
         Basic and fully diluted earnings per share
             - U.S. basis                                         $      0.03     $      0.04     $      0.22
                                                                  -----------     -----------     -----------
             - Canadian basis                                     $      0.06     $      0.04     $      0.24
                                                                  -----------     -----------     -----------
</TABLE>

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


<PAGE>   42


GLOBAL ELECTION SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 JUNE 2000 AND 1999

U.S. Funds

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

17.  UNCERTAINTY DUE TO THE YEAR 2000 ISSUE

     The Year 2000 Issue arises because many computerized systems use two digits
     rather than four to identify a year. Date-sensitive systems may recognize
     the year 2000 as 1900 or some other date, resulting in errors when
     information using year 2000 dates is processed. In addition, similar
     problems may arise in some systems which use certain dates in 1999 to
     represent something other than a date. Although the change in date has
     occurred, it is not possible to conclude that all aspects of the Year 2000
     Issue that may affect the entity, including those related to customers,
     suppliers, or other third parties, have been fully resolved. The company
     has not experienced any Year 2000 issues to date.

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

18.  SUBSEQUENT EVENTS

     a)  On 10 August 2000, the company entered into a letter of intent to
         acquire 100% of the issued and outstanding shares of Spectrum Print and
         Mail Services Ltd. The agreement, which is subject to regulatory
         approval, calls for consideration to be paid by the company of
         $1,600,000 cash and 1,600,001 shares of the company at a deemed price
         of CDN $2.09 per share. The cash consideration will be payable as to
         $600,000 on closing and the balance in three equal payments on the next
         three anniversary dates of the closing. The shares will be issued
         pursuant to Canadian and U.S. security regulations.

     b)  On 28 August 2000, the company reached an agreement with a trade
         receivable customer under which the company will collect the amount in
         full as follows:

         -    a cash payment of $250,000 by 31 August 2000 (received);

         -    the assignment of certain leases with a net present value of
              $650,000 (received); and

         -    a corporate guarantee of the payment of $100,000 per month
              commencing 30 September 2000 until the account is paid in full,
              including interest at the company's borrowing rates.

         The company reinstated the customer as an authorized reseller of the
         company's products.

     c)  Subsequent to year-end, the company granted a director 50,000 share
         purchase options with an exercise price of CDN $1.25 per share and an
         expiry date of 2 August 2005.

     d)  Subsequent to year-end, a former director exercised 50,000 share
         purchase options for cash in the amount of CDN $62,500.

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


<PAGE>   43

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

The following persons are Directors of the Company and have also been nominated
for election as Directors at the Company's 2000 annual general meeting of
shareholders. Directors serve for a term of one year and until their successors
are elected and qualified.


BRIAN W. COURTNEY has served as a Director of the Company since July 2000. Mr.
Courtney is the Chairman and Chief Executive Officer of Patent Enforcement and
Royalties Ltd., a company which makes investments in intellectual property with
an emphasis on patents relating to computer applications, software and the
Internet. Mr. Courtney, was the founding President of Oracle Canada from 1985 to
1991. Later he became Vice-President of Oracle Corporation (USA), responsible
for Latin America, Canada and Mexico. During a 17-year period with Xerox, he
held a number of senior positions including Manager of Major Accounts (Western
Europe) and Manager of Marketing Planning (Canada). Mr. Courtney holds a
Bachelor of Commerce Degree from the University of Manitoba.

P. NICHOLAS M. GLASS has served as a Director of the Company since 1997 and
Chairman of the Board of the Company since 2000. Mr. Glass is a member of the
British Columbia Bar, and of England and Wales, and currently practices in the
field of labour relations as a mediator and arbitrator. He is a Director of
Belvedere Resources, a Vancouver Stock Exchange listed company, which owns
mineral rights in Finland. From 1992 to 1996, Mr. Glass was a Director of
Tradepoint Investment Exchange, a public company traded on AIM in London and the
Vancouver Stock Exchange that has started a new electronic stock exchange based
in London. From 1972 to 1990, he was a civil trial lawyer with Swinton and
Company in Vancouver, British Columbia. Mr. Glass holds a Master of Arts degree
from Trinity College, Oxford University.

JOHN W. LARMER II has served as a Director of the Company since 1999. Mr. Larmer
is President of Soza & Company, Ltd., an international finance and management
information technology consulting company. His senior level consulting practice
encompasses a wide range of technology areas and he has lectured on numerous
topics, including the use of computers in management related to tax liabilities
and national and local election systems. Mr. Larmer has served as President of
the Washington Chapter of the Data Processing Management Association and as the
Accounting Chairman for the International Business Exposition and Conference.
Mr. Larmer holds an ABA degree in Accounting from Benjamin Franklin School of
Accounting, George Washington University, Washington, D.C.

CLINTON H. RICKARDS was appointed a Director of the Company in 1991, and until
1995 served as the Company's President. From 1993 to present, Mr. Rickards has
managed the Company's Marketing Division, Investor Relations. Involved in the
computer industry since 1968, Mr. Rickards formed a private computer company in
1980 with several partners. In 1983, he bought out his partners and founded
North American Professional Technologies ("NAPT"). NAPT began the development of
ES-2000 in 1986 which subsequently became the Company's signature product.

<PAGE>   44


ROBERT J. UROSEVICH was appointed President and Chief Operating Officer of the
Company on July 31, 2000. From 1997 to 2000, he served as Global USA's
Vice-President, Sales, Marketing and Business Development. Mr. Urosevich has
over 24 years of experience in the election systems industry. His background
with leading edge election products began in 1976 with the development of the
first OMR-based centralized vote counting system utilizing standard test scoring
equipment in the United States. In 1979, he founded American Information Systems
(AIS), which developed and marketed proprietary election counting systems to
small and medium sized jurisdictions nationwide. Mr. Urosevich served as the
President of AIS from 1979 through 1992 during which time AIS grew to be the
largest processor of OMR ballots handling approximately 400 jurisdictions and 40
million documents per year. In 1995, he launched I-Mark Systems after designing
a robust touch screen voting system anchored by smart card and biometric
encryption authorization technology. The Company acquired I-Mark in 1997, at
which time Mr. Urosevich joined the Company.

NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS:

LARRY ENSMINGER

Mr. Ensminger has served with the Company for nine years. From 1991 to 1993 he
was a sales representative, from 1993 to 1997 he was Manager, Sales and
Operations, from 1997 to August 31, 2000 he was Vice-President of Operations,
and from September 1, 2000 to present he serves as the Company's Vice-President,
Business Development. Mr. Ensminger holds an Associate of Arts Degree
(Education) from Dodge City Community College and Bachelor and Master of Science
(Education) degrees from Kansas State College.

TALBOT R. IREDALE

Mr. Iredale has served as Vice President Research and Development of the Company
since 1991. During that time Mr. Iredale has been instrumental in developing the
companies products, including the Accu-Vote-OS (optical mark sense reader), the
Accu-Votes-TS (touch screen voting system) and GEMS (Global Election Management
System). From 1986 to 1991 Mr. Iredale was in charge of research and development
for North American Professional Technologies. In this position Mr. Iredale
managed the team who developed the original Accu-Vote-OS and VTS (Vote Tally
System), which were the predecessors to Global Election Systems products. Mr.
Iredale is a Registered Professional Engineer in the Province of British
Columbia and holds a Bachelor of Applied Science Degree from the University of
British Columbia.

MAURICE E. SOKULSKI

Mr. Sokulski was appointed Treasurer of the Company in 1994. He served as a
Director of the Company from 1996 to 1997 and Controller from 1994 to 1996. From
1993 to 1994, he was Controller of Northcoast Building Products Ltd., a British
Columbia, Canada, distributor of lumber products. In 1992, he was Controller for
Adagio Enterprises Ltd, a British Columbia, Canada, clothing manufacturer and
distributor. He is a Chartered Accountant and holds a Bachelor of Commerce
degree from the University of Alberta.

No Director or Executive Officer of the Company is related to any other by blood
or marriage.

BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the US Securities Exchange Act of 1934 (the "Act"), directors and officers
of public companies are required to report to the Securities and Exchange
Commission all personal transactions involving the Company's common shares.
Based solely upon a review of Forms 3, 4 and 5 filed by Directors and officers
of the Company during the 2000 fiscal year, to the best knowledge of the
Company, all Forms required by Section 16(a) were timely filed with the
exception of a Form 4 to be filed by Mr. Courtney.

<PAGE>   45


ITEM 10. EXECUTIVE COMPENSATION

COMPENSATION OF EXECUTIVE OFFICERS

Set out below are particulars of compensation paid to the following persons (the
"Named Executive Officers:

(a) the Company's chief executive officer;

(b) each of the Company's four most highly compensated executive officers who
were serving as executive officers at the end of the most recently completed
financial year and whose total salary and bonus exceeds C$100,000 per year; and

(c) any additional individuals for whom disclosure would have been provided
under (b) but for the fact that the individual was not serving as an executive
officer of the Company at the end of the most recently completed financial year.

Based on the foregoing, during the fiscal year ended June 30, 2000, there were
six Named Executive Officers of the Company, namely:

<TABLE>
<CAPTION>
   Name                    Title
   ----                    -----
<S>                        <C>
   Larry Ensminger         Vice-President, Business Development; Secretary of the Company

   Talbot R. Iredale       Vice-President, Research and Development

   Clinton H. Rickards     Director of Investor Relations;  Director of the Company

   Maurice E. Sokulski     Treasurer of the Company

   Robert J. Urosevich     Former Vice-President, Sales, Marketing and Business Development
                           of Global USA (1)

   Howard T. Van Pelt      Former President and Chief Executive Officer of the Company (2)
</TABLE>


(1)  Mr. Urosevich was appointed President and Chief Operating Officer of the
     Company on July 31, 2000.

(2)  Mr. Van Pelt resigned as a Director of the Company in August 2000.

<PAGE>   46


The following table sets forth the compensation awarded, paid to or earned by
the Company's Named Executive Officers during the fiscal years ended June 30,
2000, 1999 and 1998 and the six months and fiscal year ended June 30, 1997.


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                     ANNUAL COMPENSATION                             LONG TERM COMPENSATION
                       -------------------------------------------------   --------------------------------------
                                                                             AWARDS              PAYOUTS
                                                                           ----------    -------------------------
                                                                           SECURITIES    RESTRICTED
                                                                              UNDER       SHARES OR
                                                            OTHER ANNUAL     OPTIONS      RESTRICTED       LTIP      ALL OTHER
 NAME AND PRINCIPAL    YEAR      SALARY(5)      BONUS      COMPENSATION     GRANTED      SHARE UNITS     PAY-OUTS   COMPENSATION
      POSITION         ENDED        ($)          ($)            ($)            (#)           (#)           ($)          ($)
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------   ------------
<S>                   <C>       <C>          <C>            <C>             <C>           <C>             <C>        <C>
HOWARD T. VAN PELT    2000(1)   US$180,000       NIL            NIL            NIL           NIL           NIL        US$1,388
Former President      1999(2)   US$180,000   US$ 22,143(5)      NIL            NIL           NIL           NIL        US$1,044
and CEO of the        1998(3)   US$177,500   US$126,015         NIL           50,000         NIL           NIL        US$1,607
Company               1997(4)   US$ 75,000   US$ 63,610         NIL            NIL           NIL           NIL          NIL
Former President of
Global USA(6)
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------    ------------
CLINTON H. RICKARDS   2000(1)    C$154,332(8)    NIL            NIL            NIL           NIL           NIL         C$1,407
Director              1999(2)    C$145,577    C$35,006          NIL            NIL           NIL           NIL         C$1,308
                      1998(3)    C$136,000    C$33,026          NIL           50,000         NIL           NIL          C$ 171
                      1997(4)    C$ 68,000    C$42,155          NIL            NIL           NIL           NIL          C$ 150
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------    ------------
ROBERT J. UROSEVICH   2000(1)   US$115,000    US$10,000         NIL            NIL           NIL           NIL          US$858
Former VP, Sales,     1999(2)   US$115,000       NIL            NIL            NIL           NIL           NIL          US$812
Marketing and         1998(3)   US$105,417    US$25,000         NIL          120,000         NIL           NIL           NIL
Business              1997(4)       N/A          N/A            NIL            N/A           NIL           NIL           N/A
Development
(Global USA)(7)
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------    ------------
MAURICE E. SOKULSKI   2000(1)    US$80,833    US$10,000         NIL            NIL           NIL           NIL          US$589
Treasurer             1999(2)    US$75,000       NIL            NIL            NIL           NIL           NIL          US$638
                      1998(3)    US$75,000    US$35,000         NIL          100,000         NIL           NIL           NIL
                      1997(4)    US$27,324       NIL            NIL            NIL           NIL           NIL           NIL
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------    ------------
TALBOT R. IREDALE     2000(1)    C$105,000     C$1,500          NIL            NIL           NIL           NIL         C$2,313
VP, Research and      1999(2)    C$ 96,667       N/A            N/A            N/A           N/A           N/A         C$1,875
Development           1998(3)       N/A          N/A            N/A            N/A           N/A           N/A           N/A
                      1997(4)       N/A          N/A            N/A            N/A           N/A           N/A           N/A
-------------------   ------    ----------   ----------     ------------    ----------    -----------     --------    ------------
LARRY ENSMINGER       2000(1)   US$107,083    US$10,000         NIL            NIL           NIL           NIL          US$733
VP, Business          1999(2)    US$95,500       NIL            NIL            NIL           NIL           NIL          US$789
Development           1998(3)    US$90,000    US$40,000         NIL           50,000         NIL           NIL          US$916
Secretary of the      1997(4)    US$45,000       NIL            NIL            NIL           NIL           NIL           NIL
Company
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     (1)  For the fiscal year ended June 30, 2000.

     (2)  For the fiscal year ended June 30, 1999.

     (3)  For the fiscal year ended June 30, 1998.

     (4)  For the six months and fiscal year ended at June 30, 1997.

     (5)  Refer to "Management Contracts" for further particulars.

     (6)  Mr. Van Pelt resigned as a Director of the Company in August 2000.

     (7)  Subsequent to the fiscal year ended June 30, 2000, Mr. Urosevich was
          appointed President and Chief Operating Officer of the Company
          effective July 31, 2000.

     (8)  This number includes C$12,381 paid to Mr. Rickards as a result of
          exchange rate fluctuations between United States and Canadian
          currency.

LONG TERM INCENTIVE PLAN AWARDS

Long term incentive plan awards ("LTIP") means "any plan providing compensation
intended to serve as an incentive for performance to occur over a period longer
than one financial year whether performance is measured by reference to
financial performance of the Company or an affiliate, or the price of the
Company's shares but does not include option or stock appreciation rights plans
or plans for compensation through restricted shares or units". No LTIPs were
granted to the Named Executive Officers or Directors during the fiscal year
ended June 30, 2000.

<PAGE>   47

STOCK APPRECIATION RIGHTS

Stock appreciation rights ("SAR's") means a right, granted by an issuer or any
of its subsidiaries as compensation for services rendered or in connection with
office or employment, to receive a payment of cash or an issue or transfer of
securities based wholly or in part on changes in the trading price of the
Company's shares. No SARs were granted to or exercised by the Named Executive
Officers or Directors during the fiscal year ended June 30, 2000.

OPTION GRANTS DURING THE FISCAL YEAR ENDED JUNE 30, 2000

During the fiscal year ended June 30, 2000, stock options were granted to John
W. Larmer II, a Director of the Company, to purchase up to a total of 50,000
common shares at a price of C$1.69 per share, exercisable on or before February
7, 2005. No other stock options were granted to the Named Executive Officers or
Directors during the fiscal year ended June 30, 2000. Subsequent to the fiscal
year ended June 30, 2000, Bryan W. Courtney, a Director of the Company, was
granted an option to purchase up to a total of 50,000 common shares at a price
of C$1.25 per share exercisable on or before August 2, 2005.

AGGREGATED OPTION EXERCISES DURING THE FISCAL YEAR ENDED JUNE 30, 2000
AND FISCAL YEAR END OPTION VALUES

No stock options were exercised by the Named Executive Officers or Directors
during the fiscal year ended June 30, 2000. Subsequent to the fiscal year ended
June 30, 2000, Mr. Van Pelt, the Company's former President and Chief Executive
Officer, exercised an option to purchase 50,000 shares at $1.25 per share.

OUTSTANDING OPTIONS

The total number of outstanding stock options to purchase common shares held by
the Named Executive Officers, Directors who were not Named Executive Officers,
and employees who were neither Directors nor Named Executive Officers of the
Company as at June 30, 2000 (including all such officers, directors and
employees of Global USA) is as follows:

<TABLE>
<CAPTION>
                            NO. OF SHARES    NO. OF OPTIONS
      OPTIONEES             UNDER OPTION       EXERCISABLE     EXERCISE PRICE       EXPIRY DATES
------------------------    -------------    --------------    --------------    -----------------
<S>                         <C>              <C>               <C>               <C>
NAMED EXECUTIVE OFFICERS       370,000           370,000           C$1.25        August 22, 2002
                               100,000            50,000           C$1.49        December 17, 2002
DIRECTORS                                         50,000           C$1.69        February 7, 2005
EMPLOYEES                      830,000           830,000          205,000 @      October 15, 2001
                                                                   C$2.05
                                                                  625,000 @      August 22, 2002
                                                                   C$1.25
TOTAL                        1,300,000         1,300,000
</TABLE>

Subsequent to the fiscal year ended June 30, 2000, Bryan W. Courtney, a Director
of the Company, was granted an option to purchase up to a total of 50,000 common
shares at a price of C$1.25 per share exercisable on or before August 2, 2005.

<PAGE>   48


The following table provides the details of stock options exercised during the
fiscal year ended June 30, 2000, and the fiscal year end stock option values for
the Named Executive officers:

<TABLE>
<CAPTION>
                                                                 NUMBER OF SHARES
                                                                    UNDERLYING        VALUE OF UNEXERCISED
                                                                UNEXERCISED OPTIONS,  IN-THE-MONEY OPTIONS,
                                                                 ALL OF WHICH WERE     ALL OF WHICH WERE
                        SHARES ACQUIRED                           EXERCISABLE, AT       EXERCISABLE, AT
    OPTIONEES            ON EXERCISE         VALUE REALIZED        JUNE 30, 2000         JUNE 30, 2000
-------------------     ---------------      --------------     -------------------   ---------------------
<S>                     <C>                  <C>                <C>                   <C>
HOWARD T. VAN PELT             Nil(1)              N/A                 50,000           Not in the Money
CLINTON H. RICKARDS            Nil                 N/A                 50,000           Not in the Money
LARRY ENSMINGER                Nil                 N/A                 50,000           Not in the Money
MAURICE E. SOKULSKI            Nil                 N/A                100,000           Not in the Money
TALBOT R. IREDALE              N/A                 N/A                    N/A                        N/A
ROBERT J. UROSEVICH            Nil                 N/A                120,000           Not in the Money
</TABLE>

(1)  Subsequent to the fiscal year ended June 30, 2000, Mr. Van Pelt exercised
     his stock option to purchase a total of 50,000 shares in the capital of the
     Company at a price of C$1.25 per share.

DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE

The Company has no Defined Benefit or Actuarial Plan benefits payable upon
retirement of the Named Executive Officers.

TERMINATION OF EMPLOYMENT, CHANGE IN RESPONSIBILITIES AND EMPLOYMENT CONTRACTS

No employment contracts exist between the Company and the Named Executive
Officers, other than set out below under the heading entitled "Management
Contracts".

COMPENSATION OF DIRECTORS

No cash compensation was paid to any Director of the Company for the Director's
services as a Director during the fiscal year ended June 30, 2000 other than to
David H. Brown, the former Chairman of the Company (C$46,667), George Cobbe, a
former director of the Company (US$5,000) P. Nicholas M. Glass (US$12,500) and
John W. Larmer II (US$7,500). These amounts included Directors' fees for the
fiscal year ended June 30, 2000. The Company has no standard arrangement
pursuant to which the Directors are compensated by the Company for the services
in their capacity as Directors except for the granting from time to time of
incentive stock options in accordance with the policies of The Toronto Stock
Exchange. The Company reimburses Directors for expenses they incur to attend
board meetings.

COMPOSITION OF THE COMPENSATION COMMITTEE

The Company's Compensation Committee consists of P. Nicholas M. Glass, Robert J.
Urosevich and Brian W. Courtney. However, compensation matters may also be
reviewed and approved by the entire Board of Directors.

EMPLOYMENT AGREEMENTS

HOWARD T. VAN PELT

Pursuant to an Employment Agreement dated August 1, 1997, Global USA employed
Howard T. Van Pelt as its President at an annual salary of US$180,000 plus an
annual bonus of 3% of the consolidated pre-tax earnings to a maximum of
US$200,000 per year. The agreement, which was for a term of three years, expired
July 31, 2000 and was not renewed. Subsequent to the fiscal year ended June 30,
2000, Mr. Van Pelt resigned as a Director of the Company, and received a
severance package of US$169,937.

<PAGE>   49

ROBERT J. UROSEVICH

Pursuant to an Employment Agreement dated August 1, 1997, Global USA employed
Mr. Urosevich as Vice-President, Sales, Marketing and Business Development at an
annual salary of US$115,000, as adjusted from time to time. The agreement, which
was for a term of three years, expired July 31, 2000.

Mr. Urosevich was appointed President and Chief Operating Officer of the Company
on July 31, 2000. On August 1, 2000 he entered into an Employment Agreement with
Global USA pursuant to which he will receive an annual salary of US$150,000 plus
an annual bonus of 3% of the consolidated pre-tax earnings to a maximum of
US$200,000 per year. The agreement, which is for a term of two years, will
expire July 31, 2002.

See Item 12: "Certain relationships and related transactions" below for
additional information.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

To the knowledge of the directors and senior officers of the Company, there are
no individuals or companies who beneficially own, directly or indirectly, or
exercise control or direction over shares carrying more than 10% of the voting
rights attached to all outstanding shares of the Company.

The following table sets forth, as of August 31, 2000, the beneficial ownership
of common shares by each person who is known by the Company to beneficially own
more than 5% of outstanding common shares in the capital of the Company:

<TABLE>
<CAPTION>
                                    AMOUNT AND NATURE OF
          NAME AND ADDRESS OF       BENEFICIAL OWNERSHIP     PERCENT OF CLASS
          BENEFICIAL OWNER                (1)(2)(3)          BENEFICIALLY OWNED
          ---------------------------------------------------------------------
<S>                                 <C>                      <C>
          DAVID H. BROWN                  1,310,067                7.1%
          Toronto, Ontario

          CLINTON H. RICKARDS             1,023,419(4)             5.5%
          Surrey, British Columbia

          HOWARD T. VAN PELT                968,000                5.2%
          McKinney, Texas
          ---------------------------------------------------------------------
</TABLE>

(1)  Not being within the knowledge of the Company, the ownership information
     disclosed above has been furnished by the respective directors
     individually.

(2)  To the Company's knowledge, except where otherwise noted, each person
     listed above has sole voting power of his shares.

(3)  Free trading shares, except as to option shares. See footnote (4) below as
     to number of stock option shares included in the table.

(4)  Includes, as to the named person, the number of shares underlying
     exercisable stock options:Rickards - 50,000 option shares exercisable at
     C$1.25 per share.


<PAGE>   50


The following table sets forth, as at August 31, 2000, the beneficial ownership
of common shares held by each director and nominee for director of the Company,
each Named Executive Officer, and by all directors and officers as a group:

<TABLE>
<CAPTION>
                                    AMOUNT AND NATURE OF
          NAME AND ADDRESS OF       BENEFICIAL OWNERSHIP     PERCENT OF CLASS
          BENEFICIAL OWNER              (1)(2)(3)(6)         BENEFICIALLY OWNED
          ---------------------------------------------------------------------
<S>                                 <C>                      <C>
          BRIAN W. COURTNEY                  50,000(4)             0.3%
          Director and Nominee

          P. NICHOLAS M. GLASS               50,000(4)             0.3%
          Director and Nominee

          JOHN W. LARMER II                  50,100(4)             0.3%
          Director and Nominee

          CLINTON H. RICKARDS(5)          1,023,419(4)             5.5%
          Director, Named Executive
          Officer and Nominee

          ROBERT J. UROSEVICH(5)            166,023(4)             0.9%
          Director, Named Executive
          Officer and Nominee

          LARRY ENSMINGER(5)                402,835(4)             2.1%
          Named Executive Officer

          TALBOT R. IREDALE(5)               24,900                0.1%
          Named Executive Officer

          MAURICE E. SOKULSKI(5)            276,700(4)             1.5%
          Named Executive Officer

          DIRECTORS AND OFFICERS          2,043,977               11.0%
          AS A GROUP
          ---------------------------------------------------------------------
</TABLE>

(1)  Not being within the knowledge of the Company, the ownership information
     disclosed above has been furnished by the respective directors
     individually.

(2)  A person is deemed, under United States securities law, to be the owner of
     securities that can be acquired by that person within 60 days of the date
     of the table upon exercise of options or warrants. Each beneficial owner's
     percentage ownership is determined by assuming that options or warrants
     that are held by that person and that are exercisable within 60 days of the
     date of this table have been exercised. The information as to the shares
     beneficially owned or over which a director exercises control or direction
     been furnished by the respective Directors individually and is for the
     month ended June 30, 2000.

(3)  To the Company's knowledge, except where otherwise noted, each person has
     sole voting and investment power as to the shares.

(4)  Includes, as to the person listed, stock options to purchase shares in the
     capital of the Company as follows:
     Courtney - 50,000 option shares exercisable at C$1.25 per share;
     Glass - 50,000 option shares exercisable at C$1.49 per share;
     Larmer - 50,000 option shares exercisable at C$1.69 per share;
     Rickards - 50,000 option shares exercisable at C$1.25 per share;
     Urosevich - 120,000 option shares exercisable at C$1.25 per share);
     Ensminger - 50,000 option shares exercisable at C$1.25 per share; and
     Sokulski - 100,000 option shares exercisable at C$1.25 per share.

(5)  Named Executive Officer.

<PAGE>   51

(6)  Free trading shares under Canadian law, except for the stock option shares
     which are subject to US Rule 144. See footnote (4) above as to the number
     of stock option shares included in the table.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In addition to the employment arrangements discussed under Item 10. Executive
Compensation, the Company employs Clinton Rickards, its Director of Investor
Relations at a salary of C$147,500 per year. Until the beginning of the current
fiscal year, the Company paid Mr. Rickards a salary of C$141,951 per year. The
Company employs its President, Mr. Urosevich at a salary of $150,000. Until the
beginning of the current fiscal year, the Company paid Mr. Urosevich at a salary
of $115,000. The Company employs its Vice President Sales & Marketing, Mr.
Herron at a salary of $120,000 per year. The Company employs its Vice President
Operations, Mr. Dix at a salary of $115,000 per year. The Company employs its
Vice President Business Development, Mr. Ensminger at a salary of $115,000 per
year. Until the beginning of the current fiscal year, the Company paid
Mr.Ensminger a salary of $107,083 per year. The Company employs its Treasurer,
Maurice E. Sokulski, at a salary of $100,000 per year; for the previous fiscal
year, the Company paid Mr. Sokulski a salary in the amount of $80,833. The
Company employs Talbot Iredale, its Vice President of Research and Development
at a salary of C$120,000 per year. Until the beginning of the current fiscal
year, the Company paid Mr. Iredale at a salary of C$105,000 per year.

In May 1999, Mr. Van Pelt loaned the Company US$300,000 on an unsecured
short-term promissory note bearing interest at a rate of 10% per annum. This
loan was repaid in full by the Company in August 1999.

With respect to transactions that were entered into before June 30, 1997, the
following information is provided as a matter of interest. By an agreement dated
November 22, 1991, the Company reserved for issuance 4,150,000 treasury shares
for issuance as restricted "performance shares". These shares were to be issued
upon payment of C$0.08 per share, and, upon issuance, were to be held in escrow
and released to specified employees on the basis of "cumulative cash flow". Two
of the original allotees ceased to be employees of the Company and, therefore,
were no longer eligible for restricted performance shares. Their 270,000 share
allotment was canceled, leaving a balance of 3,880,000 reserved for issuance.
During 1996, the Directors resolved to cancel 1,142,000 of the allotted but
unissued restricted performance shares and to extend the earn-out period on the
remaining 2,738,000 restricted performance shares from January 17, 1997 to
January 17, 2000. The Directors' resolution was subsequently approved by
shareholders and regulatory authorities. On December 6, 1996, the Company
entered into an Amended and Restated Performance Shares Allotment Agreement with
respect to the remaining shares which extended the earn-out time from January
17, 1997 to January 17, 2000, but retained the earn-out requirements of the
earlier agreement. Those requirements provided that performance shares would
have to be earned out on the basis of one performance share for every C$0.7975
cumulative cash flow. The following Directors and Officers were awarded the
following rights to acquire restricted performance shares, subject to the escrow
terms: Howard Van Pelt, 2,187,581 (of which 1,305,492 were intended for other
employees); David H. Brown, 88,208; and Clinton H. Rickards, 282,267. In January
1998, the restrictions on the performance shares lapsed and they were earned,
purchased and released from escrow. Of Mr. Van Pelt's allotment, as intended,
1,305,492 were issued to other employees, leaving him a balance of 882,089
shares.



<PAGE>   52


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
     A.       EXHIBITS                                                       PAGE
<S>           <C>                                                            <C>
     03.1     Memorandum and Articles of Incorporation, as amended.*         previously
                                                                             filed

     04.1     Parts 7, 10, 12, and 27 of the Memorandum and Articles of      previously
              Incorporation, as amended, set forth in Exhibit 3.1**          filed

     10.1     Property lease dated August 6, 1999 between David Wood         previously
              and the Company.                                               filed

     10.2     Property lease dated December 8, 1999 between Jersey           previously
              Investments, Inc. and the Company.                             filed

     10.3     Change in terms agreement for loan dated May 22, 2000          filed
              between compass Bank and the Company.                          herewith
                                                                             electronically

     10.4     Change in terms agreement for loan dated May 27, 2000          filed
              between Compass Bank and the Company.                          herewith
                                                                             electronically

     10.5     Loan agreement dated July 19, 2000 between Hibernia            filed
              National Bank and the Company                                  herewith
                                                                             electronically

              Schedule 1.  Commercial guarantee.                             filed
                                                                             herewith
                                                                             electronically

              Schedule 2.  Commercial security agreement.                    filed
                                                                             herewith
                                                                             electronically

     11.1     Computation of per-share income Treasury Stock Method          filed
              of the Company.                                                herewith
                                                                             electronically

     27       Financial Data Schedule                                        filed
                                                                             herewith
                                                                             electronically
</TABLE>


*    Incorporated by reference to Exhibit 2(1) to the Company's Form 10-SB filed
     July 31, 1998.

**   Incorporated by reference to Exhibit 3(1) to the Company's Form 10-SB filed
     July 31, 1998.

     B.   Reports on Form 8-K

     The Company filed no reports on Form 8-K during the fourth quarter of
     Fiscal 2000.


<PAGE>   53


                                    SIGNATURE

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

Dated:  September 28, 2000


                      GLOBAL ELECTION SYSTEMS INC.

                      By: /s/ Robert J. Urosevich
                      ----------------------------------------------------------
                      Robert J. Urosevich, President and Chief Operating Officer

<PAGE>   54

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER        DESCRIPTION
-------       -----------
<S>           <C>
     03.1     Memorandum and Articles of Incorporation, as amended.*

     04.1     Parts 7, 10, 12, and 27 of the Memorandum and Articles of
              Incorporation, as amended, set forth in Exhibit 3.1**

     10.1     Property lease dated August 6, 1999 between David Wood
              and the Company.

     10.2     Property lease dated December 8, 1999 between Jersey
              Investments, Inc. and the Company.

     10.3     Change in terms agreement for loan dated May 22, 2000
              between compass Bank and the Company.

     10.4     Change in terms agreement for loan dated May 27, 2000
              between Compass Bank and the Company.

     10.5     Loan agreement dated July 19, 2000 between Hibernia
              National Bank and the Company

              Schedule 1.  Commercial guarantee.

              Schedule 2.  Commercial security agreement.

     11.1     Computation of per-share income Treasury Stock Method
              of the Company.

     27       Financial Data Schedule
</TABLE>


*    Incorporated by reference to Exhibit 2(1) to the Company's Form 10-SB filed
     July 31, 1998.

**   Incorporated by reference to Exhibit 3(1) to the Company's Form 10-SB filed
     July 31, 1998.